Exhibit 10.5This Commitment Agreement has been filed to provide investors with information regarding its terms.It is not intended to provide any other factual information about the Tennessee Valley Authority.The representations and warranties of the parties in this Commitment Agreement were made to, andsolely for the benefit of, the other parties to this Commitment Agreement. The assertions embodiedin the representations and warranties may be qualified by information included in schedules,exhibits or other materials exchanged by the parties that may modify or create exceptions to therepresentations and warranties. Accordingly, investors should not rely on the representations andwarranties as characterizations of the actual state of facts at the time they were made orotherwise.
 

 
**COMMITMENTAGREEMENT**     THIS AGREEMENT is effective as of the date it is executed by the last party to execute itand is made and entered into among MEMPHIS LIGHT, GAS AND WATER DIVISION (Board), acting for itselfand on behalf of the CITY OF MEMPHIS, TENNESSEE (Municipality), a municipal corporation created andexisting under and by virtue of the laws of the State of Tennessee, as they exist on the effectivedate of this agreement, and TENNESSEE VALLEY AUTHORITY (TVA), a corporation created and existingunder and by virtue of the Tennessee Valley Authority Act of 1933, as it exists on the effectivedate of this agreement;**WITNESSETH:**     WHEREAS, TVA and Board have a long-standing relationship as seller and buyer of power, underwhich Board currently purchases all of its power requirements from TVA pursuant to Power ContractTV-65726A, dated December 26, 1984, as amended (Power Contract); and     WHEREAS, the electric utility industry is currently undergoing significant changes andrestructuring; and     WHEREAS, TVA and Board have discussed a proposed transaction under which the Municipalitywould issue municipal bonds for the benefit of the Board that areexempt from federal income tax(the Bonds) and use the proceeds of the Bonds to prepay $1,500,000,000 (one billion five hundredmillion dollars) of the costs it would incur under the Power Contract for a fifteen-year period;and     WHEREAS, Board wishes to make a prepayment to TVA of a portion of Board’s power costs overthe next fifteen years under the Power Contract in order to assure a reliable supply of electricalenergy for its customers at favorable and predictable rates;and     WHEREAS, TVA wishes to be assured of its long-term market for the sale of electrical power bycontracting to supply at least half of Board’s powerrequirements for the next fifteen years;     NOW, THEREFORE, for and in consideration of the premises and of the mutual agreements setforth below and subject to the provisions of the Tennessee Valley Authority Act of 1933, as itexists on the date of execution of this agreement, the parties agree as follows:
 

 
**Section 1.****Prepayment Transaction**.Board and TVA have agreed in principle to implement a transaction under which theMunicipality will issue for the benefit of the Board the Bonds and use the proceeds therebyobtained to prepay $1,500,000,000 (one billion five hundred million dollars) of the costs itwill incur under the Power Contract for a fifteen-year period (the Prepayment Transaction).In order to implement the Prepayment Transaction, and subject to the terms of this agreement,Board and TVA have executed as of even date a supplement to the Power Contract insubstantially the form of Attachment A hereto (the Supplement). The Supplement shall not beeffective unless the provisions of section 4 of this agreement have been satisfied.**Section 2.****Wire Transfer**.Prior to 12:00 noon, EST, on the next business day following the day Board receives theproceeds, Board shall prepay TVA $1,500,000,000 (one billion five hundred million dollars)of costs under the Power Contract by wire transferring $1,500,000,000 (one billion fivehundred million dollars) to an account designated by TVA. If such wire transfer occursbefore the first day of the month following the month in which the conditions precedentidentified in section 4 of this agreement have been satisfied, then an appropriateproration adjustment will be reflected in the document referenced in section 4(f) of thisagreement.**Section 3.****Further Assurances**.Board and TVA undertake to work diligently and in good faith to:     a. negotiate, draft, and reach agreement on the terms and conditions of such otherdocuments as are or may be necessary to consummate the Prepayment Transaction;     b. obtain all necessary approvals from their respective governing bodies to enterinto the Supplement and to execute such other documents and take such other steps as areor may be necessary to consummate the Prepayment Transaction; and     c. obtain from the Internal Revenue Service and/or the Department of Treasury allnecessary regulatory provisions, rulings, and/or other administrative guidance permittingthe use of tax-exempt financing for the Prepayment Transaction.**Section 4.****Conditions Precedent**.The Supplement shall not become effective unless and until each of the followingconditions has been satisfied prior to the Effective Date thereof:
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     a. Board and TV A shall have negotiated, drafted, and reached agreementon the terms and conditions of such other documents as are or may be necessaryto consummate the Prepayment Transaction:     b. Board and TV A shall each have rendered an opinion that theSupplement is enforceable;     c. Board and TV A shall each have obtained all necessary approvals fromtheir respective governing bodies to enter into the Supplement and to execute suchother documents and take such other steps as are or may be necessary toconsummate the Prepayment Transaction;     d. Board shall have obtained all necessary regulatory provisions, rulings,and/or other administrative guidance from the Internal Revenue Service and/or theDepartment of Treasury, acceptable to Board in its sole discretion, to permit theuse of tax-exempt financing for the Prepayment Transaction;     e. Board shall have obtained appropriate tax-exempt financing for thePrepayment Transaction containing such terms and conditions and expenses asare, after coordination with TVA, acceptable to Board in its sole discretion. Inexercising its discretion, Board will give due consideration to how the terms andconditions would affect TVA;     f. If either Board or TVA has requested an economic adjustment pursuantto section 5 of this agreement, Board and TVA shall have executed a documentmodifying the Supplement as provided in section 5 of this agreement insubstantially the form of Attachment B hereto; and     g. Board and TVA shall have executed a document confirming that theforegoing conditions precedent have been satisfied and that they waive anyremaining termination rights under section 5 of this agreement in substantially theform of Attachment C hereto.**Section 5.****Economic Adjustment****.**At any time prior to the execution of the bond purchase agreement for the issuance by theMunicipality for the benefit of the Board of Bonds for the Prepayment Transaction, eitherBoard or TVA may request a one-time adjustment of the Monthly Savings under the Supplementin order to preserve the economics of the Prepayment Transaction. If the parties shallagree on a revised level for the Monthly Savings, they shall, prior to the execution of thebond purchase agreement, execute a document modifying the Supplement by adjusting theMonthly Savings and other terms or figures, as necessary, to the agreed-upon revisedamount(s) for all purposes under the Supplement, in substantially the form of Attachment Bhereto. If they do not reach agreement, then, upon written notice from either party to theother, this agreement shall be terminated. In the event of such a termination, theSupplement shall not become effective and the parties
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shall share equally all reasonable and customary out-of-pocket expenses of thetransaction through the date of termination.**Section 6.****Books and Records****.**Each party will make available for the review of the other party and its representativesany and all information necessary for the other party’s exercise of rights and discharge ofobligations in connection with the Prepayment Transaction. This review will be conductedduring normal business hours at the location of the party making the documents available.No documents or copies may be taken from this location without the permission of the partymaking the documents available. Except for reasonable copying charges incurred if a partyallows copies to be made and removed from its offices, nether party shall charge the otherfor the cost of making its books and records available to the other party. If requested,TVA may make any records it has with respect to the Prepayment Transaction available to theU.S. General Accounting Office or other governmental body with a legitimate interest insuch transaction.**Section 7.****Definitions****.**Terms that are capitalized but not defined in this agreement have the meanings given tothem in the Supplement.**Section 8.****Entire Agreement****.**Except for such agreements of the parties as are set out in the Supplement, thisagreement contains the entire agreement and understanding between the parties, and thereare no oral understandings, terms, or conditions not herein recited, and neither party hasrelied upon any representations not contained in this agreement. All prior understandings,terms, or conditions are deemed to be merged in this agreement, which may not be changedor supplemented orally by either party.
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     IN WITNESS WHEREOF, the parties have caused this agreement to be executed by their dulyauthorized officers, as of the day and year first above written.         **MEMPHIS LIGHT, GAS AND WATER DIVISION**    **And**    **CITY OF MEMPHIS, TENNESSEE**           By: /s/ Herman Morris Jr. President of Light, Gas and Water Division           Date: November 19, 2003           **TENNESSEE VALLEY AUTHORITY**           By: /s/ Mark O. Medford           Date: November 19, 2003  
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