Document:

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                          PECO ENERGY TRANSITION TRUST

                           SECOND AMENDED AND RESTATED
                                 TRUST AGREEMENT

                                as of May 2, 2000

                                      AMONG

          GEORGE SHICORA and THOMAS R. MILLER, as BENEFICIARY TRUSTEES,

       FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, as ISSUER TRUSTEE,
                    DELAWARE TRUSTEE AND INDEPENDENT TRUSTEE

                                       and

                              PECO ENERGY COMPANY,
                              as GRANTOR and OWNER

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                                TABLE OF CONTENTS

                                                                                      Page
                                                                                      ----
                                    ARTICLE I
                                   DEFINITIONS
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1.01.  Capitalized Terms................................................................1

                                   ARTICLE II
                                  ORGANIZATION

2.01.  Name.............................................................................5
2.02.  Office...........................................................................5
2.03.  Purposes and Powers..............................................................5
2.04.  Appointment of the Trustees; Initial Trust Property..............................6
2.05.  Declaration of Trust.............................................................6
2.06.  Other Expenses, Liabilities of Trust.............................................7
2.07.  Situs of Trust...................................................................7
2.08.  Additional Capital Contributions.................................................7
2.09.  Assignment of Right to Distributions or Payments; Transfers......................7

                                   ARTICLE III
                            COMPLIANCE WITH THE CODE

3.01.  Trust to be Treated as a Division For Tax Purposes...............................8

                                   ARTICLE IV
                           SEPARATE EXISTENCE OF TRUST

4.01.  Maintenance of Separate Existence................................................8
4.02.  Merger and Other Transactions...................................................12
4.03.  Transactions with Affiliates....................................................13
4.04.  Insolvency......................................................................13
4.05.  Rating Confirmation.............................................................13
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                                    ARTICLE V
                    INVESTMENT AND APPLICATION OF TRUST FUNDS

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5.01.  Investment of Trust Funds.......................................................13
5.02.  Application of Funds............................................................14

                                   ARTICLE VI
                      AUTHORITY AND DUTIES OF THE TRUSTEES

6.01.  General Authority...............................................................14
6.02.  Specific Authority; Special Authority of Beneficiary Trustees...................14
6.03.  Accounting and Reports to the Grantor, any Owner,
           the Internal Revenue Service and Others.....................................15
6.04.  Signature of Returns............................................................16
6.05.  Right to Receive Instructions...................................................16
6.06.  No Duties Except as Specified in this Agreement or in Instructions..............16
6.07.  No Action Except Under Specified Documents or Instructions......................17
6.08.  No Action Contrary to Agreement, Trust Related Agreements or Applicable Law.....17

                                   ARTICLE VII
                             CONCERNING THE TRUSTEES

7.01.  Acceptance of Trusts and Duties.................................................17
7.02.  Furnishing of Documents.........................................................18
7.03.  Reliance; Advice of Counsel.....................................................18
7.04.  Not Acting in Individual Capacity...............................................18

                                  ARTICLE VIII
                            COMPENSATION OF TRUSTEES

8.01.  Issuer Trustee's Fees and Expenses..............................................19
8.02.  Beneficiary Trustees' Fees and Expenses.........................................19
8.03.  Fees of Separate Independent Trustee and Delaware Trustee.......................19

                                   ARTICLE IX
                           INDEMNIFICATION OF TRUSTEES

9.01.  Scope of Indemnification........................................................19
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                                    ARTICLE X
                              TERMINATION OF TRUST

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10.01.  Dissolution of Trust...........................................................20
10.02.  No Termination by Grantor or Owner.............................................20
10.03.  Cancellation of Certificate of Trust...........................................20

                                   ARTICLE XI
                   SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES

11.01.  Resignation of Trustee; Appointment of Successor...............................20

                                   ARTICLE XII
                                  MISCELLANEOUS

12.01.  Supplements and Amendments.....................................................21
12.02.  No Legal Title to Trust Property in Grantor and Owner..........................22
12.03.  Limitations on Rights of Others................................................22
12.04.  Notices........................................................................22
12.05.  Severability...................................................................23
12.06.  Separate Counterparts..........................................................23
12.07.  Successors and Assigns.........................................................23
12.08.  Headings.......................................................................23
12.09.  Governing Law..................................................................24
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Exhibit 1 Issuer Trustee Fee Schedule
Exhibit 2 Certificate of Trust

                                      iii

<PAGE>

     SECOND AMENDED AND RESTATED TRUST AGREEMENT dated as of May 2, 2000 among
PECO Energy Company, a Pennsylvania corporation, as Grantor and Owner, First
Union Trust Company, National Association, a national banking corporation, as
Issuer Trustee, Delaware Trustee and Independent Trustee, and George Shicora, an
individual, and Thomas R. Miller, an individual, as Beneficiary Trustees.

     A Certificate of Trust of the Trust was filed with the Secretary of State
of the State of Delaware on June 23, 1998.

     The Grantor, the Beneficiary Trustees and the Issuer Trustee are parties to
that certain Amended and Restated Trust Agreement dated as of February 19, 1999
(the "Prior Trust Agreement") and now desire to amend and restate the Prior
Trust Agreement as set forth below.

     NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree to amend and restate the Prior Trust Agreement in its entirety as follows.

                                    ARTICLE I

                                   DEFINITIONS

     1.01. Capitalized Terms. For all purposes of this Agreement, the following
terms shall have the meanings set forth below:

     "Agreement" means this Second Amended and Restated Trust Agreement, as it
may be amended from time to time.

     "Affiliate" shall mean, with reference to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person; provided, that, for purposes of this Agreement when used with respect to
the Grantor's or any Owner's direct or indirect subsidiaries, any limited
partners thereof shall also be deemed "Affiliates." For the purposes of this
definition, "control," when used with reference to any specified Person, shall
mean the power to direct the management and policies of such specified Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

     "Affiliated Entity" means the Grantor, any Owner, any of their respective
direct or indirect subsidiaries or any Affiliate of any of the foregoing other
than the Trust.

     "Beneficiary Trustee" means any Trustee other than the Issuer Trustee, the
Independent Trustee or the Delaware Trustee.

     "Bond Trustee" means The Bank of New York, as Bond Trustee under the
Indenture, and its successors.

<PAGE>

     "Business Day" means any day other than a Saturday, Sunday, or a day on
which banking institutions in the City of Philadelphia, the City of New York,
the City of Charlotte or the State of Delaware are required by law or executive
order to remain closed.

     "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. ss.3801, et seq., and any successor statute, as amended from time to
time.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Competition Act" means the Pennsylvania Electricity Generation Customer
Choice and Competition Act, Chapter 28 of Title 66 of the Pennsylvania
Consolidated Statutes, 66 Pa.C.S. ss. 2801, et seq.

     "Delaware Trustee" means a Trustee who is a natural person and who is a
resident of the State of Delaware, or, in all other cases, a trustee which has
its principal place of business in the State of Delaware.

     "Eligible Investments" shall be the investments so designated from time to
time by any Beneficiary Trustee.

     "Fiscal Year" means the calendar year from each January 1 to the following
December 31.

     "GAAP" means generally accepted accounting principles in effect from time
to time.

     "Grantor" means PECO Energy Company.

     "Indenture" means the Indenture, dated as of March 1, 1999, between the
Trust and the Bond Trustee as the same may be amended, supplemented or otherwise
modified from time to time.

     "Independent Trustee" means a Trustee that is not and has not been for at
least three years from the date of his or her or its appointment (i) a direct or
indirect legal or beneficial owner of the Trust or PECO Energy or any of their
respective Affiliates, (ii) a relative, supplier, employee, officer, director,
manager, contractor or material creditor of the Trust or PECO Energy or any of
their respective Affiliates or (iii) a Person who controls PECO Energy or its
Affiliates.

     "Insolvency Event" means the Significant Events described in (a)(i) and
(a)(ii) of that definition.

     "Issuer Trustee" means First Union Trust Company, National Association or
any other Issuer Trustee designated by the Grantor or any Owner from time to
time.

     "Liability" means any claim, damage, judgment, amount paid in settlement,
fine, penalty, punitive damages, or cost or expense of any nature (including,
without limitation, attorneys' fees and disbursements).

                                        2

<PAGE>

     "Moody's" means Moody's Investor Service.

     "Owner" means the Grantor and its successors and permitted assigns as a
beneficial owner (within the meaning of the Business Trust Act) of the Trust.
All references in this Agreement to "any Owner" means each of the Grantor's
successors and permitted assigns as a beneficial owner of the Trust, and not the
Grantor itself.

     "PECO Energy" means PECO Energy Company, a Pennsylvania corporation, its
successors and permitted assigns.

     "Periodic Filings" means any filings or submissions that the Trust is
required to make with any state or federal regulatory agency or under the Code.

     "Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity of
similar nature.

     "Proceeding" means any threatened, pending or completed action, suit,
appeal or other proceeding of any nature, whether civil, criminal,
administrative or investigative, whether formal or informal, and whether brought
by or in the right of the Trust, the Grantor, any Owner or otherwise.

     "Series" has the meaning assigned to that term in the Indenture.

     "Significant Event" means (a) with respect to the Trust, that the Trust (i)
shall fail to or admit in writing its inability to pay its debts generally as
they become due, or shall commence a voluntary case or other Proceeding under
any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for the Trust or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall take any trust, corporate or partnership
action authorizing the taking of any of the foregoing actions or (ii) a case or
other Proceeding shall be commenced without the application or consent of the
Trust, in any court, seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or compensation or readjustment of debts of the Trust,
the appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator, or the like for the Trust or any substantial part of its assets,
or any similar action with respect to the Trust under any law (foreign or
domestic) relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts and such case or Proceeding shall continue
undismissed or unstayed and in effect for a period of 90 days; or any of the
actions sought in such petition or Proceeding, including the entering of an
order for relief in respect of the Trust or the appointment of any trustee,
receiver, custodian, liquidator, assignee, sequestrator or the like for the
Trust or any substantial portion of the Trust's property shall be granted or
otherwise occur (each of (i) and (ii) an "Insolvency Event");

           (b) The Trust shall become subject to the registration requirements
of the Investment Company Act; or

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<PAGE>

           (c) Any Event of Default as set forth in the Indenture shall have
occurred.

     "Supplemental Indenture" means any Supplemental Indenture with respect to a
Series of Transition Bonds as defined in such Supplemental Indenture or that
amends the Indenture.

     "Transition Bonds" means the transition bonds issued from time to time by
the Trust pursuant to the Indenture and any Supplemental Indenture.

     "Transfer" means the sale, transfer or other assignment of all of the
Grantor's right, title and interest in all or a portion of its beneficial
interest in the Trust.

     "Trust" means the Delaware statutory business trust continued under this
Agreement.

     "Trustees" means the trustees of the Trust, which, as provided herein,
shall mean the Beneficiary Trustees, the Independent Trustee, the Delaware
Trustee and the Issuer Trustee collectively, not in their respective individual
capacities but solely as trustees under this Agreement, and any successor
trustees hereunder whether designated as Issuer Trustee, Independent Trustee,
Delaware Trustee or a Beneficiary Trustee.

     "Trust Property" means all right, title and interest in and to any property
contributed to the Trust by the Grantor or any Owner or otherwise acquired by
the Trust, including, without limitation, all distributions or payments thereon
or proceeds thereof.

     "Trust Related Agreements" means any instrument or agreement executed in
connection with or relating to the Trust or the Transition Bonds, including, but
not limited to, the Amended and Restated Master Servicing Agreement between the
Trust and PECO Energy, as Servicer thereunder (the "Master Servicing
Agreement"), the Amended and Restated Intangible Transition Property Sale
Agreement between the Trust and PECO Energy, as Seller thereunder (the "Sale
Agreement"), the Indenture and any supplemental indentures, any bill of sale and
a Custody Agreement for a short-term money management account between the Trust
and The Bank of New York, as custodian, as each may be supplemented or amended
from time to time.

     Each of the terms used herein and not defined herein shall have the
meanings given to such terms in the Trust Related Agreements, even after the
termination of such agreements.

                                   ARTICLE II

                                  ORGANIZATION

     2.01. Name. The Trust continued hereby shall be known as "PECO Energy
Transition Trust," in which name the Trustees shall conduct the business of the
Trust, make and execute contracts, and sue and be sued.

                                        4

<PAGE>

     2.02. Office. The initial office of the Trust shall be in care of the
Issuer Trustee, One Rodney Square, 920 King Street, 1st Floor, Wilmington,
Delaware 19801 (telephone number 302-888-7532) or at such other address as the
Trustees may designate by notice to the Grantor, any Owner and the Bond Trustee,
provided that any other office will comply with the provisions of 4.01(c) and
(e).

     2.03. Purposes and Powers; Intent. (a) The Trust has been created for the
purpose of purchasing and owning Intangible Transition Property, issuing
Transition Bonds from time to time, pledging its interest in Intangible
Transition Property and other Collateral to the Bond Trustee under the Indenture
in order to secure the Transition Bonds and performing activities that are
necessary, suitable or convenient to accomplish these purposes, including, but
not limited to, entering into any hedge or swap arrangement with respect to the
Transition Bonds.

           (b) The Grantor has determined that each of (i) the creation and
ownership of the Trust by the Grantor and (ii) the limited purposes of the Trust
is in the best interests of the Grantor and its creditors and represents a
prudent and advisable course of action that does not impair the rights and
interests of the Grantor's creditors. The Grantor has determined that the
transactions contemplated by this Agreement and the Trust Related Agreements are
in the best interests of the Grantor and its creditors and represent a prudent
and advisable course of action that does not impair the rights and interests of
the Grantor's creditors. Such determinations are memorialized in the corporate
records of the Grantor. The Grantor did not create the Trust with the intent to
hinder, delay, or defraud the Grantor's creditors, and any transfer to the Trust
will not render the Grantor insolvent or incapable of conducting its business in
the manner and to the extent presently conducted.

           (c) The Trust shall not have the power to (i) incur any debt other
than the Transition Bonds and certain costs and expenses associated therewith
(including day-to-day expenses incurred by the Trust) and debt in connection
with any credit enhancement required for any Series of Transition Bonds or (ii)
engage in any business or activity other than the business and activities
enumerated in Section 2.03 (other than in accordance with Section 6.02(a)).

           (d) The Trust's existence is not dependent on its being a subsidiary
of the Grantor or being affiliated with any Affiliated Entity, and the Trust's
business operations could be maintained even if it were not a subsidiary of the
Grantor or affiliated with any other Affiliated Entity. The Grantor will not
transfer additional Intangible Transition Property to the Trust for the purpose
of mitigating losses on the Intangible Transition Property that has previously
been transferred to the Trust.

           (e) The Trust has determined that the transactions contemplated by
the Trust Related Agreements are in the best interests of the Trust and its
creditors and represent a prudent and advisable course of action that does not
impair the rights and interests of the Trust's creditors.

     2.04. Appointment of the Trustees; Initial Trust Property. (a) The Trust
shall have no fewer than one and no more than three trustees (if the Delaware
Trustee, Issuer Trustee and Independent Trustee are the same entity) or five
trustees (if the Delaware Trustee, Issuer Trustee and Independent Trustee are
different entities) appointed from time to time by the Grantor or, in the event
of a Transfer, by the Owner or Owners. The Grantor or, in the event of a
Transfer, the Owners may at any time increase the number of Trustees, subject to
the provisions of Sections 2.04(b), 3.01, 4.01 and 4.03. The

                                        5

<PAGE>

Grantor has appointed First Union Trust Company, National Association as Issuer
Trustee, Delaware Trustee and Independent Trustee, and George Shicora and Thomas
R. Miller as Beneficiary Trustees of the Trust, which Trustees shall have all
the rights, powers and duties set forth herein.

           (b) The Trust shall at all times have an Issuer Trustee which shall
be a Person meeting the qualifications of Section 11.01(c) of this Agreement. In
addition, the Trust shall at all times have at least one Trustee which qualifies
as a Delaware Trustee and at least one Trustee which qualifies as an Independent
Trustee. The Issuer Trustee, the Delaware Trustee and the Independent Trustee
may, and will initially, be the same entity.

           (c) The Trustees acknowledge receipt in trust from the Grantor, as of
June 23, 1998, of the sum of $5,000, constituting the initial Trust Property.

     2.05. Declaration of Trust. The Trustees hereby declare that they will hold
the Trust Property in trust upon and subject to the conditions set forth herein
for the use and benefit of the Grantor or, in the event of a Transfer, any
Owner, subject to the obligations of the Trust under the Trust Related
Agreements. It is the intention of the parties hereto that the Trust constitutes
a business trust under the Business Trust Act and that this Agreement
constitutes the governing instrument of the Trust. On June 23, 1998, the
Trustees filed a Certificate of Trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act in substantially the
form attached hereto as Exhibit 2.

     2.06. Other Expenses, Liabilities of Trust. None of the Grantor, the
Trustees or any Owner shall be liable for any liabilities or obligations of the
Trust, including but not limited to, the indemnification obligations under
Article IX.

     2.07. Situs of Trust. The Trust will be located and administered in the
State of Delaware. All bank accounts maintained by the Trustees on behalf of the
Trust shall be located in the State of Delaware. The Trust shall not have any
employees in any state other than in the State of Delaware; provided, however,
that nothing shall restrict or prohibit the Issuer Trustee from having employees
within or without the State of Delaware. Payments will be received by the Trust
only in the State of Delaware and payments will be made by the Trust only from
the State of Delaware.

     2.08. Additional Capital Contributions. The assets of the Trust are
expected to generate a return sufficient to satisfy all obligations of the Trust
under this Agreement and the Trust Related Agreements and any other obligations
of the Trust. It is expected that no capital contributions to the Trust will be
necessary after the purchase of the initial Intangible Transitional Property,
except for capital contributions in connection with the issuance of additional
Series of Transition Bonds. In accordance with the private letter ruling
received by the Grantor from the Internal Revenue Service dated December 19,
1997 (the "Private Letter Ruling"), on or prior to the date of issuance of each
Series of Transition Bonds, the Grantor or, in the event of a Transfer, any
Owner, shall make an additional contribution to the Trust in an amount equal to
at least 0.50% of the initial principal amount of such Series or such greater
amount as agreed to by the Grantor in connection with the issuance by the Trust
of any Series of Transition Bonds. No capital contribution by the Grantor or any
Owner, as the case may be, to the Trust has been or will be made for the purpose
of mitigating losses on Transition Property that has previously been transferred
to the Trust, and all capital contributions shall be made in accordance with all
applicable corporate business trust procedures and

                                        6

<PAGE>

requirements, including proper record keeping by the Grantor and the Trust. Each
capital contribution will be acknowledged by a written receipt signed by any of
the Trustees. The Trustees acknowledge and agree that, notwithstanding anything
in this Agreement to the contrary, such additional contribution will be managed
by an investment manager selected by the Grantor or, in the event of a Transfer,
the Owner or Owners who shall invest such amounts only in Eligible Investments
(as defined in the Indenture), and all income earned thereon shall be allocated
or paid by the Bond Trustee in accordance with the provisions of the Indenture.

     2.09. Assignment of Right to Distributions or Payments; Transfers. The
Grantor and any Owner may assign all or any part of their respective rights to
receive distributions or payments hereunder, but such assignment shall effect no
change in the ownership of the Trust. No Transfer of a beneficial interest in
the Trust shall be made by the Grantor, except to an Affiliate or in connection
with the sale or disposition of all or substantially all of the Grantor's
electric generating business, whether by operation of law or otherwise, and only
if prior notice of such assignment is provided to Moody's.

                                   ARTICLE III

                            COMPLIANCE WITH THE CODE

     3.01. Trust to be Treated as a Division For Tax Purposes. The Trust shall
comply with the applicable provisions of the Code and the applicable Treasury
regulations thereunder in the manner necessary to effect the intention of the
parties that the Trust be treated as a division of PECO Energy for federal
income tax purposes pursuant to Treasury regulation ss. 301.7701-1 et seq. and
that the Trust be accorded such treatment until its termination pursuant to
Section 10.01 hereof and shall take, or refrain from taking, any action required
by the Code or Treasury regulations thereunder in order to maintain such status
of the Trust. In addition, the Trust may not claim any credit on, or make any
deduction from the principal and interest payable in respect of, the Transition
Bonds (other than amounts properly withheld under the Code), or assert any claim
against any present or former Transition Bondholder because of the payment of
taxes levied or assessed upon the Trust.

                                   ARTICLE IV

                           SEPARATE EXISTENCE OF TRUST

     4.01. Maintenance of Separate Existence. The Trust shall take all steps
necessary to continue the identity of the Trust as a separate legal entity and
to make it apparent to third Persons that the Trust is an entity with assets and
liabilities distinct from those of the Grantor, any Owner, the Trustees,
Affiliates of the Grantor or any Owner or any other Person, and that, except for
financial reporting purposes (to the extent required by generally accepted
accounting principles) and for state and federal income and franchise tax
purposes, it is not a division of any of the Affiliated Entities or any other
Person. In that regard, and without limiting the foregoing in any manner, the
Trust shall:

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<PAGE>

           (a) be managed by the Trustees who shall independently manage the
daily operations and business affairs of the Trust in accordance with the terms
of this Agreement and, except as otherwise provided herein, neither the Trustees
nor the Trust shall be controlled in making such decisions by the Grantor, any
Owner, any Affiliated Entity or any other Person;

           (b) maintain at least one Independent Trustee, one Issuer Trustee and
one Delaware Trustee (who may be the same Person);

           (c) if the office of the Trust is not in the care of the Issuer
Trustee, as provided by 2.02, maintain office space separate and clearly
delineated from the office space of any Affiliated Entity, owned by the Trust or
evidenced by a written lease or sublease (even if located in an office owned or
leased by, or shared with, an Affiliated Entity);

           (d) maintain the assets of the Trust in such a manner that it is not
costly or difficult to segregate, identify or ascertain its individual assets
from those of any other Person, including any Affiliated Entity;

           (e) if the office of the Trust is not in the care of the Issuer
Trustee, as provided by 2.02, maintain a separate telephone number which will be
answered only in its own name;

           (f) conduct all intercompany transactions with Affiliated Entities on
an arm's-length basis and in accordance with Section 4.03;

           (g) not guarantee, become obligated for or pay the debts of any
Affiliated Entity or hold the credit of the Trust out as being available to
satisfy the obligations of any Affiliated Entity or other Person (nor indemnify
any Person for losses resulting therefrom), nor have any of the Trust's
obligations guaranteed by any Affiliated Entity or hold the Trust out as
responsible for the debts of any Affiliated Entity or other Person or for the
decisions or actions with respect to the business and affairs of any Affiliated
Entity, nor seek or obtain credit or incur any obligation to any third-party
based upon the creditworthiness or assets of any Affiliated Entity or any other
Person (i.e. other than based on the assets of the Trust) nor allow any
Affiliated Entity to do such things based on the credit of the Trust;

           (h) except as expressly otherwise permitted hereunder or under any of
the Trust Related Agreements, not permit the commingling or pooling of the
Trust's funds or other assets with the funds or other assets of any Affiliated
Entity;

           (i) maintain separate deposit and other bank accounts and funds to
which no Affiliated Entity has any access, which accounts shall be maintained in
the name and tax identification number of the Trust;

           (j) maintain full books of accounts and records (financial or other)
and financial statements separate from those of the Affiliated Entities or any
other Person, prepared and maintained in accordance with GAAP (including, but
not limited to, all resolutions, records, agreements or instruments underlying
or regarding the transactions contemplated by the Trust Related Agreements or

                                        8

<PAGE>

otherwise) and will be audited annually by an independent accounting firm which
shall provide such audit to the Bond Trustee;

           (k) compensate (either directly or through reimbursement of the
Trust's allocable share of any shared expenses) all employees, consultants and
agents and Affiliated Entities, to the extent applicable, for services provided
to the Trust by such employees, consultants and agents or Affiliated Entities,
in each case, from the Trust's own funds and maintain a sufficient number of
employees in light of its contemplated operations;

           (l) pay from its own bank accounts for accounting and payroll
services, rent, lease and other expenses (or the Trust's allocable share of any
such amounts provided by one or more other Affiliated Entity) and not have such
operating expenses (or the Trust's allocable share thereof) paid by any
Affiliated Entities, provided, that the Grantor paid the initial organization
expenses of the Trust and shall be permitted to pay certain of the expenses
related to the transactions contemplated by the Trust Related Agreements
incurred on or prior to the closing date for such transactions;

           (m) maintain adequate capitalization to conduct its business and
affairs considering the Trust's size and the nature of its business and intended
purposes and, after giving effect to the transactions contemplated by the
Related Trust Agreements, refrain from engaging in a business for which its
remaining property represents an unreasonably small capital;

           (n) conduct all of the Trust's business (whether in writing or
orally) solely in the name of the Trust through its Trustees, employees and
agents and hold the Trust out as an entity separate from any Affiliated Entity;

           (o) not make or declare any distributions of cash or property to the
Grantor or any Owner except in accordance with appropriate trust formalities and
only consistent with sound business judgment to the extent that it is permitted
pursuant to the Trust Related Agreements and not violative of any applicable law
and only if no Significant Event or potential Significant Event then exists or
would result therefrom;

           (p) otherwise practice and adhere to all trust procedures and
formalities, such as the holding of regularly scheduled meetings of the
Trustees, to the extent required by such formalities and by this Agreement, the
State of Delaware and all other appropriate constituent documents;

           (q) not appoint an Affiliated Entity or any employee of an Affiliated
Entity as an agent of the Trust, except as otherwise permitted in the Trust
Related Agreements (although such Persons can qualify as Beneficiary Trustees);

           (r) not acquire obligations or securities of or make loans or
advances to or pledge its assets for the benefit of the Grantor, any Owner or
any Affiliate of such parties;

           (s) not permit the Grantor, any Owner or any Affiliated Entity to
acquire obligations of or make loans or advances to the Trust;

                                        9

<PAGE>

           (t) not permit the Grantor, any Owner or any Affiliated Entity to
guarantee, pay or become liable for the debts of the Trust or permit any such
entity to hold out its creditworthiness as being available to pay the
liabilities and expenses of the Trust nor, except for the indemnities in this
Agreement and the Trust Related Agreements, indemnify any Person for losses
resulting therefrom;

           (u) maintain separate minutes of the actions of the Trustees,
including of the transactions contemplated by the Trust Related Agreements.

           (v) cause (i) all written and oral communications, including, without
limitation, letters, invoices, purchase orders, and contracts, of the Trust to
be made solely in the name of the Trust, (ii) the Trust to have its own tax
identification number, stationery, checks and business forms, separate from
those of any Affiliated Entity, (iii) all Affiliated Entities not to use the
stationery or business forms of the Trust, and for the Trust not to use the
stationery or business forms of any Affiliated Entity, and (iv) all Affiliated
Entities not to conduct business in the name of the Trust, and the Trust not to
conduct business in the name of any Affiliated Entity;

           (w) direct creditors of the Trust to send invoices and other
statements of account of the Trust directly to the Trust and not to any
Affiliated Entity and to cause the Affiliated Entities not to direct their
creditors to send invoices and other statements of accounts to the Trust;

           (x) cause the Grantor or, in the event of a Transfer, any Owner to
maintain as official records all resolutions, agreements, and other instruments
underlying or regarding the transactions contemplated by the Trust Related
Agreements;

           (y) disclose, and cause the Grantor to disclose, in its financial
statements the effects of all transactions between the Grantor and the Trust in
accordance with generally accepted accounting principles, and in a manner which
makes it clear that the assets of the Trust (including the Intangible Transition
Property) are not assets of any Affiliated Entity and are not available to pay
creditors of any Affiliated Entity;

           (z) treat and cause the Grantor to treat the transfer of Intangible
Transition Property from the Grantor to the Trust as a sale under the
Competition Act;

           (aa) if in accordance with GAAP, the assets and liabilities of the
Trust are included in the consolidated financial statements of the Grantor,
including if the Trust is treated as a division of PECO Energy, cause the
Grantor to prominently and clearly disclose, whether in a footnote or in the
notes to such financial statements, that (i) the Trust is a separate legal
entity, (ii) the assets of the Trust are not available to pay the debts of the
Grantor or any other Affiliated Entity and (iii) neither the Grantor nor any
other Affiliated Entity is liable or responsible for the debts of the Trust;

           (bb) except as described herein with respect to tax reporting and
financial reporting, describe and cause each Affiliated Entity to describe the
Trust, and hold the Trust out as a separate legal entity and not as a division
or department of any Affiliated Entity, and promptly correct any known
misunderstandings regarding its identity separate from any Affiliated Entity or
any Person;

                                       10

<PAGE>

           (cc) treat the Transition Bonds as debt obligations of the Trust;

           (dd) maintain its valid existence in good standing under the laws of
the State of Delaware and maintain its qualification to do business under the
laws of such other jurisdictions as its operations require;

           (ee) comply with all laws applicable to the transactions contemplated
by this Agreement and the Trust Related Agreements; and

           (ff) cause PECO Energy to observe in all material respects all
corporate procedures and formalities required by its constituent documents and
the laws of its state of formation and all other appropriate jurisdictions.

     4.02. Merger and Other Transactions. As long as the Transition Bonds are
outstanding and subject to Section 4.05, the Trust may not consolidate with,
merge or convert into another entity or sell all or substantially all of its
assets to another entity and dissolve, unless: (i) the entity formed by or
surviving such consolidation, merger or conversion or to whom substantially all
of such assets are sold is organized under the laws of the United States, any
state thereof or the District of Columbia, (ii) such entity expressly assumes
all obligations and succeeds to all rights of the Trust under the Sale Agreement
and the Master Servicing Agreement pursuant to an assignment and assumption
agreement executed and delivered to the Bond Trustee, in form satisfactory to
the Bond Trustee, (iii) no Default or Event of Default will have occurred and be
continuing immediately after such consolidation, merger, conversion or sale of
assets, (iv) the Rating Agency Condition (as defined in the Indenture) will have
been satisfied with respect to such transaction by each Rating Agency (as
defined in the Indenture), except Moody's (to which notice will be sent), (v)
the Trust has received an opinion of counsel to the effect that such
consolidation, merger, conversion or sale of assets would have no material
adverse tax consequence to the Trust or any Transition Bondholder and such
consolidation, merger, conversion or sale of assets complies with the Indenture
and all conditions precedent therein provided relating to such transaction, (vi)
none of the Intangible Transition Property, any qualified rate orders or PECO
Energy's or the Trust's rights under the Competition Act or any qualified rate
orders are impaired and (vii) any action that is necessary to maintain the lien
and security interest created by the Indenture will have been taken. Further,
the Trust may not sell, transfer, exchange or otherwise dispose of any of its
assets, except as expressly permitted by the Indenture, any Supplemental
Indenture, the Master Servicing Agreement or the Sale Agreement.

     4.03. Transactions with Affiliates. The Trust will not enter into, or be a
party to, any transaction with any of its Affiliates, except (i) the
transactions contemplated by the Trust Related Agreements and (ii) any other
transactions (including, without limitation, the lease of office space or
computer equipment or software by the Trust from an Affiliate of the Trust and
the sharing of employees and employee resources and benefits) (A) in the
ordinary course of business or as otherwise permitted hereunder, (B) pursuant to
the reasonable requirements and purposes of the Trust's business, (C) upon fair
and reasonable terms (and, to the extent material, pursuant to written
agreements) that are on terms and conditions available at the time to the Trust
for comparable transactions with unaffiliated Persons and (D) not inconsistent
with the terms of Section 4.01. Unless such transactions are in the ordinary
course of business in which case any of the Trustees, acting singly or
collectively, may take all actions necessary to effectuate

                                       11

<PAGE>

such transactions, they will require the approval of a majority of the Trustees,
which majority must include the Independent Trustee.

     4.04. Insolvency. As of the date hereof, neither the Grantor nor the Trust
intends to file a voluntary petition for relief under the Bankruptcy Code or any
similar law. None of the Grantor nor any Owner will cause the Trust to file a
voluntary petition for relief under the Bankruptcy Code or similar law. The
Trustees shall not file a bankruptcy or insolvency petition or otherwise
institute insolvency or bankruptcy proceedings without the prior written consent
of all of the Trustees, including the Independent Trustee. Further, as of the
date hereof, after giving effect to the transactions contemplated by the Trust
Related Agreements, the Issuer is solvent and expects to remain solvent,
believes it will be able to pay its debts as they become due and such belief is
reasonable, is able to pay its debts as they mature and does not intend to
incur, or believe that it will incur, indebtedness that it will not be able to
repay at maturity.

     4.05. Rating Confirmation. Notwithstanding anything to the contrary
contained in this Agreement, as long as the Transition Bonds are outstanding,
the Trust may not engage in any dissolution, liquidation, consolidation, merger
or sale of all or substantially all of its assets without having first obtained
confirmation from Moody's Investor Service, Inc. and Standard & Poor's Rating
Services that such event will not result in either a downgrade or withdrawal of
the then current rating of the Transition Bonds.

                                    ARTICLE V

                    INVESTMENT AND APPLICATION OF TRUST FUNDS

     5.01. Investment of Trust Funds. The provisions of this Article V apply
only to funds or Trust Property that have been released from the lien of the
Indenture and are permitted to be held or applied by the Trust. Unless otherwise
directed in writing by the Beneficiary Trustees, funds or Trust Property
released by the Bond Trustee to the Trust or funds in the possession of the
Trust shall be invested and reinvested by the Trustees (or by an independent
investment manager appointed in writing by the Beneficiary Trustees) in Eligible
Investments.

     5.02. Application of Funds. Income with respect to and proceeds of any
funds or Trust Property held by the Trustees shall be transferred as determined
by the Beneficiary Trustees from time to time.

                                   ARTICLE VI

                      AUTHORITY AND DUTIES OF THE TRUSTEES

     6.01. General Authority. The Trustees are authorized to take all actions
required to be taken by them pursuant to the terms of this Agreement and the
Trust Related Agreements. The Trustees are further authorized, but shall not be
obligated, to take such further actions as are permitted but not required under
the terms of this Agreement and the Trust Related Agreements.

                                       12

<PAGE>

     6.02. Specific Authority; Special Authority of Beneficiary Trustees. (a)
Notwithstanding any other provision in this Agreement to the contrary and
without the need for any additional consent of any Person, the Trustees, acting
singly or collectively, are hereby authorized and directed to take the following
action on behalf of the Trust: (i) execute, deliver and perform any agreements
related to the issuance and sale of Transition Bonds, including the Trust
Related Agreements, as necessary, (ii) execute and deliver all certificates and
other documents required by any such agreements and (iii) issue and deliver one
or more series of Transition Bonds in accordance with the provisions of such
agreements and any qualified rate orders and qualify and register the Transition
Bonds for sale in various states. The Trustees, acting singly or collectively,
are authorized to take all actions necessary or incidental to the day-to-day
operations of the Trust. Except as otherwise specifically provided, all
non-day-to-day matters shall be determined by a majority of the then current
Trustees; provided that, such majority must include the Independent Trustee
(which may also be the Issuer Trustee) for all actions specified in Sections
4.02 and 4.03 and any matter that would, if approved by the Trustees, cause the
Trust to deviate from the provisions of Sections 2.03(a), 2.03(c), 2.04(b), 4.01
and 12.01 of this Agreement (or any provisions that by the terms hereof require
the consent of the Independent Trustee), subject to the provisions of Section
6.05. For purposes of determining a majority under this Agreement, each Person
that is serving as a Trustee shall be counted as a single Trustee, even if such
Person holds multiple Trustee positions (i.e., the vote of one Person that acts
as Delaware Trustee, Issuer Trustee and Independent Trustee shall be counted
only once).

           (b) The Grantor and the Trustees hereby authorize and direct the
Beneficiary Trustees, acting singly or collectively, (i) to file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, one or more Registration Statements on either Form S-3
or Form S-1 (collectively, the "1933 Act Registration Statements"), including
any pre-effective or post-effective amendments to such 1933 Act Registration
Statements (including the prospectus supplement, the prospectus and the exhibits
contained therein), relating to the registration under the Securities Act of
1933, as amended, of each Series of Transition Bonds, (ii) to file and execute
on behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register each Series of
Transition Bonds under the securities or "Blue Sky" laws of such jurisdictions
as the Trust may deem necessary or desirable and (iii) to do or cause to be done
all such other acts or things and to execute and deliver all such instruments
and documents that any such Beneficiary Trustee shall deem necessary or
appropriate to carry out the intent of the foregoing. In the event that any
filing referred to above is required by the rules and regulations of the
Commission or state securities or "Blue Sky" laws, to be executed on behalf of
the Trust by the Issuer Trustee, then the Issuer Trustee, not in its individual
capacity, but solely in its capacity as trustee of the Trust, is hereby
authorized and directed to join in any such filing and to execute on behalf of
the Trust any and all of the foregoing. In connection with all of the foregoing,
the Trust hereby constitutes and appoints each of the Beneficiary Trustees as
its true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for the Trust or in the Trust's name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statements and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Trust might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his respective substitute or substitutes, shall
do or cause to be done by virtue hereof.

                                       13

<PAGE>

           (c) Meetings of the Trustees for the purpose of establishing a
majority under this Article VI or otherwise may be called at any time by any of
the Trustees upon two days written or oral notice, stating the time, place and
purpose of the meeting, to all Trustees prior to the time of the meeting. In
addition, any action required or permitted to be taken at a meeting of the
Trustees may be taken without a meeting upon the written consent of the Trustees
who would be necessary to authorize the action at a meeting at which all
Trustees were present and voting or upon the unanimous written consent of the
Trustees. The Issuer Trustee shall maintain the minutes of all meetings of the
Trustees. Any meeting may be held by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear one another. Attendance, whether by telephone or in person, at any meeting
of the Trustees shall constitute a waiver of notice of such meeting.

     6.03. Accounting and Reports to the Grantor, any Owner, the Internal
Revenue Service and Others. The Grantor shall designate, from time to time, a
Trustee which shall, on behalf of the Trust, (i) maintain or cause to be
maintained the books of the Trust on a calendar year basis on the accrual method
of accounting, (ii) deliver to the Grantor and any Owner, within 90 days of the
end of each Fiscal Year, or more often, as may be required by the Code and the
regulations thereunder, a copy of the annual financial statement of the Trust
for such Fiscal Year and a statement in such form and containing such
information as may be required by such regulations, and as is necessary and
appropriate to enable the Grantor and any Owner to prepare its federal and state
income tax returns, (iii) file such tax returns relating to the Trust, cause the
Trust to pay all taxes incurred by it pursuant to the terms of any tax sharing
agreement entered into by the Trust and the Grantor and take all actions
necessary for the Trust to qualify or continue to qualify as a division of PECO
Energy or its designated affiliate for federal income tax purposes, (iv) cause
such tax returns to be signed by the Trust in the manner required by law, and
(v) cause to be mailed to the Grantor and any Owner copies of all such reports
and tax returns of the Trust.

     6.04. Signature of Returns. The Trustee designated in Section 6.03 shall
sign on behalf of the Trust the tax returns and other periodic filings of the
Trust, unless applicable law requires the Owner to sign such documents, in which
case, so long as the Grantor is the Owner and applicable law allows the Grantor
to sign any such document, the Grantor shall sign such document. At any time
that the Grantor is not the Owner, or is otherwise not allowed by law to sign
any such document, then the party required by law to sign such document shall
sign.

     6.05. Right to Receive Instructions. In the event that the Trustees are
unable to decide between alternative courses of action for whatever reason, or
are unsure as to the application of any provision of this Agreement or any Trust
Related Agreement, or such provision is ambiguous as to its application, or is,
or appears to be, in conflict with any other applicable provision, or in the
event that this Agreement or any Trust Related Agreement permits any
determination by the Trustees or is silent or is incomplete as to the course of
action which the Trustees are required to take with respect to a particular set
of facts, any one or more of the Trustees may give notice of such circumstances
(in such form as shall be appropriate under the circumstances) to the Grantor
or, in the event of a Transfer, to the Owner and request instructions from
independent, appropriate legal or other counsel to the Trustees in accordance
with Section 7.03 of this Agreement.

     6.06. No Duties Except as Specified in this Agreement or in Instructions.
The Trustees shall not have any duty or obligation to manage, make any payment
in respect

                                       14

<PAGE>

of, register, record, sell, dispose of or otherwise deal with the Trust
Property, or to otherwise take or refrain from taking any action under, or in
connection with, any document contemplated hereby to which the Trustees are a
party, except as expressly provided by the terms of this Agreement or the Trust
Related Agreements and no implied duties or obligations shall be read into this
Agreement or the Trust Related Agreements against the Trustees. The Trustees
nevertheless agree that, in the event that claims are made against any of the
Trustees in their individual capacities that are not related to the ownership or
the administration of the Trust Property or the transactions contemplated by the
Trust Related Agreements, the Trustee against whom such claims were made shall,
at its own cost and expense, promptly take all action as may be necessary to
discharge any liens on any part of the Trust Property resulting from those
claims.

     6.07. No Action Except Under Specified Documents or Instructions. The
Trustees shall not manage, control, use, sell, dispose of or otherwise deal with
any part of the Trust Property except in accordance with the powers granted to
and the authority conferred upon the Trustees pursuant to this Agreement and the
Trust Related Agreements.

     6.08 No Action Contrary to Agreement, Trust Related Agreements or
Applicable Law. The Trustees shall not be required to take or refrain from
taking any action under this Agreement or the Trust Related Agreements if the
Trustees shall reasonably determine or shall have been advised by counsel that
such action (i) is contrary to the terms of this Agreement or the Trust Related
Agreements or is otherwise contrary to applicable law or (ii) is likely to
result in liability on the part of the Trustees to risk or advance their own
funds.

                                   ARTICLE VII

                             CONCERNING THE TRUSTEES

     7.01. Acceptance of Trusts and Duties. The Trustees accept the trusts
hereby created and agree to perform their respective duties hereunder with
respect to the same but only upon the terms of this Agreement. The Trustees
shall not be personally liable under any circumstances except (i) for their own
willful misconduct or gross negligence, (ii) for liabilities arising from the
failure by any of the Trustees to perform obligations expressly undertaken by
them in Article VI, or (iii) for taxes, fees or other charges on, based on or
measured by any fees, commissions or compensation received by the Trustees in
connection with any of the transactions contemplated by this Agreement or the
Trust Related Agreements. In particular, but not by way of limitation:

           (a) The Trustees shall not be personally liable for any error of
judgment made in good faith by any of the Trustees;

           (b) The Trustees shall not be personally liable with respect to any
action taken or omitted to be taken by the Trustees in good faith in accordance
with the instructions delivered pursuant to Section 6.05;

           (c) No provision of this Agreement shall require the Trustees to
expend or risk their personal funds or otherwise incur any financial Liability
in the performance of any of their rights or

                                       15

<PAGE>

powers hereunder, if the Trustees shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
Liability is not reasonably assured or provided to them;

           (d) Under no circumstance shall the Trustees be personally liable for
any indebtedness of the Trust under any Trust Related Agreement; and

           (e) The Trustees shall not be personally responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Grantor, or for the form, character, genuineness,
sufficiency, value or validity of any Collateral, or for or in respect of the
validity or sufficiency of the Trust Related Agreements.

     7.02. Furnishing of Documents. The Trustees shall furnish to the Grantor
and any Owner, promptly upon receipt thereof, duplicates or copies of all
material reports, notices, requests, demands, certificates, financial statements
and any other instruments furnished to the Trustees by any party pursuant to the
Trust Related Agreements (other than documents originated by or otherwise
furnished by the Grantor or any Owner).

     7.03. Reliance; Advice of Counsel. (a) The Trustees shall incur no
Liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by them to be genuine and believed by them to be
signed by the proper party or parties. The Trustees may accept a certified copy
of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the manner of ascertainment of which is not specifically
prescribed herein, the Trustees may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or any assistant treasurer or the secretary or any assistant secretary of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Trustees for any action taken or omitted to be taken by
them in good faith in reliance thereon.

           (b) In the exercise or administration of the trusts hereunder and in
the performance of their respective duties and obligations under any of the
Trust Related Agreements, the Trustees (i) may act directly or, at the expense
of the Trust in the case of the Issuer Trustee, through agents or attorneys
pursuant to agreements entered into with any of them, and the Trustees shall not
be liable for the default or misconduct of such agents or attorneys if such
agents or attorneys shall have been selected by the Trustees with reasonable
care and (ii) may, at the expense of the Trust in the case of the Issuer
Trustee, consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by them, and the Trustees shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountants or other
skilled persons.

     7.04. Not Acting in Individual Capacity. Except as expressly provided in
this Article VII, in accepting the trusts hereby created the Trustees each act
solely as trustees hereunder and not in their respective individual capacities,
and all Persons having any claim against the Trustees by reason of the
transactions contemplated by this Agreement or the Trust Related Agreements
shall look only to the Trust Property for payment or satisfaction thereof.

                                       16

<PAGE>

                                  ARTICLE VIII

                            COMPENSATION OF TRUSTEES

     8.01. Issuer Trustee's Fees and Expenses. The Issuer Trustee shall receive
compensation for its services hereunder as set forth on the fee schedule
attached hereto as Exhibit 1. The Issuer Trustee shall be entitled to be
reimbursed from the Trust Property for its reasonable expenses hereunder,
including, without limitation, its travel, telephone, facsimile, postage,
overnight courier and other related expenses, as well as the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Issuer Trustee may employ in connection with the
exercise and performance of its rights and duties under this Agreement and the
Trust Related Agreements.

     8.02. Beneficiary Trustees' Fees and Expenses. The Beneficiary Trustees
shall not be compensated by the Trust for their services performed for or on
behalf of the Trust.

     8.03. Fees of Separate Independent Trustee and Delaware Trustee. At such
time as the Issuer Trustee, the Independent Trustee and the Delaware Trustee are
not the same Person, the Trust shall pay such fees to each of the Independent
Trustee and Delaware Trustee as the majority of the Trustees shall approve.

                                   ARTICLE IX

                           INDEMNIFICATION OF TRUSTEES

     9.01. Scope of Indemnification. To the fullest extent permitted by law, the
Trust shall indemnify the Trustees and their agents, employees and directors
against any Liability incurred in connection with any Proceeding in which the
Trustees may be involved as a party or otherwise by reason of the fact that such
Trustee is or was serving in its capacity as a Trustee, unless such Liability is
based on or arises in connection with the Trustee's or such other indemnified
parties' own wilful misconduct or gross negligence, the failure to perform the
obligations expressly undertaken by them in Article VI, or taxes, fees or other
charges on, based on or measured by any fees, commissions or compensation
received by the Trustees in connection with any of the transactions contemplated
by this Agreement or the Trust Related Agreements. This indemnification clause
shall survive the termination of this Agreement.

                                       17

<PAGE>

                                    ARTICLE X

                              TERMINATION OF TRUST

     10.01. Dissolution of Trust. (a) The Trust shall dissolve and, after
satisfaction of the creditors of the Trust as required by applicable law,
property held by the Trust will be distributed to the Grantor or, in the event
of a Transfer, to any Owner thirty years from the date of its creation or
sooner, at the option and expense, and upon written instruction of the Grantor,
but in no event before payment in full of all Series of Transition Bonds.

            (b) The bankruptcy of either the Grantor or any Owner or both shall
not operate to terminate this Agreement, to dissolve, terminate or annul the
Trust, to entitle the Grantor's or any Owner's legal representatives to claim an
accounting or to take any action or Proceeding in any court for a partition or
winding up of the Trust Property, nor otherwise affect the rights, obligations
and liabilities of the parties hereto.

     10.02. No Termination by Grantor or Owner. Except as provided in Section
10.01, neither the Grantor nor any Owner shall be entitled to dissolve or
terminate or revoke the Trust established hereunder.

     10.03. Cancellation of Certificate of Trust. Upon completion of the winding
up of the affairs of the Trust after dissolution of the Trust in accordance with
Section 10.01 or otherwise, the Certificate of Trust shall be canceled by a
Beneficiary Trustee's executing and filing a Certificate of Cancellation with
the Secretary of State of Delaware.

                                   ARTICLE XI

                   SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES

     11.01. Resignation of Trustee; Appointment of Successor. (a) The Trustees
may resign at any time without cause by giving at least 90 days' prior written
notice to the Grantor and any Owner, such resignation to be effective upon the
acceptance of appointment by a successor Trustee under Section 11.01(b). In
addition, the Grantor or, in the event of a Transfer, any Owner may at any time
remove any of the Trustees with or without cause by an instrument in writing
delivered to the Trustee, such removal to be effective upon the acceptance of
appointment by a successor Trustee under Section 11.01(b); except that, neither
the Grantor nor any Owner may remove the Independent Trustee (i) without cause,
(ii) after an Event of Default under the Indenture or (iii) if the removal of
one or more Trustees would cause the breach of Section 2.04(b). In case of the
resignation or removal of a Trustee, the Grantor or, in the event of a Transfer,
any Owner may appoint a successor Trustee by an instrument signed by the Grantor
or any Owner, as applicable, subject to Section 2.04(b). If the last remaining
Trustee of the Trust resigns or is removed or the Issuer Trustee, the
Independent Trustee or the Delaware Trustee resigns or is removed and a
successor Trustee shall not have been appointed within 30 days after the giving
of written notice of such resignation or the delivery of the written instrument
with respect to such removal, such Trustee, the Grantor or any Owner

                                       18

<PAGE>

may apply to any court of competent jurisdiction to appoint a successor Trustee
in compliance with Section 2.04(b) to act until such time, if any, as a
successor Trustee shall have been appointed as provided above. Any successor
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Trustee appointed as above provided. In the event of
removal of a Trustee, the Trustee so removed shall be entitled to compensation
and reimbursement for expenses incurred through the date of such removal.

            (b) Any successor Trustee, however appointed, shall execute and
deliver to the predecessor Trustee and the Trust an instrument accepting such
appointment, and thereupon such successor Trustee, without further acts, shall
become vested with all the estates, properties, rights, powers, duties and
trusts of the predecessor Trustee in the trusts hereunder with like effect as if
originally named as a Trustee herein; but nevertheless, upon the written request
of such successor Trustee, such predecessor Trustee shall execute and deliver an
instrument transferring to such successor Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers, duties and trusts of
such predecessor Trustee, and such predecessor Trustee shall duly assign,
transfer, deliver and pay over to such successor Trustee all moneys or other
property then held or subsequently received by such predecessor Trustee upon the
trusts herein expressed.

            (c) Any successor Issuer Trustee, however appointed, shall be a bank
or trust company incorporated and doing business within the United States of
America and having a combined capital and surplus of at least $50,000,000. Any
corporation into which the Issuer Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Issuer Trustee shall be a party, or any
corporation to which substantially all the corporate trust business of the
Issuer Trustee may be transferred, shall, subject to the terms of this
Agreement, be the Issuer Trustee of the Trust under this Agreement without
further act or consent of any Person.

                                   ARTICLE XII

                                  MISCELLANEOUS

     12.01. Supplements and Amendments. This Agreement may be amended only by a
written instrument signed by the Grantor, any Owner and a majority of the
Trustees (which majority shall include the Independent Trustee) at the time of
such amendment. No such amendment may be made unless the Rating Agency Condition
is satisfied with respect to each of the Rating Agencies other than Moody's (to
which notice will be sent) in connection herewith.

     12.02. No Legal Title to Trust Property in Grantor and Owner. Neither the
Grantor nor any Owner shall have legal title to or ownership of any part of the
Trust Property. No transfer, by operation of law or otherwise, of any right,
title and interest of the Grantor or any Owner in and to their undivided
beneficial interest in the Trust Property hereunder shall operate to terminate
this Agreement or the trusts hereunder, to dissolve, terminate or annul the
Trust or to entitle any successor transferee to an accounting or to the transfer
to it of legal title to any part of the Trust Property.

                                       19

<PAGE>

     12.03. Limitations on Rights of Others. Nothing in this Agreement, whether
express or implied, shall be construed to give to any Person other than the
Trust, the Grantor and any Owner any legal or equitable right, remedy or claim
in the Trust Property or except for the Grantor and any Owner, under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.

     12.04. Notices. Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and delivered by hand or mailed by
certified mail, postage prepaid, if to the Trustees, addressed to:

           First Union Trust Company,    One Rodney Square
             National Association        920 King Street, 1st Floor
                                         Wilmington, DE 19801

           George Shicora                c/o First Union Trust Company,
                                           National Association
                                         One Rodney Square
                                         920 King Street, 1st Floor
                                         Wilmington, DE 19801

           Thomas R. Miller              c/o First Union Trust Company,
                                           National Association
                                         One Rodney Square
                                         920 King Street, 1st Floor
                                         Wilmington, DE 19801

or to such other addresses as the Trustees may have set forth in a written
notice to the Grantor, any Owner and the Bond Trustee; and if to the Grantor,
addressed to: PECO Energy Company, 2301 Market Street, S21-1, Philadelphia, PA
19101 or to such other address as the Grantor may have set forth in a written
notice to the Trustees and the Bond Trustee; and if to Moody's, addressed to:
ABS Monitoring Department, 99 Church Street, New York, NY 10007. All notices to
any Owner shall be sent care of the Grantor to the Grantor's address set forth
above or to such other address as such Owner may have set forth in a written
notice to the Grantor, the Trustees and the Bond Trustee. Whenever any notice in
writing is required to be given by the Trustees hereunder, such notice shall be
deemed given and such requirement satisfied 72 hours after such notice is mailed
by certified mail, postage prepaid, addressed as provided above; any notice
given by the Grantor or any Owner to the Trustees shall be effective upon
receipt. All notices required under this Agreement to be delivered to Moody's
shall be given by one or both of the Beneficiary Trustees.

     12.05. Severability. Any provision of this Agreement 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.

                                       20

<PAGE>

     12.06. Separate Counterparts. This Agreement 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.

     12.07. Successors and Assigns. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the Trustees and
their respective successors and assigns and the Grantor, any Owner and their
respective successors and permitted assigns, all as herein provided; provided,
that Moody's receives prior notice of any such succession or assignment. Any
request, notice, direction, consent, waiver or other instrument or action by the
Grantor and any Owner shall bind its successors and permitted assigns.

     12.08. Headings. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof. Any reference to any Article or Section contained in
this Agreement shall refer to such Article or Section as set forth in this
Agreement, notwithstanding failure to use the term "hereof," "hereto" or
"herein" in connection with such reference.

                                       21

<PAGE>

     12.09. Governing Law. This Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of Delaware (without
regard to conflict of laws principles), including all matters of construction,
validity and performance.

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

                                            PECO ENERGY COMPANY,
                                            as Grantor and Owner

                                            By: /s/ J. Barry Mitchell
                                                --------------------------------
                                            Name: J. Barry Mitchell
                                                  ------------------------------
                                            Title: Vice President and Treasurer
                                                   -----------------------------

                                            FIRST UNION TRUST COMPANY,
                                            NATIONAL ASSOCIATION, not in its
                                            individual capacity but solely as
                                            Issuer Trustee, Delaware Trustee and
                                            Independent Trustee

                                            By: /s/ Edward L. Truitt, Jr.
                                                --------------------------------
                                            Name: Edward L. Truitt, Jr.
                                                  ------------------------------
                                            Title: Vice President
                                                   -----------------------------

                                            GEORGE SHICORA, not in his
                                            individual capacity but solely as a
                                            Beneficiary Trustee

                                            /s/ George Shicora
                                            ------------------------------------

                                            THOMAS R. MILLER, not in his
                                            individual capacity but solely as a
                                            Beneficiary Trustee

                                            /s/ Thomas R. Miller
                                            ------------------------------------

                                       22

<PAGE>

                                    EXHIBIT 1

                           ISSUER TRUSTEE FEE SCHEDULE

For services performed pursuant to the Second Amended and Restated Trust
Agreement to which this Exhibit 1 is attached, the Issuer Trustee shall be
entitled to the following fees:

     -    $1,500.00 upon the Trust's issuance of each series of Transition Bonds
          (calculated on a per series basis), other than the initial series of
          Transition Bonds for which no fee shall be paid; and

     -    $8,500.00 at the end of each calendar year as an annual administrative
          maintenance fee.

In addition to the foregoing fees and the out-of-pocket expenses described in
Section 8.01 of the Second Amended and Restated Trust Agreement, the Issuer
Trustee may receive a special administrative maintenance fee from time to time
in such amounts as the Grantor, any Owner and the Trustees shall mutually agree
upon in writing in the event the Issuer Trustee determines, in good faith, that
the Trust requires special administrative attention due to extraordinary
circumstances.

This Issuer Trustee Fee Schedule may be revised or amended only by a written
instrument signed by the Grantor, any Owner and the Trustees.

                                    Exhibit 1

<PAGE>

                                    EXHIBIT 2

                              CERTIFICATE OF TRUST

                         OF PECO ENERGY TRANSITION TRUST

     THIS Certificate of Trust of PECO Energy Transition Trust (the "Trust"),
dated as of June 23, 1998, is being fully executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801, et seq.).

     1. Name. The name of the business trust formed hereby is PECO Energy
Transition Trust.

     2. Delaware Trustee. The name and business address of the trustee of the
Trust with its principal place of business in the State of Delaware are First
Union Trust Company, National Association, One Rodney Square, 920 King Street,
First Floor, Wilmington, Delaware 19801, Attention: Corporate Trust
Administration.

     3. Effective Date. This Certificate of Trust shall be effective as of its
filing with the Secretary of State of the State of Delaware.

     IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first-above written.

DIANA MOY KELLY, not in her                 FIRST UNION TRUST COMPANY,
individual capacity, but solely as          NATIONAL ASSOCIATION, not in its
trustee of the Trust                        individual capacity, but solely as
                                            trustee of the Trust

/s/ Diana Moy Kelly                         By: /s/ Edward L. Truitt, Jr.
-------------------                         -------------------------------
                                            Name:  Edward L. Truitt, Jr.
                                            Title: Assistant Vice President

GEORGE SHICORA, not in his
individual capacity, but solely as
trustee of the Trust

/s/ George Shicora
------------------

                                    Exhibit 2================================================================================

                          PECO ENERGY TRANSITION TRUST,

                                     Issuer

                                       and

                              THE BANK OF NEW YORK,

                                  Bond Trustee

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

                                SERIES SUPPLEMENT

                             Dated as of May 2, 2000

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

================================================================================

<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

SECTION 1.  Definitions.......................................................2
SECTION 2.  Designation; Series Issuance Dates................................4
SECTION 3.  Initial Principal Amount; Bond Rate; Expected
            Final Payment Date; Series Termination Date; Class
            Termination Dates.................................................4
SECTION 4.  Payment Dates; Expected Amortization Schedule
            for Principal; Interest; Overcollateralization
            Amount; Monthly Allocated Balances................................5
SECTION 5.  Authorized Initial Denominations..................................6
SECTION 6.  Redemption........................................................6
SECTION 7.  Credit Enhancement................................................7
SECTION 8.  Amendments to Indenture...........................................7
SECTION 9.  Delivery and Payment for the Series 2000-A
            Transition Bonds; Form of the Series 2000-A
            Transition Bonds..................................................9
SECTION 10. Confirmation of Indenture........................................10
SECTION 11. Counterparts.....................................................10
SECTION 12. Governing Law....................................................10
SECTION 13. Issuer Obligation................................................10

Schedule A    Expected Amortization Schedule
Schedule B    Monthly Allocated Balances

Exhibit A     Form of Transition Bond

<PAGE>

                    SERIES SUPPLEMENT dated as of May 2, 2000 (this
               "Supplement"), by and between PECO ENERGY TRANSITION TRUST, a
               Delaware statutory business trust (the "Issuer"), and THE BANK OF
               NEW YORK, a New York banking corporation (the "Bond Trustee"), as
               Bond Trustee under the Indenture dated as of March 1, 1999,
               between the Issuer and the Bond Trustee (the "Indenture").

                              PRELIMINARY STATEMENT

     Section 9.01 of the Indenture provides, among other things, that the Issuer
and the Bond Trustee may at any time and from time to time enter into one or
more indentures supplemental to the Indenture for the purposes of authorizing
the issuance by the Issuer of a Series of Transition Bonds and specifying the
terms thereof and for modifying certain provisions of the Indenture. The Issuer
has duly authorized the execution and delivery of this Supplement and the
creation of a Series of Transition Bonds with an initial aggregate principal
amount of $1,000,000,000 to be known as the Issuer's Transition Bonds, Series
2000-A (the "Series 2000-A Transition Bonds"). All acts and all things necessary
to make the Series 2000-A Transition Bonds, when duly executed by the Issuer and
authenticated by the Bond Trustee as provided in the Indenture and this
Supplement and issued by the Issuer, the valid, binding and legal obligations of
the Issuer and to make this Supplement a valid and enforceable supplement to the
Indenture have been done, performed and fulfilled and the execution and delivery
hereof have been in all respects duly and lawfully authorized. The Issuer and
the Bond Trustee are executing and delivering this Supplement in order to
provide for the Series 2000-A Transition Bonds and to modify certain provisions
of the Indenture in connection with the Second Qualified Rate Order (as defined
in the Servicing Agreement) and any subsequent Qualified Rate Orders.

     In order to secure the payment of principal of and interest on the Series
2000-A Transition Bonds, and to further secure the payment of principal of and
interest on the Series 1999-A Bonds issued on March 25, 1999, in each case
issued and to be issued under the Indenture and/or any Series Supplement, the
Issuer hereby Grants, and confirms its prior Grant on March 25, 1999 in
connection with the issuance of the Series 1999-A Bonds, to the Bond Trustee as
trustee for the benefit of the Holders of the Transition Bonds from time to time
issued and outstanding, all of the Issuer's right, title and interest in and to
(a) the

<PAGE>

Intangible Transition Property transferred by the Seller to the Issuer from time
to time pursuant to the Sale Agreement and all proceeds thereof, (b) the Sale
Agreement except for Section 5.01 thereof solely to the extent such Section
provides for indemnification of the Issuer, (c) all Bills of Sale delivered by
the Seller pursuant to the Sale Agreement, (d) the Servicing Agreement except
for Section 5.02(b) thereof solely to the extent such Section provides for
indemnification of the Issuer, (e) the Collection Account and all amounts on
deposit therein from time to time, (f) all Swap Agreements with respect to the
Transition Bonds, (g) all other property of whatever kind owned from time to
time by the Issuer including all accounts, accounts receivable and chattel
paper, (h) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and (i) all payments on or under and
all proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, general intangibles, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind, and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").

     To have and to hold in trust to secure the payment of principal of and
premium, if any, and interest on, and any other amounts (including all fees,
expenses, counsel fees and other amounts due and owing to the Bond Trustee)
owing in respect of, the Transition Bonds equally and ratably without prejudice,
preference, priority or distinction, except as expressly provided in the
Indenture or any Series Supplement and to secure performance by the Issuer of
all of the Issuer's obligations under the Indenture and all Series Supplements
with respect to the Transition Bonds, all as provided in the Indenture.

     The Bond Trustee, as trustee on behalf of the Holders of the Transition
Bonds, acknowledges such Grant, accepts the trusts hereunder in accordance with
the provisions hereof and agrees to perform its duties required in the Indenture
and this Supplement.

     SECTION 1. Definitions. (a) Article One of the Indenture provides that the
meanings of certain defined terms used in the Indenture shall, when applied to
the Transition Bonds of a particular Series, be as defined in

                                       2
<PAGE>

Article One but with such additional provisions as are specified in the related
Series Supplement. With respect to the Series 2000-A Transition Bonds, the
following definitions shall apply:

     "Adjustment Date" shall mean initially each August 12th, until August 12,
2008, and commencing on February 14, 2009, such date and the 14th day of each
month thereafter until the Series Termination Date.

     "Authorized Initial Denominations" shall mean $1,000 and integral multiples
thereof.

     "Bond Rate" has the meaning set forth in Section 3 of this Supplement.

     "Calculation Date" means initially each May 14th, until May 14, 2008, and
commencing on January 14, 2009, such date and the 14th day of each month
thereafter until the Series Termination Date.

     "Class Termination Date" means, with respect to any Class of the Series
2000-A Transition Bonds, the termination date therefor, as specified in Section
3 of this Supplement.

     "Expected Amortization Schedule" means Schedule A to this Supplement.

     "Expected Final Payment Date" means, with respect to any Class of the
Series 2000-A Transition Bonds, the expected final payment date therefor, as
specified in Section 3 of this Supplement.

     "Interest Accrual Period" means, with respect to any Payment Date, the
period from and including the preceding Payment Date (or, in the case of the
first Payment Date, from and including the Series Issuance Date) to and
excluding such Payment Date.

     "Monthly Allocated Interest Balance" has the meaning set forth in Section
4(e) of this Supplement.

     "Monthly Allocated Principal Balance" has the meaning set forth in Section
4(e) of this Supplement.

     "Overcollateralization Amount" has the meaning set forth in Section 4(d) of
this Supplement.

                                       3

<PAGE>

     "Payment Date" has the meaning set forth in Section 4(a) of this
Supplement.

     "Record Date" shall mean, with respect to any Payment Date, the close of
business on the day prior to such Payment Date.

     "Series Issuance Date" has the meaning set forth in Section 2(b) of this
Supplement.

     "Series Termination Date" has the meaning set forth in Section 3 of this
Supplement.

     "Servicing Fee Rate" shall mean 0.25% per annum so long as ITC Charges are
included in electric bills otherwise sent to Customers or, if ITC Charges are
not included in such bills, 1.50% per annum.

     (b) All terms used in this Supplement that are defined in the Indenture,
either directly or by reference therein, have the meanings assigned to them
therein, except to the extent such terms are defined or modified in this
Supplement or the context clearly requires otherwise.

     SECTION 2. Designation; Series Issuance Dates. (a) Designation. The Series
2000-A Transition Bonds shall be designated generally as the Issuer's Transition
Bonds, Series 2000-A and further denominated as Classes A-1 through A-4.

     (b) Series Issuance Date. The Series 2000-A Transition Bonds that are
authenticated and delivered by the Bond Trustee to or upon the order of the
Issuer on May 2, 2000 (the "Series Issuance Date") shall have as their date of
authentication May 2, 2000. Each other Series 2000-A Transition Bond shall be
dated the date of its authentication.

     SECTION 3. Initial Principal Amount; Bond Rate; Expected Final Payment
Date; Series Termination Date; Class Termination Dates. The Transition Bonds of
each Class of the Series 2000-A Transition Bonds shall have the initial
principal amounts, bear interest at the rates per annum and shall have Expected
Final Payment Dates and Class Termination Dates as set forth below:

                                       4
<PAGE>
            Initial
           Principal        Bond          Expected Final             Class
Class        Amount         Rate           Payment Date         Termination Date
-----     -----------      -----        -----------------     ------------------
 A-1      110,000,000      7.180%       September 1, 2001      September 1, 2003
 A-2      140,000,000      7.300%       September 1, 2002      September 1, 2004
 A-3      398,838,452      7.625%         March 1, 2009          March 1, 2010
 A-4      351,161,548      7.650%       September 1, 2009        March 1, 2010

     The Bond Rate for each Class shall be computed on the basis of a 360-day
year of twelve 30-day months.

     SECTION 4. Payment Dates; Expected Amortization Schedule for Principal;
Interest; Overcollateralization Amount; Monthly Allocated Balances. (a) Payment
Dates. The Payment Dates for each Class of the Series 2000-A Transition Bonds
are March 1 and September 1 of each year or, if any such date is not a Business
Day, the next succeeding Business Day, commencing on September 1, 2000 and
continuing until the earlier of repayment of such Class in full and the
applicable Class Termination Date.

     (b) Expected Amortization Schedule for Principal. Unless an Event of
Default shall have occurred and be continuing and the unpaid principal amount of
all Series of Transition Bonds has been declared to be due and payable together
with accrued and unpaid interest thereon, on each Payment Date, the Bond Trustee
shall distribute to the Series 2000-A Transition Bondholders of record as of the
related Record Date amounts payable in respect of the Series 2000-A Transition
Bonds pursuant to Section 8.02(e) of the Indenture as principal, in accordance
with the Expected Amortization Schedule. Available funds in the Series 2000-A
Subaccount will be allocated in a sequential manner, to the extent funds are
available, as follows: (1) to the holders of the Series 2000-A Transition Bonds,
Class A-1, until this Class is retired in full, (2) to the holders of the Series
2000-A Transition Bonds, Class A-2, until this Class is retired in full, (3) to
the holders of the Series 2000-A Transition Bonds, Class A-3, until this Class
is retired in full, and (4) to the holders of the Series 2000-A Transition
Bonds, Class A-4, until this Class is retired in full. Other than in the event
of an acceleration of payments following an Event of Default or a redemption, in
no event shall a principal payment pursuant to this Section 4(b) on any Class on
a Payment Date be greater than the amount that reduces the Outstanding Amount of
such Class of Series 2000-A Transition Bonds to the amount specified in the
Expected Amortization Schedule which is attached as

                                       5

<PAGE>

Schedule A hereto for such Class and Payment Date. In the event of an
acceleration of payments following an Event of Default on the Series 2000-A
Transition Bonds, principal payments on each Class of Series 2000-A Transition
Bonds will be made on a pro rata basis based on the respective Outstanding
Amount of each Class as of the prior Payment Date.

     (c) Interest. Interest will be payable on each Class of the Series 2000-A
Transition Bonds on each Payment Date in an amount equal to one-half of the
product of (i) the applicable Bond Rate and (ii) the Outstanding Amount of the
related Class of Transition Bonds as of the close of business on the preceding
Payment Date after giving effect to all payments of principal made to the
holders of the related Class of Series 2000-A Transition Bonds on such preceding
Payment Date; and provided, further, that with respect to the initial Payment
Date or, if no payment has yet been made, interest on the outstanding principal
balance will accrue from and including the Series Issuance Date to, but
excluding, the following Payment Date.

     (d) Overcollateralization Amount. The Overcollateralization Amount for the
Series 2000-A Transition Bonds shall be $20,000,000.

     (e) Monthly Allocated Balances. The Monthly Allocated Interest Balance and
Monthly Allocated Principal Balance for any Monthly Allocation Date and the
Series 2000-A Transition Bonds shall be as set forth in Schedule B hereto.

     Not later than each Schedule Revision Date, the Issuer shall deliver to the
Bond Trustee replacement Schedules A and B hereto, adjusted to reflect the event
giving rise to such Schedule Revision Date and setting forth the Expected
Amortization Schedule for each Payment Date and the Monthly Allocated Interest
Balance and Monthly Allocated Principal Balance for each Monthly Allocation
Date; provided, however, that no such replacement schedules shall be required if
the event giving rise to such Schedule Revision Date is a redemption of the
Series 2000-A Transition Bonds in whole.

     SECTION 5. Authorized Initial Denominations. The Series 2000-A Transition
Bonds shall be issuable in the Authorized Initial Denominations.

     SECTION 6. Redemption. (a) Mandatory Redemption. The Series 2000-A
Transition Bonds shall not be subject to mandatory redemption except as provided
in

                                       6
<PAGE>

Section 10.02 of the Indenture in the event that the Issuer receives Liquidated
Damages. If the Issuer receives Liquidated Damages from the Seller as a result
of a breach of a representation and warranty under the Sale Agreement which
relates to one or more of the Qualified Rate Orders, but not all of the
Qualified Rate Orders, then (i) only the Affected Transition Bonds will be
redeemed and (ii) the Redemption Price shall be equal to the then outstanding
principal amount of the Affected Transition Bonds as of the Liquidated Damages
Redemption Date plus accrued interest to such Redemption Date.

     (b) Optional Redemption. The Series 2000-A Transition Bonds shall not be
subject to optional redemption by the Issuer except that the Series 2000-A
Transition Bonds may be redeemed in whole at a Redemption Price equal to the
principal amount thereof plus interest at the applicable Bond Rate accrued to
the Redemption Date on any Payment Date on which the Outstanding Amount thereof
(after giving effect to payments that would otherwise be made on such Payment
Date) has been reduced to less than or equal to 5% of the initial principal
balance thereof. Notwithstanding Section 10.01 of the Indenture, with respect to
an optional redemption pursuant to this Section 6(b), the Issuer shall deposit
with the Bond Trustee the Redemption Price of the Transition Bonds to be
redeemed plus accrued interest thereon to the Redemption Date on or prior to the
date that notice of such redemption is furnished.

     SECTION 7. Credit Enhancement. No credit enhancement (other than the
Overcollateralization Amount) is provided for the Series 2000-A Transition
Bonds.

     SECTION 8. Amendments to Indenture. In connection with the issuance of the
Series 2000-A Transition Bonds, the Indenture shall be amended as follows:

     (a) Section 1.01(a) of the Indenture shall be amended by (i) amending the
definition of "Eligible Investments" by replacing the entire proviso at the end
thereof with the phrase "in each case which mature no later than the Business
Day prior to the next Payment Date for that Series or Class; (ii) amending the
definition of "Liquidated Damages" by deleting the phrase "5.01(c)(ii) or" in
the second line thereof; (iii) amending the definition of "Liquidated Damages
Redemption Date" by adding the word "Affected" after the phrase "for the
redemption of" in the second line thereof; (iv) amending the definition of "Sale
Agreement" by replacing the phrase "Intangible Transition Property Sale
Agreement dated as of March 25, 1999" with the phrase "Intangible Transition
Property Sale Agreement dated

                                       7
<PAGE>

as of March 25, 1999, as amended and restated as of May 2, 2000"; and (v)
amending the definition of "Servicing Agreement" by replacing the phrase "Master
Servicing Agreement dated as of March 25, 1999" with the phrase "Master
Servicing Agreement dated as of March 25, 1999, as amended and restated as of
May 2, 2000".

     (b) Section 1.01(b) of the Indenture shall be amended by (i) adding the
term "Affected Transition Bonds" in proper alphabetical order and (ii) replacing
the term "Qualified Rate Order" with the term "Qualified Rate Orders".

     (c) Section 3.06(a) of the Indenture shall be amended by replacing the
phrase "July 1st" in the first line thereof with the phrase "March 31st" and by
replacing the phrase "July 1" in the last line thereof with the phrase "March
31".

     (d) Section 3.10(vi) of the Indenture shall be amended by replacing the
term "Qualified Rate Order" with the term "Qualified Rate Orders" in each of the
second line and third line thereof.

     (e) Section 8.02(d)(i) of the Indenture shall be amended by adding the
following phrase at the end thereof: "; provided that the Bond Trustee shall not
receive any such Indemnity Amounts if an Event of Default is reasonably expected
to occur as a result of the payment of any such Indemnity Amounts; provided,
further, that prior to the payment of any such Indemnity Amount, the Issuer
shall provide notice to the Rating Agencies of the Indemnity Amount and, if
reasonably required by the Rating Agencies, the Issuer shall deliver an
Officer's Certificate (and other backup information supporting the Officer's
Certificate reasonably required by the Rating Agencies) to the Rating Agencies
certifying that such payment is reasonably expected not to result in an Event of
Default".

     (f) Section 8.02(d)(ii) of the Indenture shall be amended by adding the
following phrase at the end thereof: "; provided that the Issuer Trustee shall
not receive any such Indemnity Amounts if an Event of Default is reasonably
expected to occur as a result of the payment of any such Indemnity Amounts;
provided, further, that prior to the payment of any such Indemnity Amount, the
Issuer shall provide notice to the Rating Agencies of the Indemnity Amount and,
if reasonably required by the Rating Agencies, the Issuer shall deliver an
Officer's Certificate (and other backup information supporting the Officer's
Certificate reasonably required by the Rating Agencies) to the Rating

                                       8

<PAGE>

Agencies certifying that such payment is reasonably expected not to result in an
Event of Default".

     (g) Section 8.02(f) of the Indenture shall be amended by (i) adding the
following phrase at the end of clause (iv) thereof: "provided that if the Issuer
receives Liquidated Damages from the Seller as a result of a breach of a
representation and warranty under the Sale Agreement which relates to one or
more of the Qualified Rate Orders, but not all of the Qualified Rate Orders,
then only the Redemption Price and accrued interest for the Affected Transition
Bonds shall be paid to Transition Bondholders of such Series, and any amounts
due to any Counterparty pursuant to a Swap Agreement entered into in connection
with the issuance of the Affected Transition Bonds shall be paid to such
Counterparty;" and (ii) adding the following phrase at the end of clause (vi)
thereof: "provided that if the Issuer receives Liquidated Damages from the
Seller as a result of a breach of a representation and warranty under the Sale
Agreement which relates to one or more of the Qualified Rate Orders, but not all
of the Qualified Rate Orders, then the balance, if any, will remain in the
Collection Account".

     (h) Section 10.02(a) of the Indenture shall be amended by adding the
following phrase at the end of clause (ii) thereof: "; provided that if the
Issuer receives Liquidated Damages from the Seller as a result of a breach of a
representation and warranty under the Sale Agreement which relates to one or
more of the Qualified Rate Orders, but not all of the Qualified Rate Orders,
then (1) only the Affected Transition Bonds will be redeemed and (2) the
Redemption Price shall be equal to the then outstanding principal amount of the
Affected Transition Bonds as of the Liquidated Damages Redemption Date plus
accrued interest to such Redemption Date".

     (i) Section 11.04 of the Indenture shall be amended by replacing the phrase
"Standard & Poor's Corporation, 26 Broadway (15th Floor), New York, NY 10004"
with the phrase "Standard & Poor's Rating Services, 55 Water Street (41st
Floor), New York, NY 10041".

     SECTION 9. Delivery and Payment for the Series 2000-A Transition Bonds;
Form of the Series 2000-A Transition Bonds. The Bond Trustee shall deliver the
Series 2000-A Transition Bonds to the Issuer when authenticated in accordance
with Section 2.02 of the Indenture. The Series 2000-A Transition Bonds of each
Class shall be in the form of Exhibits A-1 through A-4 hereto.

                                       9
<PAGE>

     SECTION 10. Confirmation of Indenture. As supplemented by this Supplement,
the Indenture is in all respects ratified and confirmed and the Indenture, as so
supplemented by this Supplement, shall be read, taken, and construed as one and
the same instrument.

     SECTION 11. Counterparts. This Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.

     SECTION 12. Governing Law. This 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 shall be determined in accordance with such laws.

     SECTION 13. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Bond Trustee on
the Transition Bonds or under this Supplement 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 none of the Bond Trustee's obligations are in its
individual capacity).

                                       10
<PAGE>

     IN WITNESS WHEREOF, the Issuer and the Bond Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month 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,
                                           Delaware Trustee and
                                           Independent Trustee

                                        By /s/ Edward L. Truitt, Jr.
                                           -------------------------------------
                                           Name: Edward L. Truitt, Jr.
                                           Title: Vice President

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

                                        By /s/ Thomas J. Provenzano
                                           -------------------------------------
                                           Name: Thomas J. Provenzano
                                           Title: Vice President

                                       11

<PAGE>

                                                                      SCHEDULE A

<TABLE>
<CAPTION>

                                           Expected Amortization Schedule

                                            Outstanding Principal Balance

Payment Date                 Class A-1        Class A-2       Class A-3         Class A-4        Series 2000-A
------------                -----------      -----------     -----------       -----------      ---------------
<S>                         <C>              <C>             <C>               <C>               <C>
Series Issuance Date..      110,000,000      140,000,000     398,838,452       351,161,548       1,000,000,000
September 1, 2000.....      110,000,000      140,000,000     398,838,452       351,161,548       1,000,000,000
March 1, 2001.........       62,081,471      140,000,000     398,838,452       351,161,548         952,081,417
September 1, 2001.....                0      140,000,000     398,838,452       351,161,548         890,000,000
March 1, 2002.........                0       68,928,136     398,838,452       351,161,548         818,928,136
September 1, 2002.....                0                0     398,838,452       351,161,548         750,000,000
March 1, 2003.........                0                0     398,838,452       351,161,548         750,000,000
September 1, 2003.....                0                0     398,838,452       351,161,548         750,000,000
March 1, 2004.........                0                0     398,838,452       351,161,548         750,000,000
September 1, 2004.....                0                0     398,838,452       351,161,548         750,000,000
March 1, 2005.........                0                0     398,838,452       351,161,548         750,000,000
September 1, 2005.....                0                0     398,838,452       351,161,548         750,000,000
March 1, 2006.........                0                0     398,838,452       351,161,548         750,000,000
September 1, 2006.....                0                0     398,838,452       351,161,548         750,000,000
March 1, 2007.........                0                0     398,838,452       351,161,548         750,000,000
September 1, 2007.....                0                0     398,838,452       351,161,548         750,000,000
March 1, 2008.........                0                0     376,413,585       351,161,548         727,575,133
September 1, 2008.....                0                0     348,838,452       351,161,548         700,000,000
March 1, 2009.........                0                0               0       351,161,548         351,161,548
September 1, 2009.....                0                0               0                 0                   0
March 1, 2010.........                0                0               0                 0                   0
</TABLE>

<PAGE>

                                                                      SCHEDULE B

                           Monthly Allocated Balances

<TABLE>
<CAPTION>
                                              Monthly Allocated         Monthly Allocated
Monthly Allocation Date                        Interest Balance         Principal Balance
-----------------------                       ------------------        -----------------
<S>                                           <C>                       <C>
June 1, 2000..........................            11,335,047                       --
July 1, 2000..........................            15,344,430                       --
August 1, 2000........................            19,880,821                       --
September 1, 2000.....................            24,921,671                       --
October 1, 2000.......................             5,860,167                7,449,228
November 1, 2000......................            12,127,490               15,416,018
December 1, 2000......................            18,091,187               22,996,849
January 1, 2001.......................            23,950,499               30,444,990
February 1, 2001......................            30,496,670               38,766,241
March 1, 2001.........................            37,696,645               47,918,583
April 1, 2001.........................             6,198,559               10,696,336
May 1, 2001...........................            12,131,238               20,933,865
June 1, 2001..........................            17,669,661               30,491,060
July 1, 2001..........................            23,208,919               40,049,695
August 1, 2001........................            29,244,409               50,464,636
September 1, 2001.....................            35,976,368               62,081,417
October 1, 2001.......................             6,026,170               12,690,993
November 1, 2001......................            11,845,275               24,945,912
December 1, 2001......................            17,173,884               36,167,856
January 1, 2002.......................            22,367,208               47,104,891
February 1, 2002......................            27,938,266               58,837,428
March 1, 2002.........................            33,747,645               71,071,864
April 1, 2002.........................             5,391,423               11,928,692
May 1, 2002...........................            10,531,897               23,302,150
June 1, 2002..........................            15,323,997               33,904,776
July 1, 2002..........................            20,114,015               44,502,883
August 1, 2002........................            25,332,185               56,048,246
September 1, 2002.....................            31,153,522               68,928,136
October 1, 2002.......................             5,254,639                       --
November 1, 2002......................            10,217,783                       --
December 1, 2002......................            14,725,198                       --
January 1, 2003.......................            19,108,589                       --
February 1, 2003......................            23,782,708                       --
March 1, 2003.........................            28,637,645                       --
April 1, 2003.........................             4,957,627                       --
May 1, 2003...........................             9,684,198                       --
June 1, 2003..........................            14,089,731                       --
July 1, 2003..........................            18,490,788                       --
August 1, 2003........................            23,285,552                       --
September 1, 2003.....................            28,637,645                       --
October 1, 2003.......................             5,272,012                       --
November 1, 2003......................            10,233,758                       --
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                              Monthly Allocated         Monthly Allocated
Monthly Allocation Date                        Interest Balance         Principal Balance
-----------------------                       ------------------        -----------------
<S>                                           <C>                       <C>
December 1, 2003......................            14,730,371                       --
January 1, 2004.......................            19,100,257                       --
February 1, 2004......................            23,769,833                       --
March 1, 2004.........................            28,637,645                       --
April 1, 2004.........................             4,956,412                       --
May 1, 2004...........................             9,683,008                       --
June 1, 2004..........................            14,088,905                       --
July 1, 2004..........................            18,489,896                       --
August 1, 2004........................            23,284,751                       --
September 1, 2004.....................            28,637,645                       --
October 1, 2004.......................             5,376,048                       --
November 1, 2004......................            10,351,765                       --
December 1, 2004......................            14,835,936                       --
January 1, 2005.......................            19,188,703                       --
February 1, 2005......................            23,825,187                       --
March 1, 2005.........................            28,637,645                       --
April 1, 2005.........................             4,957,630                       --
May 1, 2005...........................             9,684,020                       --
June 1, 2005..........................            14,089,489                       --
July 1, 2005..........................            18,490,401                       --
August 1, 2005........................            23,285,176                       --
September 1, 2005.....................            28,637,645                       --
October 1, 2005.......................             5,250,289                       --
November 1, 2005......................            10,131,763                       --
December 1, 2005......................            14,541,759                       --
January 1, 2006.......................            18,826,142                       --
February 1, 2006......................            23,539,803                       --
March 1, 2006.........................            28,637,645                       --
April 1, 2006.........................             4,952,684                       --
May 1, 2006...........................             9,681,077                       --
June 1, 2006..........................            14,089,359                       --
July 1, 2006..........................            18,487,247                       --
August 1, 2006........................            23,279,815                       --
September 1, 2006.....................            28,637,645                       --
October 1, 2006.......................             5,389,289                       --
November 1, 2006......................            10,359,806                       --
December 1, 2006......................            14,834,519                       --
January 1, 2007.......................            19,179,254                       --
February 1, 2007......................            23,813,481                       --
March 1, 2007.........................            28,637,645                       --
April 1, 2007.........................             4,972,495                       --
May 1, 2007...........................             9,704,644                       --
June 1, 2007..........................            14,110,761                       --
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                              Monthly Allocated         Monthly Allocated
Monthly Allocation Date                        Interest Balance         Principal Balance
-----------------------                       ------------------        -----------------
<S>                                           <C>                       <C>
July 1, 2007..........................            18,497,979                       --
August 1, 2007........................            23,280,298                       --
September 1, 2007.....................            28,637,645                       --
October 1, 2007.......................             5,638,132                4,414,971
November 1, 2007......................            10,620,078                8,316,111
December 1, 2007......................            15,027,315               11,767,222
January 1, 2008.......................            19,289,203               15,104,517
February 1, 2008......................            23,856,237               18,680,759
March 1, 2008.........................            28,637,645               22,424,867
April 1, 2008.........................             4,824,756                4,788,710
May 1, 2008...........................             9,415,760                9,345,415
June 1, 2008..........................            13,690,269               13,587,989
July 1, 2008..........................            17,945,258               17,811,190
August 1, 2008........................            22,583,990               22,415,265
September 1, 2008.....................            27,782,697               27,575,133
October 1, 2008.......................             4,877,526               63,650,577
November 1, 2008......................             9,506,354              124,055,689
December 1, 2008......................            13,704,594              178,841,742
January 1, 2009.......................            17,786,861              232,114,368
February 1, 2009......................            22,162,157              289,210,957
March 1, 2009.........................            26,731,395              348,838,452
April 1, 2009.........................             2,333,212               60,999,018
May 1, 2009...........................             4,552,848              119,028,704
June 1, 2009..........................             6,619,322              173,054,180
July 1, 2009..........................             8,676,449              226,835,267
August 1, 2009........................            10,918,982              285,463,581
September 1, 2009.....................            13,431,929              351,161,548
</TABLE>

<PAGE>
                                                  Exhibit A to Series Supplement

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 2000-A, 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 September 1, 2000 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

<PAGE>

                                                                               2

but excluding such Payment Date or, if no interest has yet been paid, from
May 2, 2000. 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.

     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.

<PAGE>

                                                                               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:

<PAGE>

                                                                               4

                  BOND TRUSTEE'S CERTIFICATE OF AUTHENTICATION

Dated: May 2, 2000

     This is one of the Class [ ] Transition Bonds of the Series 2000-A
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

<PAGE>

                                                                               5

                          [REVERSE OF TRANSITION BOND]

     This Series 2000-A, 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 2000-A
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
May 2, 2000 (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 2000-A
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

<PAGE>

                                                                               6

Bonds representing not less than a majority of the Outstanding Amount of the
Transition Bonds of all Series have declared the 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 2000-A 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 2000-A 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 2000-A 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

<PAGE>

                                                                               7

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 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 [ ]

<PAGE>

                                                                               8

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, 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

<PAGE>

                                                                               9

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 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

<PAGE>

                                                                              10

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.

<PAGE>

                                                                              11

                                   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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}]]