Document:

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                                                                    EXHIBIT 10.2

                          DOMESTIC SUBSIDIARY GUARANTY

      DOMESTIC SUBSIDIARY GUARANTY, dated as of September 22, 2006 (the
"SUBSIDIARY GUARANTY") made by BAZOOKA, INC., a Washington corporation, OAKLEY
SALES CORP., a Washington corporation, OAKLEY DIRECT, INC., a Washington
corporation, IACON, INC., a Washington corporation, THE OPTICAL SHOP OF ASPEN, a
California corporation, OLIVER PEOPLES, INC., a California corporation, and
BARTER OPTICAL, INC., a Washington corporation (the "GUARANTORS"), in favor of
JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") under the Credit Agreement dated as of September 22,
2006 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among Oakley, Inc. (the "COMPANY"), the Borrowing
Subsidiaries party thereto (the Company and the Borrowing Subsidiaries
collectively, the "BORROWERS"), the Administrative Agent and the Lenders party
thereto (the "Lenders"), and THE LENDERS.

                                   WITNESSETH:

      WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans and other extensions of credit to the Borrowers upon the
terms and subject to the conditions set forth therein;

      WHEREAS, the Borrowers are members of an affiliated group of corporations
that includes the Guarantors;

      WHEREAS, the proceeds of the Loans and other extensions of credit will be
used in part to enable the Borrowers to make valuable transfers to the
Guarantors in connection with the operation of their businesses;

      WHEREAS, the Guarantors and the Borrowers are engaged in related
businesses, and the Guarantors will derive substantial direct and indirect
benefit from the making of the Loans and other extensions of credit; and

      WHEREAS, it is a condition precedent to the obligation of the Lenders to
make their respective Loans and other extensions of credit to the Borrowers
under the Credit Agreement that the Guarantors and the other Guarantor
Subsidiaries (if any) referred to in the Credit Agreement shall have executed
and delivered to the Administrative Agent, for the ratable benefit of the
Lenders, a guaranty (each, a "SUBSIDIARY GUARANTY").

      NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and other extensions of credit
to the Borrowers under the Credit Agreement, the Guarantors hereby agree with
the Administrative Agent, for the ratable benefit of the Lenders, as follows:

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      1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

      (b) As used herein, "OBLIGATIONS" means the collective reference to the
unpaid principal of and interest on the Loans and LC Disbursements and all other
obligations and liabilities of the Borrowers to the Administrative Agent or the
Lenders (including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans or LC
Disbursements and interest accruing at the then applicable rate provided in the
Credit Agreement after (or but for) the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to any Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Credit Agreement, the other Loan
Documents or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by any Borrower, the Guarantors, or any
other Guarantor Subsidiary pursuant to the terms of the Credit Agreement, this
Subsidiary Guaranty, any other Subsidiary Guaranty or any other Loan Document).

      (c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Subsidiary Guaranty shall refer to this Subsidiary
Guaranty as a whole and not to any particular provision of this Subsidiary
Guaranty, and section and paragraph references are to this Subsidiary Guaranty
unless otherwise specified.

      (d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

      2. Guaranty. (a) Subject to the provisions of paragraph (b), each
Guarantor hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by each Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.

      (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable laws relating to the insolvency of debtors.

      (c) Each Guarantor further agrees to pay any and all expenses (including,
without limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Administrative Agent or any Lender in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Obligations and/or enforcing any rights with respect to, or
collecting against, such Guarantor under this Subsidiary Guaranty. This
Subsidiary Guaranty shall (i) remain in full force and effect until the
Obligations (other than contingent indemnification and expense reimbursement
obligations as to which no claim has been asserted ("CONTINGENT OBLIGATIONS"))
are paid in full and the Commitments are terminated, notwithstanding that from
time to time prior thereto any Borrower may be free from any

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Obligations, and (ii) automatically terminate upon the payment in full of the
Obligations (other than Contingent Obligations) and the termination of the
Commitments.

      (d) Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Subsidiary Guaranty or affecting the rights and remedies
of the Administrative Agent or any Lender hereunder.

      (e) No payment or payments made by any Borrower, any Guarantor, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from any Borrower, any Guarantor, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder, which shall,
notwithstanding any such payment or payments other than payments made by such
Guarantor in respect of the Obligations or payments received or collected from
such Guarantor in respect of the Obligations, remain liable for the Obligations
up to the maximum liability of such Guarantor hereunder until the Obligations
are paid in full and the Commitments are terminated.

      (f) Any and all payments by or on account of any obligation of any
Guarantor hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if any Guarantor shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this paragraph) the Administrative Agent or the relevant Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Guarantor shall make such deductions and
(iii) such Guarantor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law. In addition, such
Guarantor shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law. Each Guarantor shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of such Guarantor hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this paragraph) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to such Guarantor by a Lender,
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Guarantor to a Governmental Authority,
such Guarantor shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent. For the
purposes of this paragraph only, (i) "Indemnified Taxes" means Taxes other than
Excluded Taxes and (ii) "Excluded Taxes" means, with respect to the
Administrative Agent, any Lender, any Issuing Bank or any other recipient of any
payment to be made by any Guarantor hereunder, (x) income or franchise taxes
imposed on (or measured by) its net income by the United States of America,
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or by the jurisdiction under the laws of which such recipient is organized or
in which its principal office is located, or, in the case of any Lender, in
which its applicable lending office is located, (y) any branch profits taxes
imposed by the United States of America or any political subdivision thereof or
any similar tax imposed by any other jurisdiction in which such Guarantor is
located and (z) in the case of a Foreign Lender, any withholding tax (1) with
respect to amounts payable by any Person that is a Borrower under the Credit
Agreement at the time such Foreign Lender first becomes a party to the Credit
Agreement, at the rate applicable to such amounts on such date under the laws
and treaties in effect at such time, or (2) to the extent attributable to such
Foreign Lender's failure to comply with a request of the Company to provide the
documentation described in Section 2.16(e) of the Credit Agreement.

      (g) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.

      3. Right of Contribution. Each Guarantor hereby agrees that, to the extent
that any Guarantor Subsidiary shall have paid more than its proportionate share
of any payments made in respect of the Subsidiary Guaranties, such Guarantor
Subsidiary shall be entitled to seek and receive contribution from and against
the Guarantors hereunder. Each Guarantor Subsidiary's right of contribution
shall be subject to the terms and conditions of Section 5 hereof. The provisions
of this Section shall in no respect limit the obligations and liabilities of any
Guarantor Subsidiary to the Administrative Agent and the Lenders, and each
Guarantor Subsidiary shall remain liable to the Administrative Agent and the
Lenders for the full amount guaranteed by such Guarantor Subsidiary under its
Subsidiary Guaranty.

      4. Right of Set-off. If an Event of Default shall have occurred and be
continuing, each Guarantor hereby irrevocably authorizes the Administrative
Agent and each Lender at any time and from time to time, to the fullest extent
permitted by law and without notice to any Guarantor or any other guarantor, any
such notice being expressly waived by each Guarantor, to set-off and appropriate
and apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Administrative Agent or
such Lender to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Administrative Agent or such Lender may elect,
against and on account of the obligations and liabilities of such Guarantor to
the Administrative Agent or such Lender hereunder and claims of every nature and
description of the Administrative Agent or such Lender against such Guarantor,
in any currency, whether arising hereunder, under the Credit Agreement, any
other Loan Documents or otherwise, as the Administrative Agent or such Lender
may elect, whether or not the Administrative Agent or any Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Lender shall notify
such Guarantor promptly of any such set-off and the application made by the
Administrative Agent or such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Administrative Agent and each Lender under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which the Administrative Agent or such Lender may have.

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      5. No Subrogation. Notwithstanding any payment or payments made by any of
the Guarantor Subsidiaries under any Subsidiary Guaranty or any set-off or
application of funds of any of the Guarantor Subsidiaries by any Lender, the
Guarantors shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any Borrower or any Guarantor
Subsidiary or other guarantor or any collateral security or guarantee or right
of offset held by the Administrative Agent or any Lender for the payment of the
Obligations, nor shall the Guarantors seek or be entitled to seek any
contribution or reimbursement from any Borrower or any Guarantor Subsidiary or
other guarantor in respect of payments made by any Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrowers
on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full or the Commitments shall not have been terminated, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall, promptly upon
receipt by such Guarantor, be turned over to the Administrative Agent in the
exact form received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.

      6. Amendments, etc. with respect to the Obligations; Waiver of Rights. The
Guarantors shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantors and without notice to or further
assent by the Guarantors, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by such party and any
of the Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and the Credit Agreement, and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders, as the case may be) may deem advisable from time
to time, and any collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for this Subsidiary Guaranty or any property subject thereto.
When making any demand hereunder against any Guarantor, the Administrative Agent
or any Lender may, but shall be under no obligation to, make a similar demand on
any Borrower or any other Guarantor Subsidiary or other guarantor, and any
failure by the Administrative Agent or any Lender to make any such demand or to
collect any payments from any such Borrower or other Guarantor Subsidiary or
other guarantor or any release of any such Borrower or other Guarantor
Subsidiary or other guarantor shall not relieve the Guarantors of their
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Administrative
Agent or any Lender against the Guarantors. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.

      7. Guaranty Absolute and Unconditional. The Guarantors waive any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of

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reliance by the Administrative Agent or any Lender upon this Subsidiary Guaranty
or acceptance of this Subsidiary Guaranty, the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Subsidiary Guaranty;
and all dealings between the Borrowers (or any of them) and any of the
Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Subsidiary Guaranty. The Guarantor
Subsidiaries waive diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon any Borrower or any of the other
Guarantor Subsidiaries or other guarantors with respect to the Obligations. The
Guarantors understand and agree that this Subsidiary Guaranty shall be construed
as a continuing, absolute and unconditional guaranty of payment without regard
to (a) the validity, regularity or enforceability of the Credit Agreement, or
any other Loan Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of any Borrower,
any Guarantor Subsidiary or other guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any Borrower for the
Obligations, of any Guarantor Subsidiary under its Subsidiary Guaranty, or of
any other guarantor, in bankruptcy or in any other instance. When pursuing its
rights and remedies hereunder against the Guarantors, the Administrative Agent
and any Lender may, but shall be under no obligation to, pursue such rights and
remedies as it may have against any Borrower, any other Guarantor Subsidiary,
any other guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from any such Borrower, other
Guarantor Subsidiary or other guarantor or other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of any such Borrower, other Guarantor Subsidiary or other
guarantor or other Person or any such collateral security, guarantee or right of
offset, shall not relieve the Guarantors of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent and the Lenders
against the Guarantors. This Subsidiary Guaranty shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantors and the respective successors and assigns thereof, and shall inure to
the benefit of the Administrative Agent and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Obligations and
the obligations of the Guarantors under this Subsidiary Guaranty shall have been
satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
any Borrower may be free from any Obligations.

      8. Reinstatement. This Subsidiary Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, administration, dissolution, liquidation or reorganization of any
Borrower or any Guarantor Subsidiary or other guarantor, or upon or as a result
of the appointment of a receiver, administrative receiver, administrator,
intervenor or conservator of, or trustee or similar officer for, any Borrower or
any Guarantor Subsidiary or

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other guarantor or any substantial part of the property of such Borrower,
Guarantor Subsidiary or other guarantor, or otherwise, all as though such
payments had not been made.

      9. Payments. The Guarantors hereby guarantee that payments hereunder will
be paid to the Administrative Agent without set-off or counterclaim in the
relevant currency at the administrative office specified by the Administrative
Agent.

      10. Representations and Warranties. Each Guarantor hereby represents and
warrants that each of the representations and warranties made in Article 3 of
the Credit Agreement is true and correct. Each Guarantor agrees that the
foregoing representations and warranties shall be deemed to have been made by
such Guarantor on the date of each borrowing by any Borrower under the Credit
Agreement on and as of such date of borrowing as though made hereunder on and as
of such date.

      11. Authority of Administrative Agent. The Guarantors acknowledge that the
rights and responsibilities of the Administrative Agent under this Subsidiary
Guaranty with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Subsidiary Guaranty shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Guarantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Guarantors shall
not be under any obligation, or entitlement, to make any inquiry respecting such
authority.

      12. Notices. All notices, requests and demands to or upon the
Administrative Agent, any Lender or the Guarantors to be effective shall be in
writing (or by telex, fax or similar electronic transfer confirmed in writing)
and shall be deemed to have been duly given or made when delivered by hand or if
given by mail, when deposited in the mails by certified mail, return receipt
requested, or if by telex, fax or similar electronic transfer, when sent and
receipt has been confirmed, addressed as follows:

      (b) if to the Administrative Agent or any Lender, at its address or
transmission number for notices provided in Section 10.01 of the Credit
Agreement; and

      (c) if to a Guarantor, at its address or transmission number for notices
set forth under its signature below.

      The Administrative Agent, each Lender and each Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section.

      13. Severability. Any provision of this Subsidiary Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

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      14. Integration. This Subsidiary Guaranty represents the agreement of the
Guarantors with respect to the subject matter hereof and there are no promises
or representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein.

      15. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the
terms or provisions of this Subsidiary Guaranty may be waived, amended,
supplemented or otherwise modified except by a written instrument executed in
accordance with Section 10.02 of the Credit Agreement.

      (b) Neither the Administrative Agent nor any Lender shall by any act
(except by a written instrument pursuant to Section 15(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Lender,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion.

      (c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

      16. Section Headings. The section headings used in this Subsidiary
Guaranty are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

      17. Successors and Assigns. This Subsidiary Guaranty shall be binding upon
each Guarantor's successors and assigns and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.

      18. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Subsidiary Guaranty shall be construed in accordance with and governed by the
law of the State of New York.

      (b) Each Guarantor hereby irrevocably and unconditionally submits, for
itself and its Property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Subsidiary Guaranty, or for recognition or enforcement of any judgment, and each
Guarantor hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each
Guarantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions, to the extent permitted
by law, by suit on the judgment or in any other manner provided by law. Nothing
in this Subsidiary Guaranty or any other Loan Document shall affect any right
that the Administrative Agent, or any Lender may otherwise have to bring any
action or proceeding

<PAGE>

relating to this Subsidiary Guaranty against any Guarantor or its properties in
the courts of any jurisdiction.

      (c) Each Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Subsidiary Guaranty in any court referred to
in paragraph (b) of this Section 18. Each Guarantor hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.

      (d) Each Guarantor agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to CT
Corporation System Inc. at its address at 1633 Broadway, New York, New York
10019, or to the Guarantor at the address set forth underneath its signature
hereinbelow and agrees that nothing herein shall affect the right of the
Administrative Agent or any Lender to effect service of process in any other
manner permitted by law.

      19. (a) Each Guarantor's obligations hereunder to make payments in a
specified currency (the "OBLIGATION CURRENCY") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent or a Lender of the full amount of the Obligation Currency
expressed to be payable to the Administrative Agent or such Lender under this
Subsidiary Guaranty. If, for the purpose of obtaining or enforcing judgment
against any Guarantor in any court or in any jurisdiction, it becomes necessary
to convert into or from any currency other than the Obligation Currency (such
other currency being hereinafter referred to as the "JUDGMENT CURRENCY") an
amount due in the Obligation Currency, the conversion shall be made, at the rate
of exchange (as quoted by the Administrative Agent or if the Administrative
Agent does not quote a rate of exchange on such currency, by a known dealer in
such currency designated by the Administrative Agent) determined, in each case,
as of the Business Day immediately preceding the date on which the judgment is
given (such Business Day being hereinafter referred to as the "JUDGMENT CURRENCY
CONVERSION DATE").

      (b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, each Guarantor covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.

      (c) For purposes of determining any rate of exchange or currency
equivalent for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.

      20. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY

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HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS SUBSIDIARY GUARANTY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH GUARANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE PARTIES TO THE CREDIT AGREEMENT
HAVE BEEN INDUCED TO ENTER INTO THE CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      21. Additional Guarantors. From time to time subsequent to the date
hereof, Subsidiaries of the Company may become parties hereto, as additional
Guarantors (each, an "ADDITIONAL GUARANTOR"), by executing a counterpart of this
Subsidiary Guaranty. Upon delivery of any such counterpart to the Administrative
Agent, notice of which is hereby waived by the Guarantors, each such Additional
Guarantor shall be a Guarantor and shall be as fully a party hereto as if such
Additional Guarantor were an original signatory hereof. Each Guarantor expressly
agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Guarantor hereunder. This
Subsidiary Guaranty shall be fully effective as to any Guarantor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Guarantor hereunder.

<PAGE>

      IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
be duly executed and delivered by its duly authorized officer as of the day and
year first above written.

                                         BAZOOKA, INC.

                                         /s/ Richard Shields
                                         -----------------------------------
                                         Name:  Richard Shields
                                         Title: Chief Financial Officer

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071

<PAGE>

                                         OAKLEY SALES CORP.

                                         /s/ Cosmas Lykos
                                         -----------------------------
                                         Name:  Cosmas Lykos
                                         Title: President

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071

<PAGE>

                                         OAKLEY DIRECT, INC.

                                         /s/ Cosmas Lykos
                                         -----------------------------
                                         Name:  Cosmas Lykos
                                         Title: President

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071

<PAGE>

                                         THE OPTICAL SHOP OF ASPEN

                                         /s/ Larry Sands
                                         --------------------------------
                                         Name:  Larry Sands
                                         Title: President

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071

<PAGE>

                                         OLIVER PEOPLES, INC.

                                         /s/ Robert Fiddler
                                         --------------------------------------
                                         Name:  Robert Fiddler
                                         Title: Chief Financial Officer and
                                                Chief Operating Officer

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071

<PAGE>

                                         IACON, INC.

                                         /s/ Cosmas Lykos
                                         ------------------------------
                                         Name:  Cosmas Lykos
                                         Title: Vice President

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071

<PAGE>

                                         BARTER OPTICAL, INC.

                                         /s/ William Howard
                                         ------------------------------
                                         Name:  William Howard
                                         Title: President

                                         Address for Notices:

                                         One Icon
                                         Foothill Ranch, CA 92610
                                         Phone: 949-951-0991
                                         Fax: 949-454-1071exv4w1

 

Exhibit 4.1

 

 

PECO ENERGY COMPANY

TO

WACHOVIA BANK, NATIONAL ASSOCIATION, TRUSTEE

 

ONE HUNDRED AND SECOND SUPPLEMENTAL

INDENTURE DATED AS OF

SEPTEMBER 15, 2006

TO

FIRST AND REFUNDING MORTGAGE

OF

THE COUNTIES GAS AND ELECTRIC

COMPANY

TO

FIDELITY TRUST COMPANY, TRUSTEE

DATED MAY 1, 1923

 

5.95% SERIES DUE 2036

 

 

 

 

     THIS SUPPLEMENTAL INDENTURE dated as of September 15, 2006, by and between PECO ENERGY
COMPANY, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania
(hereinafter called the Company), party of the first part, and WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association organized and existing under the laws of the United States of
America (hereinafter called the Trustee), as successor Trustee under the Mortgage hereinafter
mentioned, party of the second part, Witnesseth that

     WHEREAS, The Counties Gas and Electric Company (hereinafter called Counties Company), a
Pennsylvania corporation and a predecessor to the Company, duly executed and delivered to Fidelity
Trust Company, a Pennsylvania corporation to which the Trustee is successor, as Trustee, a certain
indenture of mortgage and deed of trust dated May 1, 1923 (hereinafter called the Mortgage), to
provide for the issue of, and to secure, its First and Refunding Mortgage Bonds, issuable in series
and without limit as to principal amount except as provided in the Mortgage, the initial series of
Bonds being designated the 6% Series of 1923, and the terms and provisions of other series of bonds
secured by the Mortgage to be determined as provided in the Mortgage; and

     WHEREAS, thereafter Counties Company, Philadelphia Suburban-Counties Gas and Electric Company
(hereinafter called Suburban Company), and the Company, respectively, have from time to time
executed and delivered indentures supplemental to the Mortgage, providing for the creation of
additional series of bonds secured by the Mortgage and for amendment of certain of the terms and
provisions of the Mortgage and of indentures supplemental thereto, or evidencing the succession of
Suburban Company to Counties Company and of the Company to Suburban Company, such indentures
supplemental to the Mortgage, the respective dates, parties thereto, and purposes thereof, being as
follows:

2

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	First

September 1, 1926

	 	Counties Company to

Fidelity-Philadelphia
Trust Company
(Successor to Fidelity
Trust Company)
	 	Bonds of 5% Series of
1926
	 
	 	 	 	 
	Second

May 1, 1927

	 	Suburban Company to

Fidelity-Philadelphia

Trust Company
	 	Evidencing succession of
Suburban Company to
Counties Company
	 
	 	 	 	 
	Third

May 1, 1927

	 	Suburban Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 4-1/2% Series
due 1957; amendment of
certain provisions of
Mortgage
	 
	 	 	 	 
	Fourth

November 1, 1927

	 	Suburban Company to

Fidelity-Philadelphia

Trust Company
	 	Additional Bonds of
4-1/2% Series due 1957
	 
	 	 	 	 
	Fifth

January 31, 1931

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Evidencing succession of
Company to
Suburban Company
	 
	 	 	 	 
	Sixth

February 1, 1931

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 4% Series
due 1971
	 
	 	 	 	 
	Seventh

March 1, 1937

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 3-1/2% Series
due 1967; amendment of
certain provisions of
Mortgage
	 
	 	 	 	 
	Eighth

December 1, 1941

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 2-3/4% Series
due 1971; amendment of
certain provisions of
Mortgage
	 
	 	 	 	 
	Ninth

November 1, 1944

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 2-3/4% Series
due 1967 and 2-3/4% Series
due 1974; amendment of
certain provisions of
Mortgage
	 
	 	 	 	 
	Tenth

December 1, 1946

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of
2-3/4% Series
due 1981; amendment of
certain provisions of
Mortgage*

3

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	Eleventh

February 1, 1948

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 2-7/8% Series
due 1978*
	 
	 	 	 	 
	Twelfth

January 1, 1952

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 3-1/4% Series
due 1982*
	 
	 	 	 	 
	Thirteenth

May 1, 1953

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 3-7/8% Series
due 1983*
	 
	 	 	 	 
	Fourteenth

December 1, 1953

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 3-1/8% Series
due 1983*
	 
	 	 	 	 
	Fifteenth

April 1, 1955

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 3-1/8% Series
due 1985*
	 
	 	 	 	 
	Sixteenth

September 1, 1957

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 4-5/8% Series
due 1987; amendment of
certain provisions of
Mortgage*
	 
	 	 	 	 
	Seventeenth

May 1, 1958

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 3-3/4% Series
due 1988; amendment of
certain provisions of
Mortgage*
	 
	 	 	 	 
	Eighteenth

December 1, 1958

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 4-3/8% Series
due 1986*
	 
	 	 	 	 
	Nineteenth

October 1, 1959

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 5% Series
due 1989*
	 
	 	 	 	 
	Twentieth

May 1, 1964

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 4-1/2% Series
due 1994*
	 
	 	 	 	 
	Twenty-first

October 15, 1966

	 	Company to

Fidelity-Philadelphia

Trust Company
	 	Bonds of 6% Series due
1968-1973*
	 
	 	 	 	 
	Twenty-second

June 1, 1967

	 	Company to The Fidelity Bank

(formerly
Fidelity-Philadelphia
Trust Company)
	 	Bonds of 5-1/4% Series due
1968-1973 and 5-3/4%
Series due 1977*
	 
	 	 	 	 
	Twenty-third

October 1, 1957

	 	Company to The Fidelity
Bank
	 	Bonds of 6-1/8% Series
due 1997*

4

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	Twenty-fourth

March 1, 1968

	 	Company to The Fidelity
Bank
	 	Bonds of 6-1/2% Series
due 1993; amendment of
Article XIV of
Mortgage*
	 
	 	 	 	 
	Twenty-fifth

September 10, 1968

	 	Company to The Fidelity
Bank
	 	Bonds of 1968 Series due
1969-1976*
	 
	 	 	 	 
	Twenty-sixth

August 15, 1969

	 	Company to The Fidelity
Bank
	 	Bonds of 8% Series due
1975*
	 
	 	 	 	 
	Twenty-seventh

February 1, 1970

	 	Company to The Fidelity
Bank
	 	Bonds of 9% Series due
1995*
	 
	 	 	 	 
	Twenty-eighth

May 1, 1970

	 	Company to The Fidelity
Bank
	 	Bonds of 8-1/2% Series
due 1976*
	 
	 	 	 	 
	Twenty-ninth

December 15, 1970

	 	Company to The Fidelity
Bank
	 	Bonds of 7-3/4% Series
due 2000*
	 
	 	 	 	 
	Thirtieth

August 1, 1971

	 	Company to The Fidelity
Bank
	 	Bonds of 8-1/4% Series
due 1996*
	 
	 	 	 	 
	Thirty-first

December 15, 1971

	 	Company to The Fidelity
Bank
	 	Bonds of 7-3/8% Series
due 2001; amendment of
Article XI of Mortgage*
	 
	 	 	 	 
	Thirty-second

June 15, 1972

	 	Company to The Fidelity
Bank
	 	Bonds of 7-1/2% Series
due 1998*
	 
	 	 	 	 
	Thirty-third

January 15, 1973

	 	Company to The Fidelity
Bank
	 	Bonds of 7-1/2% Series
due 1999*
	 
	 	 	 	 
	Thirty-fourth

January 15, 1974

	 	Company to The Fidelity
Bank
	 	Bonds of 8-1/2% Series
due 2004
	 
	 	 	 	 
	Thirty-fifth

October 15, 1974

	 	Company to The Fidelity
Bank
	 	Bonds of 11% Series
due 1980*
	 
	 	 	 	 
	Thirty-sixth

April 15, 1975

	 	Company to The Fidelity
Bank
	 	Bonds of 11-5/8% Series
due 2000*
	 
	 	 	 	 
	Thirty-seventh

August 1, 1975

	 	Company to The Fidelity
Bank
	 	Bonds of 11% Series due
2000*
	 
	 	 	 	 
	Thirty-eighth

March 1, 1976

	 	Company to The Fidelity
Bank
	 	Bonds of 9-1/8% Series
due 2006*
	 
	 	 	 	 
	Thirty-ninth

August 1, 1976

	 	Company to The Fidelity
Bank
	 	Bonds of 9-5/8% Series
due 2002*

5

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	Fortieth

February 1, 1977

	 	Company to The Fidelity
Bank
	 	Bonds of Pollution
Control Series A
and Pollution
Control Series B*
	 
	 	 	 	 
	Forty-first

March 15, 1977

	 	Company to The Fidelity
Bank
	 	Bonds of 8-5/8% Series
due 2007*
	 
	 	 	 	 
	Forty-second

July 15, 1977

	 	Company to The Fidelity
Bank
	 	Bonds of 8-5/8% Series
due 2003*
	 
	 	 	 	 
	Forty-third

March 15, 1978

	 	Company to The Fidelity
Bank
	 	Bonds of 9-1/8% Series
due 2008*
	 
	 	 	 	 
	Forty-fourth

October 15, 1979

	 	Company to The Fidelity
Bank
	 	Bonds of 12-1/2% Series
due 2005*
	 
	 	 	 	 
	Forty-fifth

October 15, 1980

	 	Company to The Fidelity
Bank
	 	Bonds of 13-3/4% Series
due 1992*
	 
	 	 	 	 
	Forty-sixth

March 1, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 15-1/4% Series
due 1996; amendment of
Article VIII of
Mortgage*
	 
	 	 	 	 
	Forty-seventh

March 1, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 15% Series due
1996; amendment of
Article VIII of
Mortgage*
	 
	 	 	 	 
	Forty-eighth

July 1, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 17-5/8% Series
due 2011*
	 
	 	 	 	 
	Forty-ninth

September 15, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 18-3/4% Series
due 2009*
	 
	 	 	 	 
	Fiftieth

April 1, 1982

	 	Company to The Fidelity
Bank
	 	Bonds of 18% Series due
2012*
	 
	 	 	 	 
	Fifty-first

October 1, 1982

	 	Company to The Fidelity
Bank
	 	Bonds of 15-3/8% Series
due 2010*
	 
	 	 	 	 
	Fifty-second

June 15, 1983

	 	Company to The Fidelity
Bank
	 	Bonds of 13-3/8% Series
due 2013*
	 
	 	 	 	 
	Fifty-third

November 15, 1984

	 	Company to Fidelity Bank,
National Association
(formerly The Fidelity Bank)
	 	Bonds of 13.05% Series
due 1994; amendment
of Article VIII of
Mortgage*

6

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	Fifty-fourth

December 1, 1984

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 14% Series due
1988-1994; amendment
of Article VIII of
Mortgage*
	 
	 	 	 	 
	Fifty-fifth

May 15, 1985

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series C*
	 
	 	 	 	 
	Fifty-sixth

October 1, 1985

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series D*
	 
	 	 	 	 
	Fifty-seventh

November 15, 1985

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10-7/8% Series
due 1995*
	 
	 	 	 	 
	Fifty-eight

November 15, 1985

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 11-3/4% Series
due 2014*
	 
	 	 	 	 
	Fifty-ninth

June 1, 1986

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series E*
	 
	 	 	 	 
	Sixtieth

November 1, 1986

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10-1/4% Series
due 2016*
	 
	 	 	 	 
	Sixty-first

November 1, 1986

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 8-3/4% Series
due 1994*
	 
	 	 	 	 
	Sixty-second

April 1, 1987

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 9-3/8% Series
due 2017*
	 
	 	 	 	 
	Sixty-third

July 15, 1987

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 11% Series due
2016*
	 
	 	 	 	 
	Sixty-fourth

July 15, 1987

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10% Series due
1997*
	 
	 	 	 	 
	Sixty-fifth

August 1, 1987

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10-1/4% Series
due 2007*
	 
	 	 	 	 
	Sixty-sixth

October 15, 1987

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 11% Series due
1997*
	 
	 	 	 	 
	Sixty-seventh

October 15, 1987

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 12-1/8% Series
due 2016*
	 
	 	 	 	 
	Sixty-eighth

April 15, 1988

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10% Series due
1998*
	 
	 	 	 	 
	Sixty-ninth

April 15, 1988

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 11% Series due
2018*

7

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	Seventieth

June 15, 1989

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10% Series due
2019*
	 
	 	 	 	 
	Seventy-first

October 1, 1989

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 9-7/8% Series
due 2019*
	 
	 	 	 	 
	Seventy-second

October 1, 1989

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 9-1/4% Series
due 1999*
	 
	 	 	 	 
	Seventy-third

October 1, 1989

	 	Company to Fidelity Bank,
National Association
	 	Medium-Term Note
Series A*
	 
	 	 	 	 
	Seventy-fourth

October 15, 1990

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10-1/2% Series
due 2020*
	 
	 	 	 	 
	Seventy-fifth

October 15, 1990

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 10% Series due
2000*
	 
	 	 	 	 
	Seventy-sixth

April 1, 1991

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series F
and Pollution
Control Series G*
	 
	 	 	 	 
	Seventy-seventh

December 1, 1991

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series H*
	 
	 	 	 	 
	Seventy-eighth

January 15, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 7-1/2% 1992
Series due 1999*
	 
	 	 	 	 
	Seventy-ninth

April 1, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 8% Series due
2002*
	 
	 	 	 	 
	Eightieth

April 1, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 8-3/4% Series
due 2022*
	 
	 	 	 	 
	Eighty-first

June 1, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series I*
	 
	 	 	 	 
	Eighty-second

June 1, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 8-5/8% Series
due 2022*
	 
	 	 	 	 
	Eighty-third

July 15, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 7-1/2% Series
due 2002*
	 
	 	 	 	 
	Eighty-fourth

September 1, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 8-1/4% Series
due 2022*
	 
	 	 	 	 
	Eighty-fifth

September 1, 1992

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 7-1/8% Series
due 2002*

8

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	Eighty-sixth

March 1, 1993

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 6-5/8% Series
due 2003*
	 
	 	 	 	 
	Eighty-Seventh

March 1, 1993

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 7-3/4% Series
due 2023*
	 
	 	 	 	 
	Eighty-eighth

March 1, 1993

	 	Company to Fidelity Bank,
National Association
	 	Bonds of Pollution
Control Series J,
Pollution Control
Series K, Pollution
Control Series L
and Pollution Control
Series M*
	 
	 	 	 	 
	Eighty-ninth

May 1, 1993

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 6-1/2% Series
due 2003*
	 
	 	 	 	 
	Ninetieth

May 1, 1993

	 	Company to Fidelity Bank,
National Association
	 	Bonds of 7-3/4% Series
2 due 2023*
	 
	 	 	 	 
	Ninety-first

August 15, 1993

	 	Company to First Fidelity Bank,
N.A., Pennsylvania (formerly
Fidelity Bank, National
Association)
	 	Bonds of 7-1/8% Series
due 2023*
	 
	 	 	 	 
	Ninety-second

August 15, 1993

	 	Company to First Fidelity Bank,
N.A., Pennsylvania
	 	Bonds of 6-3/8% Series
due 2005*
	 
	 	 	 	 
	Ninety-third

August 15, 1993

	 	Company to First Fidelity Bank,
N.A., Pennsylvania
	 	Bonds of 5-3/8% Series
due 1998*
	 
	 	 	 	 
	Ninety-fourth

November 1, 1993

	 	Company to First Fidelity Bank,
N.A., Pennsylvania
	 	Bonds of 7-1/4% Series
due 2024*
	 
	 	 	 	 
	Ninety-fifth

November 1, 1993

	 	Company to First Fidelity Bank,
N.A., Pennsylvania
	 	Bonds of 5-5/8% Series
due 2001*
	 
	 	 	 	 
	Ninety-sixth

May 1, 1995

	 	Company to First Fidelity Bank,
N.A., Pennsylvania
	 	Medium Term Note Series B*
	 
	 	 	 	 
	Ninety-seventh

October 15, 2001

	 	Company to First Union
National Bank (formerly First
Fidelity Bank, N.A.,
Pennsylvania)
	 	Bonds of 5.95% Series
due 2011*
	 
	 	 	 	 
	Ninety-eighth

October 1, 2002

	 	Company to Wachovia Bank,
National Association (formerly
First Union National Bank)
	 	Bonds of 5.95% Series
Due 2011*
	 
	 	 	 	 
	Ninety-ninth

September 15, 2002

	 	Company to Wachovia Bank,
National Association (formerly
First Union National Bank)
	 	Bonds of 4.75% Series
Due 2012*

9

 

	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date	 	Parties	 	Providing for:
	 
	 	 	 	 
	One Hundredth

April 15, 2003

	 	Company to Wachovia Bank,
National Association (formerly
First Union National Bank)
	 	Bonds of 3.50% Series
Due 2008*
	 
	 	 	 	 
	One Hundred and First

April 15, 2004

	 	Company to Wachovia Bank,
National Association (formerly
First Union National Bank)
	 	Bonds of 5.90% Series
Due 2034*

 

			
	*	 	And amendment of certain provisions of the Ninth Supplemental Indenture.

10

 

     WHEREAS, the respective principal amounts of the bonds of each series presently
outstanding under the Mortgage and the several supplemental indentures above referred to, are as
follows:

	 	 	 	 	 
	 	 	PRINCIPAL	 
	Series	 	AMOUNT	 
	3.50% Series due 2008
	 	 	450,000,000	 
	Pollution Control Series J due 2012
	 	 	50,000,000	 
	Pollution Control Series K due 2012
	 	 	50,000,000	 
	Pollution Control Series L due 2012
	 	 	50,000,000	 
	Pollution Control Series M due 2012
	 	 	4,200,000	 
	4.75%     Series due 2012 
	 	 	225,000,000	 
	5.95%     Series due 2011 
	 	 	250,000,000	 
	5.90%     Series due 2034 
	 	 	75,000,000	 
	Total
	 	$	1,154,200,000	 
	 
	 	 	 

     WHEREAS, the Company deems it advisable and has determined, pursuant to Article XI of the
Mortgage,

     (a) to convey, pledge, transfer and assign to the Trustee and to subject specifically to the
lien of the Mortgage additional property not therein or in any supplemental indenture specifically
described but now owned by the Company and acquired by it by purchase or otherwise; and

     (b) to create a new series of bonds to be issued from time to time under, and secured by, the
Mortgage, to be designated PECO Energy Company First and Refunding Mortgage Bonds, 5.95% Series due
2036, (hereinafter sometimes called the “bonds of the New Series” or the “bonds of the 5.95% Series
due 2036”); and for the above-mentioned purposes to execute, deliver and record this Supplemental
Indenture; and

     (c) to amend certain provisions of Article II of the Mortgage; and

     WHEREAS, the Company has determined by proper corporate action that the terms, provisions and
form of the bonds of the New Series shall be substantially as follows:

11

 

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

(Form of Face of Bond)

PECO ENERGY COMPANY

			
	REGISTERED
	 	REGISTERED
	NUMBER	 	 

FIRST AND REFUNDING MORTGAGE BOND,

5.95% SERIES DUE 2036,

DUE OCTOBER 1, 2036

     PECO Energy Company, a Pennsylvania corporation (hereinafter called the Company), for value
received, hereby promises to pay to                                                or registered
assigns,

     Dollars on October 1, 2036, at the office or agency of the Company, in the City of
Philadelphia, Pennsylvania, or, at the option of the holder, at the office or agency of the
Company, in the Borough of Manhattan, The City of New York, in such coin or currency of the United
States of America as at the time of payment shall constitute legal tender for the payment of public
and private debts, and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) thereon from the date hereof at the rate of 5.95 percent per annum in like coin or
currency, payable at either of the offices aforesaid on April 1 and October 1, commencing on April
1, 2007, in each year until the Company’s obligation with respect to the payment of such principal
shall have been discharged.

     The Company may fix a date, not more than fourteen calendar days prior to any interest payment
date, as a record date for determining the registered holder of this bond entitled to such interest
payment, in which case only the registered holder on such record date shall be entitled to receive
such payment, notwithstanding any transfer of this bond upon the registration books subsequent to
such record date.

     This bond shall not be valid or become obligatory for any purpose unless it shall have been
authenticated by the certificate of the Trustee under said Mortgage endorsed hereon.

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     The provisions of this bond are continued on the reverse hereof and such continued provisions
shall for all purposes have the same effect as though fully set forth at this place.

     IN WITNESS WHEREOF, PECO Energy Company has caused this instrument to be signed in its
corporate name with the manual or facsimile signature of its President or a Vice President and its
corporate seal to be impressed or a facsimile imprinted hereon, duly attested by the manual or
facsimile signature of its Secretary or an Assistant Secretary.

     Dated:

	 	 	 	 	 
	 	PECO ENERGY COMPANY	 
	 	 	 
	 	By  	
 	 
	 	 	 	 
	 	 	President or Vice President 	 
	 

(SEAL)

	 	 	 	 	 
	 	 	 
	 	Attest:  	
 	 
	 	 	 	 
	 	 	Secretary or Assistant Secretary 	 
	 

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(Form of Reverse of New Series of Bond)

PECO ENERGY COMPANY

First and Refunding Mortgage Bond,

5.95% Series Due 2036

Due October 1, 2036

(CONTINUED)

     This bond is one of a duly authorized issue of bonds of the Company, unlimited as to amount
except as provided in the Mortgage hereinafter mentioned or in any indenture supplemental thereto,
and is one of a series of said bonds known as First and Refunding Mortgage Bonds, 5.95% Series due
2036. This bond and all other bonds of said issue are issued and to be issued under and pursuant to
and are all secured equally and ratably by an indenture of mortgage and deed of trust dated May 1,
1923, duly executed and delivered by The Counties Gas and Electric Company (to which the Company is
successor) to Fidelity Trust Company, as Trustee (to which Wachovia Bank, National Association, a
national banking association organized and existing under the laws of the United States of America,
is successor Trustee), as amended, modified or supplemented by certain supplemental indentures from
the Company or its predecessors to said successor Trustee or its predecessors, said mortgage, as so
amended, modified or supplemented being herein called the Mortgage. Reference is hereby made to
the Mortgage for a statement of the property mortgaged and pledged, the nature and extent of the
security, the rights of the holders of said bonds and of the Trustee in respect of such security,
the rights, duties and immunities of the Trustee, and the terms and conditions upon which said
bonds are and are to be secured, and the circumstances under which additional bonds may be issued.

     As provided in the Mortgage, the bonds secured thereby may be for various principal sums and
are issuable in series, which series may mature at different times, may bear interest at different
rates, and may otherwise vary. The bonds of this series mature on October 1, 2036, and are issuable
only in registered form without coupons in any denomination authorized by the Company.

     Any bond or bonds of this series may be exchanged for another bond or bonds of this series in
a like aggregate principal amount in authorized denominations, upon presentation at the office of
the Trustee in the City of Philadelphia, Pennsylvania, or, at the option of the holder, at the
office or agency of the Company in the Borough of Manhattan, The City of New York, all subject to
the terms of the Mortgage but without any charge other than a sum sufficient to reimburse the
Company for any stamp tax or other governmental charge incident to the exchange.

     The bonds of this series are redeemable at the option of the Company, as a whole or in part,
at any time upon notice sent by the Company through the mail, postage prepaid, at least thirty (30)
days and not more than forty-five (45) days prior to the date fixed for redemption, to the
registered holder of each bond to be redeemed, addressed to such holder at his address appearing
upon the registration books, at a redemption price equal to the greater of (1) 100% of the
principal amount of the bonds to be redeemed, plus accrued interest to the redemption date, or (2)
as determined by the Quotation Agent, the sum of the present values of the remaining

14

 

scheduled payments of principal and interest on the bonds to be redeemed (not including any
portion of payments of interest accrued as of the redemption date) discounted to the redemption
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate plus 20 basis points, plus accrued interest to the redemption date. Unless
the Company defaults in payment of the redemption price, on and after the redemption date, interest
will cease to accrue on the bonds of this series or portions of the bonds of this series called for
redemption.

     “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per year equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for the redemption date.

     “Business Day” means any day that is not a day on which banking institutions in New York City
are authorized or required by law or regulation to close.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the bonds of this series
that would be used, at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to the remaining term of
the bonds of this series.

     “Comparable Treasury Price” means, with respect to any redemption date:

	 	•	 	the average of the Reference Treasury Dealer Quotations for that redemption date,
after excluding the highest and lowest of the Reference Treasury Dealer Quotations; or
	 
	 	•	 	if the Trustee obtains fewer than three Reference Treasury Dealer Quotations, the
average of all Reference Treasury Dealer Quotations so received.

     “Quotation Agent” means the Reference Treasury Dealer appointed by the Company.

     “Reference Treasury Dealer” means (1) each of Barclays Capital Inc. and BNP Paribas Securities
Corp. and their respective successors, unless any of them ceases to be a primary U.S. Government
securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company shall
substitute another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by
the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third business day preceding that redemption date.

     The principal of this bond may be declared or may become due on the conditions, in the manner
and with the effect provided in the Mortgage upon the happening of an event of default as in the
Mortgage provided.

15

 

     This bond is transferable by the registered holder hereof in person or by attorney, duly
authorized in writing, at the office of the Trustee in the City of Philadelphia, Pennsylvania, or,
at the option of the holder, at the office or agency of the Company in the Borough of Manhattan,
The City of New York, in books of the Company to be kept for that purpose, upon surrender and
cancellation hereof, and upon any such transfer, a new registered bond or bonds, without coupons,
of this series and for the same aggregate principal amount, will be issued to the transferee in
exchange herefor, all subject to the terms of the Mortgage but without payment of any charge other
than a sum sufficient to reimburse the Company for any stamp tax or other governmental charge
incident to the transfer. The Company, the Trustee, and any paying agent may deem and treat the
person in whose name this bond is registered as the absolute owner hereof for the purpose of
receiving payment of or on account of the principal and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent shall be affected by any
notice to the contrary.

     No recourse shall be had for the payment of the principal of or interest on this bond to any
incorporator or any past, present or future stockholder, officer or director of the Company or of
any predecessor or successor corporation, either directly or indirectly, by virtue of any statute
or by enforcement of any assessment or otherwise, and any and all liability of the said
incorporators, stockholders, officers or directors of the Company or of any predecessor or
successor corporation in respect to this bond is hereby expressly waived and released by every
holder hereof, except to the extent that such liability may not be waived or released under the
provisions of the Securities Act of 1933 or of the rules and regulations of the Securities and
Exchange Commission thereunder.

(End of Form of Reverse of Bond)

16

 

and

     WHEREAS, on the face of each of the bonds of the New Series, there is to be endorsed a
certificate of the Trustee in substantially the following form, to wit:

(Form of Trustee’s Certificate)

     This bond is one of the bonds, of the series designated therein, provided for in the
within-mentioned Mortgage and in the One Hundred and Second Supplemental Indenture dated as of
September 15, 2006.

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee

 	 
	 	By  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

and

     WHEREAS, all acts and things necessary to make the bonds of the New Series, when duly executed
by the Company and authenticated by the Trustee as provided in the Mortgage and indentures
supplemental thereto, and issued by the Company, the valid, binding and legal obligations of the
Company, and this Supplemental Indenture a valid and enforceable supplement to the Mortgage, have
been done, performed and fulfilled and the execution and delivery hereof have been in all respects
duly and lawfully authorized.

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

     That in order to secure the payment of the principal of and interest on all bonds issued and
to be issued under the Mortgage and/or under any indenture supplemental thereto, according to their
tenor and effect, and according to the terms of the Mortgage and of any indenture supplemental
thereto, and to secure the performance of the covenants and obligations in the bonds and in the
Mortgage and any indenture supplemental thereto respectively contained, and for the proper
assuring, conveying, and confirming unto the Trustee, its successors in trust and its and their
assigns forever, upon the trusts and for the purposes expressed in the Mortgage and in any
indentures supplemental thereto, all and singular the estates, property and franchises of the
Company thereby mortgaged or intended so to be, the Company, for and in consideration of the
premises and of the sum of One Dollar ($1.00) in hand paid by the Trustee to the Company upon the
execution and delivery of this Supplemental Indenture, receipt whereof is hereby acknowledged, and
of other good and valuable consideration, has granted, bargained, sold, conveyed, released,
confirmed, pledged, assigned, transferred and set over and by these presents does grant, bargain,
sell, convey, release, confirm, pledge, assign, transfer, and set over to Wachovia Bank, National
Association, as Trustee, and to its successors in trust and its and their assigns forever, all the
following described property, real, personal and mixed of the Company, viz.:

17

 

     The real property set forth in Schedule A, attached hereto and hereby made a part hereof, with
any improvements thereon erected as may be owned by the Company but not specifically described in
the Mortgage or in any indenture supplemental thereto heretofore executed, in the places set forth
in Schedule A.

     All of the real property with any improvements thereon erected as may be owned by the Company
and described in the Mortgage or in any indenture supplemental thereto as may heretofore have been
executed, delivered and recorded, but excluding therefrom all real property heretofore released
from the lien of the Mortgage. The purpose of restating such prior conveyances as security is to
confirm that the obligations of the Company as provided in this Supplemental Indenture are included
within the lien and security of the Mortgage, and that public record be made of such purpose and
fact by the recording of this Supplemental Indenture.

     Together with all gas works, electric works, plants, buildings, structures, improvements and
machinery located upon such real estate or any portion thereof, and all rights, privileges and
easements of every kind and nature appurtenant thereto, and all and singular tenements,
hereditaments and appurtenances belonging to the real estate or any part thereof hereinbefore
described or referred to or intended so to be, or in any way appertaining thereto, and the
reversions, remainders, rents, issues and profits thereof; also all the estate, right, title,
interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the
Company, of, in and to the same and any and every part thereof, with the appurtenances.

     Also all the Company’s electric transmission and distribution lines and systems, substations,
transforming stations, structures, machinery, apparatus, appliances, devices and appurtenances.

     Also all the Company’s gas transmission and distribution mains, pipes, pipe lines and systems,
storage facilities, structures, machinery, apparatus, appliances, devices and appurtenances.

     Also all plants, systems, works, improvements, buildings, structures, fixtures, appliances,
engines, furnaces, boilers, machinery, retorts, tanks, condensers, pumps, gas tanks, holders,
reservoirs, expansion tanks, gas mains and pipes, tunnels, service pipe, pipe lines, fittings,
gates, valves, connections, gas and electric meters, generators, dynamos, fans, supplies, tools and
implements, tracks, sidings, motor and other vehicles, all electric light lines, electric power
lines, transmission lines, distribution lines, conduits, cables, stations, substations, and
distributing systems, motors, conductors, converters, switchboards, shafting, belting, wires,
mains, feeders, poles, towers, mast arms, brackets, pipes, lamps, insulators, house wiring
connections and all instruments, appliances, apparatus, fixtures, fittings and equipment and all
stores, repair parts, materials and supplies of every nature and kind whatsoever now or hereafter
owned by the Company in connection with or appurtenant to its plants and systems for production,
purchase, storage, transmission, distribution, utilization and sale of gas and its by-products and
residual products, and/or for the generation, production, purchase, storage, transmission,
distribution, utilization and sale of electricity, or in connection with such business.

     Also all the goodwill of the business of the Company, and all rights, claims, contracts,
leases, patents, patent rights, and agreements, all accounts receivable, accounts, claims, demands,

18

 

choses in action, books of account, cash assets, franchises, ordinances, rights, powers,
easements, water rights, riparian rights, licenses, privileges, immunities, concessions and
consents now or hereafter owned by the Company in connection with or appurtenant to its said
business.

     Also all the right, title and interest of the Company in and to all contracts for the
purchase, sale or supply of gas, and its by-products and residual products of electricity and
electrical energy, now or hereafter entered into by the Company with the right on the part of the
Trustee, upon the happening of an event of default as defined in the Mortgage as supplemented by
any supplemental indenture, to require a specific assignment of any and all such contracts,
whenever it shall request the Company to make the same.

     Also all rents, tolls, earnings, profits, revenues, dividends and income arising or to arise
from any property now owned, leased, operated or controlled or hereafter acquired, leased, operated
or controlled by the Company and subject to the lien of the Mortgage and indentures supplemental
thereto.

     Also all the estate, right, title and interest of the Company, as lessee, in and to any and
all demised premises under any and all agreements of lease now or at any time hereafter in force,
insofar as the same may now or hereafter be assignable by the Company.

     Also all other property, real, personal and mixed not hereinbefore specified or referred to,
of every kind and nature whatsoever, now owned, or which may hereafter be owned by the Company
(except shares of stock, bonds or other securities not now or hereafter specifically pledged under
the Mortgage and indentures supplemental thereto or required to be pledged thereunder by the
provisions of the Mortgage or any indenture supplemental thereto), together with all and singular
the tenements, hereditaments and appurtenances thereunto belonging or in any way appertaining and
the reversions, remainder or remainders, rents, issues and profits thereof; and also all the
estate, right, title, interest, property, claim and demand whatsoever as well in law as in equity
of the Company of, in and to the same and every part and parcel thereof.

     It is the intention and it is hereby agreed that all property and the earnings and income
thereof acquired by the Company after the date hereof shall be as fully embraced within the
provisions hereof and subject to the lien hereby created for securing the payment of all bonds,
together with the interest thereon, as if the property were now owned by the Company and were
specifically described herein and conveyed hereby, provided nevertheless, that no shares of stock,
bonds or other securities now or hereafter owned by the Company, shall be subject to the lien of
the Mortgage and indentures supplemental thereto unless now or hereafter specifically pledged or
required to be pledged thereunder by the provisions of the Mortgage or any indenture supplemental
thereto.

     TO HAVE AND TO HOLD, all and singular the property, rights, privileges and franchises hereby
conveyed, transferred or pledged or intended so to be, including after-acquired property, together
with all and singular the reversions, remainders, rents, revenues, income, issues and profits,
privileges and appurtenances, now or hereafter belonging or in any way appertaining thereto, unto
the Trustee and its successors in the trust hereby created, and its and their assigns forever;

19

 

     IN TRUST NEVERTHELESS, for the equal and pro rata benefit and security of each and every
person or corporation who may be or become the holders of bonds secured by the Mortgage and
indentures supplemental thereto, without preference, priority or distinction (except as provided in
Section 1 of Article VIII of the Mortgage) as to lien or otherwise of any bond of any series over
or from any other bond, so that (except as aforesaid) each and every of the bonds issued or to be
issued, of whatsoever series, shall have the same right, lien, privilege under the Mortgage and
indentures supplemental thereto and shall be equally secured thereby and hereby, with the same
effect as if the bonds had all been made, issued and negotiated simultaneously on the date of the
Mortgage.

     AND THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH:

     It is hereby covenanted that all bonds secured by the Mortgage and indentures supplemental
thereto with the coupons appertaining thereto, are issued to and accepted by each and every holder
thereof, and that the property aforesaid and all other property subject to the lien of the Mortgage
and indentures supplemental thereto is held by or hereby conveyed to the Trustee, under and subject
to the trusts, conditions and limitations set forth in the Mortgage and indentures supplemental
thereto and upon and subject to the further trusts, conditions and limitations hereinafter set
forth, as follows, to wit:

ARTICLE I.

AMENDMENTS OF MORTGAGE

     Section 1. Article II of the Ninth Supplemental Indenture to the Mortgage, as heretofore
amended, is hereby further amended as follows:

     By adding to paragraph (d) of Section 5 and to the first clause of Section 9, the following:

     5.95% Series due 2036

     Section 2. Effective when no bonds of the 3.50% Series due 2008, Pollution Control Series J
due 2012, Pollution Control Series K due 2012, Pollution Control Series L due 2012, Pollution
Control Series M due 2012, 4.75% Series due 2012, 5.95% Series due 2011 and 5.90% Series due 2034
shall remain outstanding, unless, with respect to any such series of bonds, the holders of 66.67%
of the principal amount of the bonds of such series have previously consented thereto, Article II
of the Ninth Supplemental Indenture to the Mortgage, as heretofore amended, shall be further
amended as follows:

     All references to a requirement of a certificate of an independent accountant, engineer or
appraiser shall be amended to only refer to an accountant, engineer or appraiser, unless the
principal amount of the bonds then applied for, in the aggregate with any bonds issued by the
Company since the beginning of the then current calendar year (other than those with respect to
which a certificate or opinion of an accountant is not required, or with respect to which a
certificate or opinion of an independent public accountant has previously been furnished), is ten
percentum (10%) or more of the principal amount of the bonds secured by the Mortgage then
outstanding, or as may otherwise be required by the Trust Indenture Act of 1939, as amended.

20

 

ARTICLE II.

BONDS OF THE NEW SERIES

     Section 1. The bonds of the New Series shall be designated as hereinabove specified for such
designation in the recital immediately preceding the form of bonds of the New Series, subject
however, to the provisions of Section 2 of Article I of the Mortgage, as amended, and are issuable
only as registered bonds without coupons, substantially in the form hereinbefore recited; and the
issue thereof shall be limited to $300,000,000 principal amount.

     The bonds of the New Series shall bear interest from the date thereof and shall be dated as of
the interest payment date to which interest was paid next preceding the date of issue unless (a)
such date of issue is an interest payment date to which interest was paid, in which event such
bonds shall be dated as of such interest payment date, or (b) issued prior to the occurrence of the
first interest payment date on which interest is to be paid, in which event such bonds shall be
dated September 25, 2006. The bonds of the New Series shall mature on October 1, 2036.

     The bonds of the New Series shall bear interest (computed on the basis of a 360-day year of
twelve 30-day months) at the rate provided in the form of bond hereinbefore recited, payable on
April 1 and October 1 in each year commencing on April 1, 2007, until the Company’s obligation with
respect to the payment of principal thereof shall have been discharged. Both principal and
interest on bonds of the New Series shall be payable at the office or agency of the Company in the
City of Philadelphia, Pennsylvania, or, at the option of the holder, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, and shall be payable in such coin or
currency of the United States of America as at the time of payment shall constitute legal tender
for the payment of public and private debts.

     The bonds of the New Series shall be in any denomination authorized by the Company.

     Any bond or bonds of the New Series shall be exchangeable for another bond or bonds of the New
Series in a like aggregate principal amount. Any such exchange may be made upon presentation at
the office of the Trustee in the City of Philadelphia, Pennsylvania, or, at the option of the
holder, at the office or agency of the Company in the Borough of Manhattan, The City of New York,
without any charge other than a sum sufficient to reimburse the Company for any stamp tax or other
governmental charge incident to the exchange.

     Section 2. (a) Initially, the bonds of the New Series shall be issued pursuant to a book-entry
system administered by The Depository Trust Company (or its successor, referred to herein as the
“Depository”) as a global security with no physical distribution of bond certificates to be made
except as provided in this Section 2. Any provisions of the Mortgage or the bonds of the New
Series requiring physical delivery of bonds shall, with respect to any bonds of the New Series held
under the book-entry system, be deemed to be satisfied by a notation on the bond registration books
maintained by the Trustee that such bonds are subject to the book-entry system.

21

 

          (b) So long as the book-entry system is being used, one or more bonds of the New Series in the
aggregate principal amount of the bonds of the New Series and registered in the name of the
Depository’s nominee (the “Nominee”) will be issued and required to be deposited with the
Depository and held in its custody. The book-entry system will be maintained by the Depository and
its participants and indirect participants and will evidence beneficial ownership of the bonds of
the New Series, with transfers of ownership effected on the records of the Depository, the
participants and the indirect participants pursuant to rules and procedures established by the
Depository, the participants and the indirect participants. The principal of and any premium on
each bond of the New Series shall be payable to the Nominee or any other person appearing on the
registration books as the registered holder of such bond or its registered assigns or legal
representative at the office of the office or agency of the Company in the City of Philadelphia,
Pennsylvania or the Borough of Manhattan, The City of New York. So long as the book-entry system
is in effect, the Depository will be recognized as the holder of the bonds of the New Series for
all purposes. Transfers of principal, interest and any premium payments or notices to participants
and indirect participants will be the responsibility of the Depository, and transfers of principal,
interest and any premium payments or notices to beneficial owners will be the responsibility of
participants and indirect participants. No other party will be responsible or liable for such
transfers of payments or notices or for maintaining, supervising or reviewing such records
maintained by the Depository, the participants or the indirect participants. While the Nominee or
the Depository, as the case may be, is the registered owner of the bonds of the New Series,
notwithstanding any other provisions set forth herein, payments of principal of, redemption
premium, if any, and interest on the bonds of the New Series shall be made to the Nominee or the
Depository, as the case may be, by wire transfer in immediately available funds to the account of
such holder. Without notice to or consent of the beneficial owners, the Trustee with the consent
of the Company and the Depository may agree in writing to make payments of principal, redemption
price and interest in a manner different from that set forth herein. In such event, the Trustee
shall make payment with respect to the bonds of the New Series in such manner as if set forth
herein.

          (c) The Company may at any time elect (i) to provide for the replacement of any Depository as
the depository for the bonds of the New Series with another qualified depository, or (ii) to
discontinue the maintenance of the bonds of the New Series under book-entry system. In such event,
the Trustee shall give 30 days prior notice of such election to the Depository (or such fewer
number of days acceptable to such Depository).

          (d) Upon the discontinuance of the maintenance of the bonds of the New Series under a
book-entry system, the Company will cause the bonds to be issued directly to the beneficial owners
of the bonds of the New Series, or their designees, as further described below. In such event, the
Trustee shall make provisions to notify participants and beneficial owners of the bonds of the New
Series, by mailing an appropriate notice to the Depository, that bonds of the New Series will be
directly issued to beneficial owners of the bonds as of a date set forth in such notice (or such
fewer number of days acceptable to such Depository).

          (e) In the event that bonds of the New Series are to be issued to beneficial owners of the
bonds, or their designees, the Company shall promptly have bonds of the New Series prepared in
certificated form registered in the names of the beneficial owners of such bonds shown on the
records of the participants provided to the Trustee, as of the date set forth in the

22

 

notice above. Bonds issued to beneficial owners, or their designees shall be substantially in
the form set forth in this Supplemental Indenture, but will not include the provision related to
global securities.

          (f) If the Depository is replaced as the depository for the bonds of the New Series with
another qualified depository, the Company will issue a replacement global security substantially in
the form set forth in this Supplemental Indenture.

          (g) The Company and the Trustee shall have no liability for the failure of any Depository to
perform its obligations to any participant, any indirect participant or any beneficial owner of any
bonds of the New Series, and the Company and the Trustee shall not be liable for the failure of any
participant, indirect participant or other nominee of any beneficial owner or any bonds of the New
Series to perform any obligation that such participant, indirect participant or other nominee may
incur to any beneficial owner of the bonds of the New Series.

          (h) Notwithstanding any other provision of the Mortgage, on or prior to the date of issuance
of the bonds of the New Series the Trustee shall have executed and delivered to the initial
Depository a Letter of Representations governing various matters relating to the Depository and its
activities pertaining to the bonds of the New Series. The terms and provisions of such Letter of
Representations are incorporated herein by reference and, in the event there shall exist any
inconsistency between the substantive provisions of the said Letter of Representations and any
provisions of the Mortgage, then, for as long as the initial Depository shall serve as depository
with respect to the bonds of the New Series, the terms of the Letter of Representations shall
govern.

          (i) The Company and the Trustee may rely conclusively upon (i) a certificate of the Depository
as to the identity of a participant in the book-entry system; (ii) a certificate of any participant
as to the identity of any indirect participant and (iii) a certificate of any participant or any
indirect participant as to the identity of, and the respective principal amount of bonds of the New
Series owned by, beneficial owners.

     Section 3. So long as the bonds of the New Series are held by The Depository Trust Company,
such bonds of the New Series shall bear the following legend:

     UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     Section 4. So long as any of the bonds of the New Series remain outstanding, the Company shall
keep at its office or agency in the Borough of Manhattan, The City of New York,

23

 

as well as at the office of the Trustee in the City of Philadelphia, Pennsylvania, books for
the registry and transfer of outstanding bonds of the New Series, in accordance with the terms and
provisions of the bonds of the New Series and the provisions of Section 8 of Article I of said
Mortgage.

     Section 5. So long as any bonds of the New Series remain outstanding, the Company shall
maintain an office or agency in the City of Philadelphia, Pennsylvania, and an office or agency in
the Borough of Manhattan, The City of New York, for the payment upon proper demand of the principal
of, the interest on, or the redemption price of the outstanding bonds of the New Series, and will
from time to time give notice to the Trustee of the location of such office or agency. In case the
Company shall fail to maintain for such purpose an office or agency in the City of Philadelphia or
shall fail to give such notice of the location thereof, then notices, presentations and demands in
respect of the bonds of the New Series may be given or made to or upon the Trustee at its office in
the City of Philadelphia and the principal of, the interest on, and the redemption price of said
bonds in such event be payable at said office of the Trustee. All bonds of the New Series when
paid shall forthwith be cancelled.

     Section 6. The Company may fix a date, not more than fourteen calendar days prior to any
interest payment date, as a record date for determining the registered holder of each bond of the
New Series entitled to such interest payment, in which case only the registered holder of such bond
on such record date shall be entitled to receive such payment, notwithstanding any transfer of such
bond upon the registration books subsequent to such record date.

     Section 7. The bonds of the New Series shall be issued under and subject to all of the terms
and provisions of the Mortgage, of the indentures supplemental thereto referred to in the recitals
hereof and of this Supplemental Indenture which may be applicable to such bonds or applicable to
all bonds issued under the Mortgage and indentures supplemental thereto.

ARTICLE III.

ISSUE AND AUTHENTICATION OF

BONDS OF THE NEW SERIES

     In addition to any bonds of any series which may from time to time be executed by the Company
and authenticated and delivered by the Trustee upon compliance with the provisions of the Mortgage
and/or of any indenture supplemental thereto, bonds of the New Series of an aggregate principal
amount not exceeding $300,000,000 shall forthwith be executed by the Company and delivered to the
Trustee, and the Trustee shall thereupon, whether or not this Supplemental Indenture shall have
been recorded, authenticate and deliver said bonds to or upon the written order of the President, a
Vice President, or the Treasurer of the Company, under the terms and provisions of paragraph (c) of
Section 3 of Article II of the Mortgage, as amended.

24

 

ARTICLE IV.

REDEMPTION OF BONDS OF THE

NEW SERIES

     Section 1. The bonds of the New Series shall be redeemable, at the option of the Company, as a
whole or in part, at any time upon notice sent by the Company through the mail, postage prepaid, at
least thirty (30) days and not more than forty-five (45) days prior to the date fixed for
redemption, to the registered holder of each bond to be redeemed in whole or in part, addressed to
such holder at his address appearing upon the registration books, at a redemption price equal to
the greater of (1) 100% of the principal amount of the bonds to be redeemed, plus accrued interest
to the redemption date, or (2) as determined by the Quotation Agent, the sum of the present values
of the remaining scheduled payments of principal and interest on the bonds to be redeemed (not
including any portion of payments of interest accrued as of the redemption date) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate plus 20 basis points, plus accrued interest to the redemption date.
Unless the Company defaults in payment of the redemption price, on and after the redemption date,
interest will cease to accrue on the bonds of this series or portions of the bonds of this series
called for redemption.

     “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per year equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for the redemption date.

     “Business Day” means any day that is not a day on which banking institutions in New York City
are authorized or required by law or regulation to close.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the bonds of this series
that would be used, at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to the remaining term of
the bonds of the New Series.

     “Comparable Treasury Price” means, with respect to any redemption date:

	 	•	 	the average of the Reference Treasury Dealer Quotations for that redemption date,
after excluding the highest and lowest of the Reference Treasury Dealer Quotations; or
	 
	 	•	 	if the Trustee obtains fewer than three Reference Treasury Dealer Quotations, the
average of all Reference Treasury Dealer Quotations so received.

     “Reference Treasury Dealer” means (1) each of Barclays Capital Inc. and BNP Paribas Securities
Corp. and their respective successors, unless any of them ceases to be a primary U.S. Government
securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company shall
substitute another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by
the Company.

25

 

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by that Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third business day preceding that redemption date.

     Section 2. In case the Company shall desire to exercise such right to redeem and pay off all
or any part of such bonds of the New Series as hereinbefore provided it shall comply with all the
terms and provisions of Article III of the Mortgage, as amended, applicable thereto, and such
redemption shall be made under and subject to the terms and provisions of Article III and in the
manner and with the effect therein provided, but at the time or times and upon mailing of notice,
all as hereinbefore set forth in Section 1 of this Article. No publication of notice of any
redemption of any bonds of the New Series shall be required.

ARTICLE V.

CERTAIN EVENTS OF DEFAULT; REMEDIES

     Section 1. So long as any bonds of the New Series remain outstanding, in case one or more of
the following events shall happen, such events shall, in addition to the events of default
heretofore enumerated in paragraphs (a) throughout (d) of Section 2 of Article VIII of the
Mortgage, constitute an “event of default” under the Mortgage, as fully as if such events were
enumerated therein:

     (e) default shall be made in the due and punctual payment of the principal (including
the full amount of any applicable optional redemption price) of any bond or bonds of the
5.95% Series due 2036 whether at the maturity of said bonds, or at a date fixed for
redemption of said bonds, or any of them, or by declaration as authorized by the Mortgage;

     Section 2. So long as any bonds of the New Series remain outstanding, Section 10 of Article
VIII of the Mortgage, as heretofore amended, is hereby further amended by inserting in the first
paragraph of such Section 10, immediately after the words “as herein provided,” at the end of
clause (2) thereof, the following:

     “or (3) in case default shall be made in any payment of any interest on any bond or bonds
secured by this indenture or in the payment of the principal (including any applicable optional
redemption price) of any bond or bonds secured by this indenture, where such default is not of the
character referred to in clause (1) or (2) of this Section 10 but constitutes an event of default
within the meaning of Section 2 of this Article VIII.”

26

 

ARTICLE VI.

CONCERNING THE TRUSTEE

     The Trustee hereby accepts the trust herein declared and provided and agrees to perform the
same upon the terms and conditions set forth in the Mortgage, as amended and supplemented, and upon
the following terms and conditions:

     The Trustee shall not be responsible in any manner whatsoever for or in respect of the
validity of this Supplemental Indenture or the due execution hereof by the Company or for or in
respect of the recitals contained herein, all of which recitals are made by the Company solely.

ARTICLE VII.

MISCELLANEOUS

     Section 1. Unless otherwise clearly required by the context, the term “Trustee,” or any other
equivalent term used in this Supplemental Indenture, shall be held and construed to mean the
trustee under the Mortgage for the time being whether the original or a successor trustee.

     Section 2. The headings of the Articles of this Supplemental Indenture are inserted for
convenience of reference only and are not to be taken to be any part of this Supplemental Indenture
or to control or affect the meaning of the same.

     Section 3. Nothing expressed or mentioned in or to be implied from this Supplemental
Indenture or in or from the bonds of the New Series is intended, or shall be construed, to give any
person or corporation, other than the parties hereto and their respective successors, and the
holders of bonds secured by the Mortgage and the indentures supplemental thereto, any legal or
equitable right, remedy or claim under or in respect of such bonds or the Mortgage or any indenture
supplemental thereto, or any covenant, condition or provision therein or in this Supplemental
Indenture contained. All the covenants, conditions and provisions thereof and hereof are for the
sole and exclusive benefit of the parties hereto and their successors and of the holders of bonds
secured by the Mortgage and indentures supplemental thereto.

     Section 4. This Supplemental Indenture may be executed in several counterparts, each of which
shall be an original and all collectively but one instrument.

     Section 5. This Supplemental Indenture is dated and shall be effective as of September 15,
2006, but was actually executed and delivered on September 18, 2006.

[Remainder of this page intentionally left blank]

27

 

     IN WITNESS WHEREOF, the parties of the first and second parts hereto have caused their
corporate seals to be hereunto affixed and the President or a Vice President of the party of the
first part and the President or a Vice President of the party of the second part, under and by the
authority vested in them, have hereto affixed their signatures and their Secretaries or Assistant
Secretaries have duly attested the execution hereof the 18th day of September, 2006.

	 	 	 	 	 
	 	 	PECO ENERGY COMPANY
	 
	 	 	 	 
	 

	 	By
	 	/s/ Michael R. Metzner
	 

	 	 	 	 
	 

	 	 	 	Michael R. Metzner
	 

	 	 	 	Vice President and Treasurer
	 
	 	 	 	 
	 

	 	[SEAL]	 	 
	 
	 	 	 	 
	 

	 	Attest
	 	/s/ Bruce G. Wilson
	 

	 	 	 	 
	 

	 	 	 	Bruce G. Wilson
	 

	 	 	 	Assistant Secretary
	 
	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as
	 

	 	Trustee	 	 
	 
	 	 	 	 
	 

	 	By
	 	/s/ George Rayzis
	 

	 	 	 	 
	 

	 	 	 	George Rayzis
	 

	 	 	 	Vice President
	 
	 	 	 	 
	 

	 	[SEAL]	 	 
	 
	 	 	 	 
	 

	 	Attest
	 	/s/ Ralph E. Jones
	 

	 	 	 	 
	 

	 	 	 	Ralph E. Jones
	 

	 	 	 	Assistant Secretary

28

 

STATE OF ILLINOIS

ss.

COUNTY OF COOK

     BE IT REMEMBERED, that on the 18th day of September, 2006, before me, a Notary Public in and
for said County and State, residing in Chicago, personally came Bruce G. Wilson, who being duly
sworn according to law deposes and says that he was personally present and did see the common or
corporate seal of the above named PECO Energy Company affixed to the foregoing Supplemental
Indenture, that the seal so affixed is the common or corporate seal of the said PECO Energy
Company, and was so affixed by the authority of the said corporation as the act and deed thereof;
that the above named Michael R. Metzner is a Vice President of the said corporation, and did sign
the said Supplemental Indenture as such in the presence of this deponent that this deponent is
Assistant Secretary of the said corporation; and the name of the deponent, above signed in
attestation of the due execution of the said Supplemental Indenture, is in this deponent’s own
proper handwriting.

     Sworn to and subscribed before me the day and year aforesaid.

 

Notarial Seal

/s/ Mary L. Kwilos Notary Public,

City of Chicago, Cook County

My Commission Expires October 26, 2009

[SEAL]

29

 

COMMONWEALTH OF PENNSYLVANIA

ss.

COUNTY OF PHILADELPHIA

     BE IT REMEMBERED, that on the 18th day of September, 2006, before me, the subscriber, a Notary
Public in and for said County and Commonwealth, residing in Philadelphia, personally came Ralph E.
Jones, who being duly sworn according to law deposes and says that he was personally present and
did see the common or corporate seal of the above named Wachovia Bank, National Association,
affixed to the foregoing Supplemental Indenture, that the seal so affixed is the common or
corporate seal of the said Wachovia Bank, National Association, and was so affixed by the authority
of the said corporation as the act and deed thereof, that the above named George Rayzis
is a Vice President of the said corporation, and did sign the said Supplemental Indenture as
such in the presence of this deponent; that this deponent is an Assistant Secretary of the said
corporation; and that the name of this deponent, above signed in attestation of the due execution
of the said Supplemental Indenture, is in this deponent’s own proper handwriting.

     Sworn to and subscribed before me the day and year aforesaid.

     I hereby certify that I am not an officer of director of said Wachovia Bank, National
Association.

 

Notarial Seal

/s/ Aida B. Dales-Payano, Notary Public

City of Philadelphia, Philadelphia County

My Commission Expires November 21, 2006

[SEAL]

30

 

CERTIFICATE OF RESIDENCE

     Wachovia Bank, National Association, Mortgagee and Trustee within named, hereby certifies that
its precise residence in the City of Philadelphia is N.E. Cor. Broad and Walnut Streets in the City
of Philadelphia, Pennsylvania.

	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL
	 	 	ASSOCIATION, Trustee
	 
	 	 	 	 
	 

	 	By
	 	/s/ George Rayzis
	 

	 	 	 	 
	 

	 	 	 	George Rayzis
	 

	 	 	 	Vice President

31

 

SCHEDULE A

COMMONWEALTH OF PENNSYLVANIA

 

PE 10,581

ALL THAT CERTAIN lot or tract of land SITUATE in the Township of Montgomery, County of Montgomery.
Commonwealth of Pennsylvania bounded and described according to a Boundary Survey Plan of Lot No.
5, Montgomeryville Industrial Center, made for Nappen & Associates, dated April 9, 2001 and last
revised February 24, 2005, by Charles E. Shoemaker, Inc., Engineers and Surveyors of Abington,
Pennsylvania as follows:

BEGINNING at a point of curvature on the Northwesterly right-of-way line of Domorah Drive (50 feet
wide), said point being at a distance of eleven and eight one-hundredths feet (11.08’) measured on
the arc of a circle curving to the left with a radius of five hundred twenty-five and no
one-hundredths feet (525.00’) from a point of compound curvature. said point being the beginning of
a 60 feet radius marking the right-of-way at the terminus of the cul-de-sac of Domorah Drive;
thence extending from said place of beginning and along the Northwesterly right-of-way line of
Domorah Drive on the arc of a circle curving to the left with a radius of five hundred twenty-five
and no one-hundredths feet (525.00’), the arc distance of three hundred eighty and thirty-nine
one-hundredths feet (308.39’) to a point, a corner of lands now or formerly of Francis J. and
Frieda Ambrose; thence along said lands, South forty-two degrees forty-eight minutes fifteen
seconds West four hundred seventy-six and fifty-four one-hundredths feet (476.54’) to a point on
line of lands now or formerly of PECO Energy Company; thence along said lands North fifty-one
degrees fifty-one minutes zero seconds West three hundred twenty-seven and fifty-nine
one-hundredths feet (327.59’) to a point, a corner of lands now or formerly of Montgomery Township;
thence along said lands North thirty-six degrees fifty-eight minutes twenty-seven seconds East four
hundred sixty-one and seventy-seven one-hundredths feet (461.77’) to a point on line of other lands
now or formerly of PECO Energy Company; thence along said lands, North seventy-four degrees fifty
minutes fifty-seven seconds East one hundred fifty-five and forty-one one-hundredths feet (155.41’)
to the first mentioned point and place of beginning.

BEING Lot No. 5, Montgomeryville Industrial Center.

CONTAINING 182,810 square feet or 4.1967 acres, more or less.

BEING Assessment Parcel Number 46-00-00796-62-5.

BEING the same premises which 110 Domorah Drive Limited Partnership, a Pennsylvania limited
partnership, by Deed dated August 11, 2005 and recorded in the Montgomery County Recorder of Deeds
Office, in Deed Book 5579, at page 369, granted and conveyed to PECO Energy Company, a Pennsylvania
corporation, in fee.

A-1

 

PE 10,598

ALL THAT CERTAIN lot or piece of ground with the buildings and improvements thereon erected situate
in the Borough of North Wales, County of Montgomery, State of Pennsylvania and more particularly
bounded and described according to a Survey thereof made by Herbert H. Metz, Engineer and Surveyor
of Lansdale, Pa. in May, 1940, as follows to wit:

BEGINNING at an iron pin set for a corner making the intersection of the middle line of Beaver
Street, as laid out Thirty-three feet wide with the East side line of the North Pennsylvania
Railroad Company’s land, being also the line dividing the borough of North Wales from the Township
of Upper Gwynedd; thence extending along said side line of said North Pennsylvania Railroad
Company’s land, being also the borough line as aforesaid, North Four degrees Sixteen minutes West
Five Hundred Twelve and Seven-tenths feet to a point a corner of the Keller Pottery; thence
extending along said land of the Keller Pottery, South Forty-four degrees Forty-eight minutes East
Two Hundred Forty and Thirty-five One-hundredths feet to an iron pin, a corner of land of Harlow
Kratz, thence extending along said land of Harlow Kratz, the two following courses and distances
South Forty-five degrees Twenty-five minutes West Eighty feet to a point, a corner and South
Forty-four degrees Forty-eight minutes East One Hundred Fifty and Five-tenths feet to an iron pin a
corner in the middle line of Beaver Street aforesaid; thence extending along the middle line of
said Beaver Street South Forty-five degrees Twenty-five minutes West Two Hundred Fifty-three and
Twenty-six One-hundredths feet to the place of beginning.

BEING known as 510 Beaver Street, North Wales, PA 19454.

BEING Assessment Parcel Number 14-00-00092-002.

BEING the same premises which Edward David Walker, by Deed dated August 8, 2006 and recorded in the
Montgomery County Recorder of Deeds Office, granted and conveyed to PECO Energy Company, a
Pennsylvania corporation, in fee.

A-2

 

	 	 	 	 	 
	Prepared by:

	 	/s/ Ronald Zack	 	 
	 

	 	 	 	 
	 

	 	Ronald Zack
	 	 
	 

	 	Assistant General Counsel	 	 
	 

	 	PECO Energy Company	 	 
	 

	 	2301 Market Street	 	 
	 

	 	Philadelphia, PA 19103	 	 
	 

	 	(215) 841-4419	 	 
	 
	 	 	 	 
	Return to
	 	 	 	 
	 

	 	 	 	 
	 

	 	Ronald Zack	 	 
	 

	 	Assistant General Counsel	 	 
	 

	 	PECO Energy Company	 	 
	 

	 	2301 Market Street	 	 
	 

	 	Philadelphia, PA 19103	 	 
	 

	 	(215) 841-4419	 	 

Counterpart ___of 30

PECO ENERGY COMPANY

TO

WACHOVIA BANK, NATIONAL ASSOCIATION, TRUSTEE

 

ONE HUNDRED AND SECOND SUPPLEMENTAL

INDENTURE DATED AS OF

SEPTEMBER 15, 2006

TO

FIRST AND REFUNDING MORTGAGE

OF

THE COUNTIES GAS AND ELECTRIC

COMPANY

TO

FIDELITY TRUST COMPANY, TRUSTEE

DATED MAY 1, 1923

 

5.95% SERIES DUE 2036

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