Document:

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                             Form of Transition Bond

REGISTERED                                                          $[         ]
No. ______

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                             CUSIP NO.__________

                  THE PRINCIPAL OF THIS CLASS [ ] TRANSITION BOND WILL BE PAID
IN INSTALMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS CLASS [ ] TRANSITION BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                          PECO ENERGY TRANSITION TRUST

                   TRANSITION BONDS, SERIES [___], Class [ ].

                   Bond        Original Principal         Expected Final
                   Rate             Amount                 Payment Date
                   ----             ------                 ------------
                   [  ]%         $[        ]                [  ], [  ]

                  PECO Energy Transition Trust, a statutory business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to the
Registered Holder hereof, or registered assigns, the Original Principal Amount
shown above in semi-annual instalments on the Payment Dates and in the amounts
specified on the reverse hereof or, if less, the amounts determined pursuant to
Section 8.02(e) of the Indenture, in each year, commencing on the date
determined as provided on the reverse hereof and ending on or before the Class
[ ] Termination Date, to pay the entire unpaid principal hereof on the Class [ ]
Termination Date and to pay interest, at the Bond Rate shown above, on each
March 1 and September 1 or if any such day is not a Business Day, the next
succeeding Business Day, commencing on [___] and continuing until the earlier of
the payment of the principal hereof and the Class [ ] Termination Date (each a
"Payment Date"), on the principal amount of this Class [ ] Transition Bond
outstanding from time to time. Interest on this Class [ ] Transition Bond will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid to but excluding such Payment Date or, if no interest has yet been
paid, from [___]. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest on this Class [   ]
Transition Bond shall be paid in the manner specified on the reverse hereof.

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                  The principal of and interest on this Class [ ] Transition
Bond are payable in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Class [ ] Transition Bond shall
be applied first to interest due and payable on this Class [ ] Transition Bond
as provided above and then to the unpaid principal of and premium, if any, on
this Class [ ] Transition Bond, all in the manner set forth in Section 8.02(e)
of the Indenture.

                  Reference is made to the further provisions of this Class [ ]
Transition Bond set forth on the reverse hereof, which shall have the same
effect as though fully set forth on the face of this Class [ ] Transition Bond.

                  Unless the certificate of authentication hereon has been
executed by the Bond Trustee whose name appears below by manual signature, this
Class [ ] Transition Bond shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof, or be valid or obligatory for any
purpose.

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                                                                               3

                  IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by an Authorized Officer of the Issuer
Trustee.

Date:

                                       PECO ENERGY TRANSITION TRUST,

                                            by First Union Trust Company,
                                               National Association, not in
                                               its individual capacity but
                                               solely as Issuer Trustee,

                                              by________________________________
                                                Name:
                                                Title:

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                                                                               4

                  BOND TRUSTEE'S CERTIFICATE OF AUTHENTICATION

Dated:  [___]

                  This is one of the Class [ ] Transition Bonds of the Series
[___] Transition Bonds, designated above and referred to in the within-mentioned
Indenture.

                                            THE BANK OF NEW YORK, not in its
                                            individual capacity but solely as
                                            Bond Trustee on behalf of the
                                            Transition Bondholders,

                                              by________________________________
                                                Authorized Signatory

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                                                                               5

                          [REVERSE OF TRANSITION BOND]

                  This Series [___], Class [ ] Transition Bond is one of a duly
authorized issue of Transition Bonds of the Issuer, designated as its Transition
Bonds (herein called the "Transition Bonds"), issued and to be issued in one or
more Series, which Series are issuable in one or more Classes, and this Series
[___] Transition Bond, in which this Class [ ] Transition Bond represents an
interest, consists of four Classes, including the Class [ ] Transition Bonds
(herein called the "Class [ ] Transition Bonds"), all issued and to be issued
under an indenture dated as of March 1, 1999, and a series supplement thereto
dated as of [___] (such series supplement, as supplemented or amended, the
"Supplement" and, collectively with such indenture, as supplemented or amended,
the "Indenture"), each between the Issuer and The Bank of New York, as Bond
Trustee (the "Bond Trustee", which term includes any successor bond trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the Collateral property pledged, the
nature and extent of the security, the respective rights, obligations and
immunities thereunder of the Issuer, the Bond Trustee and the Holders of the
Transition Bonds and the terms and conditions under which additional Transition
Bonds may be issued. All terms used in this Class [ ] Transition Bond that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in the Indenture.

                  The Class [ ] Transition Bonds, the other Classes of Series
[___] Transition Bonds and any other Series of Transition Bonds issued by the
Issuer are and will be equally and ratably secured by the Collateral pledged as
security therefor as provided in the Indenture.

                  The principal of this Class [ ] Transition Bond shall be
payable on each Payment Date only to the extent that amounts in the Collection
Account are available therefor, and only until the outstanding principal balance
thereof on such Payment Date (after giving effect to all payments of principal,
if any, made on such Payment Date) has been reduced to the principal balance
specified in the Expected Amortization Schedule which is attached to the
Supplement as Schedule A, unless payable earlier either because (i) an Event of
Default shall have occurred and be continuing and the Bond Trustee or the
Holders of Transition Bonds representing not less than a majority of the
Outstanding Amount of the Transition Bonds of all Series have declared the

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Transition Bonds to be immediately due and payable in accordance with Section
5.02 of the Indenture, (ii) the Issuer, at its option, shall have called for the
redemption of the Series [___] Transition Bonds in whole or from time to time in
part pursuant to Section 10.01 of the Indenture, (iii) the Issuer shall have
called for the redemption of the Series [___] Transition Bonds pursuant to
Section 10.02 of the Indenture if the Seller is required to pay Liquidated
Damages pursuant to Section 5.01(d) of the Sale Agreement or (iv) the Issuer, at
its option, shall have called for the redemption of the Series [___] Transition
Bonds in whole pursuant to Section 6(b) of the Supplement. However, actual
principal payments may be made in lesser than expected amounts and at later than
expected times as determined pursuant to Section 8.02(e) of the Indenture. The
entire unpaid principal amount of this Class [ ] Transition Bond shall be due
and payable on the earlier of the Class [ ] Termination Date hereof and the
Redemption Date, if any, herefor. Notwithstanding the foregoing, the entire
unpaid principal amount of the Transition Bonds shall be due and payable, if not
then previously paid, on the date on which an Event of Default shall have
occurred and be continuing and the Bond Trustee or the Holders of the Transition
Bonds representing not less than a majority of the Outstanding Amount of the
Transition Bonds have declared the Transition Bonds to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class [ ] Transition Bonds shall be made pro rata to the Class [
] Transition Bondholders entitled thereto based on the respective principal
amounts of the Class [ ] Transition Bonds held by them.

                  Payments of interest on this Class [ ] Transition Bond due and
payable on each Payment Date, together with the instalment of principal or
premium, if any, due on this Class [ ] Transition Bond on such Payment Date
shall be made by check mailed first-class, postage prepaid, to the Person whose
name appears as the Registered Holder of this Class [ ] Transition Bond (or one
or more Predecessor Transition Bonds) in the Transition Bond Register as of the
close of business on the Record Date or in such other manner as may be provided
in the Supplement, except that with respect to Class [ ] Transition Bonds
registered on the Record Date in the name of a Clearing Agency, payments will be
made by wire transfer in immediately available funds to the account designated
by such Clearing Agency and except for the final instalment of principal and
premium, if any, payable with respect to this Class [ ] Transition Bond on a
Payment Date which shall be payable as provided below. Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it

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appears in the Transition Bond Register as of the applicable Record Date without
requiring that this Class [ ] Transition Bond be submitted for notation of
payment. Any reduction in the principal amount of this Class [ ] Transition Bond
(or any one or more Predecessor Transition Bonds) effected by any payments made
on any Payment Date shall be binding upon all future Holders of this Class [ ]
Transition Bond and of any Class [ ] Transition Bond issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Class [ ] Transition Bond on a Payment Date, then the Bond Trustee, in the
name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the second preceding Record Date to such Payment
Date by notice mailed no later than five days prior to such final Payment Date
and shall specify that such final instalment will be payable to the Registered
Holder hereof as of the Record Date immediately preceding such final Payment
Date and only upon presentation and surrender of this Class [ ] Transition Bond
and shall specify the place where this Class [ ] Transition Bond may be
presented and surrendered for payment of such instalment.

                  The Issuer shall pay interest on overdue instalments of
interest on this Class [ ] Transition Bond at the Class [ ] Bond Rate to the
extent lawful.

                  As provided in the Indenture, the Class [ ] Transition Bonds
may be redeemed, in whole or from time to time in part, at the option of the
Issuer on any Redemption Date at the Redemption Price. In addition, as provided
in the Indenture, if the Seller is required to pay Liquidated Damages pursuant
to Section 5.01(d) of the Sale Agreement, the Issuer will be required to redeem
all outstanding Series of Transition Bonds, including the Class [ ] Transition
Bonds, on the Liquidated Damages Redemption Date.

                  As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Class [ ] Transition Bond
may be registered in the Transition Bond Register upon surrender of this Class [
] Transition Bond for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Bond
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an Eligible Guarantor Institution,

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and thereupon one or more new Class [ ] Transition Bonds of any Authorized
Initial Denominations and in the same aggregate initial principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Class [ ]
Transition Bond, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange.

                  Each Class [ ] Transition Bondholder, by acceptance of a Class
[ ] Transition Bond, covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer or the
Bond Trustee on the Class [ ] Transition Bonds or under the Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) any owner of a beneficial interest in the Issuer or (ii) any
partner, owner, beneficiary, agent, officer, director or employee of the Bond
Trustee, any holder of a beneficial interest in the Issuer or the Bond Trustee
or of any successor or assign of the Bond Trustee, except as any such Person may
have expressly agreed (it being understood that all of the Bond Trustee's
obligations are in its individual capacity).

                  Prior to the due presentment for registration of transfer of
this Class [ ] Transition Bond, the Issuer, the Bond Trustee and any agent of
the Issuer or the Bond Trustee may treat the Person in whose name this Class [ ]
Transition Bond is registered (as of the day of determination) as the owner
hereof for the purpose of receiving payments of principal of and premium, if
any, and interest on this Class [ ] Transition Bond and for all other purposes
whatsoever, whether or not this Class [ ] Transition Bond be overdue, and
neither the Issuer, the Bond Trustee nor any such agent shall be affected by
notice to the contrary.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Transition Bonds
under the Indenture at any time by the Issuer with the consent of the Holders of
Transition Bonds representing a majority of the Outstanding Amount of all
Transition Bonds at the time Outstanding of each Series or Class to be affected.
The Indenture also contains provisions permitting the Holders of Transition
Bonds representing specified percentages of the Outstanding Amount of the

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Transition Bonds of all Series, on behalf of the Holders of all the Transition
Bonds, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class [ ] Transition Bond (or
any one of more Predecessor Transition Bonds) shall be conclusive and binding
upon such Holder and upon all future Holders of this Class [ ] Transition Bond
and of any Class [ ] Transition Bond issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Class [ ] Transition Bond. The Indenture
also permits the Bond Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of the Transition Bonds
issued thereunder.

                  The term "Issuer" as used in this Class [ ] Transition Bond
includes any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Bond
Trustee and the Holders of Transition Bonds under the Indenture.

                  The Class [ ] Transition Bonds are issuable only in registered
form in Authorized Initial Denominations as provided in the Indenture and the
Supplement, subject to certain limitations therein set forth.

                  This Class [ ] Transition Bond, the Indenture and the
Supplement shall be construed in accordance with the laws of the Commonwealth of
Pennsylvania, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.

                  No reference herein to the Indenture and no provision of this
Class [ ] Transition Bond or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Class [ ] Transition Bond at the times, place,
and rate, and in the coin or currency herein prescribed.

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                                                                              10

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
                          (name and address of assignee)

the within Class [ ] Transition Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints _______________________________________,
attorney, to transfer said Class [ ] Transition Bond on the books kept for
registration thereof, with full power of substitution in the premises.

Dated: ____________________                 ___________________________________*
                                            Signature Guaranteed:

                                            ____________________________________

______________
   * NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Class [ ] Transition
Bond in every particular, without alteration, enlargement or any change
whatsoever.<PAGE>

                                    AMENDMENT dated as of[ ] to the INTANGIBLE
                           TRANSITION PROPERTY SALE AGREEMENT dated as of March
                           25, 1999, as amended and restated as of May 2, 2000
                           (the "Existing Agreement"), between PECO ENERGY
                           TRANSITION TRUST, a Delaware business trust (the
                           "Issuer"), and PECO ENERGY COMPANY, a Pennsylvania
                           corporation, and its successors in interest to the
                           extent permitted under the Existing Agreement, as
                           Seller (the "Seller").

                  WHEREAS the Issuer and the Seller desire to amend the Existing
Agreement in connection with the issuance by the Issuer of the Series [ ]
Transition Bonds.

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:

                  SECTION 1. Definitions. Capitalized terms used but not defined
in this Amendment shall have the meanings assigned to them in the Existing
Agreement.

                  SECTION 2. Amendment of Existing Agreement. The first two
sentences of Article III of the Existing Agreement are hereby amended to read in
their entirety as follows:

         "As of the Initial Transfer Date, as of any Subsequent Transfer Date
         and as of any other date on which the Issuer issues any Series of
         Transition Bonds, as applicable, the Seller makes the following
         representations and warranties on which the Issuer has relied and will
         rely in acquiring Transferred Intangible Transition Property and
         issuing any Series of Transition Bonds. The representations and
         warranties shall survive the sale of Transferred Intangible Transition
         Property to the Issuer and the pledge thereof to the Bond Trustee
         pursuant to the Indenture and the issuance by the Issuer of any Series
         of Transition Bonds."

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                                                                               2

                  SECTION 3. Agreement. Except as specifically amended hereby,
the Existing Agreement shall continue in full force and effect in accordance
with the provisions thereof as in existence on the date hereof. On and after the
date hereof, any reference to the Existing Agreement shall mean the Existing
Agreement as amended hereby.

                  SECTION 4. Separate Counterparts. This Amendment may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.

                  SECTION 5. Governing Law. This Amendment shall be construed in
accordance with the laws of the Commonwealth of Pennsylvania, without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.

                  SECTION 6. Limitation of Liability of Issuer Trustee.
Notwithstanding anything contained herein to the contrary, this Amendment has
been countersigned by First Union Trust Company, National Association, not in
its individual capacity but solely in its capacity as Issuer Trustee of the
Issuer and in no event shall First Union Trust Company, National Association, in
its individual capacity have any liability for warranties, covenants, agreements
or other obligations of the Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all purposes of this
Amendment, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the Issuer hereunder, the Issuer
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII, VIII and IX of the Trust Agreement.

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                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective officers as of the day and
year first above written.

                                      PECO ENERGY TRANSITION TRUST,

                                      By  First Union Trust Company, National
                                          Association, not in its individual
                                          capacity but solely as Issuer Trustee
                                          on behalf of the Trust,

                                      By:
                                         ---------------------------------------
                                         Title:

                                      PECO ENERGY COMPANY, Seller

                                      By:
                                         ---------------------------------------
                                         Title:

Acknowledged and Accepted:

THE BANK OF NEW YORK, not in its
individual capacity but solely as
Bond Trustee on behalf of the
Transition Bondholders,

By
  ----------------------------------
  Title:

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