Document:

ppl10q6-07exhibit10a.htm

    Exhibit
      10(a)

    

    

    APPENDIX
      1

    

    2007

    

    PPL
      ELECTRIC UTILITIES CORPORATION

    

    PROVIDER
      OF LAST RESORT

    

    SUPPLY
      MASTER AGREEMENT

    

    BETWEEN

    

    [PPL
      ELECTRIC UTILITIES CORPORATION]

    

    AND

    

    [PPL
      ENERGYPLUS, LLC]

    

    

    

    

    

    

    

    

    

    

    

    

    DATED
      [JULY 26, 2007]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PROVIDER
      OF LAST RESORT SUPPLY MASTER AGREEMENT

    Articles
      and Provisions

    Table
      of Contents

    
      	
              ARTICLE
                1 DEFINITIONS

            	
              4

            
	
              ARTICLE
                2 TERMS AND CONDITIONS OF FULL REQUIREMENTS
                SERVICE

            	
              13

            
	
              2.1

            	
              SELLER'S
                OBLIGATION TO PROVIDE SERVICE

            	
              13

            
	
              2.2

            	
              BUYER'S
                OBLIGATION TO TAKE SERVICE

            	
              13

            
	
              2.3

            	
              DISTRIBUTION
                SERVICE

            	
              14

            
	
              2.4

            	
              CHANGES
                IN PJM CHARGES

            	
              14

            
	
              2.5

            	
              STATUS
                OF SELLER

            	
              14

            
	
              2.6

            	
              SALES
                FOR RESALE

            	
              14

            
	
              2.7

            	
              GOVERNING
                TERMS

            	
              14

            
	
              2.8

            	
              TRANSACTION
                CONFIRMATION

            	
              14

            
	
              ARTICLE
                3 SCHEDULING, FORECASTING, AND INFORMATION
                SHARING

            	
              15

            
	
              3.1

            	
              SCHEDULING

            	
              15

            
	
              3.2

            	
              LOAD
                FORECASTING

            	
              15

            
	
              3.3

            	
              INFORMATION
                SHARING

            	
              15

            
	
              ARTICLE
                4 SPECIAL TERMS AND CONDITIONS

            	
              15

            
	
              4.1

            	
              CONGESTION
                AND CONGESTION MANAGEMENT

            	
              15

            
	
              4.2

            	
              LOAD
                RESPONSE PROGRAMS

            	
              16

            
	
              4.3

            	
              PJM
                E-ACCOUNTS

            	
              16

            
	
              4.4

            	
              ALTERNATIVE
                ENERGY PORTFOLIO STANDARDS OBLIGATION

            	
              16

            
	
              4.5

            	
              TITLE
                TRANSFER

            	
              16

            
	
              4.6

            	
              RELIABILITY
                GUIDELINES

            	
              17

            
	
              4.7

            	
              PJM
                MEMBERSHIP

            	
              17

            
	
              4.8

            	
              DECLARATION
                OF AUTHORITY

            	
              17

            
	
              4.9

            	
              FERC
                AUTHORIZATION

            	
              17

            
	
              4.10

            	
              DISCLOSURE
                IN THE EVENT OF SELLER DEFAULT

            	
              17

            
	
              4.11

            	
              SELLER
                STEP-UP RIGHTS

            	
              17

            
	
              ARTICLE
                5 TERM AND SURVIVAL

            	
              18

            
	
              5.1

            	
              TERM

            	
              18

            
	
              5.2

            	
              SURVIVAL

            	
              18

            
	
              ARTICLE
                6 DETERMINATION OF DELIVERED QUANTITIES

            	
              18

            
	
              6.1

            	
              MONTHLY
                SETTLEMENT LOAD

            	
              18

            
	
              ARTICLE
                7 BILLING AND SETTLEMENT

            	
              18

            
	
              7.1

            	
              BILLING

            	
              18

            
	
              7.2

            	
              PJM
                BILLING

            	
              19

            
	
              7.3

            	
              PAYMENTS
                OF THE INVOICE

            	
              19

            
	
              7.4

            	
              BILLING
                DISPUTES AND ADJUSTMENTS OF INVOICES

            	
              19

            
	
              7.5

            	
              INTEREST
                ON UNPAID BALANCES

            	
              20

            
	
              ARTICLE
                8 TAXES

            	
              20

            
	
              8.1

            	
              COOPERATION

            	
              20

            
	
              8.2

            	
              TAXES

            	
              20

            
	
              8.3

            	
              DISCLOSURE
                OF TAX TREATMENT

            	
              20

            
	
              ARTICLE
                9 INDEMNIFICATION

            	
              21

            
	
              9.1

            	
              SELLER'S
                INDEMNIFICATION FOR THIRD-PARTY CLAIMS

            	
              21

            
	
              9.2

            	
              BUYER'S
                INDEMNIFICATION FOR THIRD-PARTY CLAIMS

            	
              21

            
	
              9.3

            	
              INDEMNIFICATION
                PROCEDURES

            	
              21

            
	
              ARTICLE
                10 LIMITATIONS ON LIABILITY

            	
              22

            

    

    
      	
              ARTICLE
                11 FORCE MAJEURE

            	
              22

            
	
              11.1

            	
              FORCE
                MAJEURE

            	
              22

            
	
              11.2

            	
              NOTIFICATION

            	
              23

            
	
              ARTICLE
                12 EVENTS OF DEFAULT; REMEDIES

            	
              23

            
	
              12.1

            	
              EVENTS
                OF DEFAULT

            	
              23

            
	
              12.2

            	
              REMEDIES

            	
              24

            
	
              12.3

            	
              CALCULATION
                AND NET OUT OF SETTLEMENT AMOUNTS

            	
              25

            
	
              12.4

            	
              NOTICE
                OF TERMINATION PAYMENT

            	
              26

            
	
              12.5

            	
              DISPUTES
                WITH RESPECT TO TERMINATION PAYMENT

            	
              26

            
	
              12.6

            	
              DUTY
                TO MITIGATE

            	
              26

            
	
              ARTICLE
                13 DISPUTE RESOLUTION

            	
              26

            
	
              13.1

            	
              INFORMAL
                DISPUTE RESOLUTION

            	
              26

            
	
              13.2

            	
              FORMAL
                DISPUTE RESOLUTION

            	
              27

            
	
              ARTICLE
                14 PERFORMANCE ASSURANCE

            	
              27

            
	
              14.1

            	
              REQUIREMENT
                FOR PERFORMANCE ASSURANCE

            	
              27

            
	
              14.2

            	
              PERFORMANCE
                ASSURANCE TRANSFERS/RETURNS

            	
              27

            
	
              14.3

            	
              UNSECURED
                CREDIT

            	
              28

            
	
              14.4

            	
              CREDIT
                RATING

            	
              29

            
	
              14.5

            	
              TANGIBLE
                NET WORTH

            	
              29

            
	
              14.6

            	
              AGGREGATE
                BUYER'S EXPOSURE

            	
              29

            
	
              ARTICLE
                15 REPRESENTATIONS AND WARRANTIES

            	
              31

            
	
              15.1

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              31

            
	
              15.2

            	
              ADDITIONAL
                UNDERSTANDINGS

            	
              32

            
	
              ARTICLE
                16 MISCELLANEOUS

            	
              32

            
	
              16.1

            	
              NOTICES

            	
              32

            
	
              16.2

            	
              GENERAL

            	
              32

            
	
              16.3

            	
              RULES
                OF INTERPRETATION

            	
              32

            
	
              16.5

            	
              CONFIDENTIALITY

            	
              33

            
	
              16.6

            	
              SUCCESSORS

            	
              34

            
	
              16.7

            	
              ASSIGNMENT/CHANGE
                IN CORPORATE IDENTITY

            	
              34

            
	
              16.8

            	
              GOVERNING
                LAW

            	
              34

            
	
              16.9

            	
              JURISDICTION
                AND VENUE

            	
              34

            
	
              16.10

            	
              AMENDMENTS

            	
              35

            
	
              16.11

            	
              PJM
                AGREEMENT MODIFICATIONS

            	
              35

            
	
              16.12

            	
              DELAY
                AND WAIVER

            	
              35

            
	
              16.13

            	
              REGULATORY
                APPROVALS

            	
              35

            
	
              EXHIBIT
                A TRANSACTION CONFIRMATION EXAMPLE

            	
              37

            
	
              EXHIBIT
                B ALTERNATIVE ENERGY PORTFOLIO STANDARDS
                OBLIGATION

            	
              38

            
	
              EXHIBIT
                C PERFORMANCE ASSURANCE EVERGREEN LETTER OF
                CREDIT

            	
              39

            
	
              EXHIBIT
                D SAMPLE PJM INVOICE

            	
              42

            
	
              EXHIBIT
                E METHODOLOGY FOR CALCULATION OF MARK TO MARKET (MTM)
                EXPOSURE

            	
              44

            
	
              EXHIBIT
                F UNCONDITIONAL GUARANTY

            	
              47

            
	
              EXHIBIT
                G FORM OF NOTICE

            	
              54

            
	
              EXHIBIT H
                PJM DECLARATION OF AUTHORITY

            	
              56

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PROVIDER
      OF LAST RESORT SUPPLY MASTER AGREEMENT

    

    THIS
      PROVIDER OF LAST RESORT SUPPLY MASTER AGREEMENT ("Agreement" or "POLR SMA"),
      is
      made and entered into as of _July 26, 2007 ("Effective Date"), by and
      between _PPL EnergyPlus, LLC , hereinafter referred to as "Seller" and
_PPL Electric Utilities Corporation, hereinafter referred to as
      "Buyer" (each hereinafter referred to individually as "Party" and collectively
      as "Parties").

    

    WITNESSETH:

    

    WHEREAS,
      the Pennsylvania Public Utility Commission Orders issued pursuant to the
      Electricity Generation Customer Choice and Competition Act, 66 Pa. C. S.
      Sections 2801-2182, direct Buyer to supply electric service to Provider of
      Last
      Resort Service Load ("POLR Load") within Buyer's Pennsylvania franchise service
      territory; and

    

    WHEREAS,
      the Pennsylvania legislature has enacted a law establishing an Alternative
      Energy Portfolio Standard applicable to retail electricity suppliers serving
      customers in the Commonwealth of Pennsylvania; and

    

    WHEREAS,
      Buyer has solicited offers for obtaining all or a portion of the supply it
      requires to serve its POLR Load pursuant to a Request for Proposal ("RFP")
      and
      the Seller is a winning bidder in that solicitation; and

    

    WHEREAS,
      Seller desires to sell Full Requirements Service and Buyer desires to purchase
      such Full Requirements Service to supply a Specified Percentage in Buyer's
      Pennsylvania franchised service territory on a firm and continuous basis;
      and

    

    NOW,
      THEREFORE, and in consideration of the foregoing, and of the mutual promises,
      covenants, and conditions set forth herein, and other good and valuable
      consideration, the Parties hereto, intending to be legally bound by the terms
      and conditions set forth in this Agreement, hereby agree as
      follows:

     

    ARTICLE
      1

    DEFINITIONS

    

    In
      addition to terms defined elsewhere in this Agreement, the following definitions
      shall apply hereunder:

    

    "Affiliate"
      means, with respect to any entity, any other entity that, directly or
      indirectly, through one or more intermediaries, controls, or is controlled
      by,
      or is under common control with, such entity. For this purpose, "control" means
      the direct or indirect ownership of fifty percent (50%) or more of the
      outstanding capital stock or other equity interests having ordinary voting
      power.

    

    "Aggregate
      Buyer's Exposure" means all Buyer's Exposure for Aggregate
      Transactions.

    

    "Aggregate
      Transactions" means all Transactions under this Agreement and all other
      transactions under Supply Master agreements executed between the Parties
      pursuant to the PUC Orders.

    

    "Ancillary
      Services" shall have the meaning ascribed thereto in the PJM
      Agreements.

    

    "Alternative
      Energy Portfolio Standards ("AEPS") Obligation" shall have the meaning
      ascribed to it in Section 4.4 (Alternative Energy Portfolio Standards
      Obligation).

    

    "Alternative
      Energy Portfolio Standards ("AEPS")" shall have the meaning ascribed to it
      in the Pennsylvania Alternative Energy Portfolio Standards Act, 73 P.S. §§
1648.1-1648.8.

    

    "Amended
      and Restated PJM Operating Agreement" means the Operating Agreement of PJM
      or the successor, superceding or amended versions of the Operating Agreement
      that may take effect from time to time.

    

    "Bankrupt"
      means, with respect to any entity, such entity: (i) voluntarily files a petition
      or otherwise commences, authorizes or acquiesces in the commencement of a
      proceeding or cause of action under any bankruptcy, insolvency, reorganization
      or similar law, or has any such petition filed or commenced against it by its
      creditors and such petition is not dismissed within sixty (60) calendar days
      of
      the filing or commencement; (ii) makes an assignment or any general arrangement
      for the benefit of creditors; (iii) otherwise becomes insolvent, however
      evidenced; (iv) has a liquidator, administrator, receiver, trustee, conservator
      or similar official appointed with respect to it or any substantial portion
      of
      its property or assets; or (v) is generally unable to pay its debts as they
      fall
      due.

    

    "Business
      Day" means any day except a Saturday, Sunday or a day that PJM declares to
      be a holiday, as posted on the PJM website. A Business Day shall open at 8:00
      a.m. and close at 5:00 p.m. Eastern Prevailing Time ("EPT").

    

    "Buyer
      Downgrade Event " means that Buyer's (or Buyer's Guarantor's) Credit
      Rating is
      less than BBB- by S&P, BBB- by Fitch or Baa3 by Moody's.

    

    "Buyer's
      Exposure" during the term of a Transaction shall be deemed equal to the
      positive difference between: (i) the MtM Exposure pursuant to a Transaction
      under this Agreement; less (ii) the sum of any unpaid or unbilled amounts owed
      by Buyer to Seller pursuant to a Transaction under this Agreement. With respect
      to the preceding sentence, "unbilled amounts owed by Buyer" shall consist of
      a
      good faith estimate by Buyer as to any amounts which will be owed by Buyer
      for
      service already rendered by Seller under a Transaction.

    

    "Capacity"
      means "Unforced Capacity" as set forth in the PJM Agreements, or any successor
      measurement of the capacity obligation of a Load Serving Entity as may be
      employed in PJM (whether set forth in the PJM Agreements or
      elsewhere).

    

    "Capacity
      Forward Price" means the price, as reported by PJM, for Capacity stated in
      terms of $/MWD associated with each month remaining in a Transaction Delivery
      Period.

    

    "Capacity
      Initial Mark Price" means the Capacity Forward Price as of the Transaction
      Date.

    

    "Capacity
      Obligation" means the product of the capacity obligation, consistent with
      PJM unforced capacity accounting and corresponding to the Current PLC Per
      Tranche, and the number of Tranches awarded to the Seller.

    

    "Congestion
      Revenue Rights" or "CRR" means the current or any successor congestion
      management mechanism or mechanisms as may be employed by PJM (whether set forth
      in the PJM Tariff or elsewhere) for the purpose of allocating financial
      congestion hedges.

    

    "Costs"
      means, with respect to the Non-Defaulting Party, brokerage fees, commissions,
      PJM charges, and other similar third party transaction costs and expenses
      reasonably incurred by such Party either in terminating any arrangement pursuant
      to which it has hedged its POLR Load obligations or entering into new
      arrangements which replace a Terminated Transaction; and all reasonable
      attorneys' fees and expenses incurred by the Non-Defaulting Party in connection
      with the termination of a Transaction.

    

    "Credit
      Rating" means, with respect to any entity, the rating then assigned to such
      entity's unsecured, senior long-term debt obligations (not supported by third
      party credit enhancements) or if such entity does not have a rating for its
      senior unsecured long-term debt, then the rating then assigned to such entity
      as
      an issuer rating by S&P, Moody's or Fitch.

    

    "Current
      PLC Per Tranche" means, on any given Business Day, for each Transaction, the
      product of: (i) the aggregate PLC for an entire Service Type; and (ii) the
      quotient of (x) the Specified Percentage and (y) the number of
      Tranches.

    

    "Declaration
      of Authority" shall have the meaning ascribed to it in Section 4.8
      (Declaration of Authority).

    

    "Default
      Damages" means, for the period of time specified in Section 12.2(b)(ii)
      (Remedies) any direct damages and Costs, calculated in a commercially reasonable
      manner, that the Non-Defaulting Party incurs with respect to the Specified
      Percentage as a result of an Event of Default. Direct damages may include,
      but
      are not limited to: (i) the positive difference (if any) between the price
      of
      Full Requirements Service hereunder and the price at which the Buyer or Seller
      is able to purchase or sell (as applicable) Full Requirements Service (or any
      components of Full Requirements Service it is able to purchase or sell) from
      or
      to third parties, including PJM; (ii) Emergency Energy charges; and (iii)
      additional transmission or congestion costs incurred to purchase or sell Full
      Requirements Service.

    

    "Delivery
      Period" means the period of delivery for a Transaction as specified in a
      Transaction Confirmation.

    

    "Delivery
      Point" means the PPL Zone as defined within PJM.

    

    "Eastern
      Prevailing Time" or "EPT" means Eastern Standard Time or Eastern Daylight
      Savings Time, whichever is in effect on any particular date.

    

    "Emergency
      Energy" shall have the meaning ascribed to it in the PJM
      Agreements.

    

    "Energy"
      means three-phase, 60-cycle alternating current electric energy, expressed
      in
      units of kilowatt-hours or megawatt-hours.

    

    "Equitable
      Defenses" means any bankruptcy, insolvency, reorganization and other laws
      affecting creditors' rights generally, and with regard to equitable remedies,
      the discretion of the court before which proceedings to obtain same may be
      pending.

    

    "FERC
      " means the Federal Energy Regulatory Commission or its successor.
"Fitch" means Fitch Investor Service, Inc. or its successor.

    

    "Force
      Majeure" "Force Majeure" means an event or circumstance which prevents one
      party from performing its obligations under one or more transactions, such
      riot
      or revolutions, demands or embargoes of the United States Government, fire,
      flood, drought, insurrection, acts of God which are not within the reasonable
      control of, or the result of the negligence of the affected party and which,
      by
      the exercise of due diligence, the Party is unable to mitigate or avoid or
      cause
      to be avoided. Notwithstanding the foregoing, under no circumstance shall an
      event of Force Majeure be based on: (i) the loss or failure of Seller's supply;
      (ii) Seller's ability to sell the Full Requirements Service at a price greater
      than that received under any Transaction; (iii) curtailment by a Transmitting
      Utility; (iv) Buyer's ability to purchase the Full Requirements Service at
      a
      price lower than paid under any Transaction; or (v) Labor stoppage or
      lockout.

    

    "Full
      Requirements Service" means all necessary Energy, Capacity, Transmission
      other than Network Integration Transmission Service, Ancillary Services,
      Pennsylvania Alternative Energy Portfolio Standard (AEPS) requirement,
      transmission and distribution losses, congestion management costs, and such
      other services or products that are required to supply the Specified Percentage
      except for Network Integration Transmission Service and distribution
      service.

    

    "Gains"
      means, with respect to any Party, an amount equal to the present value of the
      economic benefit to it, if any (exclusive of Costs), resulting from a Terminated
      Transaction, determined in a commercially reasonable manner.

    

    "Generator
      Attribute Tracking System" or "GATS" means the system owned and
      operated by PJM Environmental Services, Inc. to provide environmental and
      emissions attributes reporting and tracking services to its subscribers in
      support of Pennsylvania Alternative Energy Portfolio Standard (AEPS)
      Act.

    

    "Governmental
      Authority" means any federal, state, local, municipal or other governmental
      entity, authority or agency, department, board, court, tribunal, regulatory
      commission, or other body, whether legislative, judicial or executive, together
      or individually, exercising or entitled to exercise any administrative,
      executive, judicial, legislative, policy, regulatory or taxing authority or
      power over a Party or this Agreement.

    

    "Guarantor"
      means any party, who agrees to guaranty Seller's financial obligations under
      this Agreement pursuant to the guaranty agreement, attached hereto as Exhibit
      F,
      recognizing that such a party will be obligated to meet or exceed Buyer's credit
      requirements for Seller and that the acceptability of such guaranty will be
      determined at Buyer's sole discretion.

    

    "Interest
      Rate" means, for any date, the lesser of: (i) the per annum rate of interest
      equal to the prime lending rate as may from time to time be published in The Wall Street Journal
      under "Money
      Rates" on such day (or if not published on such day on the most recent preceding
      day on which published), plus two percent (2%); and (ii) the maximum rate
      permitted by applicable law.

    

    "kWh"
      means one kilowatt of electric power over a period of one hour.

    

    "Letter(s)
      of Credit" means one or more irrevocable, transferable standby letters of
      credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch,
      with such bank having a credit rating of at least A- from S&P or A3 from
      Moody's and a minimum of $10 billion in assets, in a form acceptable to the
      Party in whose favor the letter of credit is issued (for clarification, the
      form
      of Letter of Credit attached as Exhibit C hereto shall be considered an
      acceptable form). Costs of a Letter of Credit shall be borne by the applicant
      for such Letter of Credit. The Party to whom the Letter of Credit is in favor
      reserves the right to monitor the financial position of the issuing bank and,
      if
      the issuing bank's Credit Rating is downgraded by any increment; or if the
      issuing bank's Current, Quick, Return on Assets, or Price/Earnings ratios
      diminish (reflecting the financial stability of the bank); or if the Party
      determines, for any reason, at its sole discretion that the issuing bank's
      position has deteriorated, then the Party has the right to demand and receive,
      from the applicant for the Letter of Credit, that the Letter of Credit be
      reissued from a bank that meets or exceeds the credit ratings and asset
      valuation listed above.

    

    "Load
      Percentage" means the percentage of the Monthly Settlement Load that the
      Monthly Settlement Price is applicable to, as set forth in Section 6.2 (Load
      Percentages).

    

    "Load
      Serving Entity" or "LSE" shall have the meaning ascribed to it in the PJM
      Agreements.

    

    "Losses"
      means, with respect to any Party, an amount equal to the present value of the
      economic loss to it, if any (exclusive of Costs), resulting from the termination
      of a Terminated Transaction, determined in a commercially reasonable
      manner.

    

    "Mark
      to Market Exposure" or "MtM Exposure" means, with respect to each month
      remaining in each Transaction Delivery Period, the sum of: (i) the relevant
      month On-Peak Forward Price minus the relevant month On-Peak Initial Mark Price,
      multiplied by the relevant month On-Peak Estimated Energy Quantity; (ii) the
      relevant month Off-Peak Forward Price minus the relevant month Off-Peak Initial
      Mark Price, multiplied by the relevant month Off-Peak Estimated Energy Quantity;
      and (iii) the relevant month Capacity Forward Price minus the relevant month
      Capacity Initial Mark Price, multiplied by the remaining Capacity
      Obligation.

    

    The
      methodology for calculating the MtM Exposure and an example are included in
      Exhibit E.

    

    "Monthly
      Settlement Amount" means with respect to any calendar month during the
      Delivery Period, the sum of: (i) the product of the applicable Monthly
      Settlement Price and Monthly Settlement Load; and (ii) any other adjustments
      as
      set forth in this Agreement.

    

    "Monthly
      Settlement Price" means the price for Monthly Settlement Load for the
      applicable month of the Delivery Period as set forth in a Transaction
      Confirmation.

    

    "Monthly
      Settlement Date" means, with respect to any calendar month of a Delivery
      Period, the date(s) determined to be the PJM Settlement Date(s) pursuant to
      the
      PJM Agreements.

    

    "Monthly
      Settlement Load" means, with respect to any calendar month during an
      applicable Delivery Period, the product of Specified Percentage and POLR
      Load.

    

    "Moody's"
      means Moody's Investor Services, Inc. or its successor.

    

    "MWD"
      means one megawatts of electric power available over a period of one day which
      shall be rounded in a manner consistent with the standards in the PJM
      Agreements.

    

    "MWh"
      means one megawatt of electric power used over a period of one hour which shall
      be rounded in a manner consistent with standards in the PJM Agreements. The
      current rounding standards are to the nearest one-thousandth of a megawatt
      hour.

    

    "MW-Measure"
      means the estimated megawatt measure of PLC corresponding to a single
      Tranche.

    

    "NERC"
      means the North American Electric Reliability Council or any successor
      organization thereto.

    

    "Network
      Integration Transmission Service" shall have the meaning ascribed to it in
      the PJM Agreements.

    

    "Non-Defaulting
      Party" means the Party not responsible for an Event of Default, as set forth
      in Article 12.

    

    "Off-Peak
      Estimated Energy Quantity" means, for each month in each Transaction, the
      product of: (i) the relevant month Off-Peak Estimated Energy Quantity per
      MW-Measure; (ii) the quotient of the Current PLC Per Tranche divided by the
      MW-Measure; (iii) the number of Tranches awarded to the Seller per the
      Transaction Confirmation; and (iv) the percentage of Off-Peak Hours remaining
      (excluding current day) in each month.

    

    "Off-Peak
      Estimated Energy Quantity Per MW-Measure" means the estimation of Energy,
      inclusive of electrical line losses, in the Off-Peak Hours for each of the
      twelve (12) calendar months, as set forth in the Transaction
      Confirmation.

    

    "Off-Peak
      Forward Price" means the price, as provided by the Pricing Agent, for
      Off-Peak Hours, stated in terms of $/MWh, associated with each month remaining
      in a Transaction Delivery Period, and based on the most recent publicly
      available information and/or quotes from Reference Market-Makers on forward
      Energy transactions occurring at the PJM Western HUB (as discussed in Exhibit
      E). If the publicly available information is not available from the Reference
      Market-Makers then the price shall equal the product of: (i) the relevant month
      Off-Peak Forward Price; and (ii) the relevant month Off-Peak Price
      Ratio.

    

    "Off-Peak
      Hours" means those hours which are not On-Peak Hours.

    

    "Off-Peak
      Initial Mark Price" means the Off-Peak Forward Price as of the Transaction
      Date.

    

    "Off-Peak
      Price Ratio" means the ratio of the relevant month's average off-peak price
      to the annual average off-peak price calculated using PJM's reported day-ahead
      hourly prices as set forth by Buyer each month based on the previous 36-month
      rolling period.

    The
      historical off-peak prices used to calculate the ratio will be the PJM Western
      Hub day-ahead hourly prices for the Off-Peak Hours. The relevant month's average
      off-peak price will be calculated as the sum of all the off-peak hourly prices
      in all such months divided by the total amount of off-peak hours in all such
      months (e.g., for the month of January, there would be three such months).
      The
      annual average off-peak price will be calculated as the sum of all the off-peak
      hourly prices in the 36-month rolling period divided by the total amount of
      off-peak hours in the 36-month rolling period.

    

    "On-Peak
      Estimated Energy Quantity" means, for each month in each Transaction, the
      product of: (i) the relevant month On-Peak Estimated Energy Quantity per
      MW-Measure; (ii) the quotient of the Current PLC Per Tranche divided by the
      MW-Measure; (iii) the number of Tranches awarded to the Seller per the
      Transaction Confirmation; and (iv) the percentage of On-Peak Hours remaining
      (excluding current day) in each month.

    

    "On-Peak
      Estimated Energy Quantity Per MW-Measure" means the estimation of Energy,
      inclusive of electrical line losses, in the On-Peak Hours for each of the twelve
      (12) calendar months, as set forth in the Transaction Confirmation.

    

    "On-Peak
      Forward Price" means the price, as provided by the Pricing Agent, for
      On-Peak Hours, stated in terms of $/MWh, associated with each month remaining
      in
      a Transaction Delivery Period, and based on the most recent publicly available
      information and/or quotes from Reference Market-Makers on forward Energy
      transactions occurring at the PJM Western HUB (as discussed in Exhibit E).
      If
      the publicly available information is not available from the Reference
      Market-Makers then the price shall equal the product of: (i) the relevant month
      On-Peak Forward Price; and (ii) the relevant month On Peak Price
      Ratio.

    

    "On-Peak
      Hours" means Hour Ending ("HE") 0800 through HE 2300 EPT, Monday through
      Friday, excluding Saturday, Sunday and PJM holidays.

    

    "On-Peak
      Initial Mark Price" means the On-Peak Forward Price as of the Transaction
      Date.

    

    "On-Peak
      Price Ratio" means the ratio of the relevant month's average on-peak price
      to the annual average on-peak price calculated using PJM's reported day-ahead
      hourly prices as set forth by Buyer each month based on the previous 36-month
      rolling period.

    The
      historical on-peak prices used to calculate the ratio will be the PJM Western
      Hub day-ahead hourly prices for the On-Peak Hours. The relevant month's average
      on-peak price will be calculated as the sum of all the on-peak hourly prices
      in
      all such months divided by the total amount of on-peak hours in all such months
      (e.g., for the month of January, there would be three such months). The annual
      average on-peak price will be calculated as the sum of all the on-peak hourly
      prices in in the 36-month rolling period divided by the total amount of on-peak
      hours in the 36-month rolling period.

    

    "Peak
      Load Contribution" or "PLC" means the aggregation of retail customer peak
      load contributions, as determined by the Buyer in accordance with the PJM
      Agreements and reported by Buyer to PJM pursuant to Buyer's retail load
      settlement process, and used by PJM in determining the Seller's capacity
      obligation for each Transaction.

    

    "Performance
      Assurance" means collateral in the form of cash, Letter(s) of Credit, or
      other security acceptable to the Requesting Party.

    

    "Photo-voltaic
      ("PV")" means shall have the meaning ascribed in Tier 1 Alternative Energy
      Sources.

    

    "PJM"
      means the PJM Interconnection, LLC or any successor organization
      thereto.

    

    "PJM
      Active Load Management " shall have the meaning ascribed to it in the PJM
      Agreements.

    

    "PJM
      Agreements" means the PJM OATT, PJM Operating Agreement, PJM RAA, PJM West
      RAA, and any other applicable PJM manuals or documents, or any successor,
      superceding or amended versions that may take effect from time to
      time.

    

    "PJM
      Control Area" shall have the meaning ascribed to it in the PJM
      Agreements.

    

    "PJM
      OATT" or "PJM Tariff' means the Open Access Transmission Tariff of PJM or
      the successor, superceding or amended versions of the Open Access Transmission
      Tariff that may take effect from time to time.

    

    "PJM
      Planning Period" shall have the meaning ascribed to it in the PJM
      Agreements. Currently, the PJM Planning Period is the twelve (12) months
      beginning June 1 and extending through May 31 of the following
      year.

    

    "PJM
      RAA" means the PJM Reliability Assurance Agreement or any successor,
      superceding or amended versions of the PJM Reliability Assurance Agreement
      that
      may take effect from time to time.

    

    "PJM
      Settlement Date" means the date on which payments are due to PJM for
      services provided by PJM in accordance with the PJM Agreements. Such date
      currently occurs on the first Business Day after the nineteenth (19th) calendar
      day of
      the month following service.

    

    "PJM
      Western Hub" means the aggregated Locational Marginal Price ("LMP") nodes
      defined by PJM.

    

    "PJM
      West RAA" means the PJM West Reliability Assurance Agreement or the
      successor, superceding or amended versions of the PJM West Reliability Assurance
      Agreement that may take effect from time to time.

    

    "POLR
      Service" shall have the meaning ascribed to it in the Electricity Generation
      Customer Choice and Competition Act and PUC Orders enacted
      thereunder.

    

    "Pricing
      Agent" shall be the person or entity described in Article 14.6, Exhibit B,
      and Exhibit E.

    

    "Provider
      of Last Resort Service Load" or "POLR Load" means the total sales at the
      retail meter, plus any losses and Unaccounted For Energy, expressed in MWh
      or
      MW, as appropriate, for a particular class(es) of retail customers being served
      by Buyer pursuant to the PUC Orders and Settlements, as such sales vary from
      hour to hour, in Buyer's Pennsylvania franchise service territory, as such
      territory exists on the Effective Date or may increase or decrease due to de
      minimis geographic border changes to the service territory that exists on the
      Effective Date. For purposes of clarification, POLR Load shall not include
      sales
      resulting from changes in the Buyer's Pennsylvania service territory which
      occur
      as a result of a merger, consolidation, or acquisition of another entity which
      has a franchised service territory in Pennsylvania or a result of a significant
      franchise territory swap with another entity which has a franchised service
      territory in Pennsylvania.

    

    "PUC"
      means the Pennsylvania Public Utility Commission and any successor
      thereto.

    

    "PUC
      Orders" means the orders issued by the PUC pursuant to the Electricity
      Generation customer Choice and Competition Act, 66 Pa. C. S. Sections 2801-2812,
      including the Order authorizing the parties to enter into this
      Agreement.

    

    "Rate
      Classes" means the existing, and modified or successor, customer rate
      schedule designations in PPL Electric Utilities Corporation's General
      Tariff.

    

    "Reference
      Market-Maker" means any broker in energy products.

    

    "Request
      for Proposal" or "RFP" means the request for proposals issued from time to
      time by Buyer pursuant to the PUC Orders and Settlements.

    

    "S&P"
      means Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. and
      any successor thereto.

    

    "Service
      Type" means the customer class, partial customer class and/or group of
      customer classes, as set forth in a Transaction Confirmation.

    

    "Settlement
      Amount" means, with respect to a Transaction and the Non-Defaulting Party,
      the Losses or Gains, and Costs, expressed in U.S. Dollars, which such Party
      incurs as a result of the liquidation of a Terminated Transaction pursuant
      to
      Article 12 (Events of Default – Remedies). The calculation of a Settlement
      Amount for a Terminated Transaction shall exclude any Default Damages calculated
      pursuant to Section 12.2(b)(ii) for the same Terminated Transaction. For the
      purposes of calculating the Termination Payment, the Settlement Amount shall
      be
      considered an amount due to the Non-Defaulting Party under this Agreement if
      total of the Losses and Costs exceeds the Gains and shall be considered an
      amount due to the Defaulting Party under this Agreement if the Gains exceed
      the
      total of the Losses and Costs.

    

    "Specified
      Percentage" means the percentage of POLR Load as set forth in a Transaction
      Confirmation.

    

    "Tangible
      Net Worth" or "TNW" means an entity's total assets (exclusive of intangible
      assets), minus that entity's total liabilities, each as would be reflected
      on a
      balance sheet prepared in accordance with generally accepted accounting
      principles, and as of the relevant date of determination most recently filed
      with the United States Securities and Exchange Commission.

    

    "TNW
      Amount" shall equal the product of the applicable TNW Percentage and an
      entity's Tangible Net Worth.

    

    "TNW
      Percentage"
      means the
      percentage determined pursuant to Section 14.3 (Unsecured Credit) that is
      multiplied by an entity's Tangible Net Worth to determine that entity's TNW
      Amount.

    

    "Tier
      1 Alternative Energy Sources" shall have the meaning ascribed to it in the
      Pennsylvania Alternative Energy Portfolio Standards Act, 73 P.S. §§
1648.1-1648.8.

    

    "Tier
      2 Alternative Energy Sources" shall have the meaning ascribed to it in the
      Pennsylvania Alternative Energy Portfolio Standards Act, 73 P.S. §§
1648.1-1648.8.

    

    "Tranche"
      means a fixed percentage share of load for a Service Type that is awarded to
      Seller in accordance with Buyer's RFP as set forth in a Transaction
      Confirmation. The fixed percentage defines the Tranche size for each of the
      Company's Service Types.

    

    "Transaction"
      means a particular agreement by which Buyer purchases and Seller sells Full
      Requirements Service pursuant to this Agreement, the details of which are more
      fully set forth in a Transaction Confirmation.

    

    "Transaction
      Confirmation" shall have the meaning ascribed to it in Section 2.8
      (Transaction Confirmation).

    

    "Transaction
      Date" means the date that a Transaction is executed as set forth in the
      Transaction Confirmation.

    

    "Transmitting
      Utility" means the utility or utilities and their respective control area
      operators and their successors, transmitting Full Requirements
      Service.

    

    "Unaccounted
      For Energy" means an energy accounting adjustment assessed by PJM for
      settlement purposes among retail energy suppliers in the PPL zone. It is the
      difference on an hourly basis (as either a credit or a charge), between, the
      PPL
      zonal load as measured and billed by PJM and adjusted for losses, and, the
      sum
      of the individually metered customer hourly loads served within the zone as
      billed and adjusted for losses. Unaccounted for Energy also includes energy
      related adjustments for PJM billing charges that are normally billed to PPL
      Electric and not necessarily billed to LSEs serving retail load in the zone.
      Load profiles adjusted for losses are used to determine individual hourly
      customer usage when actual hourly loads are not available. Unaccounted for
      Energy is distributed by PJM among all retail energy suppliers in the PPL zone
      on an hourly basis.

    

    "Unsecured
      Credit" means an amount that is the lower of: (i) the relevant Unsecured
      Credit Limit as determined pursuant to Section 14.3 (Unsecured Credit); (ii)
      the
      relevant TNW Amount, as determined pursuant to Section 14.3 (Unsecured Credit);
      or (iii) the Guaranty Amount from Seller's Guarantor as set forth in the
      Guaranty Agreement.

    

    "Unsecured
      Credit Limit" shall have the meaning ascribed to it in Section 14.3
      (Unsecured Credit).

     

    ARTICLE
      2

    TERMS
      AND CONDITIONS OF FULL REQUIREMENTS SERVICE

    

    
      	
              2.1

            	
              Seller's
                Obligation To Provide Service. With respect to a Transaction, Seller
                shall provide Full Requirements Service on a firm and continuous
                basis
                such that the Specified Percentage is supplied during the Delivery
                Period.

            

    

    

    
      	
              2.2

            	
              Buyer's
                Obligation to Take Service. With respect to a Transaction, Buyer shall
                accept Full Requirements Service as provided by Seller pursuant to
                Section
                2.1 (Seller's
                Obligation
                to Provide Service), and shall pay Seller the Monthly Settlement
                Amounts
                for such Full Requirements Service on the applicable Monthly Settlement
                Date in accordance with Section 7.3 (Payments of the
                Invoice).

            

    

     

    
      	
              2.3

            	
              Network
                Integration Transmission Service and Distribution Service. With
                respect to a Transaction, Buyer shall be responsible, at its sole
                cost and
                expense, for the provision of Network Integration Transmission Service
                for
                PPL Electric customers and distribution service necessary to serve
                the
                Specified Percentage. Buyer is responsible, at its sole cost and
                expense
                for future PJM charges assessed to network transmission customers
                for
                PJM-required transmission system enhancements pursuant to the PJM
                Regional
                Transmission Expansion Plan and for future PJM charges assessed to
                network
                transmission customers for transition costs related to the elimination
                of
                through-and-out transmission rates.

            

    

    

    
      	
              2.4

            	
              Other
                Changes in PJM Charges. Except as provided in Section 2.3 (Network
                Integration Transmission Service and Distribution Service), Seller
                bears
                the risk of any other changes in PJM products and pricing during
                the term
                of this Agreement. However, if there are any other new FERC-approved
                PJM
                transmission charges other than those referred to in Section 2.3
                or other
                new PJM charges and costs, charged to network transmission customers,
                that
                Seller believes the Buyer should recover through retail rates because
                they
                are directly related to the Buyer's obligations, then Buyer will
                file with
                the PUC, and provide notice to all intervening parties in PUC Docket
                No.
                P-00062227, a request for approval to recover such new costs. Seller
                is
                required to intervene in any such proceeding before the PUC. Such
                new
                costs can only be charged by Seller to Buyer to the extent that the
                PUC
                approves Buyer's recovery of those costs. Seller agrees to be bound
                by the
                decision of the PUC (subject to the normal rules for appeal of the
                decision of the PUC) and waives all claims concerning this issue
                before
                FERC. Notwithstanding the foregoing, nothing in the Agreement shall
                preclude Seller from taking any position before FERC regarding the
                creation and allocation of any such PJM
                charges.

            

    

    

    
      	
              2.5

            	
              Status
                of Seller. Seller, for purposes of this Agreement and any Transaction,
                is a Load Serving Entity.

            

    

    

    
      	
              2.6

            	
              Sales
                for Resale. All Full Requirements Service provided by Seller to Buyer
                shall be sales for resale, with Buyer reselling such Full Requirements
                Service to POLR Load customers.

            

    

    

    
      	
              2.7

            	
              Governing
                Terms. Each Transaction shall be governed by this Agreement. This
                Agreement, including all exhibits hereto, any designated collateral,
                credit support, margin agreement or similar arrangements and all
                Transaction Confirmations shall form a single integrated agreement
                between
                Buyer and Seller. Any inconsistency between terms in this Agreement
                and
                terms in a Transaction Confirmation shall be resolved in favor of
                the
                terms of this Agreement.

            

    

    

    
      	
              2.8

            	
              Transaction
                Confirmation. A Transaction shall be documented in a Transaction
                Confirmation in the form attached hereto as Exhibit A. On the Business
                Day
                on which Seller is selected and approved by the PUC as a provider
                of Full
                Requirements Service, Buyer will forward by facsimile or other immediate
                means acceptable to both Parties, to Seller a partially executed
                Transaction Confirmation(s) and shall send by overnight delivery
                three (3)
                originals. Except as otherwise provided in the RFP, by 2:00 p.m.
                EPT on
                the next Business Day following Seller's receipt of such facsimile
                of
                partially executed Transaction Confirmation(s), Seller shall return
                by
                facsimile, or other immediate means acceptable to both Parties, to
                Buyer a
                fully executed Transaction Confirmation(s), and shall send by overnight
                delivery two (2) originals. In addition, if such Transaction(s) is
                the
                initial Transaction(s) with the Seller under the current RFP solicitation,
                then Buyer will forward by facsimile or other immediate means acceptable
                to both Parties, to Seller a fully executed Agreement, and shall
                send by
                overnight delivery two (2)
                originals.

            

    

    

    ARTICLE
      3

    SCHEDULING,
      FORECASTING, AND INFORMATION SHARING

    

    
      	
              3.1

            	
              Scheduling.
                Seller shall schedule Full Requirements Service pursuant to the PJM
                Agreements. Buyer will provide to Seller and PJM all information
                required
                by PJM, for the purpose of calculating Seller's Full Requirements
                Service
                obligations.

            

    

    

    
      	
              3.2

            	
              Load
                Forecasting. Buyer shall not be required to provide to the Seller any
                load forecasting services for any
                Transaction.

            

    

    

    
      	
              3.3

            	
              Information
                Sharing. On each Business Day, Buyer shall provide to the Seller on a
                reasonable efforts basis, Buyer's estimation of the PLC for the seventh
                (7th)
                following day, representing the Seller's Specified Percentage of
                each
                Service Type. Buyer does not warrant the accuracy of such
                information.

            

    

    

    ARTICLE
      4

    SPECIAL
      TERMS AND CONDITIONS

    

    
      	
              4.1

            	
              Congestion
                and Congestion Management. Seller is responsible for any congestion
                costs incurred to supply the Specified Percentage. Because the PJM
                Planning Period does not correspond exactly with the supply term
                of this
                POLR SMA, Buyer, in its capacity as LSE for POLR Load during the
                Year
                2009, will ensure that rights to CRRs for the period January 1, 2010,
                through May 31, 2010, obtained in conjunction with Buyer's designation
                as
                LSE for POLR Load will be provided to Seller as described herein.
                Buyer
                shall transfer or assign to Seller, Buyer's rights to CRRs for the
                period
                January 1, 2010 through May 31, 2010 to which Buyer is entitled as
                an LSE
                pursuant to the PJM Agreements, provided that such rights are related
                to
                the service being provided to the Specified Percentage. All rights
                and
                obligations associated with such CRRs will accrue to the Seller through
                the transfer or assignment from Buyer to Seller including the ability
                of
                Seller to request or nominate such CRRs when applicable. The Seller
                is
                responsible for nominating and obtaining CRRs for the period June
                1, 2010,
                through December 31, 2010. Seller, as a LSE serving POLR Load, shall
                have
                the right to request and nominate CRRs provided all Transactions
                for the
                Seller's Specified Percentage of POLR Load have been executed and
                are in
                full force and effect. Effective January 1, 2011 all CRR rights will
                transfer back to the Buyer.

            

    

    

    
      	
              4.2

            	
              Load
                Response Programs. Buyer will manage its load response programs in
                accordance with the provisions of its applicable riders and retail
                electric service tariffs, as amended and approved by the PUC from
                time to
                time or distribution utility customer contracts, as amended by the
                distribution utility from time to time. Unless specifically prohibited
                by
                its retail electric service tariffs, POLR Service customers may,
                at their
                election, participate in demand response programs offered under the
                PJM
                OATT.

            

    

    

    
      	
              4.3

            	
              PJM
                E-Accounts. Buyer and Seller shall work with PJM to establish any PJM
                E-Accounts necessary for Seller to provide Full Requirements Service.
                In a
                timely manner, Buyer shall establish PJM E-Account contract(s) for
                the
                entire duration of the Transaction(s) and Seller shall confirm the
                PJM
                E-Account contract(s) for the entire duration of the
                Transaction(s).

            

    

    

    
      	
              4.4

            	
              Alternative
                Energy Portfolio Standards
                Obligation.

            

    

    

    
      	
              (a)  

            	
              Seller
                shall enable the Buyer to comply with the Alternative Energy Portfolio
                Standards, including regulations adopted thereunder, (together the
                AEPS
                Obligation) and shall provide its proportional share of the Buyer's
                AEPS
                Obligation as set forth in the AEPS Act and PUC rules and Orders
                that may
                be promulgated to implement the AEPS
                Act.

            

    

    

    
      	
              (b)  

            	
              Seller
                and Buyer shall work together to establish the proper accounts within
                the
                GATS. Seller shall be a subscriber to GATS and is responsible for
                paying
                its annual subscription fee. Seller shall transfer certificates into
                the
                Buyer's account(s) in the amount necessary to fulfill Seller's AEPS
                Obligation under this Agreement. Seller shall be responsible for
                paying
                the volumetric fees associated with LSE GATS fee requirements in
                proportion to Seller's Full Requirements
                Service.

            

    

    

    
      	
              (c)  

            	
              Seller
                shall provide to the Buyer all information regarding its share of
                the AEPS
                Obligation that may be required by the PUC rules governing reporting
                and
                auditing of Buyer's compliance with the AEPS
                Obligation.

            

    

    

    The
      Buyer
      will provide the Seller with a
version of Exhibit B
      to this Agreement at the same time that it provides
      the Transaction Confirmation. Exhibit B at that time will incorporate the AEPS
      percentage obligations for 2010 in effect on the day the bid was submitted.
      Exhibit B as provided with the Transaction Confirmation will apply during the
      term of the Agreement and will be used to determine the Seller's AEPS
      Obligation.

    

    
      	
              4.5

            	
              Title
                Transfer. Seller shall cease to have title to, possession of, and risk
                of loss with respect to liability pursuant to Sections 9.1 (Seller's
                Indemnification for Third-Party Claims) and 9.2 (Buyer's Indemnification
                for Third-Party Claims) of Full Requirements Service scheduled and
                received or delivered hereunder at the Delivery Point(s). Seller
                warrants
                that it has good title to the Full Requirements Service sold and
                delivered
                hereunder and that it has the right to sell such Full Requirements
                Service. The word "loss" in this Section 4.5 (Title Transfer) does
                not
                encompass electrical transmission and distribution losses. As between
                Buyer and Seller only, Buyer shall take title to, possession of,
                and risk
                of loss with respect to liability pursuant to Sections 9.1 (Seller's
                Indemnification for Third-Party Claims) and 9.2 (Buyer's Indemnification
                for Third-Party Claims) of Full Requirements Service scheduled and
                received or delivered hereunder at the Delivery Point(s). Notwithstanding
                the foregoing, nothing contained in this Agreement is intended to
                create
                or increase liability of Buyer to any third party beyond such liability,
                if any, that would otherwise exist under the PJM Agreements or under
                applicable law if Buyer had not taken
                title.

            

    

    

    
      	
              4.6

            	
              Reliability
                Guidelines. Each Party agrees to adhere to the applicable operating
                policies, criteria and/or guidelines of the NERC, PJM, their successors,
                and any regional or sub regional
                requirements.

            

    

    

    
      	
              4.7

            	
              PJM
                Membership. For the period of time that this Agreement is in effect,
                Seller shall be:  a member in good standing of PJM; (ii)
                qualified as a PJM "Market Buyer" and "Market Seller" pursuant to
                the PJM
                Agreements; and (iii) qualified as a PJM "Load Serving Entity." For
                the
                period of time that this Agreement is in effect, Buyer shall be a
                member
                in good standing of PJM.

            

    

    

    
      	
              4.8

            	
              Declaration
                of Authority. For the period of time that this Agreement is in effect,
                both Buyer and Seller shall have executed the Declaration of Authority
                in
                the form attached hereto as Exhibit
                H.

            

    

    

    
      	
              4.9

            	
              FERC
                Authorization. For the period of time that this Agreement is in
                effect, Seller shall have FERC authorization to make sales of energy,
                capacity, and ancillary services at market based rates within PJM.
                (Appendix 5 in RFP Process and Rules
                Document)

            

    

    

    
      	
              4.10

            	
              Disclosure
                in the Event of Seller Default. If Seller defaults and this Agreement
                is terminated pursuant to Article 12 (Events of Default; Remedies),
                Buyer
                may disclose the terms of this Agreement and any Transaction Confirmation
                to all other non-defaulting wholesale suppliers providing service
                to Buyer
                pursuant to the PUC Orders and Settlements. Such disclosure by Buyer
                shall
                be made for the purpose of allowing each non-defaulting wholesale
                supplier
                to make its Step-Up elections described in Section 4.11 (Seller Step-Up
                Rights) below.

            

    

    

    
      	
              4.11

            	
              Seller
                Step-Up Rights. In the event of an early termination of a POLR SMA and
                associated transactions between Buyer and an entity other than Seller,
                Buyer shall send a written notification to Seller which: (i) describes
                the
                individual supply obligations associated with the terminated
                transaction(s) for the remaining term(s) of such transaction(s),
                including
                all available information regarding the associated CRRs; and (ii)
                requests
                Seller to agree to supply its full or partial pro-rata share of the
                supply
                obligation associated with each terminated transaction for the remaining
                term(s) of the terminated transaction(s), without change to the pricing,
                terms and conditions of the terminated full requirements service
                agreement
                and transaction(s). Such agreement to make additional supply available
                shall be termed a "Step-Up".

            

    

    

    In
      the
      event that Seller wishes to exercise its option to Step-Up, Seller shall notify
      Buyer of such within five (5) Business Days from the date of Buyer's
      notification. In Seller's notification, Seller shall indicate: (i) the amount
      of
      the increased obligation that Seller wishes to take on in respect of certain
      specified transaction(s) (which need not be all); and (ii) that it is willing
      to
      meet any additional collateral requirements related to the Step-Up. If other
      sellers do not exercise their option to Step-Up, Buyer shall again notify Seller
      as to the amount available for Step-Up and Seller will again have an option
      to
      take a full or partial pro-rata share of the amount that such other sellers
      declined to take. Seller's notification shall take place no later than two
      (2)
      Business Days of its receipt of Buyer's notification. Seller's pro-rata share,
      as described in this paragraph, shall be the ratio of Seller's total load
      obligation across all service types and customer classes at the time the Step-Up
      option is offered, stated on a PLC basis, to the total load being supplied
      under
      this Agreement and other full requirements service agreements pursuant to the
      PUC Orders and Settlements on a PLC basis, excluding the terminated
      transactions(s) and, if applicable, excluding the full requirement service
      agreements under which other sellers declined to exercise their Step-Up option
      in part or full.

    

    For
      the
      avoidance of doubt, in the event that Seller does not respond to Buyer's Step-Up
      request within the relevant timeframe, Seller shall be deemed to have rejected
      the Buyer's request in full.

    

    ARTICLE
      5

    TERM
      AND SURVIVAL

    

    
      	
              5.1

            	
              Term.
                Unless otherwise agreed upon by Buyer and Seller, this Agreement
                shall
                continue in full force and effect from the Effective Date until the
                end of
                all Transaction(s) executed under this Agreement unless this Agreement
                is
                terminated prematurely pursuant to Article 12 of this
                Agreement.

            

    

    

    
      	
              5.2

            	
              Survival.
                All provisions of this Agreement which must, in order to give full
                force
                and effect to the rights and obligations of the Parties hereto, survive
                termination or expiration of this Agreement, shall so survive, including,
                without limitation, Articles 9, 10, 12, and
                13.

            

    

    

    ARTICLE
      6

    DETERMINATION
      OF DELIVERED QUANTITIES

    

    
      	
              6.1

            	
              Monthly
                Settlement Load. The amount of Monthly Settlement Load with respect to
                any calendar month during the Delivery Period shall be determined
                in terms
                of megawatt-hours ("MWh") of Energy. The MWh of Energy shall be equivalent
                to the amount of Energy reported as the Seller's Specified Percentage
                obligation by Buyer to PJM, and shall include seller's share of 500KV
                losses as determined by PJM. The MWh of Energy shall also be adjusted
                for
                any subsequent meter corrections reported to PJM, or as a result
                of any
                subsequent retail load settlement process. The MWh of Energy as reported
                includes any reduction in load as a result of the Buyer's and PJM's
                operation of its load response
                programs.

            

    

    

    ARTICLE
      7

    BILLING
      AND SETTLEMENT

    

    
      	
              7.1

            	
              Billing.
                Unless otherwise agreed to by the Parties, on or before the sixth
                (6th) Business Day of each month, Buyer shall deliver to
                Seller, via electronic transmission or other means agreed to by the
                Parties, an invoice ("Invoice") that sets forth the total amount
                due for
                the previous calendar month for all Transactions. The Invoice shall
                detail
                for each Transaction the following:

            

    

     

    
      	
              (a)  

            	Monthly Settlement Load

    

    
      	
              (b)  

            	Monthly Settlement Price

      	
              (c)  

            	Monthly Settlement Amount

      	
              (d)  

            	PJM billing adjustments

      	
              (e)  

            	Any other adjustments set forth in this
              Agreement

    

     

    
      	
              7.2

            	
              PJM
                Billing.

            

    

    

    
      	
              (a)  

            	
              Buyer
                and Seller shall direct PJM to invoice Seller and Buyer for charges
                and
                credits relating to Seller's and Buyer's rights and obligations under
                this
                Agreement as set forth in Exhibit D attached hereto and made a part
                hereof. If PJM is unable to invoice charges or credits in accordance
                with
                Exhibit D, Buyer shall rectify such PJM invoice discrepancy in the
                Invoice
                sent pursuant to Section 7.1
                (Billing).

            

    

    

    
      	
              (b)  

            	
              The
                Parties agree that the PJM bill may change from time to time. Allocation
                of any charges that are reflected in a PJM bill that are not included
                on
                or are inconsistent with Exhibit D will be determined pursuant to
                Sections
                2.3 (Network Integration Transmission Service and Distribution Service),
                2.4 (Other Changes in PJM Charges), and 16.11 (PJM Agreement
                Modifications) of this Agreement.

            

    

    

    
      	
              7.3

            	
              Payments
                of the Invoice. On the Monthly Settlement Date, Buyer will pay to
                Seller, or Seller will pay to the Buyer, as the case may be, the
                total
                amount due in the applicable Invoice. All payments shall be made
                by
                "Electronic Funds Transfer" ("EFT") via "Automated Clearing House"
                ("ACH"), to a bank designated in writing by such Party, by 12:00
                p.m. EPT
                on the Monthly Settlement Date. Payment of Invoices shall not relieve
                the
                paying Party from any other responsibilities or obligations it has
                under
                this Agreement (other than the obligation to make such payment),
                nor shall
                such payment constitute a waiver of any claims arising
                hereunder.

            

    

    

    7.4            Billing
      Disputes and Adjustments of Invoices.

    

    
      	
              (a)  

            	
              Within
                twelve (12) months of the date on which an Invoice is issued, Buyer
                may,
                in good faith, adjust the Invoice to correct any errors. The adjustment
                shall include interest calculated at the Interest Rate from the original
                due date to the date of payment. Buyer shall provide Seller a written
                explanation of the basis for the
                adjustment.

            

    

    

    
      	
              (b)  

            	
              Within
                twelve (12) months of the date on which an Invoice is issued or an
                Invoice
                is adjusted pursuant to Section 7.4(a) (Billing Disputes and Adjustment
                of
                Invoices), Seller may, in good faith, dispute the correctness of
                such
                Invoice or adjustment, pursuant to the provisions of Article 13 (Dispute
                Resolution), and provided that Seller has paid by the Monthly Settlement
                Date any portion of an Invoice that is not
                disputed.

            

    

    

    
      	
              (c)  

            	
              Within
                twelve (12) months of the date on which a PJM bill is issued, Buyer
                or
                Seller may, in good faith, dispute the correctness of any such PJM
                bill,
                pursuant to the provisions of Article 13 (Dispute Resolution), and
                provided that the disputing Party has paid by the Monthly Settlement
                Date
                any portion of an Invoice that is not
                disputed.

            

    

    

    
      	
              7.5

            	
              Interest
                on Unpaid Balances. Interest on delinquent amounts, other than amounts
                in dispute as described in Section 7.4 (Billing Disputes and Adjustment
                of
                Invoices), shall be calculated at the Interest Rate from the original
                due
                date to the date of payment.

            

    

    

    
      	
              7.6

            	
              Netting
                of Payments. Buyer and Seller shall discharge mutual debts and payment
                obligations due and owing to each other under this Agreement, as
                of the
                Monthly Settlement Date, such that all amounts owed by each Party
                to the
                other Party shall be reflected in a single amount due to be paid
                by the
                Party who owes it and received by the other Party, provided that
                the
                calculation of the net amount shall not include any disputed amounts
                being
                withheld pursuant to Section 7.4 (Billing Disputes and Adjustment
                of
                invoices).

            

    

    

    ARTICLE
      8

    TAXES

    

    
      	
              8.1

            	
              Cooperation.
                Each Party shall use reasonable efforts to implement the provisions
                of and
                administer this Agreement in accordance with the intent of the Parties
                to
                minimize taxes, so long as neither Party is materially adversely
                affected
                by such efforts.

            

    

    

    
      	
              8.2

            	
              Taxes.

            

    

    

    
      	
              (a)  

            	
              As
                between the Parties: (i) Seller is responsible for the payment of
                all
                taxes imposed by any Governmental Authority on the wholesale sales
                of Full
                Requirements Service under this Agreement; and (ii) Buyer is responsible
                for the payment of all taxes imposed by any Governmental Authority
                on
                retail sales of Full Requirements Service under this
                Agreement.

            

    

    

    
      	
              (b)  

            	
              Any
                Party paying taxes that should have been paid by the other Party
                pursuant
                to Section 8.2(a) (Taxes), shall be reimbursed by such other Party
                in the
                next invoice issued pursuant to Section 7.1
                (Billing).

            

    

    

    
      	
              8.3

            	
              Disclosure
                of Tax Treatment. Notwithstanding anything to the contrary in this
                Agreement or in the RFP and appendices thereto, Seller and Buyer
                agree
                that: (i) any obligation of confidentiality with respect to the Parties'
                Transactions hereunder does not apply, and has not applied from the
                commencement of discussions between the Parties, to the tax treatment
                and
                tax structure of the Agreement and all Transactions thereunder, and
                (ii)
                Seller and Buyer (and each of their respective employees, representatives,
                or agents) may disclose to any and all persons, without limitation
                of any
                kind, the tax treatment and tax structure of the Agreement and the
                Transactions thereunder, as well as any materials of any kind (including
                opinions or other tax analyses) that have been provided to the disclosing
                Party relating to such tax treatment and tax structure, all within
                the
                meaning of Treasury Regulations Section 1.6011-4; provided, however,
                that
                the foregoing is not intended to affect any privileges that each
                Party is
                entitled, at its sole discretion, to maintain, including with respect
                to
                any confidential communications with its attorney or any confidential
                communications with a federally authorized tax practitioner under
                Section
                7525 of the Internal Revenue Code.

            

    

    

    ARTICLE
      9

    INDEMNIFICATION

    

    
      	
              9.1

            	
              Seller's
                Indemnification for Third-Party Claims. Seller shall indemnify, hold
                harmless, and defend Buyer and its Affiliates, and their respective
                officers, directors, employees, agents, contractors, subcontractors,
                invitees, successors, representatives and permitted assigns (collectively,
                "Buyer's Indemnitees") from and against any and all claims, liabilities,
                costs, losses, damages, punitive damages and expenses including reasonable
                attorney and expert fees, disbursements actually incurred, and any
                penalties or fines imposed by Government Authorities in any action
                or
                proceeding between Buyer and a third party or Seller for damage to
                property of unaffiliated third parties, injury to or death of any
                person,
                including Buyer's employees or any third parties, to the extent directly
                caused by the negligence, gross negligence or willful misconduct
                of Seller
                and/or its officers, directors, employees, agents, contractors,
                subcontractors or invitees arising out of or connected with Seller's
                performance under this Agreement, Seller's exercise of rights under
                this
                Agreement, or Seller's breach of this Agreement. Buyer shall have
                the
                right to hire the attorney of its choice to defend it in any proceeding
                brought against it pursuant to this
                provision.

            

    

    

    
      	
              9.2

            	
              Buyer's
                Indemnification for Third-Party Claims. Buyer shall indemnify, hold
                harmless, and defend Seller and its Affiliates, and their respective
                officers, directors, employees, agents, contractors, subcontractors,
                invitees, successors, representatives and permitted assigns (collectively,
                "Seller's Indemnitees") from and against any and all claims, liabilities,
                costs, losses, damages, and expenses including reasonable attorney
                and
                expert fees, disbursements actually incurred, and any penalties or
                fines
                imposed by Government Authorities in any action or proceeding between
                Seller and a third party or Buyer for damage to property of unaffiliated
                third parties, injury to or death of any person, including Seller's
                employees or any third parties, to the extent directly caused by
                the gross
                negligence or willful misconduct of Buyer and/or its officers, directors,
                employees, agents, contractors, subcontractors or invitees arising
                out of
                or connected with Buyer's performance under this Agreement, Buyer's
                exercise of rights under this Agreement, or Buyer's breach of this
                Agreement. Seller shall have the right to hire the attorney of its
                choice
                to defend it in any proceeding brought against it pursuant to this
                provision.

            

    

    

    
      	
              9.3

            	
              Indemnification
                Procedures. If either Party intends to seek indemnification under
                Sections 9.1 (Seller's Indemnification for Third-Party Claims) or
                9.2
                (Buyers Indemnification for Third-Party Claims), as applicable, from
                the
                other Party, the Party seeking indemnification shall give the other
                Party
                notice of such claim within ninety (90) days of the later of the
                commencement of, or the Party's actual knowledge of, such claim or
                action.
                Such notice shall describe the claim in reasonable detail, and shall
                indicate the amount, estimated if necessary, of the claim that has
                been,
                or may be, sustained by said Party. To the extent that the other
                Party
                will have been actually and materially prejudiced as a result of
                the
                failure to provide such notice, such notice will be a condition precedent
                to any liability of the other Party under the provisions for
                indemnification contained in this Agreement. Neither Party may settle
                or
                compromise any claim without the prior consent of the other Party;
                provided, however, said consent shall not be unreasonably withheld
                or
                delayed.

            

    

    

    ARTICLE10

    LIMITATIONS
      ON LIABILITY

    

    Limitation
      of Remedies, Liability and Damages. EXCEPT AS SET FORTH IN THIS AGREEMENT,
      THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
      AND
      ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE
      EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY
      THE
      ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS
      REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF
      DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR'S LIABILITY SHALL
      BE
      LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT
      LAW
      OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY
      PROVIDED HEREIN, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO COSTS AND DEFAULT
      DAMAGES AS DEFINED IN THIS AGREEMENT, SUCH COSTS AND DEFAULT DAMAGES SHALL
      BE
      THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN
      EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE
      LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES,
      LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR
      CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE
      PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF
      DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
      THE
      NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT,
      OR ACTIVE OR PASSIVE, TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER
      ARE LIQUATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR
      IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBATINING AN ADEQUATE REMEDY IS
      INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE
      APPROXIMATION OF THE HARM OR LOSS.

    

    ARTICLE
      11

    FORCE
      MAJEURE

    

    
      	
              11.1

            	
              Force
                Majeure means an event or circumstance as defined in Article 1.
                Notwithstanding anything in this Agreement to the contrary, the Parties
                shall be excused from performing their respective obligations under
                this
                Agreement (other than the obligation to make payments with respect
                to
                performance prior to the event of Force Majeure) and shall not be
                liable
                for damages or otherwise due to their failure to perform, during
                any
                period that one Party is unable to perform due to an event of Force
                Majeure, provided that the Party declaring an event of Force Majeure
                shall: (i) act expeditiously to resume performance; (ii) exercise
                all
                commercially reasonable efforts to mitigate or limit damages to the
                other
                Party; and (iii) fulfills the requirements set forth in Section 11.2
                (Notification).

            

    

    

    
      	
              11.2

            	
              Notification.
                A Party unable to perform under this Agreement due to an event of
                Force
                Majeure shall: (i) provide prompt written notice of such event of
                Force
                Majeure to the other Party, which shall include an estimate of the
                expected duration of the Party's inability to perform due to the
                event of
                Force Majeure; and (ii) provide prompt notice to the other Party
                when
                performance resumes.

            

    

    

    ARTICLE
      12

    EVENTS
      OF DEFAULT; REMEDIES

    

    
      	
              12.1

            	
              Events
                of Default. An "Event of Default"
                shall mean,
                with respect to a Party ("Defaulting Party"), the occurrence of any
                of the
                following:

            

    

    

    
      
        	
                (a)  

              	
                the
                  failure to make, when due, any payment required pursuant to this
                  Agreement
                  if such failure is not remedied within two (2) Business Days after
                  written
                  notice;

              

      

      

      
        	
                (b)  

              	
                any
                  representation or warranty made by such Party herein or in response
                  to the
                  RFP is intentionally or unintentionally false or misleading in
                  any
                  material respect when made or when deemed made or
                  repeated;

              

      

      

      
        	
                (c)  

              	
                the
                  failure of a Party to comply with the requirements of Section 4.7
                  (PJM
                  Membership) and 4.9 (FERC Authorization) if such failure is not
                  remedied
                  within three (3) Business Days after written
                  notice;

              

      

      

      
        	
                (d)  

              	
                PJM
                  has declared a Party to be in default of any provision of any PJM
                  Agreement, which default prevents a Party's performance hereunder
                  if such
                  failure is not remedied within three (3) Business Days after written
                  notice;

              

      

      

      
        	
                (e)  

              	
                the
                  failure to perform any material covenant or obligation set forth
                  in this
                  Agreement (except to the extent constituting a separate Event of
                  Default)
                  if such failure is not remedied within three (3) Business Days
                  after
                  written notice;

              

      

      

      
        	
                (f)  

              	
                such
                  Party becomes Bankrupt;

              

      

      

      
        	
                (g)  

              	
                such
                  Party consolidates with, or merges with or into, or transfers all
                  or
                  substantially all of its assets to, another entity, or assigns
                  the
                  Agreement or any rights, interests, or obligations hereunder without
                  the
                  prior written consent of the other Party when such consent is required,
                  and, at the time of such consolidation, merger, transfer or assign,
                  the
                  resulting, surviving, transferee, or assigned entity fails to assume
                  all
                  the obligations of such Party under this Agreement to which it
                  or its
                  predecessor was a party by operation of law or pursuant to an agreement
                  reasonably satisfactory to the other
                  Party;

              

      

      

      
        	
                (h)  

              	
                the
                  occurrence and continuation of: (i) a default, event of default
                  or other
                  similar condition or event in respect of such Party under one or
                  more
                  agreements or instruments, individually or collectively, relating
                  to
                  indebtedness for borrowed money in an aggregate amount of not less
                  than
                  five percent (5%) of such Party's TNW, which results in such indebtedness
                  becoming immediately due and payable or; (ii) a default by such
                  Party in
                  making on the due date therefore one or more payments, individually
                  or
                  collectively, in an aggregate amount of not less than five percent
                  (5%) of
                  such Party's TNW.

              

      

      

      
        	
                (i)  

              	
                the
                  failure of a Party to comply with its obligations pursuant to Article
                  14
                  (Performance Assurance) if such failure is not remedied within
                  three (3)
                  Business Days after written notice.

              

      

      

      
        	
                (j)  

              	
                with
                  respect to Seller's Guarantor if any: (i) if any representation
                  or
                  warranty made by the Guarantor in connection with this Agreement
                  is
                  intentionally or unintentionally false or misleading in any material
                  respect when made or when deemed made or repeated; (ii)the failure
                  of the
                  Guarantor to make any payment required or to perform any other
                  material
                  covenant or obligation in any guaranty made in connection with
                  this
                  Agreement and such failure shall not be remedied within three (3)
                  Business
                  Days after written notice; (iii) the failure of the Guarantor's
                  guaranty
                  to be in full force and effect for purposes of this Agreement (other
                  than
                  in accordance with its terms) prior to the satisfaction of all
                  obligations
                  of such Party under this Agreement without the written consent
                  of the
                  other Party; (iv) the Guarantor repudiates, disaffirms, disclaims,
                  or
                  rejects, in whole or in part, or challenges the validity of any
                  guaranty;
                  or (v) conditions described with respect to a Party in subparagraph
                  (f) of
                  this Section 12.1 (Events of Default) occurs with respect to its
                  Guarantor.

              

      

    

     

    
      	
              12.2

            	
              Remedies.
                If an Event of Default with respect to a Defaulting Party shall have
                occurred and be continuing, the other Party (the "Non-Defaulting
                Party"),
                shall provide written notice to the Defaulting Party and shall have
                the
                right to temporarily suspend performance pursuant to Section 12.2(a)
                or
                implement all remedies pursuant to Section
                12.2(b):

            

    

    

    
      	
              (a)  

            	
              If
                an Event of Default has occurred and is continuing, the Non-Defaulting
                Party shall have the right to suspend performance, provided that
                such
                suspension shall not continue for longer than ten (10) Business Days.
                At
                any time during or subsequent to the temporary suspension of performance,
                the Non-Defaulting Party may proceed with the steps outlined in Section
                12.2(b). If, by the end of the ten (10) Business Day period of suspension,
                the Non-Defaulting Party has not commenced the implementation of
                the
                remedies pursuant to Section 12.2(b), then the Non-Defaulting Party
                must
                resume performance of its obligations under this
                Agreement.

            

    

    

    
      	
              (b)  

            	
              In
                addition to any other remedies available at law or in equity to the
                Non-Defaulting Party, if an Event of Default has occurred and is
                continuing, the Non-Defaulting Party shall have the right to implement
                all, but not less than all, the following
                remedies:

            

    

    

    
      	
               

            	
              i.

            	
              designate
                a day, in such notice, no earlier than the day such notice is effective
                and no later than twenty (20) calendar days after such notice iseffective,
                as an early termination date ("Early Termination Date") for the purposes
                of determining the Settlement
                Amount;

            

    

    
      	
               

            	
              ii.

            	
              calculate
                and receive from the Defaulting Party, payment for any Default Damages
                and
                costs, as defined this Agreement, the Non-Defaulting Party incurs
                as of
                the date of the event giving rise to the Event of Default, until
                the
                earlier of: (i) the Early Termination Date (if applicable); or (ii)
                the

            

    

    Event
      of
      Default has been cured by the Defaulting Party; or (iii) the Non-Defaulting
      Party waives such Event of Default; (iv) withhold any payments due to the
      Defaulting Party under this Agreement as an offset to any Default Damages and
      costs, as defined this Agreement, or Termination Payment, as defined in Section
      12.3 (Calculation and Net Out of Settlement Amounts); and (v) permanently
      suspend performance.

    

    
      	
              (c)  

            	
              If
                an Event of Default has occurred and the Non-Defaulting Party is
                the
                Buyer, then:

            

    

    

    
      	
               

            	
              i.

            	
              unless
                the Event of Default was a failure by Seller to meet any or all of
                its
                Full Requirements Service obligations, Buyer may offer to waive the
                default on such terms and conditions as Buyer, at its sole discretion,
                may
                deem appropriate to propose ("Special Remedy"); provided however
                that;

            

    

    
      	
               

            	
              ii.

            	
              any
                such Special Remedy can only be offered to Seller if it first is
                specifically approved by the PUC in accordance with PUC Orders and
                Settlements.

            

    

    

    
      	
               

            	
              12.3
                Calculation and Net Out of Settlement
                Amounts.

            

    

    

    
      	
              (a)  

            	
              The
                Non-Defaulting Party shall calculate, in a commercially reasonable
                manner,
                a Settlement Amount for each such Terminated Transaction as of the
                Early
                Termination Date or, to the extent that in the reasonable opinion
                of the
                Non-Defaulting Party certain of such Terminated Transactions are
                commercially impracticable to liquidate and terminate or may not
                be
                liquidated and terminated under applicable law on the Early Termination
                Date, as soon thereafter as is reasonably practicable. For purposes
                of
                calculating the Settlement Amount, the Non-Defaulting Party shall
                reflect
                the net impact of the exercise of the option on the part of other
                wholesale suppliers as described in Section 4.11 (Seller Step-Up
                Rights)
                of this Agreement. The Non-Defaulting Party shall aggregate all Settlement
                Amounts into a single liquidated amount (the "Termination Payment")
                by
                netting out: (i) all Settlement Amounts that are due to the Defaulting
                Party, plus, at the option of the Non-Defaulting Party, any cash
                or other
                form of security then available to the Non-Defaulting Party pursuant
                to
                Article 14 (Performance Assurance/Accelerated Payments), plus any
                or all
                other amounts due to the Defaulting Party under this Agreement; against
                (ii) all Settlement Amounts that are due to the Non-Defaulting Party
                plus
                any or all other amounts due to the Non-Defaulting Party, including
                but
                not limited to Default Damages and costs, under this Agreement. The
                Termination Payment shall be due to the Non-Defaulting Party. In
                no event
                will a termination payment result in payment from the Non-Defaulting
                Party
                with the exception for any amount due, after set off, for services
                provided by the Defaulting Party prior to the Early Termination
                Date.

            

    

    

    
      	
              (b)  

            	
              In
                order to avoid doubt regarding a commercially reasonable calculation
                for
                thepurposes of calculating the Settlement Amount by the Non-Defaulting
                Party, the quantity of amounts of Energy, Capacity and other services
                to
                have been provided under the POLR SMA for the period following the
                Early
                Termination Date (the "Termination Quantity") shall be deemed those
                quantity amounts that would have been delivered on an hourly basis
                had the
                POLR SMA been in effect during the previous calendar year, adjusted
                for
                such POLR load changes as have occurred since the previous calendar
                year.
                Nothing in this section shall limit the right of the Buyer when Seller
                is
                the Defaulting Party to replace Seller's full requirements obligation
                and
                the result of any Commission-approved procedure will be deemed to
                be
                commercially reasonable for purposes of calculating the Settlement
                Amount
                and will be deemed to have been determined by reference to the Termination
                Quantity.

            

    

    

    
      	
              12.4

            	
              Notice
                of Termination Payment. As soon as practicable after an Early
                Termination Date is declared, the Non-Defaulting Party shall provide
                written notice to the Defaulting Party of the amount of the Termination
                Payment. The notice shall include a written statement explaining
                in
                reasonable detail the calculation of such amount. The Defaulting
                Party
                shall make the Termination Payment within five (5) Business Days
                after
                such notice is effective.

            

    

    

    
      	
              12.5

            	
              Disputes
                With Respect to Termination Payment. If the Defaulting Party disputes
                the Non-Defaulting Party's calculation of the Termination Payment,
                in
                whole or in part, the Defaulting Party shall, within five (5) Business
                Days of receipt of Non-Defaulting Party's calculation of the Termination
                Payment, provide to the Non-Defaulting Party a notice that it intends
                to
                dispute the calculation of the Termination Payment ("Termination
                Payment
                Dispute Notice"), pursuant to the provisions of Article 13 (Dispute
                Resolution), and provided, the Defaulting Party shall first transfer
                collateral to the Non-Defaulting Party in an amount equal to the
                Termination Payment, such collateral to be in a form acceptable to
                the
                Non-Defaulting Party by the Termination Payment
                Date.

            

    

    

    
      	
              12.6

            	
              Duty
                to Mitigate. Each Party agrees that it has a duty to mitigate damages
                and covenants that it will use commercially reasonable efforts to
                minimize
                any damages it may incur as a result of the other Party's failure
                to
                perform pursuant to this Agreement.

            

    

    

    ARTICLE
      13

    DISPUTE
      RESOLUTION

    

    
      	
              13.1

            	
              Informal
                Dispute Resolution. Before pursuing resolution of any dispute arising
                out of this Agreement, the disputing Party shall provide written
                notice to
                the other Party setting forth the nature of the dispute, the amount
                involved, if any, and the remedies sought. The Parties shall use
                good
                faith and reasonable commercial efforts to informally resolve such
                dispute. Such efforts shall last for a period of at least thirty
                (30)
                calendar days from the date that the notice of the dispute is first
                delivered from one Party to the other Party. Any amounts that are
                owed by
                one Party to the other Party as a result of resolution of a dispute
                pursuant to this Section 13.1 (Informal Dispute Resolution), shall
                be paid
                within two (2) Business Days of such resolution and the payment shall
                include interest calculated at the Interest Rate from the original
                due
                date through the date of payment.

            

    

    

    
      	
              13.2

            	
              Formal
                Dispute Resolution. After the requirements of Section 13.1 (Informal
                Dispute Resolution) have been satisfied, all disputes, except as
                noted
                below, between the Parties shall be submitted to the appropriate
                authority.

            

    

    

    ARTICLE
      14

    PERFORMANCE
      ASSURANCE

    

    
      	
              14.1

            	
              Requirement
                for Performance Assurance. With respect to Aggregate Transactions, if
                at any time and from time to time during the term of this Agreement,
                Aggregate Buyer's Exposure exceeds the Unsecured Credit on any Business
                Day, then Buyer shall request that Seller post Performance Assurance
                in an
                amount equal to the amount by which Aggregate Buyer's Exposure exceeds
                the
                Unsecured Credit (rounding upwards to the nearest $100,000), less
                any
                Performance Assurance already posted with Buyer. Notwithstanding
                the
                above, Seller shall only be required to post the required Performance
                Assurance to the extent the amount of required Performance Assurance
                is
                equal to or greater than $500,000. Subsequent and incremental requests
                for
                Performance Assurance shall be in $100,000 increments. Buyer's request
                for
                Performance Assurance shall not be disputed by
                Seller.

            

    

    

    
      	
              14.2

            	
              Performance
                Assurance Transfers/Returns. If the request for Performance Assurance
                is made by Buyer before 1:00 p.m. EPT on a Business Day, then if
                Seller is
                posting cash as the form of Performance Assurance collateral, Seller
                shall
                be required to deliver the Performance Assurance cash to Buyer on
                the
                Business Day following the date of such request; and if Seller is
                posting
                a Letter of Credit or other security as acceptable to Buyer as the
                form of
                Performance Assurance collateral, Seller shall be required to deliver
                the
                Performance Assurance Letter of Credit or other security on the second
                Business Day following the date of such request. If a request for
                Performance Assurance is made by Buyer at or after 1:00 p.m. EPT,
                then if
                Seller is posting cash as the form of Performance Assurance collateral,
                Seller shall be required to deliver the Performance Assurance cash
                to
                Buyer on the second Business Day following the date of such request;
                and
                if Seller is posting a Letter of Credit or other security as acceptable
                to
                Buyer as the form of Performance Assurance collateral, Seller shall
                be
                required to deliver the Performance Assurance Letter of Credit or
                other
                security on the third Business Day following the date of such request.
                Telephone, facsimile, or other communication means mutually acceptable
                by
                the Parties, are suitable means for the Buyer to make requests for
                Performance Assurance. If Seller provides its Performance Assurance
                collateral in cash, in whole or in part, Seller will also simultaneously
                grant Buyer a first-priority security interest in that cash, in a
                form
                mutually acceptable to Buyer and Seller. Buyer shall not be entitled
                to
                hold Performance Assurance in the form of cash; rather, Performance
                Assurance in the form of cash shall be held in any major U.S. commercial
                bank, or a foreign bank with a U. S. branch office, (which is not
                the
                Buyer or an affiliate of the Buyer), and has assets of at least $10
                billion and a credit rating of at least "A" by Standard and Poor's,
                or
                "A2" by Moody's Investor Services ("Qualified Institution").
                The Buyer
                will pay to Seller on the first Business Day of each calendar quarter
                the
                amount of interest it receives based upon the applicable overnight
                repurchase interest rate from the Qualified Institution on any Performance
                Assurance in the form of cash posted by Seller. The interest amount
                or
                portion thereof not returned to Seller pursuant to this Section 14.2
                will
                constitute Performance Assurance and will be subject to the provisions
                of
                Article 14 of this Agreement.

            

    

    

    
      	
               

            	
              On
                any Business Day (but no more frequently than weekly with respect
                to
                Letters of Credit or other security acceptable to Buyer, and daily
                with
                respect to cash), Seller, at its sole cost, may request that the
                Performance Assurance be reduced correspondingly to reflect the decrease
                in Buyer Exposure or an increase in Seller's Unsecured Credit, if
                any
                (rounding upwards for any fractional amount to the nearest $100,000).
                Buyer shall be required to return the amount of Performance Assurance
                due
                in accordance with the timeframes set forth in the preceding paragraph.
                A
                written means is suitable for the Seller to make requests for return
                of
                Performance Assurance.

            

    

    

    In
      the
      event that Seller fails to provide Performance Assurance or Buyer fails to
      return Performance Assurance pursuant to the terms of this Article 14
      (Performance Assurance) within the applicable timeframes, then an Event of
      Default pursuant to Section 12.1(i) shall be deemed to have occurred with
      respect to the non-performing Party and the other Party will be entitled to
      the
      remedies set forth therein.

    

    In
      instances caused by the timing of the requests for both the return of
      Performance Assurance and placement of Performance Assurance, a situation may
      arise where the Parties are both sending and receiving transactions on the
      same
      day. In these instances, the Parties may net the requested amounts and proceed
      with only one transaction. Netting is only permitted for Performance Assurance
      purposes if it is mutually agreed to by both Parties in advance and confirmed
      in
      advance.

    

    
      	
              14.3

            	
              Unsecured
                Credit. During the term of this Agreement, Buyer shall extend, solely
                with respect to the Performance Assurance set forth in Section 14.1
                (Requirement for Performance Assurance), Unsecured Credit, as defined
                in
                Article 1 of this Agreement, to Seller in an amount initially determined
                on the Effective Date and redetermined each Business Day thereafter
                pursuant to this Section 14.3.

            

    

    

    For
      purposes of determining Unsecured Credit, the relevant Unsecured Credit Limit
      shall be the Unsecured Credit Limit listed in the following table that
      corresponds to Seller's (or Seller's Guarantor's) lowest Credit Rating most
      recently published by S&P, Fitch and/or Moody's. The relevant TNW Amount
      shall be calculated using the TNW Percentage listed in the following table
      that
      corresponds to Seller's (or Seller's Guarantor's) lowest Credit Rating most
      recently published by S&P, Fitch and/or Moody's. 

    
      
        

        
          	
                  CREDIT

                  RATING

                	 
	
                  S&P

                	
                  Fitch

                	
                  Moody's

                	
                  TNW

                  Percentage

                	
                  Unsecured

                  Credit
                    Limit

                
	
                  A-
                    or

                  above

                	
                  A-
                    or above

                	
                  A3
                    or

                  above

                	
                  5%

                	
                  $75,000,000

                
	
                  BBB+

                	
                  BBB+

                	
                  Baal

                	
                  5%

                	
                  $50,000,000

                
	
                  BBB

                	
                  BBB

                	
                  Baa2

                	
                  5%

                	
                  $35,000,000

                
	
                  BBB-

                	
                  BBB-

                	
                  Baa3

                	
                  5%

                	
                  $20,000,000

                
	
                  Below

                  BBB-

                	
                  Below

                  BBB-

                	
                  Below

                  Baa3

                	
                  5%

                	
                  $0

                

        

         

      

    

    Pursuant
      to this Article 14 and Article 1, the analysis of Unsecured Credit will also
      include consideration of the Guaranty Agreement, if any, submitted by Seller
      in
      connection with this contract.

    

    
      	
              14.4

            	
              Credit
                Rating. If during the term of the Agreement, Seller's or Seller's
                Guarantor's, if applicable, Credit Rating changes, by either being
                upgraded or downgraded by any of the rating agencies referenced in
                Section
                14.3 (Unsecured Credit) of the Agreement, the Seller shall be required
                to
                provide written notice to Buyer of such Credit Rating change no later
                than
                two (2) Business Days after the date of such change. However, if
                Seller's,
                or Seller's Guarantor's, if applicable, equity is publicly traded
                on the
                New York Stock Exchange, NASDAQ National Market, or American Stock
                Exchange, the Buyer will waive the requirement to provide written
                notice.

            

    

    

    
      	
              14.5

            	
              Tangible
                Net Worth. During the term of the Agreement, Seller, or Seller's
                Guarantor, if applicable, shall be required to provide Buyer written
                financial information to determine the Seller's, or Seller's Guarantor's
                Tangible Net Worth. Financial information shall include an audited
                Annual
                Report, containing, but not limited to, a balance sheet prepared
                in
                accordance with generally accepted accounting principles, a schedule
                of
                long term debt including maturity dates, and all notes to the financial
                statement that apply to long term debt, short term borrowing, and
                liquidity and capital resources. The Seller, or Seller's Guarantor,
                shall
                also provide the Buyer written financial information on a quarterly
                basis
                containing a balance sheet prepared in accordance with generally
                accepted
                accounting principles. However, if Seller's, or Seller's Guarantor's,
                if
                applicable, equity is publicly traded on the New York Stock Exchange,
                NASDAQ National Market, or American Stock Exchange, the Buyer will
                waive
                the requirement to provide written financial
                information.

            

    

    
      

      
        	
                14.6

              	
                Aggregate
                  to Buyer's
                  Exposure. In order to determine the amount of Performance Assurance
                  during the term of this Agreement, Buyer shall calculate the Aggregate
                  Buyer's Exposure under Aggregate Transactions once per Business
                  Day,
                  pursuant to the process and methodology described in Exhibit E.
                  On a
                  Transaction Date, the Buyer's Exposure for that Transaction shall
                  be
                  deemed equal to zero.

              

      

      

      
        	
                 

              	
                To
                  the extent that the calculations of the Aggregate Buyer's Exposure
                  for a
                  given date results in a negative number, the Aggregate Buyer's
                  Exposure
                  for such date shall be deemed equal to
                  zero.

              

      

      

      
        	
                (a)  

              	
                Pricing
                  Agent. Buyer shall contract with and pay for the services of a single
                  independent consultant to provide pricing services with respect
                  to the
                  Transactions under this Agreement ("Pricing Agreement"). The Pricing
                  Agent
                  shall provide to the Buyer the On-Peak Initial Mark Price and the
                  Off-Peak
                  Initial Mark Price. In addition, on each Business Day, the Pricing
                  Agent
                  shall provide to the Buyer the On-Peak Forward Price and the Off-Peak
                  Forward Price. To the extent that information and/or quotes are
                  not
                  available to determine an On-Peak Forward Price or Off-Peak Forward
                  Price
                  for a given month the Pricing Agent shall be permitted to use information
                  and/or quotes relevant to such month for which information/and
                  quotes are
                  available in order to provide the Buyer the required On-Peak Forward
                  Price
                  and Off-Peak Forward Price for such month. Exhibit E presents in
                  more
                  detail the methodology to be used by the Pricing Agent in determining
                  the
                  Off-Peak Initial Mark Price, On-Peak Initial Mark Price, Capacity
                  Forward
                  Price, Capacity Initial Mark Price, the On-Peak Forward Price,
                  and the
                  Off-Peak Forward Price.

              

      

      

      
        	
                (b)  

              	
                Buyer
                  shall use reasonable efforts to provide Seller with Aggregate Buyer's
                  Exposure on each Business Day subject to the Confidentiality provisions
                  of
                  this Agreement.

              

      

      

      
        	
                (c)  

              	
                Pursuant
                  to Section 14.1 above, Seller shall not dispute any request by
                  Buyer for
                  Performance Assurance. Notwithstanding such provision, Seller may
                  dispute
                  the Pricing Agent's determinations of the On-Peak Initial Mark
                  Price,
                  Off-Peak Initial Mark Price, Capacity Forward Price, Capacity Initial
                  Mark
                  Price, On-Peak Forward Price, and Off-Peak Forward Price if Seller
                  can
                  demonstrate that the Pricing Agent has been grossly negligent or
                  has
                  exhibited willful misconduct in such determinations, or that the
                  Pricing
                  Agent is making such determinations in a manner that is arbitrary,
                  capricious or erroneous on its face. Such dispute of the Pricing
                  Agent's
                  determinations by the Seller shall not be cause for any delay by
                  the
                  Seller in posting any Performance Assurance requested by the
                  Buyer.

              

      

       

      
        	
                14.7

              	Accelerated Payments: If at any time and from
                time to
                time during the term of this Agreement, a Buyer Downgrade Event occurs,
                notwithstanding the provisions of Article 7 (Billing and Settlement),
                Seller shall have the right to require Buyer to divide the Monthly
                Settlement Amount into weekly amounts and pay such amounts on a weekly
                basis for so long as the Buyer Downgrade Event continues. A "weekly
                basis"
                as referred to in the preceding sentence means that for a given Monday
                through Sunday period in a Delivery Period. Seller shall notify Buyer
                who
                shall be required to make payment for such period no later than the
                first
                Wednesday following such period (or if such day is not a Business
                Day, on
                the next Business Day). Buyer's failure to make such accelerated
                payments
                shall be deemed an Event of Default under Section 12.1 (Events of
                Default)
                of the Agreement.

      

    

    ARTICLE
      15

    REPRESENTATIONS
      AND WARRANTIES

    

    
      	
              15.1

            	
              Representations
                and Warranties. On the Effective Date and throughout the term of this
                Agreement, each Party represents and warrants to the other Party
                that:

            

    

    
      

      
        	
                (a)  

              	
                it
                  is duly organized, validly existing and in good standing under
                  the laws of
                  the jurisdiction of its formation;

              

      

      

      
        	
                (b)  

              	
                it
                  has all regulatory authorizations necessary for it to legally perform
                  its
                  obligations under this Agreement and each
                  Transaction;

              

      

      

      
        	
                (c)  

              	
                the
                  execution, delivery and performance of this Agreement and each
                  Transaction
                  are within its powers, have been duly authorized by all necessary
                  action
                  and do not violate any of the terms and conditions in its governing
                  documents, any contracts to which it is a party or any law, rule,
                  regulation, order or the like applicable to
                  it;

              

      

      

      
        	
                (d)  

              	
                this
                  Agreement and each Transaction constitutes its legally valid and
                  binding
                  obligation enforceable against it in accordance with its terms;
                  subject to
                  any equitable defenses;

              

      

      

      
        	
                (e)  

              	
                it
                  is not Bankrupt and there are no proceedings pending or being contemplated
                  by it or, to its knowledge, threatened against it which would result
                  in it
                  becoming Bankrupt;

              

      

      

      
        	
                (f)  

              	
                there
                  are no pending, or to its knowledge threatened, actions, suits
                  or
                  proceedings against it or any of its Affiliates any legal proceedings
                  before any Governmental Authority that could materially adversely
                  affect
                  its ability to perform its obligations under this Agreement and
                  each
                  Transaction;

              

      

      

      
        	
                (g)  

              	
                no
                  Event of Default with respect to it has occurred and is continuing
                  and no
                  such event or circumstance would occur as a result of its entering
                  into or
                  performing its obligations under this Agreement and each
                  Transaction;

              

      

      

      
        	
                (h)  

              	
                with
                  respect to Buyer, it is acting to fulfill its obligations under
                  and in
                  accordance with PUC Orders and Settlements to enter into this
                  Agreement;

              

      

      

      
        	
                (i)  

              	
                it
                  is not relying upon the advice or recommendations of the other
                  Party in
                  entering into this Agreement, it is capable of understanding, understands
                  and accepts the terms, conditions and risks of this Agreement and
                  each
                  Transaction, and the other Party is not acting as a fiduciary for
                  or
                  advisor to it in respect of this
                  Agreement;

              

      

       

      
        	
                (j)  

              	
                it
                  is a "forward contract merchant" within the meaning of the United
                  States
                  Bankruptcy Code; and

              

      

       

      
        	
                (k)  

              	
                it
                  has entered into this Agreement and each Transaction in connection
                  with
                  the conduct of its business and it has the capacity or ability
                  to provide
                  or take delivery of the Full Requirements Service; and it is an
                  "eligible
                  contract participant" as defined
                  in Section la(12) of the Commodity Exchange
                  Act.

              

      

       

    

    
      	
              15.2

            	
              Additional
                Understandings. This Agreement is for the purchase and sale of Full
                Requirements Service that will be delivered in quantities expected
                to be
                used or sold over a defined period(s) in the normal course of business,
                and it is the intention at the inception and throughout the term
                of this
                Agreement and each Transaction hereunder that the Agreement will
                result in
                physical delivery and not financial settlement, and the quantity
                of Full
                Requirements Service that Seller must deliver and Buyer must receive
                will
                be determined by the requirements of the POLR Load served by Buyer,
                and,
                as such, the Agreement does not provide for an option by either Party
                with
                respect to the quantity of Full Requirements Service to be delivered
                or
                received during performance of the Agreement. This Agreement has
                been
                drafted to effectuate Buyer's and Seller's specific intent so that
                in
                accordance with Financial Accounting Standards Board Statement No.
                133
                ("FAS 133"), as amended, Buyer would be able to elect to use accrual
                accounting for its purchases under this Agreement, while Seller would
                be
                able to elect to use either accrual or mark-to-market accounting
                for its
                sales under the Agreement. If either Buyer or Seller determines,
                in good
                faith, that the intended accounting treatment has become jeopardized,
                due
                to a change in interpretations of FAS 133, as amended, or otherwise,
                then
                Buyer and Seller agree to meet and use their best efforts to reform
                the
                Agreement so that, with the minimum changes possible, the Agreement
                again
                qualifies for the intended accounting
                treatments.

            

    

    

    ARTICLE
      16

    MISCELLANEOUS

    

    
      	
              16.1

            	
              Notices.
                Unless otherwise specified herein, all notices shall be in writing
                and
                delivered by hand, overnight or facsimile (provided a copy is also
                sent by
                overnight mail). Notice shall be effective on the next Business Day
                after
                it is sent. A Party may change its address by providing notice of
                the same
                in accordance with this Section 16.1. Notice information for Buyer
                and
                Seller is shown on Exhibit G.

            

    

    

    
      	
              16.2

            	
              General.
                This Agreement shall be considered for all purposes as prepared through
                the joint efforts of the Parties and shall not be construed against
                one
                Party or the other as a result of the preparation, substitution,
                submission or other event of negotiation, drafting or execution hereof.
                Each Party further agrees that it will not assert, or defend itself,
                on
                the basis that any applicable tariff is inconsistent with this Agreement.
                This Agreement shall not impart any rights enforceable by any third
                party
                other than a permitted successor or assignee bound to this Agreement
                or
                any Transaction. Any provision declared or rendered unlawful will
                not
                otherwise affect the remaining lawful obligations that arise under
                this
                Agreement or any Transaction; provided that in such event the Parties
                shall use commercially reasonable efforts to amend this Agreement
                or any
                Transaction in order to give effect to the original intention of
                the
                Parties.

            

    

    

    
      	
              16.3

            	
              Rules
                of Interpretation. The following principles shall be observed in the
                interpretation and construction of this
                Agreement:

            

    

    

    
      	
              (a)  

            	
              unless
                otherwise stated, the terms "include" and "including" when used in
                this
                Agreement shall be interpreted to mean by way of example only and
                shall
                not be considered limiting in any
                way;

            

    

    

    
      	
              (b)  

            	
              all
                titles and headings used herein are for convenience and reference
                purposes
                only, do not constitute a part of this Agreement and shall be ignored
                in
                construing or interpreting the obligations of the parties under this
                Agreement;

            

    

     

    
      	
              (c)  

            	references to the singular include the plural and
              vice
              versa;

    

    

    
      	
              (d)  

            	
              references
                to Articles, Sections, Clauses and the Preamble are, unless the context
                indicates otherwise, references to Articles, Sections, Clauses and
                the
                Preamble of this Agreement; and

            

    

    

    
      	
              (e)  

            	
              in
                carrying out its rights, obligations and duties under this Agreement,
                each
                Party shall have an obligation of good faith and fair
                dealing.

            

    

    

    
      	
              16.4

            	
              Audit.
                Each Party has the right on at least three (3) Business Days prior written
                notice, at its sole expense and during normal working hours, to examine
                the records of the other Party to the extent reasonably necessary
                to
                verify the accuracy of any statement, charge or computation made
                pursuant
                to this Agreement. If any such examination reveals any inaccuracy
                in any
                statement, the necessary adjustments in such statement and the payments
                thereof will be made in accordance with Sections 7.1 (Billing) and
                7.5
                (Interest on Unpaid Balances).

            

    

    

    
      	
              16.5

            	
              Confidentiality.

            

    

    

    (a)  Each
      Party shall hold in confidence and not release or disclose any document or
      information furnished by the other Party in connection with this Agreement,
      unless: (i) compelled to disclose such document or information by judicial,
      regulatory or administrative process or other provision of law; (ii) such
      document or information is generally available to the public; (iii) such
      document or information was available to the receiving Party on a
      non-confidential basis; or (iv) such document or information was available
      to
      the receiving Party on a non-confidential basis from a third –party, providing
      that the receiving Party does not know, and by reasonable effort, could not
      know
      that such third-party is prohibited from transmitting the document or
      information to the receiving Party by a contractual, legal or fiduciary
      obligation.

    

    (b)  Notwithstanding
      any other provision of this Section 16.5, a Party may disclose it its employees,
      representative and agents all documents and information furnished by the other
      Party in connection with this Agreement, provided that such employees,
      representatives and agents have been advised of the confidentiality provisions
      of this Section 16.5, and further provided that in no event shall a document
      or
      information be disclosed in violation of the standard of conduct requirements
      established by FERC.

    

    (c)  A
      Party
      receiving notice or otherwise concluding that any confidential document or
      information furnished by the other Party in connection with this Agreement
      is
      being sought under any provision of law, to the extent it is permitted to do
      so
      under any applicable law, shall: (i) promptly notify the other Party; and (ii)
      use reasonable efforts in cooperation with the other Party to seek confidential
      treatment of such confidential information.

    

    (d)  Any
      independent auditor performing an audit on behalf of a Party pursuant to Section
      16.4 shall be required to execute a confidentiality agreement with the Party
      being audited. Such audit information shall be treated as confidential pursuant
      to this Section 16.5,

    

    (e)  The
      Parties agree that monetary damages may be inadequate to compensate a Party
      for
      the other Party's breach of its obligations under this Section 16.5. Each Party
      accordingly agrees that the other Party shall be entitled to equitable relief,
      by way of injunction or otherwise, if the Party breaches or threatens to breach
      its obligations under this Section 16.5, which equitable relief shall be granted
      without bond or proof of damages, and the receiving Party shall not plead in
      defense that there would be an adequate remedy at law.

    

    
      	
              16.6

            	
              Successors.
                This Agreement and all of the provisions hereof are binding upon,
                and
                inure to
                the benefit of, the Parties and their respective successors and permitted
                assigns.

            

    

    

    
      	
              16.7

            	
              Assignment/Change
                in Corporate Identity. Neither Party shall assign this Agreement, its
                rights or obligations hereunder without the prior written consent
                of the
                other Party, which consent may not be unreasonably withheld; provided,
                however, either Party may, without the consent of the other Party
                (and
                without relieving itself from liability
                hereunder),

            

    

    

    
      	
              (a)  

            	
              transfer,
                sell, pledge, encumber or assign this Agreement or the accounts,
                revenues
                or proceeds hereof in connection with any financing or other financial
                arrangements;

            

    

    

    
      	
              (b)  

            	
              transfer
                or assign this Agreement to an affiliate of such Party if: (i) such
                affiliates creditworthiness is equal to or higher than that of such
                Party;
                or (ii) in such event, the Transferee should assume all obligations
                pursuant to this Agreement and shall provide appropriate performance
                assurances as required by this
                Agreement;

            

    

    

    
      	
              (c)  

            	
              transfer
                or assign this Agreement to any person or entity succeeding to all
                or
                substantially all of the assets whose: (i) creditworthiness is equal
                to or
                higher than that of such Party; or (ii) in such event, the Transferee
                should assume all obligations pursuant to this Agreement and shall
                provide
                appropriate performance assurances as required by this Agreement;
                and

            

    

    

    
      	
              (d)  

            	
              provided,
                however, that in each such case, any such assignee shall agree in
                writing
                to be bound by the terms and conditions hereof and so long as the
                transferring Party delivers such tax and enforceability assurance
                as the
                non-transferring Party may reasonably
                request.

            

    

    

    
      	
              16.8

            	
              Governing
                Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
                HEREUNDER SHALL BE GOVERNED BY AND CONSTITUTED IN ACCORDANCE WITH
                THE LAWS
                OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO PRINCIPLES
                OF
                CONFLICTS OF LAW.

            

    

    

    
      	
              16.9

            	
              Jurisdiction
                and Venue. Except for matters jurisdictional to FERC, the PUC or the
                appellate courts having jurisdiction over the PUC or FERC matters,
                all
                disputes hereunder shall be resolved in the Federal or State courts
                of
                Pennsylvania and each Party hereby irrevocably submits to the in
                personam
                jurisdiction of such courts. Each Party hereby waives its respective
                rights to any jury trial with respect to any litigation arising under
                or
                in connection with this Agreement.

            

    

    

    
      	
              16.10

            	
              Amendments.
                Except as provided in Section 16.11 (PJM Agreement Modifications),
                this
                Agreement or any Transaction shall not be amended, modified, terminated,
                discharged or supplemented, nor any provision hereof waived, unless
                mutually agreed, in writing, by the Parties. Except as provided in
                Section
                16.11 (PJM Agreement Modifications), the rates, terms and conditions
                contained in this Agreement or any Transaction are not subject to
                change
                under Sections 205 or 206 of the Federal Power Act absent the mutual
                written agreement of the Parties. Absent the agreement of all parties
                to
                the proposed change, the standard of review for changes to this Agreement
                proposed by a Party, a non-Party or the FERC acting sua sponte shall
                be the "public interest" standard of review set forth in United Gas Pipe
                Line Co. v.
                Mobile Gas Service Corp., 350 U.S. 332 (1956), and Federal
                Power Commission v.
                Sierra Pacific Power Co., 350 U. S. 348 (1956) (the "Mobile-Sierra"
                doctrine).

            

    

    

    
      	
              16.11

            	
              PJM
                Agreement Modifications.

            

    

    

    
      	
              (a)  

            	
              If
                the PJM Agreements are amended or modified so that any schedule or
                section
                references herein to such agreements is changed, such schedule or
                section
                references herein shall be deemed to automatically (and without any
                further action by the Parties) refer to the new or successive schedule
                or
                section in the PJM Agreements which replaces that originally referred
                to
                in this Agreement.

            

    

    

    
      	
              (b)  

            	
              If
                the applicable provisions of the PJM Agreements referenced herein,
                or any
                other PJM rules relating to the implementation of this Agreement,
                are
                changed materially from those in effect on the Effective Date, both
                Parties shall cooperate to make conforming changes to this Agreement
                to
                fulfill the purposes of this
                Agreement.

            

    

    

    
      	
              16.12

            	
              Delay
                and Waiver. Except as otherwise provided in this Agreement, no delay
                or omission to exercise any right, power or remedy accruing to the
                respective Parties hereto upon any breach or default of any other
                Party
                under this Agreement shall impair any such right, power or remedy,
                nor
                shall it be construed to be a waiver of any such similar breach or
                default
                thereafter occurring; nor shall any waiver of any single breach or
                default
                be deemed a waiver of any other breach or default theretofore or
                thereafter occurring. Any waiver, permit, consent or approval of
                any kind
                or character of any breach or default under this Agreement, or any
                waiver
                of any provision or condition of this Agreement, must be in writing
                and
                shall be effective only to the extent specifically set forth in such
                writing.

            

    

    

    
      	
              16.13

            	
              Regulatory
                Approvals. The commencement of the Delivery Period is subject to the
                receipt or waiver by Buyer of all Buyer required regulatory approvals.
                In
                the event such required regulatory approvals are not received or
                waived,
                the Step-Up provisions of Section 4.11 (Seller Step-Up Rights) shall
                apply.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties hereto have executed this Agreement to be effective
      as of the day and year first written above.

    
       

        
          	
                  ATTEST:

                	 	
                  PPL
                    ELECTRIC UTILITES CORPORATION

                
	 	 	 
	 	 	
                  By:

                
	 	 	 
	
                  Title:

                	 	
                  Name:

                
	 	 	 
	 	 	
                  Title:

                
	 	 	 
	 	 	 
	
                  ATTEST:

                	 	 
	 	 	 
	 	 	 
	 	 	
                  By:

                
	 	 	 
	
                  Title:

                	 	
                  Name:
                    Clarence J. Hopf, Jr.

                
	 	 	 
	 	 	
                  Title:  President

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      EXHIBIT
        A

       

      TRANSACTION
        CONFIRMATION EXAMPLE

    

    

    This
      Transaction Confirmation letter is being provided pursuant to and in accordance
      with the Provider of Last Resort Supply Master Agreement ("POLR SMA") dated
      __
      between PPL Electric
      Utilities Corporation ("Company" or "PPL Electric") and
      _____  ("Seller"). Terms used but not defined herein shall have the
      meanings ascribed to them in the POLR SMA. This Transaction Confirmation shall
      confirm the following terms of the transaction ("Transaction") agreed
      to
      on  _____________ ("Bid Proposal Due Date").

    

    Product:
      Full Requirements Electric Service

    Group:
      Residential

    Service
      Type: Rate Classes RS, RTS, RTD

    Delivery
      Location: PPL Electric Zone

    Delivery
      Period: January 1, 2010 through December 31, 2010

    

    The
      Seller's specified percentage is ___________.  Seller will
      supply_______ tranches at a monthly settlement
      price of $______ per MWh for the duration of the delivery
      period.

    
      

      
        	
                Service
                  Type

              	
                Total

                Tranches

              	
                %
                  Size of

                a
                  Tranche

              	
                PLC

                (MW)

              	
                Approximate

                Tranche
                  Size

                
                  (MW)

                

              
	
                Rate
                  Classes RS, RTS, RTD

              	 	
                1.67%

              	 	
                50.0

              

      

      

      
        	 	 	
                2010
                  Estimated Quantity Per Tranche (MWh)

              	 
	
                Jan

              	
                Feb

              	
                Mar

              	
                Apr

              	
                May

              	
                Jun

              	
                Jul

              	
                Aug

              	
                Sep

              	
                Oct

              	
                Nov

              	
                Dec

              
	 	 	 	 	 	 	 	 	 	 	 	 

      

       

    

    Please
      confirm that the terms stated herein accurately reflect the Transaction reached
      on the Bid Proposal Due Date above between Seller and PPL Electric by returning
      an executed copy of this Transaction Confirmation by facsimile to PPL Electric
      at [Fax number to be provided] in accordance with Section 2.8 — Transaction
      Confirmation of the POLR SMA. The signatories to this Transaction Confirmation
      must have the authority to enter into this Transaction.

    

    
      	
              SELLER

               

              By:_______________

               

              Name:
                ____________

               

              Title:______________

               

            	
              PPL
                ELECTRIC UTILITIES CORPORATION

               

              By:
                ___________________________________

               

              Name:_________________________________

               

              Title:
                _________________________________

               

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    ALTERNATIVE
      ENERGY PORTFOLIO STANDARDS OBLIGATION

    

    

    This
      Exhibit B shall confirm the Alternative Energy Portfolio Standards Obligation
      of
      the transaction ("Transaction") agreed to on —("Bid Proposal Due
      Date").

    

    Alternative
      Energy Portfolio Standards Obligations for the period beginning January 1,
      2010
      based on the total MWh supplied by Seller :

    

    

    2007
      Solicitations - Residential and Small C&I

    

    
      	
                Compliance
                Period

            	
              Tier
                I

            	
              PV(included
                in

              Tier
                I Obligation)

            	
              Tier
                II

            
	
              1/1/10
                to 5/31/10

            	
              2.5%

            	
              0.0360%

            	
              4.2%

            
	
              6/1/10
                to 12/31/10

            	
              3.0%

            	
              0.0609%

            	
              6.2%

            

    

    

    

    2008
      and
      2009 Solicitations - Residential and Small C&I

    

    
      	
                Compliance
                Period

            	
              Tier
                I

            	
              PV(included
                in

              Tier
                I Obligation)

            	
              Tier
                II

            
	
              1/1/10
                to 5/31/10

            	
              2.5%

            	
              0.0000%

            	
              4.2%

            
	
              6/1/10
                to 12/31/10

            	
              3.0%

            	
              0.0000%

            	
              6.2%

            

    

    

    

    2009
      Solicitations - Large C&I

    

    
      	
              Compliance
                Period

            	
              Tier
                I

            	
              PV(included
                in

              Tier
                I Obligation)

            	
              Tier
                II

            
	
              1/1/10
                to 5/31/10

            	
              2.5%

            	
              0.0120%

            	
              4.2%

            
	
              6/1/10
                to 12/31/10

            	
              3.0%

            	
              0.0203%

            	
              6.2%

            

    

    

    The
      percentages set forth above are those applicable for the first RFP and may
      be
      revised for future RFPs to reflect changes in law or other applicable regulatory
      requirements.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

    PERFORMANCE
      ASSURANCE EVERGREEN LETTER OF CREDIT

    

    {TO
      BE ISSUED ON THE LETTERHEAD OF THE ISSUING BANK}

    

    IRREVOCABLE
      LETTER OF CREDIT NO.

    

    ISSUE
      DATE_____________________________                                            EXPIRY
      DATE: ________

    

    APPLICANT

    

    [
      NAME]

    

    [
      ADDRESS]

    

    BENEFICIARY

    

    [
      NAME ]

    

    [ADDRESS]

    

    CURRENCY
      AMOUNT USD

    *********$

    WE
      HEREBY
      ISSUE IN YOUR FAVOR OUR IRREVOCABLE LETTER OF CREDIT NO:________
      FOR THE ACCOUNT OF _________ (APPLICANT) FOR AN AMOUNT OR AMOUNTS
      NOT TO EXCEED IN THE AGGREGATE US DOLLARS _________ AVAILABLE BY
      YOUR
      DRAFT(S) AT SIGHT ON THE BANK OF ________ ("ISSUER") ________
      (ADDRESS), EFFECTIVE________ AND EXPIRING AT OUR COUNTERS ON OR
      ANY
      AUTOMATICALLY EXTENDED EXPIRY DATE, AS PROVIDED HEREIN. THIS LETTER OF CREDIT
      IS
      AVAILABLE IN ONE OR MORE DRAFTS UP TO THE AGGREGATE AMOUNT SET FORTH
      HEREIN.

    

    THIS
      LETTER OF CREDIT IS PRESENTABLE AND PAYABLE AT OUR COUNTERS AND WE HEREBY ENGAGE
      WITH YOU THAT DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER
      OF CREDIT WILL BE HONORED ON PRESENTATION IF ACCOMPANIED BY THE REQUIRED
      DOCUMENTS PURSUANT TO THE TERMS OF THIS LETTER OF CREDIT.

    

    THE
      BELOW
      MENTIONED DOCUMENT(S) MUST BE PRESENTED ON OR BEFORE THE EXPIRY DATE OF THIS
      INSTRUMENT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF
      CREDIT.

    

    1.
      YOUR
      SIGNED AND DATED STATEMENT, READING AS FOLLOWS:

    

    "THE
      AMOUNT FOR THIS DRAWING, USD (INSERT AMOUNT), BEING MADE UNDER THE BANK
      OF________ (BANK) LETTER OF CREDIT NUMBER
      (INSERT LETTER OF CREDIT REFERENCE NUMBER), REPRESENTS AN AMOUNT DUE AND PAYABLE
      TO BENEFICIARY FROM APPLICANT FOR PERFORMANCE ASSURANCE RELATED TO THE FULL
      REQUIREMENTS SERVICE AGREEMENT(S) DATED __________ 
      BETWEEN  __________  AND_________."

    

    2.
      THIS
      ORIGINAL LETTER OF CREDIT AND ANY AMENDMENT(S).

    

    IF
      PRESENTATION OF ANY DRAWING IS MADE ON A BUSINESS DAY (AS HEREIN DEFINED) AND
      SUCH PRESENTATION IS MADE ON OR BEFORE 11:00 A.M. NEW YORK TIME, ISSUER SHALL
      SATISFY SUCH DRAWING REQUEST ON THE NEXT BUSINESS DAY. IF THE DRAWING IS
      RECEIVED AFTER 11:00 A.M. NEW YORK TIME, ISSUER WILL SATISFY SUCH DRAWING
      REQUEST ON THE SECOND FOLLOWING BUSINESS DAY.

    

    IT
      IS A
      CONDITION OF THIS LETTER OF CREDIT THAT IT WILL BE AUTOMATICALLY EXTENDED
      WITHOUT AMENDMENT FOR ONE YEAR FROM THE EXPIRATION DATE HEREOF, OR ANY FUTURE
      EXPIRATION DATE, UNLESS AT LEAST 90 DAYS PRIOR TO ANY EXPIRATION DATE WE NOTIFY
      YOU AT THE ABOVE ADDRESS BY REGISTERED MAIL OR HAND DELIVERED COURIER THAT
      WE
      ELECT NOT TO CONSIDER THIS LETTER OF CREDIT RENEWED FOR ANY SUCH
      PERIOD.

    

    THIS
      LETTER OF CREDIT MAY BE TERMINATED UPON BENEFICIARY'S RECEIPT OF FULL PAYMENT
      FROM THE APPLICANT AND ISSUER'S RECEIPT OF A WRITTEN RELEASE FROM THE
      BENEFICIARY RELEASING THE ISSUER FROM ITS OBLIGATIONS UNDER THIS LETTER OF
      CREDIT.

    

    THE
      TERM
      "BUSINESS DAY" AS USED HEREIN MEANS ANY DAY OTHER THAN (I) A SATURDAY, (II)
      A
      SUNDAY, OR (III) A DAY ON WHICH BANKING INSTITUTIONS LOCATED IN THE CITY OF
      NEW
      YORK, NEW YORK ARE REQUIRED OR AUTHORIZED BY LAW TO BE CLOSED.

    

    APPLICANT'S
      FILING OF A BANKRUPTCY, RECEIVERSHIP OR OTHER DEBTOR-RELIEF PETITION, AND/OR
      APPLICANT'S DISCHARGE THEREUNDER, SHALL IN NO WAY AFFECT THE LIABILITY OF [BANK]
      UNDER THIS LETTER OF CREDIT AND [BANK] SHALL ALWAYS REMAIN LIABLE TO
      [BENEFICIARY] FOR THE FULL AMOUNT OF APPLICANT'S OBLIGATIONS HEREIN TO
      [BENEFICIARY] NOT TO EXCEED THE AVAILABLE AMOUNT IN THIS LETTER OF
      CREDIT.

    

    ADDITIONAL
      TERMS AND CONDITIONS:

    
       

      
        
          	
                  1.  

                	
                  ALL
                    COMMISSIONS AND OTHER BANKING CHARGES WILL BE BORNE BY THE
                    APPLICANT.

                

        

        
          	
                  2.  

                	
                  THIS
                    LETTER OF CREDIT MAY NOT BE TRANSFERRED OR
                    ASSIGNED.

                

        

        
          	
                  3.  

                	
                  THIS
                    LETTER OF CREDIT IS IRREVOCABLE.

                

        

        
          	
                  4.  

                	
                  THIS
                    LETTER OF CREDIT IS SUBJECT
                    TO THE INTERNATIONAL STANDBY PRACTICES (1998) OF THE INTERNATIONAL
                    CHAMBER
                    OF COMMERCE PUBLICATION
                    NO. 590 ("ISP98") OR
                    SUCH LATER REVISION(S) OF THE ISP AS MAY BE HEREAFTER ADOPTED. AS
                    TO MATTERS NOT GOVERNED BY ISP98, THIS LETTER OF CREDIT SHALL
                    BE GOVERNED
                    BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
                    OF
                    PENNSYLVANIA, INCLUDING, TO THE EXTENT NOT INCONSISTENT WITH
                    ISP98, THE
                    UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF PENNSYLVANIA.
                    THIS
                    LETTER OF CREDIT MAY NOT BE AMENDED, CHANGED OR MODIFIED WITHOUT
                    THE
                    EXPRESS WRITTEN CONSENT OF THE BENEFICIARY AND THE
                    ISSUER.

                

        

        
          	
                  5.  

                	
                  THE
                    BENEFICIARY SHALL NOT BE DEEMED TO HAVE WAIVED ANY RIGHTS UNDER
                    THIS LETTER OF CREDIT,
                    UNLESS
                    THE BENEFICIARY OR AN AUTHORIZED AGENT OF THE BENEFICIARY SHALL
                    HAVE
                    SIGNED A DATED WRITTEN WAIVER. NO SUCH WAIVER, UNLESS EXPRESSLY
                    SO STATED
                    THEREIN, SHALL BE EFFECTIVE AS TO ANY TRANSACTION THAT OCCURS
                    SUBSEQUENT
                    TO THE DATE OF THE WAIVER, NOR AS TO ANY CONTINUANCE OF A BREACH
                    AFTER THE
                    WAIVER.

                

        

        
          	
                  6.  

                	
                  A
                    FAILURE TO MAKE ANY PARTIAL DRAWINGS AT ANY TIME SHALL NOT IMPAIR
                    OR
                    REDUCE THE AVAILABILTY OF THIS LETTER OF CREDIT IN ANY SUBSEQUENT
PERIOD OR OUR
                    OBLIGATION
                    TO HONOR YOUR SUBSEQUENT
                    DEMANDS FOR
                    PAYMENT MADE IN ACCORDANCE WITH THE TERMS OF THIS LETTER OF
                    CREDIT.

                

        

        

      

    

    

    

    AUTHORIZED
      SIGNATURE:  ________________________

    

    TITLE:________

    

    PLEASE
      DIRECT ANY WRITTEN CORRESPONDENCE, INCLUDING DRAWING OR INQUIRIES
      TO:

    

    [BANK
      NAME, ADDRESS AND PHONE NUMBER]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

     

    SAMPLE
      PJM INVOICE

     

    FINAL
      BILLING STATEMENT ISSUED ON: MM/DD/YYYY FOR PERIOD: MM/DD/YYYY TO
      MM/DD/YYYY

     

     

    
      	 OPERATING
              AGREEMENT OF PJM INTERCONNECTION, L.L.C.:
              

    

    

    
      	 	
              Day-Ahead

            	
              Balancing

            	
              Total

            

    

    Charges:

    
      	
              Spot
                Market Energy

            	
              Seller

            	
              Seller

            	
              Seller

            
	
              Transmission
                Congestion

            	
              Seller

            	
              Seller

            	
              Seller

            
	
              Transmission
                Losses (Point-to-Point)

            	
              Seller

            	
              Seller

            	
              Seller

            
	
              Regulation

            	 	 	
              Seller

            
	
              Spinning
                Reserve

            	 	 	
              Seller

            
	
              Operating
                Reserves

            	
              Seller

            	
              Seller

            	
              Seller

            
	
              Synchronous
                Condensing

            	 	 	
              Seller

            
	
              Capacity
                Credit Market

            	 	 	
              Seller

            
	
              Reconciliation
                for Spot Market

            	 	 	
              Seller

            
	
              Reconciliation
                for Regulation

            	 	 	
              Seller

            
	
              Reconciliation
                for Operating Reserves

            	 	 	
              Seller

            
	
              Emergency
                Energy

            	 	 	
              Seller

            
	
              FTR
                Auction

            	 	 	
              Seller

            
	
              Meter
                Error Correction

            	 	 	
              Seller

            
	
              PJM
                Load Response Program

            	 	 	
              Seller

            
	 	 	 	 
	 	 	 	 
	
              Credits:

            	 	 	 
	
              Spot
                Market Energy

            	
              Seller

            	
              Seller

            	
              Seller

            
	
              Transmission
                Congestion

            	 	 	 
	
              Hourly

            	 	 	
              Seller

            
	
              Planning
                Period Excess

            	 	 	
              Buyer

            
	
              Transmission
                Losses (Point-to-Point)

            	 	 	
              Seller

            
	
              Regulation

            	 	 	
              Seller

            
	
              Spinning
                Reserve

            	 	 	
              Seller

            
	
              Operating
                Reserves

            	
              Seller

            	
              Seller

            	
              Seller

            
	
              Synchronous
                Condensing

            	 	 	
              Seller

            
	
              Capacity
                Credit Market

            	 	 	
              Seller

            
	
              Reconciliation
                for Transmission Losses

            	 	 	
              Seller

            
	
              Emergency
                Energy

            	 	 	
              Seller

            
	
              FTR
                Auction

            	 	 	
              Seller

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D (Continued)

    

    SAMPLE
      PJM INVOICE

    

    FINAL
      BILLING STATEMENT ISSUED On: MM/DD/YYYY FOR PERIOD:

    MM/DD/YYYY
      TO MM/DD/YYYY 

     

     

    PJM
      OPEN ACCESS TRANSMISSION TARIFF:

    
      	 	
              Total

            

    

    

    Charges:

    
      	
              PJM
                Scheduling, System Control and Dispatch Service

            	
              Seller

            
	
              Transmission
                Owner Scheduling, System Control and Dispatch Service

            	
              Seller

            
	
              Reactive
                Supply and Voltage Control from Generation Sources Service

            	
              Seller

            
	
              Black
                Start Service

            	
              Seller

            
	
              Network
                Integration Transmission Service

            	
              Buyer

            
	
              Network
                Transmission Service Offset Charges

            	
              Buyer

            
	
              Firm
                Point-to-Point Transmission Service

            	
              Seller

            
	
              Non-Firm
                Point-to-Point Transmission Service

            	
              Seller

            
	
              Transitional
                Market Expansion Charges (Transmission Customer Charge
                Only)

            	
              Buyer

            
	
              Reconciliation
                for PJM Scheduling, System Control and Dispatch Service

            	
              Seller

            
	
              Reconciliation
                for Transmission Owner Scheduling, System Control and
                Dispatch

            	
              Seller

            
	
              Service

            	 
	
              Intra-PJM
                Seams Elimination Cost Assignment Charges

            	
              Buyer

            
	
              PJM/MISO
                Seams Elimination Cost Assignment Charges

            	
              Buyer

            
	 	 
	 	 
	
              Credits:

            	 
	
              Non-Firm
                Point-to-Point Transmission Service

            	
              Buyer

            
	
              Other
                Supporting Facilities

            	
              Buyer

            

    

    

    Reliability
      Assurance Agreement Among Load Serving Entities in the PJM Control
      Ares:

    
      	 	
              Total

            

    

    Charges:

    
      	
              Capacity
                Deficiency

            	
              Seller

            

    

    

    Credits:

    
      	
              Capacity
                Excess

            	
              Seller

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E,

    METHODOLOGY
      FOR CALCULATION OF MARK TO MARKET (MTM)

    EXPOSURE

    

    Parameters

    

    In
      calculating the Mark to Market (MtM) Exposure for each Transaction, the
      following parameters are set on the Transaction Date:

    

    1.  On-Peak
      Initial Mark Price

    2.  Off-Peak
      Price Ratio/On-Peak Price Ratio

    3.  Off-Peak
      Initial Mark Price

    4.  On-Peak
      Estimated Energy Quantity Per Tranche for each of the twelve calendar
      months

    5.  Off-Peak
      Estimated Energy Quantity Per Tranche for each of the twelve calendar
      months

    6.  Capacity
      Initial Mark Price

    7.  Capacity
      Obligation

    8.  Number
      of
      awarded Tranches

    

    In
      calculating the MtM Exposure for each Transaction, the following parameters
      are
      set each Business Day subsequent to the Transaction Date:

    

    1.  On-Peak
      Forward Price

    2.  Off-Peak
      Forward Price

    3.  Capacity
      Forward Price

    4.  Capacity
      Obligation

    5.  On-Peak
      Estimated Energy Quantity

    6.  Off-Peak
      Estimated Energy Quantity

    

    Calculation
      of the MtM Exposure

    
      

      On
        each
        Business Day subsequent to the Transaction Date, the MtM Exposure will be
        calculated, with respect to each month remaining in the Transaction Delivery
        Period, as the sum of the following:

    

     

    
      	
            	
              (i)

            	
              the
                relevant month On-Peak Forward Price minus the relevant month On-Peak
                Initial Mark
                Price, multiplied by the relevant month On-Peak Estimated Energy
                Quantity;

            

    

    
      
        	
              	
                (ii)

              	
                the
                  relevant month Off-Peak Forward Price minus the relevant month
                  Off-Peak
                  Initial Mark
                  Price, multiplied by the relevant month Off-Peak Estimated Energy
                  Quantity;

              

      

      
        	
              	
                (iii)

              	
                the
                  relevant month Capacity Forward Price minus the relevant month
                  Capacity
                  Initial Mark
                  Price, multiplied by the remaining Capacity Obligation per Tranche
                  and
                  number of
                  Tranches award to the Seller.

              

      

       

    

    Determination
      of On-Peak Forward Prices

    

    On
      each
      Business Day subsequent to the Transaction date, the Pricing Agent will follow
      the steps outlined below to determine the on-peak forward
      prices.

    

    
      	
              1.  

            	
              The
                Pricing Agent will contact four Reference Market-Makers to obtain
                bid and
                ask Energy price quotes for PJM Western Hub On-Peak Hours for each
                month
                of the Delivery Period. Both bid and ask Energy price quotes must
                be
                available to be considered a valid
                quote.

            

    

    
      	
              2.  

            	
              If
                a minimum of two quotes in a particular month are available, the
                Pricing
                Agent will determine the On-Peak Forward Price by averaging the bid
                and
                ask Energy prices.

            

    

    
      	
              3.  

            	
              If
                a minimum of two quotes in a particular month are not available,
                then the
                Pricing Agent will determine the On-Peak Forward Price using an annual
                quote, obtain in the same manner above. In this case, the On-Peak
                Forward
                Price will be calculated as the product of the Off-Peak Price Ratio
                and
                the annual price quote.

            

    

    

    Determination
      of Off-Peak Forward Prices

    

    On
      each
      Business Day subsequent to the Transaction date, the Pricing Agent will follow
      the steps outlined below to determine the off-peak forward prices.

    

    
      	
              1.  

            	
              The
                Pricing Agent will contact four Reference Market-Makers to obtain
                bid and
                ask Energy price quotes for PJM Western Hub Off-Peak Hours for each
                month
                of the Delivery Period. Both bid and ask Energy price quotes must
                be
                available to be considered a valid
                quote.

            

    

    
      	
              2.  

            	
              If
                a minimum of two quotes in a particular month are available, the
                Pricing
                Agent will determine the Off-Peak Forward Price by averaging the
                bid and
                ask Energy prices.

            

    

    
      	
              3.  

            	
              If
                a minimum of two quotes in a particular month are not available,
                then the
                Pricing Agent will determine the Off-Peak Forward Price using an
                annual
                quote obtained in the same manner as the in the following manner
                obtained
                in the same manner as discussed above. In this case, the Off-Peak
                Forward
                Price will be calculated as the product of the Off-Peak Price Ratio
                and
                the annual price quote.

            

    

    

    Determination
      of Capacity Forward Prices

    

    The
      Pricing Agent will obtain Capacity Forward Prices for the PPL Zone, or capacity
      pricing region within which the PPL Zone is included, as reported by PJM. To
      the
      extent that actual Capacity Forward Prices are unavailable through PJM, the
      Pricing Agent will obtain applicable Capacity Forward Prices as estimated by
      PJM. 

    
      
        

      

    

    
    

    EXHIBIT
      E (Continued)

    

    MtM
      EXAMPLE CALCULATION FOR A TRANSACTION

    

    
       

      
        
        

        
          

        

      

       

    

    EXHIBIT
      F

    

    UNCONDITIONALGUARANTY

    

    THIS
      GUARANTY AGREEMENT (this "Guaranty") is made and entered into as of this
      ________ day of____, by ____ (the "Guarantor"), with an address at _______,
      in
      favor of [Utility] (the
      "Buyer"), with an address at_______, in consideration of the Provider of Last
      Resort Supply Master
      Agreement(s) (the "POLR SMA(s)") between [Utility] and________ (the "Seller")
      dated ________,
      and other good and valuable consideration, the receipt and sufficiency of which
      are hereby
      acknowledged. Guarantor is the________ of Seller.

    

    Whereas,
      Seller________ is an affiliate of ____, _____ will therefore benefit by
Supplier
      entering into the POLR SMA with Buyer and________ desires Buyer to enter into
      the POLR SMA with Seller and to extend credit to Seller thereunder. (May be
      revised if guarantor is not a parent or affiliate of Seller.)

    

    
      	
              1.  

            	
              Guaranty
                of Obligations.

            

    

    

    
      	
              (a)  

            	
              The
                Guarantor hereby irrevocably and unconditionally guarantees, with
                effect
                from date hereof, the prompt and complete payment when due of all
                of
                Seller's payment obligations under the POLR SMA (to the extent such
                payment obligations exceed the amount of any Performance Assurance
                provided to the Buyer by Seller as defined in and in accordance with
                the
                POLR SMA), whether on scheduled payment dates, when due upon demand,
                upon
                declaration of termination or otherwise, in accordance with the terms
                of
                the POLR SMA and giving effect to any applicable grace period, and,
                provided only that the Buyer is the prevailing party in any judicial
                suit,
                action or proceeding arising out of, resulting from, or in any way
                relating to this Guaranty, or if by mutual agreement by Guarantor
                and
                Buyer, all reasonable out-of-pocket costs and expenses incurred by
                Buyer
                in the enforcement of the Guarantor's obligations or collection under
                this
                Guaranty, including reasonable attorney's fees and expenses (collectively,
                the "Obligations"). [Optional provision: Notwithstanding anything
                to the
                contrary herein, the liability of the Guarantor under this Guaranty
                and
                Buyer's right of recovery hereunder for all Obligations is limited
                to a
                total aggregate amount of $("Guaranty Amount"), where Guaranty Amount
                shall be no less than Five Hundred Thousand US Dollars
                ($500,000).]

            

    

    

    
      	
              (b)  

            	
              The
                limitations on liabilities of the Seller set forth in Article 10
                of the
                POLR SMA shall also apply to the liabilities of the Guarantor
                hereunder.

            

    

    

    
      	
              2.  

            	
              Nature
                of Guaranty; Waivers

            

    

     

    
      	
              (a)  

            	
              This
                is a guaranty of payment and not of collection and the Buyer shall
                not be
                required, as a condition of the Guarantor's liability, to pursue
                any
                rights which may be available to it with respect to any other person
                who
                may be liable for the payment of the Obligations. This is not a
                performance guaranty and the Guarantor is not obligated to provide
                power
                under the POLR SMA or this
                Guaranty.

            

    

     

    
      	
              (b)  

            	
              
                
                  This
                    Guaranty is an absolute, unconditional, irrevocable (subject
                    to the
                    provisions of Section 12 of this Guaranty) and continuing guaranty
                    and
                    will remain in full force and effect until all of the Obligations
                    have
                    been indefeasibly paid in full, or until the POLR SMA has been
                    terminated,
                    whichever comes later. This Guaranty will not be affected by
                    any
                    surrender, exchange, acceptance, compromise or release by the
                    Buyer of any
                    other party, or any other guaranty or any security held by it
                    for any of
                    the Obligations, by any failure of the Buyer to take any steps
                    to perfect
                    or maintain its lien or security interest in or to preserve its
                    rights to
                    any security or other collateral for any of the Obligations or
                    any
                    guaranty, or by any irregularity, unenforceability or invalidity
                    of any of
                    the Obligations (other than any irregularity, unenforceability
                    or
                    invalidity of any of the obligations under the POLR SMA resulting
                    from the
                    conduct of the Buyer) or any part
                    thereof.

                

              

            

    

     

    
      	
              (c)  

            	
              Except
                as to any claims, defenses, rights of set-off or to reductions of
                Seller
                in respect of its obligations under the POLR SMA, (all of which are
                expressly reserved under this Guaranty), the Guarantor's obligations
                hereunder shall not be affected, modified or impaired by any counterclaim,
                set-off, deduction or defense based upon any claim the Guarantor
                may have
                against Seller or the Buyer, including: (i) any change in the corporate
                existence (including its charter or other governing agreement, laws,
                rules, regulations or powers), structure or ownership of Seller or
                the
                Guarantor; or (ii) any insolvency, bankruptcy, reorganization or
                other
                similar proceeding affecting Seller or its assets; or (iii) the invalidity
                or unenforceability in whole or in part of the POLR SMA; or (iv)
                any
                provision of applicable law or regulations purporting to prohibit
                payment
                by Seller of amounts to be paid by it under the POLR SMA (other than
                any
                law or regulation that eliminates or nullifies the obligations under
                the
                POLR SMA).

            

    

    

    
      	
              (d)  

            	
              Guarantor
                waives notice of acceptance of this Guaranty, diligence, presentment,
                notice of dishonor and protest and any requirement that at any time
                any
                person exhaust any right to take any action against Seller or their
                assets
                or any other guarantor or person, provided, however, that any failure
                of
                Buyer to give notice will not discharge, alter or diminish in any
                way
                Guarantor's obligations under this Guaranty. The Guarantor waives
                all
                defenses based on suretyship or impairment of collateral or any other
                defenses that would constitute a legal or equitable discharge of
                Guarantor's obligations, except any claims or defenses of Seller
                in
                respect of its obligations under the POLR
                SMA.

            

    

    

    
      	
              (e)  

            	
              The
                Buyer at any time and from time to time, without notice to or the
                consent
                of the Guarantor, and without impairing or releasing, discharging
                or
                modifying the Guarantor's liabilities hereunder, may (i) to the extent
                permitted by the POLR SMA, change the manner, place, time or terms
                of
                payment or performance of, or other terms relating to, any of the
                Obligations; (ii) to the extent permitted by the POLR SMA, renew,
                substitute, modify, amend or alter, or grant consents or waivers
                relating
                to any of the Obligations, or any other guaranties for any Obligations;
                (iii) settle, compromise or deal with any other person, including
                Seller ,
                with respect to any Obligations in such manner as the Buyer deems
                appropriate at its sole discretion; (iv) substitute, exchange or
                release
                any guaranty; or (v) take such actions and exercise such remedies
                hereunder as Buyer deems
                appropriate.

            

    

     

    
      	
              3.  

            	
              Representations
                and Warranties. The Guarantor hereby represents and warrants
                that:

            

    

    

    
      	
              (a)  

            	
              it
                is a [limited liability company, corporation, limited partnership,
                general
                partnership] duly organized, validly existing and in good standing
                under
                the laws of the jurisdiction of its [formation, organization,
                incorporation] and has the [corporate power] [power] and authority
                to
                conduct the business in which it is currently engaged and enter into
                and
                perform its obligations under this
                Guaranty;

            

    

    

    
      	
              (b)  

            	
              it
                has the [corporate power] [power] and authority and the legal right
                to
                execute and deliver, and to perform its obligations under, this Guaranty,
                and has taken all necessary [corporate action] [action] to authorize
                its
                execution, delivery and performance of this
                Guaranty;

            

    

    

    
      	
              (c)  

            	
              this
                Guaranty constitutes a legal, valid and binding obligation of the
                Guarantor enforceable in accordance with its terms, except as affected
                by
                bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
                and other similar laws relating to or affecting the enforcement of
                Buyers'
                rights generally, general equitable principles and an implied covenant
                of
                good faith and fair dealing;

            

    

    

    
      	
              (d)  

            	
              the
                execution, delivery and performance of this Guaranty will not violate
                any
                provision of any requirement of law or contractual obligation of
                the
                Guarantor (except
                to the extent that any such violation would not reasonably be expected
                to
                have a material adverse effect on the Guarantor or this
                Guaranty);

            

    

    

    
      	
              (e)  

            	
              no
                consent or authorization of, filing with, or other act by or in respect
                of, any arbitrator or governmental authority and no consent of any
                other
                person (including, without limitation, any stockholder or creditor
                of the
                Guarantor) is required in connection with the execution, delivery,
                performance, validity or enforceability of this Guaranty, other than
                any
                which have been obtained or made prior to the date hereof and remain
                in
                full force and effect; and

            

    

    

    
      	
              (f)  

            	
              no
                litigation, investigation or proceeding of or before any arbitrator
                or
                governmental authority is pending or, to the knowledge of the Guarantor,
                threatened by or against the Guarantor that would have a material
                adverse
                effect on this Guaranty.

            

    

    

    
      	
              4.  

            	
              Repayments
                or Recovery from the Buyer. If any demand is made at any time upon the
                Buyer for the repayment or recovery of any amount received by it
                in
                payment or on account of any of the Obligations, including but not
                limited
                to upon the bankruptcy, insolvency, dissolution or reorganization
                of the
                Seller and if the Buyer repays all or any part of such amount by
                reason of
                any judgment, decree or order of any court or administrative body
                or by
                reason of any settlement or compromise of any such demand, the Guarantor
                (subject to Sections 2 (c) and (d) of this Guaranty) will be and
                remain
                liable hereunder for the amount so repaid or recovered to the same
                extent
                as if such amount had never been received originally by the Buyer.
                The
                provisions of this section will be and remain effective notwithstanding
                any contrary action which may have been taken by the Guarantor in
                reliance
                upon such payment, and any such contrary action so taken will be
                without
                prejudice to the Buyer's rights hereunder and will be deemed to have
                been
                conditioned upon such payment having become final and
                irrevocable.

            

    

    

    
      	
              5.  

            	
              Enforceability
                of Obligations. No modification, limitation or discharge of the
                Obligations of Seller arising out of or by virtue of any bankruptcy,
                reorganization or similar proceeding for relief of debtors under
                federal
                or state law will affect, modify, limit or discharge the Guarantor's
                liability in any manner whatsoever and this Guaranty will remain
                and
                continue in full force and effect and will be enforceable against
                the
                Guarantor to the same extent and with the same force and effect as
                if any
                such proceeding had not been instituted. The Guarantor waives all
                rights
                and benefits which might accrue to it by reason of any such proceeding
                and
                will be liable to the full extent hereunder, irrespective of any
                modification, limitation or discharge of the liability of Seller
                that may
                result from any such proceeding.

            

    

    

    
      	
              6.  

            	
              Postponement
                of Subrogation. Only to the extent that, at the relevant time, there
                are
                Obligations, or other amounts hereunder, that are then due and payable
                but
                unpaid, the Guarantor postpones and subordinates in favor of the
                Buyer any
                and all rights which the Guarantor may have to (a) assert any claim
                against the Seller based on subrogation rights with respect to payments
                made by Guarantor hereunder and (b) any realization on any property
                of the
                Seller, including participation in any marshalling of the Seller's
                assets.
                Upon payment of such due and unpaid Obligations, Buyer agrees that
                Guarantor shall be subrogated to the rights of Buyer against Seller
                to the
                extent of Guarantor's payment to
                Buyer.

            

    

    

    
      	
              7.  

            	
              Notices.
                All notices, demands, requests, consents, approvals and other
                communications required or permitted hereunder must be in writing
                and will
                be effective upon receipt. Such notices and other communications
                may be
                hand-delivered, sent by facsimile transmission with confirmation
                of
                delivery and a copy sent by first-class mail, or sent by nationally
                recognized overnight courier service, to the addresses for the Buyer
                and
                the Guarantor set forth below or to such other address as one may
                give to
                the other in writing for such
                purpose:

            

    

    

    All
      communications to Buyer shall be directed to:

    

    Attn:_______________

    Phone:
      _____________

    Fax:
      _______________

    With
      a
      copy to: ______

    

    Phone
      __________

    Fax
      ___________

    

    

    or
      such
      other address as the Buyer shall from time to time specify to Guarantor.
All
      communications to Guarantor shall be directed to:

     

    Attn:
      ________

    Phone:__________

    Fax:
      _________

    

    

    or
      such
      other address as the Guarantor shall from time to time specify to
      Buyer.

    

    
      	
              8.  

            	
              Preservation
                of Rights. Except as provided by any applicable statute of
                limitations, no delay or omission on the Buyer's part to exercise
                any
                right or power arising hereunder will impair any such right or power
                or be
                considered a waiver of any such right or power, nor will the Buyer's
                action or inaction impair any such right or power. The Buyer's
                rights and
                remedies hereunder are cumulative and not exclusive of any other
                rights or
                remedies which the Buyer may have under other agreements with the
                Guarantor, at law or in equity.

            

    

    

    
      	
              9.  

            	
              Illegality.
                In case any one or more of the provisions contained in this Guaranty
                should be invalid, illegal or unenforceable in any respect, the validity,
                legality and enforceability of the remaining provisions contained
                herein
                shall not in any way be affected or impaired
                thereby.

            

    

    

    
      	
              10.  

            	
              Amendments.
                No modification, amendment or waiver of any provision of this Guaranty
                nor
                consent to any departure by the Guarantor therefrom, will be effective
                unless made in a writing signed by the Buyer, and then such waiver
                or
                consent shall be effective only in the specific instance and for
                the
                purpose for which given. No notice to or demand on the Guarantor
                in any
                case will entitle the Guarantor to any other or further notice or
                demand
                in the same, similar or other
                circumstance.

            

    

    

    
      	
              11.  

            	
              Entire
                Agreement. This Guaranty (including the documents and instruments
                referred to herein) constitutes the entire agreement and supersedes
                all
                other prior agreements and understandings, both written and oral,
                between
                the Guarantor and the Buyer with respect to the subject matter
                hereof.

            

    

    

    
      	
              12.  

            	
              Successors
                and Assigns. This Guaranty will be binding upon and inure to the
                benefit of the Guarantor and the Buyer and their respective successors
                and
                permitted assigns. Neither party may assign this Guaranty in whole
                or in
                part without the other's prior written consent, which consent will
                not be
                unreasonably withheld or delayed, except that Buyer may at any time
                assign
                this Guaranty without Guarantor's consent, in the same manner, on
                the same
                terms and to the same persons as Buyer assigns the POLR SMA in accordance
                with Section 16.7(b) of the POLR SMA, and except that this Section
                12
                shall not limit the Guarantor's right to assign this Guaranty, along
                with
                substantially all of the Guarantor's assets and business to a successor
                entity or Affiliate that assumes all obligations thereunder and (i)
                where
                the successor Guarantor's Lowest Credit Rating is equal to or greater
                than
                the Guarantor's Lowest Credit Rating or where the successor Guarantor's
                Lowest Credit Rating is equal to or greater than BBB, as rated by
                S&P
                or Fitch, or Baa2, as rated by Moody's, and (ii) the Seller is in
                compliance with Article 14 of
                the POLR SMA. The "Lowest Credit Rating" shall mean the lowest of
                the
                senior unsecured long-term debt ratings determined by Moody's Investor
                Services, Inc. (or its successor) ("Moody's"), the Standard & Poor's
                Rating Group, a division of McGraw-Hill, Inc., (or its successor)
                ("S&P"), or Fitch Investor Service, Inc. (or its successor) ("Fitch")
                immediately before such transfer and assumption. Upon any such delegation
                and assumption of obligations by a successor Guarantor, the Guarantor
                shall be relieved of and fully discharged from all of its obligations
                hereunder, whether such obligations arose before or after the date
                of such
                delegation and assumption.

            

    

    

    
      	
              13.  

            	
              Interpretation.
                In this Guaranty, unless the Buyer and the Guarantor otherwise agree
                in
                writing, the singular includes the plural and the plural the singular;
                references to statutes are to be construed as including all statutory
                provisions consolidating, amending or replacing the statute referred
                to;
                the word "or" shall be deemed to include "and/or", the words "including",
                "includes" and "include" shall be deemed to be followed by the words
                "without limitation"; and references to sections or exhibits are
                to those
                of this Guaranty unless otherwise indicated. Section headings in
                this
                Guaranty are included for convenience of reference only and shall
                not
                constitute a part of this Guaranty for any other
                purpose.

            

    

    

    
      	
              14.  

            	
              Governing
                Law.

            

    

    

    
      	
              (a)  

            	
              This
                Guaranty has been delivered to and accepted by the Buyer. THIS GUARANTY
                WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BUYER AND
                THE
                GUARANTOR DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
                OF
                PENNSYLVANIA, EXCLUDING ITS CONFLICT OF LAWS
                RULES.

            

    

    

    
      	
              (b)  

            	
              The
                Guarantor hereby irrevocably consents to the non-exclusive jurisdiction
                of
                any federal court in the Commonwealth of Pennsylvania, but in the
                event
                that the Guarantor and the Buyer determine in good faith that jurisdiction
                does not lay with such court or that such court refuses to exercise
                jurisdiction or venue over the Guarantor and the Buyer or any claims
                made
                pursuant to this Guaranty, then the Guarantor and the Buyer agree
                to
                submit to the non-exclusive jurisdiction of the Pennsylvania state
                courts;
                provided that nothing contained in this Guaranty will prevent the
                Buyer
                from bringing any action, enforcing any award or judgment or exercising
                any rights against the Guarantor individually, against any security
                or
                against any property of the Guarantor within any other county, state
                or
                other foreign or domestic jurisdiction. The Guarantor acknowledges
                and
                agrees that the venue provided above is the most convenient forum
                for both
                the Buyer and the Guarantor. The Guarantor waives any objection to
                venue
                and any objection based on a more convenient forum in any action
                instituted under this Guaranty.

            

    

     

    
      	
              15.  

            	
              WAIVER
                OF JURY TRIAL. THE GUARANTOR AND BUYER IRREVOCABLY WAIVE ANY AND ALL
                RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
                NATURE
                RELATING TO THIS GUARANTY, ANY DOCUMENTS EXECUTED IN CONNECTION WITH
                THIS
                GUARANTY OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.
                THE
                GUARANTOR AND BUYER ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING
                AND
                VOLUNTARY.

            

    

    

    
      	
              16.  

            	
              Term.
                This Guaranty shall survive termination of the POLR SMA and remain
                in full
                force and effect until all amounts due hereunder, including all of
                the
                Obligations, have been paid or performed in
                full.

            

    

    

    
      	
              17.  

            	
              Stay
                of Acceleration Ineffective with Respect to Guarantor. If acceleration
                of the time for payment of any amount payable by Seller under the
                POLR SMA
                is stayed upon the insolvency, bankruptcy or reorganization of Seller,
                all
                such amounts otherwise subject to acceleration or required to be
                paid upon
                an early termination pursuant to the terms of the POLR SMA shall
                nonetheless be payable by the Guarantor hereunder on written demand
                by
                Buyer.

            

    

     

    The Guarantor acknowledges that it has read and understood all the
      provisions of this Guaranty, and has been advised by counsel as necessary or
      appropriate.

     

     

    [Guarantor]

    

    

    By:
      __________________________

    Name:
      ____________________________

    Title:
      _____________________________

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      

    

    EXHIBIT
      G

    

    FORM
      OF NOTICE

    

    
      	
              Any
                notices required under this Agreement shall be made as
                follows:

            

    

    

    
      	
              BUYER:

               

              All
                Notices:

              Street:
                Two North Ninth Street 

              City/State/Zip:
                Allentown, PA 18101 

              Attn:
                Douglas R. Stinner

              Facsimile:
                610-774-5694

              Duns:
                00-790-9427

              Federal
                Tax ID Number: 23-0959590

               

              Invoices:

               

              Attn:
                Douglas R. Stinner

              Phone:
                610-774-5568

              Facsimile:
                610-774-5694

               

              
                Scheduling:

                 

                Attn:
                  N/A

                Phone:
                  N/A

                Facsimile:
                  N/A

                 

              

              
                Payments:

                 

                Attn:
                  John M. George

                Phone:
                  610-774-6053

                Facsimile:
                  610-774-7413

                 

                Wire
                  Transfer:

                 

                BNK:
                  Mellon Bank

                ABA:

                ACCT:

                 

                Credit
                  and Collections:

                 

                Attn:
                  John M. George

                Phone:
                  610-774-6053

                Facsimile:
                  610-774-7413

              

            	
              SELLER:
                

               

              All
                Notices:

              
                 

                Street:

                City/State/Zip

                Attn:

                Facsimile:

                Duns:

                Federal
                  Tax ID Number:

                 

                Invoices:

                 

                Attn:

                Phone:

                Facsimile:

                 

                Scheduling:

                 

                Attn:

                Phone:

                Facsimile:

                 

                Payments:

                 

                Attn:

                Phone:

                Facsimile:

                 

                Wire
                  Transfer

                 

                BNK:

                ABA:

                ACCT:

                 

                Credit
                  and Collections:

                 

                Attn:

                Phone:

                Facsimile:

              

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              With
                additional Notices of an

              Event
                of Default to:

               

              Attn:
                Douglas R. Stinner

              Phone:
                610-774-5568

              Facsimile:
                610-774-5694

            	
              With
                Additional Notices of an

              Event
                of Default to:

               

              Attn:

              Phone:

              Facsimile:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      H

    

    PJM
      DECLARATION OF AUTHORITY

    

    This
      Declaration of Authority ("Declaration") is a statement and certification made
      this 26th day of July,2007 by [PPL Electric Utilities
      Corporation], ("PARTY A") and [PPL EnergyPlus, LLC]
("PARTY B") for the benefit of PJM Interconnection,
      LLC.

    

    

    

    RECITALS:

    

    WHEREAS,
      PJM is a Regional Transmission Organization ("RTO") subject to the jurisdiction
      of the Federal Energy Regulatory Commission, ("FERC");

    

    WHEREAS,
      PJM administers centralized markets that clear various electric energy and
      energy-related products among multiple buyers and sellers;

    

    WHEREAS,
      PJM additionally exercises operational control over its members' transmission
      facilities whereby PJM provides control area functions, including economic
      dispatch, the scheduling of transmission service and emergency response to
      ensure reliability across an integrated transmission system; and

    

    WHEREAS,
      in capacities more fully described below, PARTY A and PARTY B seek to
      participate either directly or indirectly in the markets administered by PJM
      or
      engage in operations that use or affect the integrated transmission system
      operated by PJM.

    

    

    

    DECLARATION:

    

    NOW,
      THEREFORE, acknowledging that PJM will rely on the truth, accuracy and
      completeness of the statements made below, PARTY A and PARTY B, as indicated
      below, provide the following certifications:

    

    1.       Certification.

    

    
      	
              (a)  

            	
              PARTY
                B hereby certifies that in all activities with PJM regarding PARTY
                B's
                provision of energy, capacity, ancillary services, scheduling and
                procurement of transmission service, congestion management and all
                other
                required products and services necessary to serve the load obligation
                assumed by PARTY B, PARTY B shall be billed and be primarily liable
                to PJM
                for all costs associated in its procurement of such products and
                services;
                provided, however, that charges, for PPL Electric customers, for
                Network
                Integration Transmission Service, Transitional Market Expansion assessed
                to Network Integration Transmission Service customers, Expansion
                Integration assessed to Network Integration Transmission Service
                customers, and any Transmission Congestion credits remaining at the
                end of
                a planning period for such load shall be billed to PARTY A and remain
                the
                sole and primary responsibility of PARTY
                A.

            

    

     

    2.       Reliance
      By PJM On Certifications.

    

    
      	
              (a)  

            	
              Each
                of PARTY A and PARTY B recognizes and accepts that PJM is relying
                on the
                truth, accuracy and completeness of the certifications herein made
                in
                making its assessments as to creditworthiness and in assuring PJM's
                own
                compliance with its tariff, operating agreement, reliability agreement
                and
                business practices.

            

    

    

    
      	
              (b)  

            	
              Each
                of PARTY A and PARTY B recognizes and accepts that each has a continuing
                duty to notify PJM if and when the certifications herein made cease
                to be
                accurate or complete. Until such time as PJM receives written notification
                of any changes to such certifications, signed by both PARTY A and
                PARTY B,
                PJM shall be entitled to rely perpetually on this Declaration as
                governing
                its relationship with PARTY A and PARTY B as to the subject matter
                of this
                Declaration. Any written notice of changes to the certifications
                herein
                made must be provided to PJM at least thirty days in advance of their
                effectiveness.

            

    

    

    
      	
              (c)  

            	
              Each
                of PARTY A and PARTY B recognize and acknowledge that PJM will receive
                and
                rely on individually modeled POLR Seller accounts that contain only
                zonal-specific POLR load to manually adjust the accounts to move
                the
                applicable billing line items' amounts in their entirety from the
                applicable POLR Seller's account to the applicable EDC's
                account.

            

    

    

    
      	
              (d)  

            	
              PARTY
                A and PARTY B recognize and acknowledge that they have entered into
                a
                Provider of Last Resort Supply Master Agreement (POLR SMA) and that
                this
                Certification is not intended in any way to change, revise or redistribute
                the rights and obligations of the PARTY A or PARTY B under the POLR
                SMA.
                If this Certification is determined to be inconsistent with any provision
                of the POLR SMA, with respect to the rights and obligations of PARTY
                A and
                PARTY B under the POLR SMA, the provisions of the POLR SMA shall
                be
                controlling on PARTY A and PARTY B.

            

    

    

    
      	
              3.

            	
              Duration.
                Each of PARTY A and PARTY B acknowledge and agree that this Declaration
                shall terminate upon the termination of the POLR SMA in accordance
                with
                its terms. To this end, within 30 days prior to the termination of
                the
                POLR SMA in accordance with its terms or as soon thereafter as is
                practicable, each of PARTY A and PARTY B will provide written notice
                to
                PJM of the termination of this
                Declaration.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, PARTY A and PARTY B execute this Declaration to be effective
      as
      of the date written above.

    

    
      	
              PARTY
                A _______________________________

               

              NAME:
                _______________________________

               

              TITLE:
                ______________________________

            	
              PARTY
                B  _________________________

               

              NAME:
                ____________________________

               

               TITLE:
                _____________________________ppl10q6-07exhibit10b.htm

    Exhibit
      10(b)

    FIFTH
      AMENDMENT

    TO

    CREDIT
      AND SECURITY AGREEMENT

    

    THIS
      FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT, dated as of July 30, 2007
      (this “Amendment”), is entered into by and among PPL Receivables
      Corporation (“Borrower”), PPL Electric Utilities Corporation
      (“PPL Electric”), Variable Funding Capital Company LLC
      (successor to Blue Ridge Asset Funding Corporation) (“VFCC”),
      and Wachovia Bank, National Association (together with its successors and
      assigns, the “Agent”).  Capitalized terms used and not
      otherwise defined herein are used as defined in the Agreement (as defined
      below).

     

    WHEREAS,
      the Borrower, PPL Electric, VFCC  and the Agent are parties to that
      certain Credit and Security Agreement, dated as of August 1, 2004 (as amended,
      supplemented or otherwise modified from time to time, the "Agreement");
      and

     

    WHEREAS,
      the parties to the Agreement wish to amend the Agreement in certain respects
      as
      hereinafter described.

     

    NOW
      THEREFORE, in consideration of the premises and the other mutual covenants
      contained herein, the parties hereto agree as follows:

     

    SECTION
      1.  Amendment.  The Agreement is hereby amended as
      follows:

     

    (a)  The
      definition of “Facility Termination Date” in Exhibit I of the Agreement is
      hereby amended and restated in its entirety to read as follows:

     

    “Facility
      Termination Date:  The earlier of (i) the Liquidity Termination
      Date, (ii) the Amortization Date and (iii) July 28, 2008.”

     

    (b)  Exhibit
      IV hereto hereby replaces the existing Exhibit IV to the
      Agreement.

     

    SECTION
      2.  Reference to and Effect on the Agreement and the Related
      Documents.  Upon the effectiveness of this Amendment, (i) each of
      the Borrower and PPL Electric hereby reaffirms all representations and
      warranties made by it in the Agreement and agrees that all such representations
      and warranties shall be deemed to have been remade as of the effective date
      of
      this Amendment, (ii) each of the Borrower and PPL Electric hereby represents
      and
      warrants that no Amortization Event or Unmatured Amortization Event shall have
      occurred and be continuing and (iii) each reference in the Agreement to “this
      Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
      and be, and any references to the Agreement in any other document, instrument
      or
      agreement executed and/or delivered in connection with the Agreement shall
      mean
      and be, a reference to the Agreement as amended hereby.

     

    SECTION
      3.  Effect.  Upon the execution and delivery of
      counterparts of this Amendment by each of the parties hereto, this Amendment
      shall be effective as of the date of receipt by the Agent of all executed
      signature pages.  Except as otherwise amended by this Amendment, the
      Agreement shall continue in full force and effect and is hereby ratified and
      confirmed.

     

    SECTION
      4.  Governing Law.  This Amendment will be governed
      by and construed in accordance with the laws of the State of New York, without
      giving effect to the conflicts of laws principles thereof (other than Section
      5-1401 of the New York General Obligations Law).

     

    SECTION
      5. Severability.  Each provision of this Amendment shall be
      severable from every other provision of this Amendment for the purpose of
      determining the legal enforceability of any provision hereof, and the
      unenforceability of one or more provisions of this Amendment in one jurisdiction
      shall not have the effect of rendering such provision or provisions
      unenforceable in any other jurisdiction.

     

    SECTION
      6. Counterparts.  This Amendment may be executed in one or more
      counterparts, each of which shall be deemed to be an original, but all of which
      together shall constitute one and the same instrument.  Delivery of an
      executed counterpart of a signature page by facsimile shall be effective as
      delivery of a manually executed counterpart of this Amendment.

    [remainder
      of page intentionally left blank]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have
      caused this Amendment to be executed by their respective officers thereunto
      duly
      authorized, as of the date first above written.

    

    

    PPL
      RECEIVABLES CORPORATION

    

    

    By:____________________________

    Name:__________________________

    Title:___________________________

    

    

    PPL
      ELECTRIC UTILITIES CORPORATION

    

    By:____________________________

    Name:__________________________

    Title:___________________________

    

    

    VARIABLE
      FUNDING CAPITAL COMPANY LLC

    By:           Wachovia
      Capital Markets, LLC,

     
as
      Attorney-In-Fact

    

    

    By:____________________________

    Name:__________________________

    Title:___________________________

    

    

    WACHOVIA
      BANK,

    NATIONAL
      ASSOCIATION,

    as
      a
      Liquidity Bank and as Agent

    

    By:____________________________

    Name:__________________________

    Title:___________________________

    

    

    

    

    

    

    

    

    [Signature
      page to Fifth Amendment to CSA - PPL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      IV

    

    Names
      of
      Collection Banks & Collection Accounts

    

    

    Collection
      Accounts

    

    Name
      of
      Current Account Holder:  PPL Electric Utilities

    Account
      Number:  2334233

    Mellon
      Bank

    ABA
      Number:  031000037

    Contact
      Person:  ACH Operations

    Contact’s
      Tel:  (412)234-2694

    

    Name
      of
      Current Account Holder:  PPL Electric Utilities

    Account
      Number:  2000303379562

    Wachovia
      Bank, National Association

    ABA
      Number:  031000503 (ACH)

    ABA
      Number:  053000219 (Wire Transfer)

    Contact
      Person:  Customer Service

    Contact’s
      Tel:  (800)590-7868 ext.663

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