-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, KsfWOzTCap4Y0hmzZ1XMX38lPYoz6VMBUJYrioMUuv+RvfJ9/g/ckSC+zDDPB9vS /aXkwpVjDClfnI5MBSKarw== 0000950154-94-000069.txt : 19940808 0000950154-94-000069.hdr.sgml : 19940808 ACCESSION NUMBER: 0000950154-94-000069 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19940805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PECO ENERGY CO CENTRAL INDEX KEY: 0000078100 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 230970240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-54935 FILM NUMBER: 94541957 BUSINESS ADDRESS: STREET 1: 2301 MARKET ST STREET 2: P O BOX 8699 CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2158414000 FORMER COMPANY: FORMER CONFORMED NAME: PHILADELPHIA ELECTRIC CO DATE OF NAME CHANGE: 19920703 S-3 1 PECO ENERGY CO. -- FORM S-3 As filed with the Securities and Exchange Commission on August 5, 1994 Registration No. 33- =========================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- PECO ENERGY COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Pennsylvania 23-0970240 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.) OF INCORPORATION) P.O. Box 8699 2301 Market Street, Philadelphia, PA 19101 (215) 841-4000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) M. W. RIMERMAN Vice President and Treasurer P.O. Box 8699 2301 Market Street, Philadelphia, PA 19101 (215) 841-4000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) with copies to: JAMES W. DURHAM, ESQ. Senior Vice President and General Counsel P.O. Box 8699 2301 Market Street, Philadelphia, PA 19101 ROBERT C. GERLACH, ESQ. ROBERT M. JONES, JR., ESQ. Ballard Spahr Andrews & Ingersoll Drinker Biddle & Reath 1735 Market Street 1100 Philadelphia National Bank Building Philadelphia, PA 19103-7599 Philadelphia, PA 19107 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the Registration Statement becomes effective, as determined by market conditions and other factors. ---------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. / X / ---------- CALCULATION OF REGISTRATION FEE ============================================================================= PROPOSED PROPOSED TITLE OF EACH MAXIMUM MAXIMUM AMOUNT OF CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE - ----------------------------------------------------------------------------- Collateralized Medium-Term Notes, Series B ......... $250,000,000 100%* $250,000,000* $86,207 ============================================================================== *Estimated solely for the purpose of calculating the filing fee. ---------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ============================================================================== SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED AUGUST 5, 1994 $250,000,000 PECO ENERGY COMPANY COLLATERALIZED MEDIUM-TERM NOTES, SERIES B DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE ---------- PECO Energy Company (Company) may from time to time offer its Collateralized Medium-Term Notes, Series B (Series B Notes), in an aggregate principal amount of up to $250,000,000. The Series B Notes will be offered at maturities, which may vary from 9 months to 30 years from their dates of issuance, and may be subject to redemption at the option of the Company. Each Series B Note will bear interest at a fixed rate as set forth in the pricing supplement (Pricing Supplement) to this Prospectus applicable to such Series B Note. See "DESCRIPTION OF SERIES B NOTES AND NOTE INDENTURE." The Series B Notes will be secured by a series of the Company's First and Refunding Mortgage Bonds to be issued and pledged to First Fidelity Bank, National Association (successor to Fidelity Bank, National Association), acting as trustee under the Collateralized Note Indenture. See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE." The issue price, interest rate, maturity date, and optional redemption provisions of each Series B Note will be established at the time of issuance of such Note and set forth in the Pricing Supplement. The Series B Notes will be issued in book-entry form or, in certain circumstances, fully registered certificated form. Beneficial interests in Series B Notes in book-entry form will be shown on, and transfers thereof will be effected only through, records maintained by The Depository Trust Company, as Depositary, and its participants. See "DESCRIPTION OF SERIES B NOTES AND NOTE INDENTURE--BOOK-ENTRY NOTES." The authorized denominations of Series B Notes will be $1,000 and any integral multiple of thereof. Interest on each Series B Note will accrue at a fixed rate from its date of issuance and will be payable semiannually on each January 1 and July 1 and at maturity or upon earlier redemption. ---------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PRICING SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PRICE TO AGENTS' PROCEEDS TO THE PUBLIC (1) COMMISSIONS (2) COMPANY (2) (3) ---------- --------------- --------------- Per Note ....... 100% Total ..........$250,000,000 $ $ - ---------- (1) The Series B Notes will be sold at 100% of their principal amount except as may be provided in a Pricing Supplement hereto. (2) The Company will pay a commission to each as an Agent (collectively, the Agents), in the form of a discount, ranging from . % to . %, depending upon the maturity of the Series B Note sold through such Agent (or sold to such Agent as principal at negotiated discounts, for resale to investors and other purchasers). The Company has agreed to indemnify each Agent against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended. (3) Before deducting other expenses payable by the Company, estimated to be $376,000, including reimbursement of certain of the Agents' expenses. ---------- Offers to purchase the Series B Notes are being solicited, on a reasonable efforts basis, from time to time by the Agents on behalf of the Company. The Series B Notes may be sold to the Agents on their own behalf at negotiated discounts. The Company reserves the right to sell the Series B Notes directly on its own behalf. The Company also reserves the right to withdraw, cancel or modify the offering contemplated hereby without notice. No termination date for the offering of the Series B Notes has been established. The Company or the Agents may reject any order as a whole or in part. See "PLAN OF DISTRIBUTION." ---------- The date of this Prospectus is , 1994 Information contained herein is subject to completion or amendment. A Registration Statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. This Prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. IN CONNECTION WITH THE DISTRIBUTION OF THE SERIES B NOTES, THE AGENTS MAY OVER-ALLOT OR EFFECT TRANSACTIONS IN THE SERIES B NOTES WITH A VIEW TO STABILIZING OR MAINTAINING THE MARKET PRICE OF THE SERIES B NOTES AT LEVELS OTHER THAN THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. STATEMENT OF AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (Exchange Act) and, in accordance therewith, files reports, proxy and information statements and other information with the Securities and Exchange Commission (SEC). Such reports, proxy and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, DC 20549, and at certain of its regional offices at 500 West Madison Street, Chicago, IL 60661-2511 and 7 World Trade Center, New York, NY 10048. Copies of such material may also be obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, DC 20549 at prescribed rates. Securities of the Company are listed on the New York and Philadelphia Stock Exchanges, where reports, proxy material and other information concerning the Company may be inspected. ---------- INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed (File No. 1-1401) with the SEC pursuant to Section 13 of the Exchange Act by the Company are incorporated herein by reference: 1. the Company's Annual Report on Form 10-K for the year ended December 31, 1993; 2. the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994; and 3. the Company's Current Reports on Form 8-K dated March 18, 1994, April 14, 1994, May 25,1994, June 16, 1994 and July 27, 1994. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL THE DOCUMENTS DESCRIBED ABOVE UNDER "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE," OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUESTS SHOULD BE DIRECTED TO PECO ENERGY COMPANY, FINANCIAL DIVISION, S21-1, P.O. BOX 8699, PHILADELPHIA, PA 19101, (215) 841-5741. THE COMPANY The Company was incorporated in Pennsylvania in 1929 and is an operating utility which provides electric and gas service to the public in southeastern Pennsylvania. The total area served by the Company and its subsidiaries covers 2,475 square miles. Electric service is supplied in an area of 2,340 square miles with a population of about 3,700,000, including 1,600,000 in the City of Philadelphia. Approximately 95% of the electric service area and 64% of retail kilowatthour sales are in the suburbs around Philadelphia and in northeastern Maryland, and 5% of the service area and 36% of such sales are in the City of Philadelphia. In 1993, approximately 60% of the Company's electric output was generated from nuclear sources. The Company esti- 2 mates for 1994 that 59% of its electric output will be generated from nuclear sources. Natural gas service is supplied in a 1,475-square-mile area of southeastern Pennsylvania adjacent to Philadelphia with a population of 1,900,000. The Company and its subsidiaries hold franchises to the extent necessary to operate in the areas served. The principal executive offices of the Company are located at 2301 Market Street, Philadelphia, Pennsylvania. Its mailing address is P.O. Box 8699, Philadelphia, PA 19101, and its telephone number is (215) 841-4000. USE OF PROCEEDS The net proceeds from sales of the Series B Notes will be used for the reduction of the outstanding amount of certain series of the Company's previously issued, long-term debt or preferred stock and/or for general corporate purposes. DESCRIPTION OF SERIES B NOTES AND NOTE INDENTURE The Series B Notes will be issued under a Collateralized Note Indenture dated as of October 1, 1989, as previously amended, and as supplemented by a Second Supplemental Indenture dated as of July 1, 1994 (Note Indenture), between the Company and First Fidelity Bank, National Association, as trustee (in such capacity, the Note Trustee). Copies of the Note Indenture and the form of Second Supplemental Indenture are on file with the SEC as exhibits to the Registration Statement covering the Series B Notes or as exhibits to other documents. The statements under this caption are brief summaries of certain provisions of the Note Indenture and are qualified in their entirety by reference to the provisions of the Note Indenture. Each section reference under this caption refers to the corresponding provision in the Note Indenture. GENERAL The Series B Notes may be sold from time to time in an aggregate principal amount not to exceed $250,000,000. Each Series B Note will bear interest at a fixed rate (not to exceed 10%) to maturity specified in the applicable Pricing Supplement. The Series B Notes will mature on any Business Day from 9 months to 30 years from the date of issue, but not later than July 1, 2025, as selected by the purchaser and agreed to by the Company. Prior to maturity, Series B Notes may be subject to optional redemption by the Company at the price or prices set forth in the applicable Pricing Supplement. The Series B Notes will not be subject to any sinking fund or mandatory redemption. The applicable Pricing Supplement relating to each sale of Series B Notes will describe the following terms of such Series B Notes: (1) the price (expressed as a percentage of the aggregate principal amount thereof) at which the Series B Notes will be sold; (2) the date on which the Series B Notes will mature; (3) the rate at which the Series B Notes will bear interest and the date from which any such interest will accrue; and (4) the date, if any, after which, and the price at which, the Series B Notes may be redeemed, in whole or in part, at the option of the Company. The Series B Notes will be authenticated and delivered upon receipt by the Note Trustee from the Company of a request for authentication, an officers' certificate stating that no Event of Default under the Note Indenture has occurred and is continuing and that conditions precedent for issuance have been met, an opinion of counsel and the Series B First Mortgage Bonds, as defined below. The Company presently anticipates that the Series B Notes will be issued in book-entry form (Book-Entry Notes) through The Depository Trust Company (DTC) or other depositary selected by the Company (Depositary), see "Book-Entry Notes" below. However, the Company reserves the right to issue the Series B Notes in fully registered certificated form. If the Series B Notes are issued in fully registered certificated form or in book-entry form through a Depositary other than DTC, the applicable Pricing Supplement will contain information with respect thereto. The authorized denominations of the Series B Notes will be $1,000 and any integral multiple thereof. The Series B Notes will be exchangeable for other Series B Notes of like tenor and aggregate principal amount, 3 without payment of any charge other than a sum sufficient to reimburse the Company for any tax or other governmental charge incident to the exchange. Transfers and exchanges of Series B Notes in certificated form may be made at the principal corporate trust offices of First Fidelity Bank, National Association, Philadelphia, Pennsylvania. The Company will not be required to: (i) register the transfer of or exchange such Series B Notes during a period beginning at the opening of business 15 days before any selection of Series B Notes to be redeemed and ending at the close of business on the day of mailing of the relevant notice of redemption; or (ii) register the transfer of or exchange any Series B Note, or portion thereof, called for redemption, except the unredeemed portion of any Series B Note being redeemed in part (Section 2.07 of Article II). Additional Notes, unlimited as to principal amount, may be issued from time to time in one or more series under the Note Indenture (Section 2.03 of Article II). Such additional Notes may not be issued unless the Note Trustee receives mortgage bonds of the Company equal to the aggregate principal amount of the additional Notes to be issued and meeting the debt service requirements of such additional Notes (Section 3.01 of Article III). All Notes from time to time outstanding under the Note Indenture, including the Series B Notes, will be equally secured thereunder and are hereinafter referred to as Notes. In order to secure its obligations under the Note Indenture, the Company is required to deliver to the Note Trustee the Company's First and Refunding Mortgage Bonds corresponding to the Notes then being issued. Concurrently with each issuance of Series B Notes, the Company will deliver to the Note Trustee a like principal amount of its First and Refunding Mortgage Bonds, Medium-Term Note Series B (Series B First Mortgage Bonds). The Series B First Mortgage Bonds will contain provisions for the payment of principal or redemption price and interest corresponding to the principal or redemption price and interest payments on the Series B Notes. For a description of the security for the Series B Notes, see "Security: Pledge of First Mortgage Bonds" below and "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE." PAYMENT OF PRINCIPAL AND INTEREST Each Series B Note will bear interest from its date of issue at the rate per annum stated on the face thereof until the principal amount thereof is paid or made available for payment. Interest on each Series B Note will be payable semiannually on each January 1 and July 1 (each, an Interest Payment Date) and at maturity or upon earlier redemption; provided, however, that the first payment of interest on any Series B Note with a date of issue between a record date and an Interest Payment Date will be made on the next succeeding Interest Payment Date. The record date with respect to any Interest Payment Date will be the fifteenth day of the calendar month preceding such Interest Payment Date. Each payment of interest in respect of an Interest Payment Date will include interest accrued to but excluding such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months (Section 2.02 of Article II). Interest payable and punctually paid or duly provided for on any Interest Payment Date will be paid to the person in whose name a Series B Note is registered at the close of business on the record date for such Interest Payment Date; provided, however, that interest payable at maturity or upon earlier redemption will be payable to the person to whom principal shall be payable (Sections 2.09 and 2.10 of Article II). Any payment required to be made in respect of a Series B Note on a date that is not a business day need not be made on such date, but may be made on the next succeeding business day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment. Both principal and interest payable at maturity or on redemption of the Series B Notes will be payable at the principal corporate trust office of First Fidelity Bank, National Association, Philadelphia, Pennsylvania. Interest payable on any Interest Payment Date will be paid by check mailed to the registered holders of the Series B Notes at their registered addresses (Section 2.09 of Article II). Holders of greater than $10 million of Series B Notes will be entitled to interest payments by wire transfer. BOOK-ENTRY NOTES Series B Notes may be issued in whole or in part in book-entry form only through DTC or such other Depositary as is specified in the Pricing Supplement. In order to facilitate the issuance of Book-Entry Notes, a single certificated Series B Note (Global Note) registered in the name of the Depositary or its nominee and 4 representing Book-Entry Notes having the same date of issue, maturity date, redemption provisions and interest rate will be deposited with or on behalf of the Depositary (Section 2.12 of Article II). Upon the deposit of a Global Note with or on behalf of the Depositary, the Depositary will credit the accounts of persons held with it with the respective principal amounts of the Book-Entry Notes represented by such Global Note. Such amounts shall be designated by the Agents with respect to such Book-Entry Notes. Ownership of beneficial interests in a Global Note will be limited to persons who have accounts with the Depositary for such Global Note or its nominee (participants) or persons that may hold interests through participants. Ownership of beneficial interests in such Global Note by participants will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary or its nominee (with respect to interests of participants) for such Global Note and on the records of participants (with respect to interests of persons other than participants). Payment of principal of and any premium and interest on Book-Entry Notes will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Global Note representing the Book-Entry Notes. None of the Company, the Note Trustee or any agent of the Company or the Mortgage Trustee will have any responsibility or liability for any aspect of the Depositary's records relating to or payments made on account of beneficial ownership interests in a Global Note representing any Book-Entry Notes or for maintaining, supervising or reviewing any of the Depositary's records relating to such beneficial ownership interests. The Company has been advised by DTC that upon receipt of any payment of principal of or any premium or interest on any Global Note, DTC will immediately credit, on its book-entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note as shown on the records of DTC. Payments by participants to owners of beneficial interests in a Global Note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for customer accounts registered in "street name," and will be the sole responsibility of such participants. A Global Note representing Book-Entry Notes is exchangeable for definitive Series B Notes in registered form, bearing interest at the same rate, having the same date of issuance, maturity date and redemption provisions, if any, and of differing denominations aggregating a like amount, only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Note or if at any time the Depositary ceases to be a clearing agency registered or in good standing under the Exchange Act or (ii) the Company in its sole discretion determines that such Global Notes shall be exchangeable for definitive Series B Notes in registered form. Upon such exchange, the definitive Series B Notes will be registered in the names of the owners of the beneficial interests in such Global Note as provided by the Depositary's relevant participants (as identified by the Depositary holding such Global Note). Except as provided above, owners of beneficial interests in a Global Note will not be entitled to receive physical delivery of Series B Notes in definitive form and will not be considered the holders thereof for any purpose under the Note Indenture. Accordingly, each person owning a beneficial interest in a Global Note must rely on the procedures of the Depositary and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a Series B Noteholder under the Note Indenture. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global Note. The Note Indenture provides that the Depositary may grant proxies and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Series B Noteholder is entitled to give or take under the Note Indenture. The Company understands that under existing industry practices, in the event that the Company requests any action of Series B Noteholders or that an owner of a beneficial interest in such a Global Note desires to give or take any action which a Series B Noteholder is entitled to give or take under the Note Indenture, the Depositary would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them. 5 DTC has advised the Company and the Agents as follows: DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers (including the Agents), banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. REDEMPTION, REPURCHASE AND REFUND The Pricing Supplement relating to each sale of Series B Notes will indicate whether such Series B Notes will be redeemable by the Company prior to maturity and, if redeemable, the redemption periods and the redemption prices applicable thereto and any limitations relating to redemptions with proceeds from borrowed funds having a lower cost of money than such Series B Notes. The Series B Notes will not be subject to any sinking fund or mandatory redemption. The Company may redeem any of the Series B Notes which are redeemable, either in whole or from time to time in part, upon not less than 30 nor more than 45 days' notice by first class mail to the registered holders of the Series B Notes to be redeemed at their registered addresses (Section 4.05 of Article IV). The Company may at any time purchase Series B Notes at any price in the open market or otherwise. The Series B Notes so purchased by the Company will be surrendered to the Note Trustee for cancellation. SECURITY: PLEDGE OF MORTGAGE BONDS Concurrently with each issuance of Series B Notes, the Company will deliver to the Note Trustee a like principal amount of its Series B First Mortgage Bonds. The Series B First Mortgage Bonds will be issued under the Company's First and Refunding Mortgage dated May 1, 1923, as amended and supplemented, including the Ninety-sixth Supplemental Indenture dated as of July 1, 1994 relating to the Series B First Mortgage Bonds (herein sometimes referred to as the Mortgage). First Fidelity Bank, National Association, is Trustee under the Mortgage (in such capacity, the Mortgage Trustee). The Series B First Mortgage Bonds will bear interest at times and in amounts sufficient to provide for the payment of interest on the Series B Notes and will be redeemed at times and in amounts that correspond to the required payments of principal of the Series B Notes. The Company will deposit in trust with the Note Trustee amounts sufficient to provide for the payment of any premium on any optional redemption of the Series B Notes by the Company. Payments on the Series B Notes will satisfy payment obligations on the Series B First Mortgage Bonds relating thereto (Section 6.04 of Article VI). The Series B First Mortgage Bonds will be secured by a first mortgage lien on certain property owned by the Company and will rank on a parity with all other mortgage bonds of the Company. At July 1, 1994, the Company had outstanding $4,236,705,000 aggregate principal amount of mortgage bonds. See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE." The Company covenants and agrees under the Note Indenture that upon the required payment of principal becoming due and payable with respect to any Series B Notes, it will redeem Series B First Mortgage Bonds in an aggregate principal amount of such Series B Notes becoming due and payable (Section 5.04 of Article V). Until satisfied in accordance with their terms or released pursuant to the Note Indenture, the Note Trustee will hold all mortgage bonds delivered to it in trust for the holders of the Notes. Subject to certain minor exceptions, the Note Trustee shall not sell, assign or transfer such mortgage bonds, and the Note Trustee shall at all times maintain physical possession of each of such mortgage bonds until paid or otherwise satisfied and discharged in accordance with the terms of the Indenture (Section 5.01 of Article V). 6 SECURITY: VOTING OF MORTGAGE BONDS The Note Trustee, as the holder of mortgage bonds, may attend meetings of the holders of the mortgage bonds outstanding under the Mortgage and either at such meeting or otherwise vote the mortgage bonds held by it in connection with any proposed amendment, change, modification, waiver or consent (hereinafter collectively referred to as an "amendment") to or in respect of the Mortgage or the mortgage bonds held by it. The Note Trustee may agree to any such amendment, without the consent of the Noteholders, where such amendment does not adversely affect the Noteholders. In the case of proposed amendments which would adversely affect the Noteholders, the Note Trustee shall not consent without notice to the Noteholders and approval by the Noteholders as follows: (a) If the proposed amendment affects no mortgage bonds outstanding under the Mortgage other than the mortgage bonds held by the Note Trustee under the Note Indenture, the Note Trustee may consent thereto only with the approval of the holders of at least 66-2/3% in principal amount of the outstanding Notes which would be affected by the proposed action. (b) If the proposed amendment affects mortgage bonds outstanding under the Mortgage other than or in addition to the mortgage bonds held by the Note Trustee under the Note Indenture, the Note Trustee shall establish a procedure for the Noteholders to direct how they wish the Note Trustee to vote on the proposed action. If the holders of at least 33-1/3% in principal amount of the outstanding Notes respond in accordance with such procedure, the Note Trustee shall vote all of such mortgage bonds proportionately in accordance with the directions received from the responding Noteholders; provided that if the holders of at least 66-2/3% in principal amount of the outstanding Notes respond with the same direction, the Note Trustee shall vote all of such mortgage bonds in accordance with such direction. If the holders of less than 33-1/3% in principal amount of the outstanding Notes respond in accordance with such procedure, the Note Trustee shall vote an equivalent portion (in principal amount) of the mortgage bonds held by the Note Trustee under the Note Indenture in accordance with the directions so received and shall not vote the remaining such mortgage bonds. Notwithstanding the foregoing, the Note Trustee shall not, without the unanimous consent of the outstanding Noteholders, consent to any such amendment which would (i) decrease the amounts payable on the mortgage bonds held by the Note Trustee under the Note Indenture, (ii) change the principal or interest payment dates on or the redemption provisions of such mortgage bonds, or (iii) require unanimous consent of the holders of the mortgage bonds outstanding under the Mortgage (Section 5.06 of Article V). EVENTS OF DEFAULT Any one of the following events will constitute an Event of Default under the Note Indenture: (a) failure to pay any interest on any Note when due, continued for 60 days; (b) failure to pay principal of (or premium, if any, on) any Note when due; or (c) if outstanding mortgage bonds shall have been declared due and payable prior to their stated maturities (Section 7.01 of Article VII). See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE--RIGHTS OF BONDHOLDERS UPON DEFAULT." If an Event of Default other than an Event of Default described under (c) above occurs and is continuing, the Note Trustee or the holders of 25% in principal amount of all Notes then outstanding may, declare the principal of all Notes to be immediately due and payable. If an Event of Default described under (c) above occurs, the principal of all Notes then outstanding shall become due and payable immediately; provided, however, that a waiver of default and rescission of the declaration of acceleration of the mortgage bonds pursuant to the provisions of the Mortgage shall also constitute a waiver of the Event of Default described under (c) above and its consequences (Section 7.02 of Article VII). Upon the issuance of additional Notes, the Company is required to file with the Note Trustee documents and reports with respect to absence of default. 7 MODIFICATION OF NOTE INDENTURE The Note Indenture may be amended or supplemented from time to time for various purposes, including the issuance of additional series of Notes, to provide for the acceptance of a successor trustee or co-trustee and to modify, eliminate or add provisions to the extent necessary or helpful to qualify the Note Indenture under the Trust Indenture Act of 1939 without the consent of Noteholders (Section 11.01 of Article XI). With the consent of the holders of not less than a majority in principal amount of the outstanding Notes affected, the Company and the Note Trustee are empowered to change the Note Indenture in any way; provided, however, that no such supplemental indenture shall, without the consent of the holder of each outstanding Note affected thereby, (a) reduce the amount or extend the due dates of or the principal of or interest on the Notes, (b) reduce the percentage of Noteholders required to effect changes in the Note Indenture, (c) change any obligation of the Company to maintain an office or agency for the payment of the Notes or (d) modify or waive certain provisions of the Note Indenture, except to increase the percentage of Noteholders necessary for such action (Section 11.02 of Article XI). SATISFACTION AND DISCHARGE OF NOTE INDENTURE The Note Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Notes expressly provided for), and the Note Trustee shall execute instruments acknowledging satisfaction and discharge of the Note Indenture, and shall deliver to the Company all mortgage bonds then held by the Note Trustee upon satisfaction of the following conditions: (1) when either (A) all Notes authenticated and delivered have been delivered to the Note Registrar for cancellation; or (B) all such Notes not delivered to the Note Registrar for cancellation (i) have become due and payable, or (ii) will become due and payable at their stated maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Note Trustee, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Note Trustee in trust an amount sufficient to pay and discharge the entire indebtedness on such Notes not delivered to the Note Registrar for cancellation; (2) when the Company has paid or caused to be paid all other sums payable under the Note Indenture; and (3) when the Company has delivered to the Note Trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the satisfaction and discharge of the Note Indenture have been complied with (Section 12.01 of Article XII). NOTE TRUSTEE First Fidelity Bank, National Association, is the Note Trustee under the Note Indenture. First Fidelity Bank, National Association, also serves as Mortgage Trustee under the Mortgage. See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE--Mortgage Trustee." DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE The Series B First Mortgage Bonds will be issued under the Company's Mortgage dated May 1, 1923, as amended and supplemented, including the Ninety-sixth Supplemental Indenture dated as of July 1, 1994 relating to the Series B First Mortgage Bonds. The Series B First Mortgage Bonds will be delivered to the Note Trustee on each date that Series B Notes are issued in an amount equal to such Series B Notes. Copies of the First and Refunding Mortgage, the supplemental indentures thereto that amend the Mortgage or that relate to mortgage bonds which are currently outstanding, including the Ninety-sixth Supplemental Indenture dated as of July 1, 1994, are on file with the SEC as exhibits to the Registration Statement covering the Series B Notes or as exhibits to other documents. The following description of the Series B First Mortgage Bonds and brief summaries of certain Mortgage provisions are qualified in their entirety by the provisions of the Mortgage. Each section reference under this caption refers to the corresponding provision in the Mortgage. The Series B First Mortgage Bonds will have a stated interest rate of 10% per annum, with interest payable on the Interest Payment Dates for the Series B Notes; will mature on July 1, 2025, the maximum maturity of the Series B Notes; and will be redeemed by the Company in amounts and at times corresponding to the maturities of the Series B Notes. The Company will be entitled to a credit against the Series B First Mortgage 8 Bonds to the extent it makes payments directly on the Series B Notes and to the extent that interest due on the Series B First Mortgage Bonds exceeds interest due on the Series B Notes. At the time any Series B Notes cease to be outstanding under the Note Indenture, the Note Trustee will surrender to the Mortgage Trustee an equal aggregate principal amount of Series B First Mortgage Bonds. SECURITY The Series B First Mortgage Bonds will be secured equally with all other mortgage bonds outstanding or hereafter issued under the Mortgage by the lien of the Mortgage which, subject to minor exceptions and certain excepted encumbrances as defined in the Mortgage and to the Mortgage Trustee's prior lien for compensation and expenses, constitutes a first lien on all the Company's properties (including its undivided fractional interests in certain properties), consisting principally of electric generating stations, electric transmission and distribution lines and substations, gas production plants, gas distribution facilities and general office and service buildings, other than property which has been released from the lien of the Mortgage in accordance with the terms thereof. Under the Atomic Energy Act, neither the Mortgage Trustee nor any other transferee of the Company's property may operate a nuclear generating station without authorization from the NRC. The Company has pledged with the Mortgage Trustee, as additional security for the Series B First Mortgage Bonds and all other mortgage bonds now outstanding or hereafter issued under the Mortgage, all of the common stock of PECO Energy Power Company (a subsidiary of the Company). The Company reserves broad rights with respect thereto and also the right to sell or dispose of said common stock so long as the Company shall not be in default under the terms of the Mortgage. No securities may be issued by the Company which will rank ahead of the mortgage bonds as to security. The Company may acquire property subject to prior liens, but, if such property is made the basis for the issuance of additional bonds under the Mortgage, all additional mortgage bonds issued under the prior lien after acquisition of the property by the Company must be pledged under the Mortgage (Sections 5, 6 and 7 of Article V). AUTHENTICATION AND DELIVERY OF ADDITIONAL BONDS The Mortgage permits the issuance from time to time of additional mortgage bonds thereunder without limit as to aggregate amount, upon the terms and conditions provided in Article II thereof, which are summarized briefly below: Such additional mortgage bonds may be in principal amount equal to: (1) the principal amount of underlying mortgage bonds secured by prior lien upon property acquired by the Company after March 1, 1937 and deposited with the Mortgage Trustee under the Mortgage (paragraph (a) of Section 3 of Article II); (2) the principal amount of any such underlying mortgage bonds, redeemed or retired, or for the payment, redemption or retirement of which funds have been deposited in trust (paragraph (b) of Section 3 of Article II); (3) the principal amount of mortgage bonds authenticated under the Mortgage on or after March 1, 1937 which have been delivered to the Mortgage Trustee (paragraph (c) of Section 3 of Article II); (4) the principal amount of mortgage bonds issued under the Mortgage on or after March 1, 1937, which are being refunded or redeemed, if funds for said refunding or redemption have been deposited with the Mortgage Trustee (paragraph (d) of Section 3 of Article II); (5) an amount not exceeding 60% of the actual cost or the fair value, whichever is less, of the net amount of permanent additions to the property subject to the lien of the Mortgage, made or acquired after November 30, 1941, and of additional plants or property acquired by the Company after November 30, 1941, and to be used in connection with its electric or gas business as part of one connected system and located in Pennsylvania or within 150 miles of Philadelphia (paragraph (e) of Section 3 of Article II; Sections 15 and 16 of Article II); and 9 (6) the amount of cash deposited with the Mortgage Trustee, which cash shall not at any time exceed $3,000,000 or 10% of the aggregate principal amount of bonds then outstanding under the Mortgage, whichever is greater, and which cash may subsequently be withdrawn to the extent of 60% of capital expenditures, as described in Item 5 above (paragraph (f) of Section 3 of Article II). No additional bonds may be issued under the Mortgage as outlined in Items (5) and (6) and, in certain cases, Item (3) hereinabove, unless the net earnings of the Company (as defined in Section 4 of Article II), after deductions for amounts set aside for renewal and replacement or depreciation reserves and before provision for income taxes, for 12 consecutive calendar months within the 15 calendar months immediately preceding the application for such mortgage bonds shall have been equal to at least twice the annual interest charges on all bonds outstanding under the Mortgage (including those then applied for) and any other mortgage bonds secured by a lien on property of the Company. For purposes of this test, the Company has not included in earnings Allowance for Funds Used During Construction which is included in net income in the Company's consolidated financial statements in accordance with the prescribed system of accounts. The coverages under the earnings test of the Mortgage and the ratios of earnings to fixed charges are or will be included under "Part I, Item 1. Business--Capital Requirements and Financing Activities" of the Company's Annual Report to the SEC on Form 10-K and under "Part I. Financial Information, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Quarterly Reports to the SEC on Form 10-Q described above under "Incorporation of Certain Documents By Reference." At December 31, 1993, the Company had at least $918 million of available property additions (the most restrictive issuance test of the Mortgage at December 31, 1993) against which $551 million of mortgage bonds could have been issued. In addition, at December 31, 1993, the Company was entitled to issue approximately $3.2 billion of mortgage bonds without regard to the earnings and property additions tests against previously retired mortgage bonds. The Series B First Mortgage Bonds will be issued against previously retired mortgage bonds (see Item (3) above). RELEASE AND SUBSTITUTION OF PROPERTY The Company, while no event of default exists, may obtain the release from the lien of the Mortgage of property subject thereto only upon the deposit or pledge with the Mortgage Trustee of cash or purchase money obligations, or in certain instances upon the substitution of other property of equivalent value (Sections 1, 2 and 3 of Article VI). The Mortgage also contains certain requirements relating to the withdrawal or application of proceeds of released property and other funds held by the Mortgage Trustee (Section 4 of Article VI). CORPORATE EXISTENCE The Company may consolidate or merge with or into or convey, transfer or lease all of the mortgaged property as an entirety or substantially as an entirety to any corporation lawfully entitled to acquire or lease and operate the property, provided that such consolidation, merger, conveyance, transfer or lease in no respect impairs the lien of the Mortgage or any rights or powers of the Mortgage Trustee or the holders of the outstanding mortgage bonds and provided that such successor corporation executes and causes to be recorded an indenture which assumes all of the terms, covenants and conditions of the Mortgage and any supplement thereto (Sections 1 and 2 of Article VII). DEFAULTS Events of default are defined in the Mortgage as (a) default for 60 days in the payment of interest on bonds or sinking fund deposits under the Mortgage, (b) default in the payment of principal of bonds under the Mortgage, (c) default in the performance of any other covenant in the Mortgage continuing for a period of 60 days after written notice from the Mortgage Trustee, and (d) certain events of bankruptcy, insolvency or reorganization, but in the case of reorganization only so long as the Company's First and Refunding Mortgage Bonds, 13.05% Series due 1994 are outstanding (Section 2 of Article VIII). Upon the authentication and delivery of additional mortgage bonds, and the release of cash or property, the Company is required to file with the Mortgage Trustee documents and reports with respect to the absence of default. 10 RIGHTS OF BONDHOLDERS UPON DEFAULT The holders of a majority in principal amount of all the outstanding mortgage bonds may, upon the occurrence of an event of default, require the Mortgage Trustee to accelerate the maturity of the mortgage bonds (Section 2 of Article VIII) and to enforce the lien of the Mortgage (Section 5 of Article VIII). Any such acceleration of the maturity of the mortgage bonds may, prior to any sale under the Mortgage, and upon the remedying of all defaults, be annulled by the holders of at least a majority of the outstanding mortgage bonds (Section 22 of Article VIII). The Mortgage permits the Mortgage Trustee to require indemnity before proceeding to enforce the lien of the Mortgage (Sections 5 and 7 of Article VIII). AMENDMENTS The Company and the Trustee may amend the Mortgage without the consent of the holders of mortgage bonds: (1) to subject additional property to the lien to the Mortgage; (2) to define the covenants and provisions permitted under or not inconsistent with the Mortgage; (3) to add to the limitations of the authorized amount, date of maturity, method, conditions and purposes of issue of any bonds issued under the Mortgage; (4) to evidence the succession of another corporation to the Company and the assumption by a successor corporation of the covenants and obligations of the Company under the Mortgage; (5) to make such provision in regard to matters or questions arising under the Mortgage as may be necessary or desirable and not inconsistent with the Mortgage (Section 1 of Article XI). In addition, when the Company's First and Refunding Mortgage Bonds of the 6-1/8% Series due 1997 no longer remain outstanding, the Company and the Trustee may amend the Mortgage or modify the rights of the holders of the mortgage bonds with the written consent of the holders of at least 66-2/3% of the principal amount of the mortgage bonds then outstanding; provided, that no such amendment shall, without the written consent of the holder of each outstanding mortgage bond affected thereby: (1) change the date of maturity of the principal of, or any installment of interest on, any mortgage bond, or reduce the principal amount of any mortgage bond or the interest thereon or any premium payable on the redemption thereof, or change any place of payment where, or currency in which, any mortgage bond or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the date of maturity thereof; (2) reduce the percentage in principal amount of the outstanding mortgage bonds, the consent of whose holders is required for any amendment, waiver of compliance with the provisions of the Mortgage or certain defaults and their consequences; (3) modify any of the amendment provisions or Section 22 of Article VIII (relating to waiver of default), except to increase any such percentage or to provide that certain other provisions of the Mortgage cannot be modified or waived without the consent of the holder of each mortgage bond affected thereby (Sections 2 and 3 of Article XI). MORTGAGE TRUSTEE First Fidelity Bank, National Association, the Mortgage Trustee under the Mortgage, is also registrar and disbursing agent for the Company's mortgage bonds. First Fidelity Bank, National Association is the Note Trustee and is also a depository of the Company, from time to time makes loans to the Company and is the trustee under an indenture securing pollution control revenue bonds issued for the benefit of the Company which are secured by bonds now outstanding under the Mortgage. EXPERTS The consolidated financial statements and schedules of the Company incorporated by reference in this Registration Statement have been audited by Coopers & Lybrand, L.L.P, independent accountants, for the periods indicated in their report thereon which is included in the Annual Report on Form 10-K for the year ended December 31, 1993. The consolidated financial statements and schedules audited by Coopers & Lybrand have been incorporated herein by reference in reliance on their report given on their authority as experts in accounting and auditing. 11 LEGAL MATTERS Certain legal matters will be passed upon for the Company by Ballard Spahr Andrews & Ingersoll, who will rely on Cahill, Wilinski & Cahill as to certain matters of New Jersey law. Certain legal matters will be passed upon for the Agents by Drinker Biddle & Reath. The statements as to matters of law and legal conclusions under "Description of Series B First Mortgage Bonds and Mortgage" have been reviewed by Ballard Spahr Andrews & Ingersoll as to matters of Pennsylvania and Maryland law and Cahill, Wilinski & Cahill as to matters of New Jersey law, and such statements are included herein upon the authority of such counsel. PLAN OF DISTRIBUTION The Series B Notes will be offered on a continual basis or from time to time by the Company through the Agents. The Company will pay an Agent a commission of . % to . % of the principal amount of Series B Notes sold through such Agent, depending upon the maturity of such Series B Notes. The Company may sell Series B Notes to any of the Agents acting as principal, at a discount to be agreed upon at the time of sale, or a purchasing Agent may receive from the Company a commission or discount equivalent to that set forth on the cover page hereof in the case of any such principal transaction in which no other discount is agreed to by the Company and such purchasing Agent. Such Series B Notes may be resold at prevailing market prices, or at prices related thereto, at the time of such resale, as determined by the Agents. The Company reserves the right to sell Series B Notes directly on its own behalf. No commission will be payable on any Series B Notes sold directly by the Company. In addition, the Agents may offer Series B Notes they have purchased as principal to other dealers. The Agents may sell Series B Notes to any dealer at a discount and, unless otherwise specified in the applicable Pricing Supplement, such discount allowed to any dealer may include all or part of the discount to be received from the Company. After the initial public offering of Series B Notes to be resold to investors and other purchasers on a fixed public offering price basis, the public offering price, concession and discount may be changed. The Company will agree to indemnify each Agent against certain civil liabilities, including liabilities under the Securities Act of 1933 (Act) or to contribute to payments such Agent may be required to make in respect thereof. Each Agent may be deemed to be an "underwriter" within the meaning of the Act with respect to Series B Notes sold through it. The Company will agree to reimburse the Agents for certain expenses. Series B Notes may also be sold at the price to the public set forth in the Pricing Supplement relating thereto to dealers who may resell to investors. Such dealers may be deemed to be "underwriters" within the meaning of the Act. The Company will have the right, in its sole discretion, to accept offers to purchase Series B Notes and may reject any proposal to purchase Series B Notes in whole or in part. Each Agent will have the right, in its discretion reasonably exercised, to reject any offer to purchase Series B Notes received by it in whole or in part. The Series B Notes are a new issue of securities and will not have an established trading market when issued. The Series B Notes will not be listed on any securities exchange. Each Agent may make a market in the Series B Notes, but such Agent is not obligated to do so and may discontinue any market-making at any time without notice. There can be no assurance as to the existence or liquidity of a secondary market for any Series B Notes, or that all or any of the Series B Notes will be sold. 12 ================================== ================================== NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO $250,000,000 MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN PECO THIS PROSPECTUS, AND IF GIVEN OR ENERGY MADE SUCH INFORMATION OR COMPANY REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY COLLATERALIZED ANY PURCHASER OR UNDERWRITER. MEDIUM-TERM NOTES, SERIES B THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES COVERED BY THIS PROSPECTUS TO ANY PERSON IN PROSPECTUS ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF. ---------- CONTENTS PAGE ---- Statement of Available Information .............. 2 Incorporation of Certain Documents by Reference.... 2 The Company ................ 2 Use of Proceeds............. 3 Description of Series B Notes and Note Indenture.. 3 Description of Series B First Mortgage Bonds and Mortgage.............. 8 Experts..................... 11 Legal Matters............... 12 Plan of Distribution........ 12 ================================== ================================== PART II--INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION* Filing Fees .............................. $ 86,207 Legal Services ........................... 75,000 Accounting Services ...................... 25,000 Trustee's Charges, Including Counsel ..... 75,000 Printing and Engraving ................... 50,000 Rating Agencies Services ................. 40,000 Recording Indenture ...................... 15,000 Miscellaneous ............................ 39,793 -------- Total .................................... $376,000 ======== *Estimated ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company's Bylaws provide that the Company is obligated to indemnify directors and officers and other persons designated by the Board of Directors against any liability including any damage, judgment, amount paid in settlement, fine, penalty, cost or expense (including, without limitation, attorneys' fees and disbursements) incurred in connection with any proceeding. The Bylaws provide that no indemnification shall be made where the act or failure to act giving rise to the claim for indemnification is determined by arbitration or otherwise to have constituted willful misconduct or recklessness or attributable to receipt from the Company of a personal benefit to which the recipient is not legally entitled. The Business Corporation Law of 1988 provides that indemnification pursuant to a bylaw may be granted for any action taken or any failure to take any action, absent a court determination of willful misconduct or recklessness, and may be made whether or not the corporation would have the power to indemnify the person under any other provision of law. Pursuant to the Business Corporation Law of 1988, the Company's Bylaws provide that directors generally will not be liable for monetary damages in any action whether brought by shareholders directly or in the right of the Company or by third parties unless they fail in the good faith performance of their duties as fiduciaries (the standard of care established by the Business Corporation Law of 1988), and such failure constitutes self-dealing, willful misconduct or recklessness. The Agents will also agree to indemnify the directors and officers of the Company against certain liabilities as set forth in Section 7 of the Distribution Agreement (see Exhibit 1). The Company has purchased directors' and officers' liability insurance. R-1 ITEM 16. EXHIBITS Pursuant to Rule 411 of the Securities Act of 1933 (Act), certain of the following listed exhibits are annexed as exhibits to previous SEC filings by the Company and are incorporated by reference as Exhibits to this Registration Statement. EXHIBIT NUMBER DESCRIPTION - -------------- -------------------------------------------------------------- 1 Form of Distribution Agreement. 3(i) Amended and Restated Articles of Incorporation of PECO Energy Company (Filed with 1993 Form 10-K, file No. 1-1401, Exhibit 3-1). 3(ii) Bylaws of the Company, as adopted February 26, 1990 and amended January 24, 1994 (Filed with 1993 Form 10-K, file No. 1-1401, Exhibit 3-2). 4 Copy of First and Refunding Mortgage dated May 1, 1923 between The Counties Gas and Electric Company (predecessor to the Company) and Fidelity Trust Company, Trustee (First Fidelity Bank, National Association, successor), securing First and Refunding Mortgage Bonds (Filed with Registration No. 2-2881, effective March 10, 1937, Exhibit B-1), and indentures supplemental thereto dated as follows: 4(b)-3 May 1, 1927 (Filed with Registration No. 2-2881, effective March 10, 1937, Exhibit B-1(c)). 4(b)-7 March 1, 1937 (Filed with Registration No. 2-2881, effective March 10, 1937, Exhibit B-1(g)). 4(b)-8 December 1, 1941 (Filed with Registration No. 2-4863, effective November 25, 1941, Exhibit B-1(h)). 4(b)-9 November 1, 1944 (Filed with Registration No. 2-5472, effective October 19, 1944, Exhibit B-1(i)). 4(b)-10 December 1, 1946 (Filed with Registration No. 2-6821, effective December 13, 1946, Exhibit 7-1(j)). 4(b)-16 September 1, 1957 (Filed with Registration No. 2-13562, effective September 10, 1957, Exhibit 2(b)-17). 4(b)-17 May 1, 1958 (Filed with Registration No. 2-14020, effective April 23, 1958, Exhibit 2(b)-18). 4(b)-20 May 1, 1964 (Filed with Registration No. 2-25628, effective November 16, 1966, Exhibit 4(b)-21). 4(b)-23 October 1, 1967 (Filed with Registration No. 2-28242, effective March 7, 1968, Exhibit 2(b)-23). 4(b)-24 March 1, 1968 (Filed with Registration No. 2-34051, effective August 8, 1969, Exhibit 2(b)-24). 4(b)-29 December 15, 1970 (Filed with Registration No. 2-41081, effective July 26, 1971, Exhibit 2(b)-29). 4(b)-31 December 15, 1971 (Filed with Registration No. 2-44195, effective June 15, 1972, Exhibit 2(b)-31). 4(b)-33 January 15, 1973 (Filed with Registration No. 2-49842, effective January 10, 1974, Exhibit 2(b)-33). 4(b)-46 March 1, 1981 (Filed with Registration No. 2-72802, effective July 7, 1981, Exhibit 4-46). 4(b)-47 March 1, 1981 (Filed with Registration No. 2-72802, effective July 7, 1981, Exhibit 4-47). 4(b)-53 November 15, 1984 (Filed with 1984 Form 10-K, file No. 1-1401, Exhibit 4-2(a)). 4(b)-54 December 1, 1984 (Filed with 1984 Form 10-K, file No. 1-1401, Exhibit 4-2(b)). 4(b)-55 May 15, 1985 (Filed with 1985 Form 10-K, file No. 1-1401, Exhibit 4-2(a)). 4(b)-56 October 1, 1985 (Filed with 1985 Form 10-K, file No. 1-1401, Exhibit 4-2(b)). R-2 EXHIBIT NUMBER DESCRIPTION - -------------- -------------------------------------------------------------- 4(b)-61 November 1, 1986 (Filed with 1986 Form 10-K, file No. 1-1401, Exhibit 4-2(c)). 4(b)-63 July 15, 1987 (Filed with Form 8-K dated July 21, 1987, file No. 1-1401, Exhibit 4(c)-63). 4(b)-64 July 15, 1987 (Filed with Form 8-K dated July 21, 1987, file No. 1-1401, Exhibit 4(c)-64). 4(b)-65 August 1, 1987 (Filed with Registration No. 33-17438, effective September 28, 1987, Exhibit 4(c)-65). 4(b)-66 October 15, 1987 (Filed with Form 8-K dated October 7, 1987, file No. 1-1401, Exhibit 4(c)-66). 4(e)-67 October 15, 1987 (Filed with Form 8-K dated October 7, 1987, file No. 1-1401, Exhibit 4(c)-67). 4(b)-68 April 15, 1988 (Filed with Form 8-K dated April 11, 1988, file No. 1-1401, Exhibit 4(c)-68). 4(b)-69 April 15, 1988 (Filed with Form 8-K dated April 11, 1988, file No. 1-1401, Exhibit 4(c)-69). 4(b)-70 June 15, 1989 (Filed with Registration No. 33-31289, effective September 29, 1989, Exhibit 4(c)-70). 4(b)-71 October 1, 1989 (Filed with Form 8-K dated October 6, 1989, file No. 1-1401, Exhibit 4(b)-71). 4(b)-72 October 1, 1989 (Filed with Form 8-K dated October 6, 1989, file No. 1-1401, Exhibit 4(b)-72). 4(b)-73 October 1, 1989 (Filed with Form 8-K dated October 18, 1989, file No. 1-1401, Exhibit 4(b)-73). 4(b)-74 October 15, 1990 (Filed with 1990 Form 10-K, file No. 1-1401, Exhibit 4(b)-74). 4(b)-75 October 15, 1990 (Filed with 1990 Form 10-K, file No. 1-1401, Exhibit 4(b)-75). 4(b)-76 April 1, 1991 (Filed with 1991 Form 10-K, file No. 1-1401, Exhibit 4(b)-76). 4(b)-77 December 1, 1991 (Filed with 1991 Form 10-K, file No. 1-1401, Exhibit 4(b)-77). 4(b)-78 January 15, 1992 (Filed with Form 8-K dated January 27, 1992, file No. 1-1401, Exhibit 4(b)-78). 4(b)-79 April 1, 1992 (Filed with March 31, 1992 Form 10-Q, file No. 1-1401, Exhibit 4(b)-79). 4(b)-80 April 1, 1992 (Filed with March 31, 1992 Form 10-Q, file No. 1-1401, Exhibit 4(b)-80). 4(b)-81 June 1, 1992 (Filed with June 30, 1992 Form 10-Q, file No. 1-1401, Exhibit 4(b)-81). 4(b)-82 June 1, 1992 (Filed with June 30, 1992 Form 10-Q, file No. 1-1401, Exhibit 4(b)-82). 4(b)-83 July 15, 1992 (Filed with June 30, 1992 Form 10-Q, file No. 1-1401, Exhibit 4(b)-83). 4(b)-84 September 1, 1992 (Filed with 1992 Form 10-K, file No. 1-1401, Exhibit 4(b)-84). 4(b)-85 September 1, 1992 (Filed with 1992 Form 10-K, file No. 1-1401, Exhibit 4(b)-85). 4(b)-86 March 1, 1993 (Filed with 1992 Form 10-K, file No. 1-1401, Exhibit 4(b)-86). 4(b)-87 March 1, 1993 (Filed with 1992 Form 10-K, file No. 1-1401, Exhibit 4(b)-87). 4(b)-88 March 1, 1993 (Filed with March 31, 1993 Form 10-Q, file No. 1-1401, Exhibit 4(b)-88). 4(b)-89 May 1, 1993 (Filed with March 31, 1993 Form 10-Q, file No. 1-1401, Exhibit 4(b)-89). 4(b)-90 May 1, 1993 (Filed with March 31, 1993 Form 10-Q, file No. 1-1401, Exhibit 4(b)-90). 4(b)-91 August 15, 1993 (Filed with Form 8-A dated August 19, 1993, Exhibit 4(b)-91). 4(b)-92 August 15, 1993 (Filed with Form 8-A dated August 19, 1993, Exhibit 4(b)-92). 4(b)-93 August 15, 1993 (Filed with Form 8-A dated August 19, 1993, Exhibit 4(b)-93). 4(b)-94 November 1, 1993 (Filed with Form 8-A dated October 27, 1993, Exhibit 4(b)-94). 4(b)-95 November 1, 1993 (Filed with Form 8-A dated October 27, 1993, Exhibit 4(b)-95). R-3 EXHIBIT NUMBER DESCRIPTION - -------------- -------------------------------------------------------------- 4(b)-96 Form of Ninety-sixth Supplemental Indenture. 4(f) Collateralized Note Indenture dated as of October 1, 1989 between Philadelphia Electric Company (now known as PECO Energy Company) and Fidelity Bank, National Association (First Fidelity Bank, National Association, successor) (Filed with Form 8-K dated October 18, 1989, file No. 1-1401, Exhibit 4(f)). 4(f)-1 First Supplemental Indenture dated as of July 1, 1994. 4(f)-2 Form of Second Supplemental Indenture dated as of July 1, 1994. 5 Opinion of Counsel. 12 Ratio of Earnings to Fixed Charges for the 12 months ended December 31, 1993 (Filed with 1993 Form 10-K, file No. 1-1401, Exhibit 12-1). Ratio of Earnings to Fixed Charges for the 3 months ended March 31, 1994 (Filed with March 31, 1994 Form 10-Q, file No. 1-1401, Exhibit 12-2). 23-1 Consent of Independent Accountants. 23-2 Consent of Cahill, Wilinski & Cahill. 23-3 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5). 24 Powers of Attorney. 25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939. ITEM 17. UNDERTAKINGS A. TO UPDATE ANNUALLY The Company hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that Paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (Exchange Act) that are incorporated by reference in the registration statement; (2) that for the purpose of determining any liability under the Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. R-4 B. INCORPORATION BY REFERENCE The Company hereby undertakes that, for purposes of determining any liability under the Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. INDEMNIFICATION Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. R-5 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT, PECO ENERGY COMPANY, CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF PHILADELPHIA, COMMONWEALTH OF PENNSYLVANIA ON THE 4TH DAY OF AUGUST, 1994. PECO ENERGY COMPANY By /s/ J. F. Paquette, Jr. ------------------------------------------ J. F. Paquette, Jr., Chairman of the Board PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED. SIGNATURE TITLE DATE - ----------------------- ---------------------------------- ----------------- /s/ J. F. PAQUETTE, JR. Chairman of the Board and Director August 4, 1994 - ----------------------- (Principal Executive Officer) J. F. PAQUETTE, JR. /s/ C. A. MCNEILL, JR. President and Director (Principal August 4, 1994 - ----------------------- Operating Officer) C. A. MCNEILL, JR. /s/ K. G. LAWRENCE Senior Vice President (Principal August 4, 1994 - ----------------------- Financial and Accounting Officer K. G. LAWRENCE THIS REGISTRATION STATEMENT OR AMENDMENT HAS ALSO BEEN SIGNED BY C. A. MCNEILL, JR., ATTORNEY-IN-FACT, ON BEHALF OF THE FOLLOWING DIRECTORS ON THE DATE INDICATED: Susan W. Catherwood Joseph C. Ladd M. Walter D'Alessio Edithe J. Levit Richard G. Gilmore Kinnaird R. McKee Richard H. Glanton Joseph J. McLaughlin James A. Hagen John M. Palms Nelson G. Harris Ronald Rubin By /s/ C. A. MCNEILL, JR. August 4, 1994 ------------------------------------- C. A. McNeill, Jr., Attorney-in-Fact R-6 EX-1 2 EXHIBIT 1 -- FORM OF DISTRIBUTION AGREEMENT Exhibit 1 PECO ENERGY COMPANY $250,000,000 COLLATERALIZED MEDIUM-TERM NOTES, SERIES B DISTRIBUTION AGREEMENT ---------------------- July __, 1994 [Insert underwriters names] Dear Sirs: PECO Energy Company (the "Company") proposes to issue and sell from time to time its Collateralized Medium-Term Notes, Series B (the "Notes") in an aggregate amount up to $250,000,000 and agrees with each of you (individually, an "Agent" and collectively, the "Agents") as set forth in this Agreement. Subject to the terms and conditions stated herein and to the reservation by the Company of the right to sell Notes directly on its own behalf, the Company hereby (i) appoints each Agent as an agent of the Company for the purpose of soliciting and receiving offers to purchase Notes from the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as otherwise contemplated herein, whenever it determines to sell Notes directly to any Agent as principal, it will enter into a separate agreement (each a "Terms Agreement"), substantially in the form of Annex I hereto, relating to such sale in accordance with Section 2(b) hereof. The Notes will be issued under a Collateralized Note Indenture dated as of October 1, 1989, as previously amended and as further supplemented by a Second Supplemental Indenture dated as of July 1, 1994 (the "Indenture"), between the Company and Fidelity Bank, National Association (to which First Fidelity Bank, National Association is successor), as trustee (the "Note Trustee"). The Notes shall have the maturity ranges, fixed interest rates, redemption provisions and other terms set forth in the Prospectus referred to below as it may be amended or supplemented from time to time. The Notes will be issued, and the terms and rights thereof established, from time to time by the Company in accordance with the Indenture. 1. The Company represents and warrants to, and agrees with, each Agent that: (a) A registration statement on Form S-3 in respect of the Notes has been filed with the Securities and Exchange Commission (the "Commission") in the form heretofore delivered or to be delivered to such Agent, excluding exhibits to such registration statement but including all documents incorporated by reference in the prospectus included therein, and such registration statement in such form has been declared effective by the Commission and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement (together with any other registration statement with respect to the Notes), including all exhibits thereto but excluding Form T-1 and, if applicable, including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Act"), in accordance with Section 4(a) hereof, each as amended at the time such part became effective, being hereinafter collectively called the "Registration Statement"; the prospectus (including, if applicable, any prospectus supplement) relating to the Notes, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus, including any supplement to the Prospectus that sets forth only the terms of a particular issue of the Notes (a "Pricing Supplement"), shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated therein by reference; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to and include the Prospectus as amended or supplemented (including by the applicable Pricing Supplement filed in accordance with Section 4(a) hereof) in relation to Notes sold pursuant to this Agreement, in the form filed with the Commission pursuant to Rule 424(b) under the Act and in accordance with Section 4(a) hereof, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents, when they became effective or were so filed, as the case may be, contained, in the case of documents which became effective under the Act, an untrue - 2 - statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, in the case of documents which were filed under the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and any further documents so filed and incorporated by reference in the Prospectus as amended and supplemented, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain, in the case of documents which become effective under the Act, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and in the case of documents which are filed under the Exchange Act with the Commission, an untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Agent expressly for use in the Prospectus as amended or supplemented; (c) The Registration Statement and the Prospectus conform, and any amendments or supplements thereto will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date in the case of the Registration Statement and any amendment thereto and as of the applicable filing date in the case of the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Agent expressly for use in the Prospectus as amended or supplemented to relate to a particular issuance of Notes; (d) Since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, there has not been any material adverse change, or any development which the Company reasonably believes will result in a prospective material adverse change, in the financial condition, business or results of operations of the Company and - 3 - its subsidiaries, considered as a whole, otherwise than as set forth or contemplated in the Prospectus; (e) The Company is a validly existing corporation in good standing under the laws of the Commonwealth of Pennsylvania. Each of the Company's subsidiaries which constitutes a "gas utility company" or an "electric utility company", as such terms are defined in the Public Utility Holding Company Act of 1935, as amended, ("Utility Subsidiary"), is a validly existing corporation under the laws of its jurisdiction of incorporation. The Company and each Utility Subsidiary have all requisite power and authority to own and occupy their respective properties and carry on their respective businesses as presently conducted and as described in the Prospectus and are duly qualified as foreign corporations to do business and in good standing in every jurisdiction in which the nature of the business conducted or property owned by them make such qualification necessary and in which the failure to so qualify would have a materially adverse effect on the Company; (f) At or prior to each Time of Delivery and each Settlement Date fixed pursuant to the Administrative Procedure, the Company will have pledged with the Note Trustee under the Indenture for the benefit of the holders of the Notes an aggregate principal amount of the Company's First and Refunding Mortgage Bonds, Medium-Term Note Series B (the "Bonds") to be issued under the First and Refunding Mortgage dated May 1, 1923, between The Counties Gas and Electric Company (to which the Company is successor) and Fidelity Trust Company (to which First Fidelity Bank, National Association is successor) (the "Bond Trustee"), as supplemented and amended by ninety-five supplemental indentures and as to be further supplemented and amended by that supplemental indenture to be dated July 1, 1994 between the Company and the Bond Trustee relating to the Bonds (said First and Refunding Mortgage and supplemental indentures being hereinafter collectively called the "Mortgage") equal to the principal amount of Notes then being issued pursuant to the Indenture; (g) At each Time of Delivery and each Settlement Date fixed pursuant to the Administrative Procedure, the title to the Bonds then being issued and delivered to the Note Trustee will be free and clear of any liens, charges or encumbrances (other than the lien of the Indenture), and the Indenture will constitute a valid and binding perfected first lien upon such Bonds; (h) The Notes have been duly authorized, and, when issued and delivered pursuant to this Agreement and any Terms Agreement and authenticated by the Note Trustee, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company - 4 - entitled to the benefits provided by the Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly authorized by the Company and has been qualified under the Trust Indenture Act and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture conforms and the Notes of any particular issuance of Notes will conform to the descriptions thereof in the Prospectus as amended or supplemented to relate to such issuance of Notes; (i) The Bonds have been duly authorized, and, when issued and delivered pursuant to Mortgage and authenticated by the Mortgage Trustee, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Mortgage, which will be substantially in the form filed as an exhibit to the Registration Statement; the Mortgage has been duly authorized by the Company and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights, to applicable state laws which may affect the remedies provided for in the Mortgage without, however, rendering inadequate the remedies available to the Bond Trustee for the practical realization of the benefit of the security intended to be afforded thereby, to the Atomic Energy Act of 1954, 42 U.S.C. section 2011, et seq., and the rules and regulations thereunder and to general equity principles; and the Mortgage conforms and the Bonds will conform to the descriptions thereof in the Prospectus as amended or supplemented; (j) The issue and sale of the Notes, the issue and pledge of the Bonds, the compliance by the Company with all of the provisions of the Notes, the Indenture, the Bonds, the Mortgage, this Agreement and any Terms Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, or result in the creation of (or impose any obligation on the Company or any Utility Subsidiary to create) any mortgage, pledge, lien, security or encumbrance (other than the liens of the Mortgage and the Indenture) upon any properties or assets of the Company or any Utility Subsidiary pursuant to any such term; nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or the Bylaws of the - 5 - Company, as amended, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Notes, the issue and pledge of the Bonds or the consummation by the Company of the other transactions contemplated by this Agreement, any Terms Agreement, the Mortgage or the Indenture, except such as have been, or will have been prior to the Commencement Date (as defined in Section 3 hereof), obtained under the Act or the Trust Indenture Act, from the Pennsylvania Public Utility Commission authorizing the Company to issue and sell the Notes and to issue Bonds pursuant to the Mortgage to collateralize the Notes and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws; (k) The accountants that have certified or shall certify the financial statements filed or to be filed with the Commission and incorporated by reference as parts of the Registration Statement and the Prospectus as amended or supplemented are independent accountants as required by the Act; and (l) Other than as set forth or contemplated in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, which may individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries, and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. 2. (a) On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, each of the Agents hereby severally and not jointly agrees, as agent of the Company, when so instructed by the Company, to use its reasonable efforts to solicit and receive offers to purchase the Notes from the Company upon the terms and conditions set forth in the Prospectus as amended or supplemented from time to time. Instruction by the Company to solicit and receive offers to purchase the Notes shall be deemed to constitute a reaffirmation as of the date of such instruction of the Company's representations and warranties set forth in Section 1 above as if such representations and warranties were then made. So long as each Agent's obligation to solicit offers to purchase the Notes has not been terminated hereunder, the Company shall not, without the consent of such Agent, solicit or accept offers to purchase, or sell, any debt - 6 - securities with a maturity at the time of original issuance of 9 months to 30 years except pursuant to this Agreement, any Terms Agreement, or except pursuant to a private placement not constituting a public offering under the Act or except in connection with a competitive bid or firm commitment underwriting pursuant to an underwriting agreement that does not provide for a continuous offering of medium-term debt securities. However, the Company reserves the right to sell, and may solicit and accept offers to purchase, Notes directly on its own behalf, and, in the case of any such sale not resulting from a solicitation made by an Agent, no commission will be payable with respect to such sale. These provisions shall not limit Section 4(f) hereof or any similar provision included in any Terms Agreement. Procedural details relating to the issue and delivery of Notes, the solicitation of offers to purchase Notes and the payment in each case therefor shall be as set forth in the Administrative Procedure attached hereto as Annex II as it may be amended from time to time by written agreement between the Agents and the Company (the "Administrative Procedure"). The provisions of the Administrative Procedure shall apply to all transactions contemplated hereunder other than those made pursuant to a Terms Agreement. Each Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by each of them in the Administrative Procedure. The Company will furnish to the Note Trustee a copy of the Administrative Procedure as from time to time in effect. The Company reserves the right, in its sole discretion, to instruct the Agents to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase the Notes. As soon as practicable, but in any event not later than one business day in New York City, after receipt of notice from the Company, the Agents will suspend solicitation of offers to purchase Notes from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. The Company agrees to pay each Agent a commission, at the time of settlement of any sale of a Note by the Company as a result of a solicitation made by such Agent, in an amount equal to the following applicable percentage of the principal amount of such Note sold: - 7 - Commission (percentage of aggregate principal amount Range of Maturities of Notes sold) ------------------- -------------- From 9 months to less than 1 year. . . . From 1 year to less than 18 months . . . From 18 months to less than 2 years. . . From 2 years to less than 3 years. . . . From 3 years to less than 4 years. . . . From 4 years to less than 5 years. . . . From 5 years to less than 6 years. . . . From 6 years to less than 7 years. . . . From 7 years to less than 10 years . . . From 10 years to less than 15 years. . . From 15 years to less than 20 years. . . 20 years and more. . . . . . . . . . . . Unless otherwise agreed between the Company and each Agent, each Agent shall communicate to the Company, orally or in writing, each offer to purchase Notes received by it as Agent other than those rejected by such Agent in accordance herewith. The Company shall have the right in its sole and absolute discretion to accept offers to purchase Notes and may reject any proposed purchase of Notes. If the Company accepts an offer to purchase Notes, it shall confirm such acceptance in writing. Each Agent shall have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes received by it, and any such rejection by it shall not be deemed a breach of its agreements contained herein. No Agent shall have the authority to accept any offer to purchase Notes resulting from such Agent's solicitation of offers. The appointment by the Company of each Agent shall not authorize such Agent to take any action on behalf of the Company other than as set forth in this Agreement and the Administrative Procedure. (b) Each sale of Notes to any Agent as principal shall be made in accordance with the terms of this Agreement and (unless the Company and such Agent shall otherwise agree in writing) a Terms Agreement which will provide for the sale of such Notes to, and the purchase thereof by, such Agent. Terms Agreements, each of which shall be substantially in the form of Annex I hereto, may take the form of an exchange of any standard form of written telecommunication between any Agent and the Company, including by telecopy or telex. The Company and any Agent who is a party to a Terms Agreement agree to exchange executed copies of such Terms Agreement as promptly as practicable after they have entered into such Terms Agreement pursuant to the foregoing exchange of written telecommunication. - 8 - For each sale of Notes to an Agent as principal that is not made pursuant to a Terms Agreement, the procedural details relating to the issue and delivery of such Notes and payment therefor shall be as set forth in the Administrative Procedure. For each such sale of Notes to an Agent as principal that is not made pursuant to a Terms Agreement, the Company agrees to pay such Agent a commission (or grant an equivalent discount) as provided in Section 2(a) hereof and in accordance with the schedule set forth therein. Each time and date of delivery of and payment for Notes to be purchased by an Agent as principal, whether set forth in a Terms Agreement or in accordance with the Administrative Procedure, is referred to herein as a "Time of Delivery". 3. The documents required to be delivered pursuant to Section 6 hereof on the Commencement Date (as defined below) shall be delivered to the Agents at the offices of PECO Energy Company, 2301 Market Street, Philadelphia, PA 19103 at 11:00 A.M., Philadelphia time, on the date of this Agreement, which date and time of such delivery may be postponed by agreement between the Agents and the Company but in no event shall be later than the day prior to the date on which solicitation of offers to purchase Notes is commenced or on which any Terms Agreement is executed (such time and date being referred to herein as the "Commencement Date"). 4. The Company covenants and agrees with each Agent: (a) (i) To make no amendment or supplement to the Registration Statement or the Prospectus (A) prior to the Commencement Date which shall be disapproved by any Agent promptly after reasonable notice thereof or (B) after the date of any Terms Agreement or other agreement by an Agent to purchase Notes as principal and prior to the related Time of Delivery which shall be disapproved by any Agent party to such Terms Agreement or so purchasing as principal promptly after reasonable notice thereof; provided, however, that the foregoing requirement shall not apply to periodic filings with the Commission by the Company of Current Reports on Form 8-K or Quarterly Reports on Form 10-Q under the Exchange Act, copies of which filings the Company will cause to be delivered to such Agent reasonably on or after the date of filing with the Commission; (ii) to prepare, with respect to any Notes to be sold through or to such Agent pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a form previously approved by such Agent and to file such Pricing Supplement pursuant to Rule 424(b) under the Act within the applicable time period for such filing by the rules and regulations under the Act; (iii) to make no amendment or supplement to the Registration Statement or Prospectus, other than any Pricing Supplement, at any time prior to having afforded each Agent a reasonable opportunity to review and comment on it; - 9 - provided, however, that the foregoing requirement shall not apply to periodic filings with the Commission by the Company of Current Reports on Form 8-K or Quarterly Reports on Form 10-Q or under the Exchange Act, copies of which filings the Company will cause to be delivered to such Agent reasonably on or after the date of filing with the Commission; (iv) to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of the Notes, and during such same period to advise such Agent, promptly after the Company receives notice thereof, of the time when any amendment to the Registration Statement has been filed or has become effective or any supplement to the Prospectus or any amended Prospectus (other than any Pricing Supplement that relates to Notes not purchased through or by such Agent) has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Notes, of the suspension of the qualification of the Notes for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amendment or supplement of the Registration Statement or Prospectus or for additional information; and (v) in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any such prospectus or suspending any such qualification, to use promptly its reasonable efforts to obtain its withdrawal; (b) Promptly from time to time to take such action as such Agent reasonably may request to qualify the Notes for offering and sale under the securities laws of such jurisdictions as such Agent may request and to comply with such laws so as to permit the continuance of sales and dealings therein for as long as may be necessary to complete the distribution or sale of the Notes; provided, however, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish such Agent with copies of the Registration Statement and each amendment thereto, with copies of the Prospectus as each time amended or supplemented, other than any Pricing Supplement (except as provided in the Administrative procedure), in the form in which it is filed with the Commission pursuant to Rule 424 under the Act, and with copies of the documents incorporated by reference therein, all in such quantities as such Agent may reasonably request from time to time; and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Notes (including Notes purchased from the Company by such Agent as principal) and if at such time any event shall have occurred as a - 10 - result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify such Agent and request such Agent, in its capacity as agent of the Company, to suspend solicitation of offers to purchase Notes from the Company (and, if so notified, such Agent shall promptly cease such solicitations); and if the Company shall decide to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to so advise such Agent promptly by telephone (with confirmation in writing) and to prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance; provided, however, that if during such same period such Agent continues to own Notes purchased from the Company by such Agent as principal or such Agent is otherwise required to deliver a prospectus in respect of transactions in the Notes, the Company shall promptly prepare and file with the Commission such an amendment or supplement; (d) To make generally available to its security holders as soon as is reasonably practicable, but in any event not later than eighteen months after the date of acceptance by the Company of an offer to purchase Notes covering a period of at least twelve months beginning on the later of (i) the effective date of the Registration Statement, (ii) the effective date of each post-effective amendment to the Registration Statement, and (iii) the date of each filing by the Company with the Commission of an Annual Report on Form 10-K that is incorporated by reference in the Registration Statement, an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158); (e) During the term of this Agreement, to furnish to such Agent copies of all reports or other communications (financial or other) furnished to stockholders, and deliver to such Agent (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as such Agent may from time to time reasonably request (such financial statements to be on a consolidated basis - 11 - to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission); (f) That, from the date of any Terms Agreement with such Agent or other agreement by such Agent to purchase Notes as principal and continuing to and including the related Time of Delivery, the Company will not, without the prior written consent of such Agent, offer, sell, contract to sell or otherwise dispose of any debt securities of the Company which both mature more than 9 months after such Time of Delivery and are substantially identical to the Notes; (g) That each acceptance by the Company of an offer to purchase Notes hereunder (including any purchase by such Agent as principal not pursuant to a Terms Agreement), each execution and delivery by the Company of a Terms Agreement with such Agent, and each delivery of Notes by the Company on the settlement date for the Notes relating to such acceptance or Time of Delivery, shall be deemed to be an affirmation to such Agent that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct in all material respects as of the date of such acceptance, of such Terms Agreement or of such delivery of Notes, as the case may be, as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and/or the Prospectus as amended and supplemented to such date); (h) That upon each Settlement Date or Time of Delivery, the Company shall furnish to counsel to the Agents such papers and information as they may reasonably request to enable them to furnish to such Agent the opinion or opinions referred to in Section 6(b) hereof; (i) That upon each Settlement Date or Time of Delivery, the Company shall furnish or cause to be furnished to such Agent a written opinion of counsel for the Company satisfactory to such Agent, dated the date of such Settlement Date or Time of Delivery relating to such sale, in form satisfactory to such Agent, to the effect that such Agent may rely on the opinion of such counsel referred to in Section 6(c) hereof which was last furnished to such Agent to the same extent as though it were dated the date of such letter authorizing reliance (except that the statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in lieu of such opinion, an opinion of the same tenor as the opinion of such counsel referred to in Section 6(c) hereof but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date; - 12 - (j) That, if the Registration Statement or the Prospectus shall have been amended or supplemented, or a document shall have been filed under the Act or the Exchange Act and incorporated by reference into the Prospectus, in either case to set forth financial information included in or derived from the Company's consolidated financial statements or accounting records, and in each case if such amendment, supplement or incorporation shall have taken place prior to any Settlement Date or Time of Delivery and since the later of the effective date of the Registration Statement or the date of the last such Settlement Date or Time of Delivery on or at which such Agent acted as agent or principal pursuant to a Terms Agreement or otherwise, then the Company shall cause the independent certified public accountants who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement to furnish such Agent a letter, dated the date of such Settlement Date or Time of Delivery relating to such sale in form satisfactory to such Agent, of the same tenor as the letter referred to in Section 6(d) hereof but modified to relate to the Registration Statement and the Prospectus as amended or supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company, to the extent such financial statements and other information are available as of a date not more than five business days prior to the date of such letter; provided, however, that, with respect to any financial information or other matter, such letter may reconfirm as true and correct at such date as though made at and as of such date, rather than repeat, statements with respect to such financial information or other matter made in the letter referred to in Section 6(d) hereof which was last furnished to such Agent; (k) That upon each Settlement Date or Time of Delivery, the Company shall furnish or cause to be furnished forthwith to such Agent a certificate, dated the date of such Settlement Date or Time of Delivery relating to such sale in such form and executed by such officers of the Company as shall be satisfactory to such Agent, to the effect that the statements contained in the certificate referred to in Section 6(g) hereof which was last furnished to such Agent are true and correct at such date as though made at and as of such date (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in lieu of such certificate, certificates of the same tenor as the certificates referred to in said Section 6(g) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date; and (l) To offer to any person who has agreed to purchase Notes as the result of an offer to purchase solicited by such Agent the right to refuse to purchase and pay for such Notes - 13 - if, on the related settlement date fixed pursuant to the Administrative Procedure, any condition set forth in Section 6(a), 6(e), 6(f), 6(h) or 6(i) hereof shall not have been satisfied (it being understood that the judgment of such person with respect to the impracticability or inadvisability of such purchase of Notes shall be substituted, for purposes of this Section 4(l), for the respective judgments of an Agent with respect to certain matters referred to in such Sections 6(a), 6(e), 6(f), 6(h) and 6(i) on behalf of any such person). 5. The Company covenants and agrees with each Agent that the Company will pay or cause to be paid, whether or not any sale of Notes is consummated, the following: (i) the fees and expenses of the Company's counsel and accountants in connection with the registration of the Notes under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, the Prospectus and any Pricing Supplements and all other amendments and supplements thereto and the mailing and delivering of copies thereof to such Agent; (ii) the fees and expenses of counsel for the Agents in connection with the establishment of the program contemplated hereby, any opinions to be rendered by such counsel hereunder and the transactions contemplated hereunder; (iii) the cost of printing, preparing by word processor or reproducing this Agreement, any Terms Agreement, the Indenture, the Mortgage, any Blue Sky and Legal Investment Memoranda and any other documents in connection with the offering, purchase, sale and delivery of the Notes or pledge of the Bonds; (iv) all expenses in connection with the qualification of the Notes for offering and sale under state securities laws as provided in Section 4(b) hereof, including fees and disbursements of counsel for the Agents in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (v) any fees charged by securities rating services for rating the Notes; (vi) any filing fees incident to any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Notes; (vii) the cost of preparing the Notes and the Bonds; (viii) the fees and expenses of the Note Trustee and any agent of the Note Trustee and any transfer or paying agent of the Company and the fees and disbursements of counsel for the Note Trustee or such agent in connection with the Indenture and the Notes; (ix) the fees and expenses of the Bond Trustee and any agent of the Bond Trustee and any transfer or paying agent of the Company and the fees and disbursements of counsel for the Bond Trustee or any agent in connection with the Mortgage and the Bonds; (x) any advertising expenses connected with the solicitation of offers to purchase and the sale of Notes so long as such advertising expenses have been approved by the Company; and (xi) all other costs and expenses incident to the performance by the Company of its obligations hereunder which are not otherwise specifically provided for in this Section. Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other expenses it incurs. - 14 - 6. The obligation of any Agent, as agent of the Company, at any time ("Solicitation Time") to solicit offers to purchase the Notes, and the obligation of any Agent to purchase Notes as principal, pursuant to any Terms Agreement or otherwise, shall in each case be subject, in such Agent's discretion, to the condition that all representations and warranties of the Company herein (and, in the case of an obligation of an Agent under a Terms Agreement, in or incorporated in such Terms Agreement by reference) are true and correct in all material respects at and as of the Commencement Date, the Solicitation Time, the Settlement Date or Time of Delivery (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date), and at and as of such Settlement Date or Time of Delivery, the condition that prior to such Settlement Date or Time of Delivery, the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) (i) With respect to any Notes sold, at or prior to such Settlement Date or Time of Delivery, as the case may be, the Prospectus as amended or supplemented (including the Pricing Supplement) with respect to such Notes shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 4(a) hereof; (ii) no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and (iii) all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of such Agent; (b) Counsel to the Agents shall have furnished to such Agent (i) such opinion or opinions, dated the Commencement Date, with respect to the validity of the Notes, the Registration Statement, the Prospectus as amended or supplemented and other related matters as such Agent may reasonably request, and (ii) if and to the extent requested by such Agent, an opinion or opinions, dated as of the Settlement Date or Time of Delivery, as the case may be, to the effect that such Agent may rely on the opinion or opinions which were last furnished to such Agent pursuant to this Section 6(b) to the same extent as though it or they were dated the date of such letter authorizing reliance (except that the statements in such last opinion or opinions shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in any case, in lieu of such an opinion or opinions, an opinion or opinions of the same tenor as the opinion or opinions referred to in clause (i) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such - 15 - date; and in each case such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Counsel for the Company satisfactory to such Agent shall have furnished to such Agent their written opinion, dated the Commencement Date and each Settlement Date or Time of Delivery referred to in Section 4(i) hereof, as the case may be, in form and substance satisfactory to such Agent, to the effect that: (i) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to own and operate its properties and conduct its business as then being conducted and as then proposed to be conducted, to enter into this Agreement and any applicable Terms Agreement, the Mortgage and the Indenture, to issue and pledge the Bonds, to issue and sell the Notes, and to carry out the terms of this Agreement, any applicable Terms Agreement, the Mortgage, the Indenture, the Bonds and the Notes; (ii) Each of the Company's Utility Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to own and operate its properties and conduct its business as then being conducted and as then proposed to be conducted; (iii) The Company and each Utility Subsidiary are duly qualified as foreign corporations to do business and in good standing in every jurisdiction in which the nature of the business conducted or property owned by them makes such qualification necessary and in which the failure to so qualify would have a materially adverse effect on the Company; (iv) FROM IN-HOUSE COUNSEL -- To the best of such counsel's knowledge and other than as set forth or contemplated in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, which may individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole; and to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (v) The execution, delivery and performance by the Company of this Agreement and any applicable Terms Agreement, - 16 - the Indenture, the Mortgage, the Notes and the Bonds will not result in any violation of or be in conflict with or constitute a default under any term of the Company's Articles of Incorporation or Bylaws, or, to the best of such counsel's knowledge after due inquiry of officials of the Company, of any term of any mortgage, loan agreement or indenture to which it is a party or by which it is bound or result in the creation of (or impose any obligation on the Company or any Utility Subsidiary to create) any mortgage, pledge, lien, security interest, charge or encumbrance (other than the liens of the Mortgage and the Indenture) upon any of the properties or assets of the Company or any Utility Subsidiary pursuant to any such term; (vi) The Pennsylvania Public Utility Commission has entered an appropriate order authorizing the Company to issue and pledge the Bonds as contemplated by the Mortgage and Indenture, such order is in full force and effect and, to the best of their knowledge after due inquiry, no proceeding has been initiated upon appeal from or to review the effectiveness of such order; the Pennsylvania Public Utility Commission has entered an appropriate order authorizing the Company to issue and sell the Notes as contemplated by this Agreement and any applicable Terms Agreement, such order is in full force and effect and, to the best of their knowledge after due inquiry, no proceeding has been initiated upon appeal from or to review the effectiveness of such order; no other approval, authorization, order or consent of or declaration, registration or filing with any governmental agency is required for the valid execution and delivery of this Agreement, any applicable Terms Agreement, the Indenture and the Mortgage, the issue and sale of the Notes, the issue and pledge of the Bonds or the consummation by the Company of the other transactions contemplated by this Agreement, any applicable Terms Agreement, the Indenture, or the Mortgage except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws; (vii) The Indenture has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by duly authorized officers of the Company. The Indenture constitutes a legal, valid and binding instrument, enforceable in accordance with its terms, except, as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws or affecting creditors' rights generally, and to general equity principles; the Indenture has been qualified under the Trust Indenture Act; and the Indenture conforms to the description thereof in the Prospectus as amended or supplemented; (viii) The Mortgage has been duly authorized by all necessary corporate action on the part of the Company and has - 17 - been duly executed and delivered by duly authorized officers of the Company. The Mortgage constitutes a legal, valid and binding instrument, enforceable in accordance with its terms, except, as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally, (b) applicable state laws which may affect the remedies provided for in the Mortgage without, however, rendering inadequate, in such counsel's opinion, the remedies available to the Bond Trustee for the practical realization of the benefit of the security intended to be afforded thereby, (c) the Atomic Energy Act of 1954, 42 U.S.C. section 2011, et seq, and the rules and regulations thereunder, and (d) general equity principles; and the Mortgage conforms to the description thereof in the prospectus as amended or supplemented; (ix) This Agreement and any applicable Terms Agreement have been duly authorized, executed and delivered by the Company; (x) The Notes have been duly authorized by all necessary corporate action on the part of the Company, and when duly executed, issued and delivered by duly authorized officers of the Company and authenticated by the Note Trustee, will constitute legal, valid and binding obligations of the Company; (xi) The Notes when issued and authenticated in compliance with the Indenture will be entitled to the benefit of the security afforded by the Indenture and will be secured equally and ratably with all other notes outstanding under the Indenture, if any; (xii) The Bonds have been duly authorized by all necessary corporate action on the part of the Company, and when duly executed, issued and delivered by duly authorized officers of the Company and authenticated by the Bond Trustee, will constitute legal, valid and binding obligations of the Company; (xiii) The Bonds when issued and authenticated in compliance with the Mortgage will be entitled to the benefit of the security afforded by the Mortgage and will be secured equally and ratably with all other bonds outstanding under the Mortgage except insofar as the benefit of any sinking or other fund provided for in the Mortgage may be limited to the bonds of a particular series; (xiv) Upon delivery of the Bonds to the Note Trustee in accordance with the Indenture, the pledge of the Bonds pursuant to the Indenture will create in favor of the holders of the Notes a valid and perfected first priority security interest in the Bonds; - 18 - (xv) The Registration Statement has become effective under the Act and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated; (xvi) The descriptions in the Registration Statement and Prospectus as amended or supplemented of the Notes and the Bonds and of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown and they do not know of any legal or governmental proceedings required to be described in the Prospectus as amended or supplemented which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or prospectus as amended or supplemented or to be filed as exhibits to the Registration Statement which are not described and filed as required; and (xvii) The Registration Statement and the Prospectus as amended and supplemented comply as to form in all material respects with the Act and the Trust Indenture Act, and the documents incorporated therein by reference in the Prospectus as amended and supplemented complied, when filed, in all material respects with the Exchange Act (provided that such counsel need not express any opinion as to financial statements, schedules or other financial data included in the Registration Statement or the prospectus as amended and supplemented); Such counsel shall also state that they have acted as special counsel to the Company in connection with the issuance and sale of the Notes and in connection therewith have participated in the preparation of the Registration Statement and in the review of all the documents incorporated therein by reference, and that based upon such participation and review, such counsel do not believe that either the Registration Statement or the Prospectus as amended and supplemented, including the documents incorporated therein by reference (except for financial statements, schedules and other financial data included therein or incorporated therein by reference, as to which counsel need express no opinion or belief) at the time the Registration Statement became effective contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as amended or supplemented, including the documents incorporated therein by reference (except for financial statements, schedules and other financial data included therein or incorporated by reference as to which counsel need express no opinion or belief) contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the - 19 - light of the circumstances under which they were made, not misleading. Such opinion shall also cover the title to the Company's properties, the lien of the Mortgage on present and after-acquired real property of the Company and perfection of security interests in the Company's present and after acquired personal property and in all of the capital stock of PECO Energy Company, all in the form and scope to which you have heretofore given your approval; (d) Not later than 10:00 A.M., Philadelphia time, on the Commencement Date and on each Settlement Date or Time of Delivery referred to in Section 4(j) hereof, the independent certified public accountants who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to such Agent a letter, dated the Commencement Date or such Settlement Date or Time of Delivery, as the case may be, in form and substance satisfactory to such Agent, substantially in the form heretofore approved by you; (e) Since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented there shall not have been any change, or any development which the Agent reasonably believes will result in a material adverse change, in the financial condition, business or results of operations of the Company and its subsidiaries, considered as a whole, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented, the effect of which, in any such case is in the judgment of such Agent so material and adverse as to make it impracticable or inadvisable to proceed with the solicitation by such Agent of offers to purchase Notes from the Company or the purchase by such Agent of Notes from the Company as principal, as the case may be, on the terms and in the manner contemplated in the Prospectus as amended or supplemented; (f) There shall not have occurred any of the following: (i) trading in securities on the New York Stock Exchange shall have been suspended or materially limited, or minimum prices have been established on such Exchange, or any new restrictions on transactions in securities materially affecting the free market shall have been established by such Exchange, by the Commission, by any other federal or state agency, by action of the Congress or by Executive Order; (ii) a general moratorium on commercial banking activities in New York shall have been declared by either federal or New York State authorities; or (iii) there shall have occurred any outbreak or escalation of hostilities or any calamity or crisis of comparable magnitude that, in the judgment of any Agent, is material and adverse and, in the case of any of the events specified in clauses (i) through - 20 - (iii), such event singly or together with any other event, makes it, in the reasonable judgment of any Agent, impracticable or inadvisable to proceed with the solicitation of offers to purchase Notes or the purchase of Notes from the Company as principal, pursuant to the applicable Terms Agreement or otherwise, as the case may be, on the terms and in the manner contemplated in the Prospectus as amended or supplemented; or (iv) any downgrading in the rating accorded the Company's first and refunding mortgage bonds by Moody's Investors Service, Inc. or Standard & Poor's Corporation; (g) The Company shall have furnished or caused to be furnished to such Agent certificates of officers of the Company dated the Commencement Date and each Settlement Date or Time of Delivery referred to in Section 4(k) hereof, as the case may be, in such form and executed by such officers of the Company as shall be satisfactory to such Agent, as to the accuracy of the representations and warranties of the Company herein at and as of the Commencement Date or such Settlement Date or Time of Delivery, as the case may be, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to the Commencement Date or such Settlement Date or Time of Delivery, as the case may be, as to the matters set forth in subsections (a), (e), (h) and (i) of this Section 6, and as to such other matters as such Agent may reasonably request; (h) At the Settlement Date or Time of Delivery, as the case may be, there shall be in full force and effect a Notice of Registration of a Securities Certificate under the Pennsylvania Public Utility Law permitting the issuance and pledge of the Bonds and the transactions relating thereto substantially in accordance with the terms and conditions herein set forth and containing no provision unacceptable to the Agents, it being understood that the Notice in effect as of the date of this Agreement (of which a copy is available at the office of the Company for examination by the Agents) does not contain any such unacceptable provision, and that no subsequent Notice shall be deemed to contain any such unacceptable provision, unless the Agents, within 24 hours after receiving a copy thereof from the Company, shall give notice to the Company to the effect that such Notice contains an unacceptable provision; and (i) At the Settlement Date or Time of Delivery, as the case may be, there shall be in full force and effect a Notice of Registration of a Securities Certificate under the Pennsylvania Public Utility Law permitting the issuance and sale of the Notes and the transactions relating thereto substantially in accordance with the terms and conditions herein set forth and containing no provision unacceptable to the Agents, it being understood that the Notice in effect as of the date of this Agreement (of which a copy is available at the office of the Company for examination by the Agents) does not contain any such - 21 - unacceptable provision, and that no subsequent Notice shall be deemed to contain any such unacceptable provision, unless the Agents, within 24 hours after receiving a copy thereof from the Company, shall give notice to the Company to the effect that such Notice contains an unacceptable provision. 7. (a) The Company will indemnify and hold harmless each Agent against any losses, claims, damages or liabilities, joint or several, to which such Agent may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus or the Prospectus as amended or supplemented, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such Agent for any legal or other expenses reasonably incurred in connection with investigating or defending any such action or claim; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus or the Prospectus as amended or supplemented, in reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use therein; or (ii) any statements or alleged statements in or omissions or alleged omissions from the Statement of Eligibility and Qualification of the Note Trustee under the Indenture; and further provided that the foregoing indemnification with respect to the Preliminary Prospectus or Prospectus shall not inure to the benefit of any Agent from whom or through whom the person asserting any such losses, claims, damages or liabilities purchased Notes if the Company shall sustain the burden of proving that a copy of the Preliminary Prospectus or Prospectus as amended or supplemented (if the Company shall have furnished any amendments or supplements thereto) was provided to such Agent in a timely fashion and not sent or given by or on behalf of such Agent to such person at or prior to written confirmation of the sale of such Notes to such person and if the Prospectus as so amended or supplemented would have cured all defects giving rise to such losses, claims, damages or liabilities. (b) Each Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration - 22 - Statement, the Prospectus or the Prospectus as amended or supplemented, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Prospectus or the Prospectus as amended or supplemented, in reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party pursuant to the second sentence of subsection (d) below and otherwise than under this Agreement. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish to assume the defense thereof, with counsel selected by the indemnifying party and reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. (d) If the indemnification provided for in this Section 7 is unavailable to (other than by reason of failure to give notice pursuant to subsection (c) above) or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable - 23 - by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and each Agent on the other from the offering of the Notes to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above and such failure did not prejudice the indemnifying party, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and each Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and each Agent on the other shall be deemed to be in the same proportion as the total net proceeds from the sale of Notes (before deducting expenses) received by the Company bear to the total commissions or discounts received by such Agent in respect thereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information supplied by the Company on the one hand or by any Agent on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and each Agent agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if all Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), an Agent shall not be required to contribute any amount in excess of the amount by which the total public offering price at which the Notes purchased by or through it were sold exceeds the amount of any damages which such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent - 24 - misrepresentation. The obligations of each of the Agents under this subsection (d) to contribute are several in proportion to the respective purchases made by or through it to which such loss, claim, damage or liability (or action in respect thereof) relates and are not joint. (e) The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Agent within the meaning of the Act; and the obligations of each Agent under this Section 7 shall be in addition to any liability which such Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. 8. Each Agent, in soliciting offers to purchase Notes from the Company and in performing the other obligations of such Agent hereunder (other than in respect of any purchase by an Agent as principal, pursuant to a Terms Agreement or otherwise), is acting solely as agent for the Company and not as principal. Each Agent will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes from the Company was solicited by such Agent and has been accepted by the Company, but such Agent shall not have any liability to the Company in the event such purchase is not consummated for any reason. If the Company shall default on its obligation to deliver Notes to a purchaser whose offer it has accepted, the Company shall (i) hold each Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) notwithstanding such default, pay to the Agent that solicited such offer any commission to which it would be entitled in connection with such sale; provided however that in the event of a purchaser's refusal to purchase pursuant to Section 4(l) hereof such Agent shall not be entitled to any commission. 9. The respective indemnities, agreements, representations, warranties and other statements by any Agent and the Company set forth in or made pursuant to this Agreement shall remain in full force and effect regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Agent or any controlling person of any Agent, or the Company, or any officer or director or any controlling person of the Company, and shall survive each delivery of and payment for any of the Notes. 10. The provisions of this Agreement relating to the solicitation of offers to purchase Notes from the Company may be suspended or terminated at any time by the Company as to any Agent; terminated at any time by any Agent as to such Agent and, - 25 - if in the judgment of any Agent the conditions to the obligations of any purchaser to purchase securities might not be met on any prospective Settlement Date, suspended at any time by any Agent as to such Agent upon the giving of written notice of such suspension or termination to such Agent or the Company, as the case may be. In the event of such suspension or termination with respect to any Agent, (x) this Agreement shall remain in full force and effect with respect to any Agent as to which such suspension or termination has not occurred, (y) this Agreement shall remain in full force and effect with respect to the rights and obligations of any party which have previously accrued or which relate to Notes which are already issued, agreed to be issued or the subject of a pending offer at the time of such suspension or termination and (z) in any event, this Agreement shall remain in full force and effect insofar as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5, Section 7, Section 8 and Section 9 hereof are concerned. 11. Except as otherwise specifically provided herein or in the Administrative Procedure, all statements, requests, notices and advices hereunder shall be in writing, or by telephone if promptly confirmed in writing, and if to [insert names, delivery addresses and fax #'s of agents] and if to the Company shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to 2301 Market Street, Philadelphia, Pennsylvania 19101, Facsimile Transmission No. 215-________, Attention: Treasurer. 12. This Agreement and any Terms Agreement shall be binding upon, and inure solely to the benefit of, each Agent and the Company, and to the extent provided in Section 7, Section 8 and Section 9 hereof, the officers and directors of the Company and any person who controls any Agent or the Company, and their respective personal representatives, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any Terms Agreement. No purchaser of any of the Notes through or from any Agent hereunder shall be deemed a successor or assign by reason of such purchase or to be entitled to the benefits of this Agreement by reason of such purchase. 13. Time shall be of the essence in this Agreement and any Terms Agreement. As used herein, the term "business day" shall mean any day when the office of the Commission in Washington, D.C. is normally open for business. 14. This Agreement and any Terms Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. - 26 - 15. This Agreement and any Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts. If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, whereupon this letter and the acceptance by each of you thereof shall constitute a binding agreement between the Company and each of you in accordance with its terms. Very truly yours, PECO ENERGY COMPANY By:/s/ M. W. Rimerman _______________________________ M. W. Rimerman Vice President Accepted in New York, New York, as of the date hereof: [________________________________] By:_______________________________ By:_______________________________ Vice President - 27 - ANNEX I PECO ENERGY COMPANY [$____________] [COLLATERALIZED MEDIUM-TERM NOTES, SERIES B] TERMS AGREEMENT --------------- , 19 [Insert names and addresses of underwriters] Dear Sirs: PECO Energy Company (the "Company") proposes, subject to the terms and conditions stated herein and in the Distribution Agreement, dated ____________, 1994 (the "Distribution Agreement"), between the Company on the one hand and [ ], [ ] [ ] (the "Agents") on the other, to issue and sell to [ ], [ ] [ ] the securities specified in the Schedule hereto (the "Purchased Notes"). Each of the provisions of the Distribution Agreement not specifically related to the solicitation by the Agents, as agents of the Company, of offers to purchase Notes is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Nothing contained herein or in the Distribution Agreement shall make any party hereto an agent of the Company or make such party subject to the provisions therein relating to the solicitation of offers to purchase Notes from the Company, solely by virtue of its execution of this Terms Agreement. Each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement, except that each representation and warranty in Section 1 of the Distribution Agreement which makes reference to the Prospectus shall be deemed to be a representation and warranty as of the date of the Distribution Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Terms Agreement in relation to the Prospectus as amended and supplemented to relate to the Purchased Notes. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Purchased Notes, in the form heretofore delivered to you is now proposed to be filed with, or in the case of a supplement, mailed for filing to, the Commission. Subject to the terms and conditions set forth herein and in the Distribution Agreement incorporated herein by reference, the Company agrees to issue and sell to you and you agree to purchase from the Company the Purchased Notes, at the time and place, in the principal amount and at the purchase price set forth in the Schedule hereto. If the foregoing is in accordance with your understanding, please sign and return to us _____ counterparts hereof, and upon acceptance hereof by you this letter and such acceptance hereof, including those provisions of the Distribution Agreement incorporated herein by reference, shall constitute a binding agreement between you and the Company. PECO ENERGY COMPANY By:__________________________ Accepted: [___________________________________] By:_________________________________] (Title) By:________________________________] (Title) I-2 Schedule to Annex I Title of purchased Notes: [____% Notes due _____] [Collateralized Medium-Term Notes, Series B] Aggregate Principal Amount: [$_____________] [Price to Public:] Purchase Price by [___________________________________]: _____% of the principal amount of the purchased Notes [, plus accrued interest from to ] [and accrued amortization, if any, from to ] Method of and specified Funds for Payment of Purchase Price: [By certified or official bank check or checks, payable to the order of the Company, in [[New York] Clearing House] [immediately available] funds] [By wire transfer to a bank account specified by the Company in [next day] [immediately available] funds] Indenture: Indenture, dated as of October 1, 1989, as previously amended and as further supplemented by a Second Supplemental Indenture dated as of July 1, 1994 between the Company and Fidelity Bank, National Association (to which First Fidelity Bank, National Association is successor), as Note Trustee Time of Delivery: Closing Location: Maturity: Redemption Provisions: Initial Redemption Date: Initial Redemption Price: Annual Redemption Reduction: ____% per annum Limitation Date: I-3 Interest Rate: [ %] Interest Payment Dates: [months and dates] [Collateral: $__________ First and Refunding Mortgage Bonds, Medium-Term Note Series B] Documents to be Delivered: The following documents referred to in the Distribution Agreement shall be delivered as a condition to the Closing: [(1) The opinion or opinions of counsel to the Agents referred to in Section 4(h).] [(2) The opinion of counsel to the Company referred to in Section 4(i).] [(3) The accountants' letter referred to in Section 4(j).] [(4) The officers' certificate referred to in Section 4(k).] Other Provisions (including Syndicate Provisions, if applicable): I-4 ANNEX II PECO ENERGY COMPANY ADMINISTRATIVE PROCEDURE ------------------------ This Administrative Procedure relates to the Notes defined in the Distribution Agreement, dated July __, 1994 (the "Distribution Agreement"), between PECO Energy Company (the "Company") and [ ] (together, the "Agents"), to which this Administrative Procedure is attached as Annex II. Defined terms used herein and not defined herein shall have the meanings given such terms in the Distribution Agreement, the Prospectus as amended or supplemented or the Indenture as amended or supplemented. To the extent any procedure set forth below conflicts with the provisions of the Notes, the Indenture or the Distribution Agreement, the relevant provisions of the Notes, the Indenture and the Distribution Agreement shall control. The procedures to be followed with respect to the settlement of sales of Notes directly by the Company to purchasers solicited by an Agent, as agent, are set forth below. Part I below describes procedures of general applicability with respect to such Notes. Part II below describes procedures specifically and exclusively applicable (any procedure in Part I below to the contrary notwithstanding) to such Notes which are either Global Notes or Book-Entry Notes (each as defined below). The terms and settlement details related to a purchase of Notes by an Agent, as principal, from the Company will be set forth in a Terms Agreement pursuant to the Distribution Agreement, unless the Company and such Agent otherwise agree as provided in Section 2(b) of the Distribution Agreement, in which case the procedures to be followed in respect of the settlement of such sale will be as set forth below. An Agent, in relation to a purchase of a Note by a purchaser solicited by such Agent, is referred to herein as the "Selling Agent" and, in relation to a purchase of a Note by such Agent as principal other than pursuant to a Terms Agreement, as the "Purchasing Agent." The Company will advise each Agent in writing of those persons with whom such Agent is to communicate regarding offers to purchase Notes and the related settlement details. Each Note will be issued only in fully registered form and will be represented by either a global certificate (a "Global Certificate") delivered to the Trustee, as agent for The Depository Trust Company (the "Depositary") and recorded in the book-entry system maintained by the Depositary (a "Book-Entry Note") or a certificate (a "Definitive Certificate") delivered to a person designated by an Agent. PART I: PROCEDURES OF GENERAL APPLICABILITY POSTING RATES BY COMPANY: - ------------------------- The Company and the Agents will discuss from time to time the rates of interest per annum to be borne by and the maturities of Notes that may be sold as a result of the solicitation of offers by an Agent. The Company may establish a fixed set of interest rates and maturities for an offering period. If the Company decides to change already posted rates, it will promptly advise the Agents to suspend solicitation of offers until the new posted rates have been established with the Agents. ACCEPTANCE OF OFFERS BY COMPANY: - -------------------------------- Each Agent will promptly advise the Company by telephone or other appropriate means of all reasonable offers to purchase Notes, other than those rejected by such Agent. Each Agent may, in its discretion reasonably exercised, reject any offer received by it in whole or in part. Each Agent also may make offers to the Company to purchase Notes as a Purchasing Agent. The Company will have the sole right in its absolute discretion to accept offers to purchase Notes and may reject any such offer in whole or in part. The Company will promptly notify the Selling Agent or Purchasing Agent, as the case may be, of its acceptance or rejection of an offer to purchase Notes. If the Company accepts an offer to purchase Notes, it will confirm such acceptance in writing to the Selling Agent or Purchasing Agent, as the case may be, and the Trustee. COMMUNICATION OF SALE INFORMATION TO COMPANY BY SELLING AGENT: - -------------------------------------------------------------- After the acceptance of an offer by the Company, the Selling Agent or Purchasing Agent, as the case may be, will communicate the following details of the terms of such offer (the "Sale Information") to the Company by telephone (confirmed in writing) or by facsimile transmission or other acceptable written means: (1) Principal amount of Notes to be purchased; (2) Interest Rate; (3) Maturity Date; (4) Issue Date; II-2 (5) Issue Price; (6) Selling Agent's commission or Purchasing Agent's discount, as the case may be; (7) Net proceeds to the Company; (8) Settlement Date; (9) If a redeemable Note, such of the following as are applicable: (i) Initial Redemption Date, (ii) Initial Redemption Price (% of par), (iii) Annual Redemption Reduction (% per annum), and (iv) Limitation Date; (10) Name, address and taxpayer identification number of the registered owner; and (11) Denomination of certificates to be delivered at settlement. PREPARATION OF PRICING SUPPLEMENT BY COMPANY: - --------------------------------------------- If the Company accepts an offer to purchase a Note, it will prepare a Pricing Supplement. The Company will supply at least ten copies of such Pricing Supplement to the Selling Agent or Purchasing Agent, as the case may be, not later than 5:00 P.M., New York City time, on the Business Day following the date of acceptance of such offer, or if the Company and the purchaser agree to settlement on the date of such acceptance, not later than noon, New York City time, on such date. The Company will arrange to have the Pricing Supplement filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period for such filing by the rules and regulations under the Act. DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT: - ---------------------------------------------------------------------- The Selling Agent will deliver to the purchaser of a Note a written confirmation of the sale and delivery and payment instructions. In addition, the Selling Agent will deliver to such purchaser or its agent the Prospectus as amended or supplemented (including the Pricing Supplement) in relation to such Note prior to or together with the earlier of the delivery to such purchaser or its agent of (a) the confirmation of sale (including, in the case of a Book-Entry Note, the confirmation through the Depositary's Institutional Delivery System) or (b) the Note. II-3 DATE OF SETTLEMENT: - ------------------- All offers solicited by a Selling Agent or made by a Purchasing Agent and accepted by the Company will be settled on a date (the "Settlement Date") which is the fifth Business Day after the date of acceptance of such offer, unless the Company and the purchaser agree to settlement (a) on any other Business Day after the acceptance of such offer or (b) with respect to an offer accepted by the Company prior to 10:00 A.M., New York City time, on the date of such acceptance. INSTRUCTION FROM COMPANY TO TRUSTEE FOR PREPARATION OF NOTES: - ------------------------------------------------------------- After receiving the Sale Information from the Selling Agent or Purchasing Agent, as the case may be, the Company will communicate such Sale Information to the Trustee by telephone (confirmed in writing) or by facsimile transmission or other acceptable written means. The Company will instruct the Trustee by facsimile transmission or other acceptable written means to authenticate and deliver the Notes no later than 2:15 P.M., New York City time, on the Settlement Date. Such instruction will be given by the Company prior to 3:00 P.M., New York City time, on the Business Day prior to the Settlement Date unless the Settlement Date is the date of acceptance by the Company of the offer to purchase Notes in which case such instruction will be given by the Company by 11:00 A.M., New York City time. PREPARATION AND DELIVERY OF NOTES BY TRUSTEE AND RECEIPT OF PAYMENT THEREFOR: - ----------------------------------------------------------------------------- The Trustee will prepare each Note and appropriate receipts that will serve as the documentary control of the transaction. In the case of a sale of Notes to a purchaser solicited by an Agent, the Trustee will, by 2:15 P.M., New York City time, on the Settlement Date, deliver the Notes to the Selling Agent for the benefit of the purchaser of such Notes against delivery by the Selling Agent of a receipt therefor. On the Settlement Date the Selling Agent will deliver payment for such Notes in immediately available funds to the Company in an amount equal to the issue price of the Notes less the Selling Agent's commission; provided that the Selling Agent reserves the right to withhold payment for which it has not received funds from the purchaser. The Company shall not use any proceeds advanced by a Selling Agent to purchase or carry any margin securities in violation of Regulations G, T, U or X of the Federal Reserve Board. In the case of a sale of Notes to a Purchasing Agent, the Trustee will, by 2:15 P.M., New York City time, on the II-4 Settlement Date, deliver the Notes to the Purchasing Agent against delivery of payment for such Notes in immediately available funds to the Company in an amount equal to the issue price of the Notes less the Purchasing Agent's discount. FAILURE OF PURCHASER TO PAY SELLING AGENT: - ------------------------------------------ If a purchaser (other than a Purchasing Agent) fails to make payment to the Selling Agent for a Note, the Selling Agent will promptly notify the Trustee and the Company thereof by telephone (confirmed in writing) or by facsimile transmission or other acceptable written means. The Selling Agent will immediately return the Note to the Trustee. Immediately upon receipt of such Note by the Trustee, the Company will return to the Selling Agent an amount equal to the amount previously paid to the Company in respect of such Note. The Company will reimburse the Selling Agent on an equitable basis for its loss of the use of funds during the period when they were credited to the account of the Company. The Trustee will cancel the Note in respect of which the failure occurred, make appropriate entries in its records and, unless otherwise instructed by the Company, destroy the Note. II-5 PART II: PROCEDURES APPLICABLE TO BOOK-ENTRY NOTES AND GLOBAL NOTES In connection with the qualification of Book-Entry Notes for eligibility in the book-entry system maintained by the Depositary, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representation from the Company and the Trustee to the Depositary, dated July ___, 1994, and a Medium-Term Note Certificate Agreement dated July ___, 1994, between the Trustee and the Depositary (the "Certificate Agreement"), and the Trustee's obligations as a participant in the Depositary, including the Depositary's Same-Day Funds Settlement System ("SDFS"). It is understood that the ownership interests of purchasers of Book-Entry Notes will be credited to the book-entry accounts of one or more participants in the Depositary (each a "Participant") in accordance with the Depositary's customary practices and reflected in the records of such Participants or one or more indirect participants in the Depositary designated by such purchasers in accordance with the arrangements between such purchasers and such Participants and indirect participants. Issuance: All Notes which are Book-Entry Notes and have the same Issue Date, redemption provisions, repayment provisions, Interest Payment Dates, interest rate, interest payment periods, and Stated Maturity (collectively, the "Terms") will be represented initially by a single Global Certificate in fully registered form without coupons. Identification: The Company has arranged with the CUSIP Service Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation of approximately [ ] CUSIP numbers which have been reserved for and relating to Book-Entry Notes, and the Company has delivered to the Trustee and the Depositary such list of such CUSIP numbers. The Company will assign CUSIP numbers to Book-Entry Notes as described below under Settlement Procedure B. The Depositary will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Company has assigned to Book-Entry Notes. The Trustee will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Book-Entry Notes, and, if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Book-Entry Notes. Upon obtaining such II-6 additional CUSIP numbers, the Company will deliver a list of such additional numbers to the Trustee and the Depositary. Book-Entry Notes having an aggregate principal amount in excess of $100,000,000 will be represented by two or more Global Certificates which shall all be assigned the same CUSIP number. Registration: Each Global Certificate will be registered in the name of Cede & Co., as nominee for the Depositary, on the register maintained by the Trustee under the Indenture. On the first Business Day of each month, the Trustee will deliver to the Company a written statement indicating the total principal amount of Outstanding Book-Entry Notes as of the immediately preceding Business Day. Transfers: Transfers of interests in a Book-Entry Note will be effected in accordance with arrangements in effect between Participants (and in certain cases, one or more indirect participants in the Depositary) and the beneficial transferors and beneficial transferees of such Book-Entry Note, and the interests of participants therein will be reflected as appropriate by book entries made by the Depositary. Exchanges: The Trustee may deliver to the Depositary and the CUSIP Service Bureau at any time a written notice specifying (a) the CUSIP numbers of two or more Global Certificates for outstanding Book-Entry Notes having the same Terms, (except that Issue Dates need not be the same), and for which interest (if any) has been paid to the same date; (b) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date (if any) for such Book-Entry Notes, on which such Global Certificates shall be exchanged for a single replacement Global Certificate; and (c) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Certificate. Upon receipt of such a notice, the Depositary will send to its participants (including the Trustee) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver to the CUSIP Service Bureau written notice setting forth such II-7 exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Certificates to be exchanged will no longer be valid. On the specified exchange date, the Trustee will exchange such Global Certificates for a single Global Certificate bearing the new CUSIP number, and the CUSIP numbers of the exchanged Global Certificates will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Global Certificates to be exchanged exceed $100,000,000 in aggregate principal amount, one replacement Global Certificate will be authenticated and issued to represent each $100,000,000 of principal amount of the exchanged Global Certificates and an additional Global Certificate will be authenticated and issued to represent any remaining principal amount of such Global Certificates (see "Denominations" below). Denominations: All Book-Entry Notes will be denominated in U.S. dollars. Book-Entry Notes will be issued in denominations of $1,000 and any integral multiple thereof. Global Certificates will be denominated in principal amounts not in excess of $100,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $100,000,000 would, but for the preceding sentence, be represented by a single Global Certificate, then one Global Certificate will be issued to represent each $100,000,000 principal amount of such Book-Entry Note or Book-Entry Notes and an additional Global Certificate will be issued to represent any remaining principal amount of such Book-Entry Note or Book-Entry Notes. In such a case, each of the Global Certificates representing such Book-Entry Note or Notes shall be assigned the same CUSIP number. Interest: General. The Depositary will arrange for each pending deposit message described under Settlement Procedure C below to be transmitted to Standard & Poor's Corporation, which will use the message to include certain information regarding the related Book-Entry Notes in the appropriate daily bond report published by Standard & Poor's Corporation. II-8 Payments of Principal and Interest: Payments of Interest Only. Promptly after each Regular Record Date, the Trustee will deliver to the Company and the Depositary a written notice specifying by CUSIP number the amount of interest (if any) to be paid on each Book-Entry Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with the Stated Maturity) and the total of such amounts. The Depositary will confirm the amount payable (if any) on each Book-Entry Note on such Interest Payment Date by reference to the daily bond reports published by Standard & Poor's Corporation. On such Interest Payment Date, the Company will pay to the Trustee, as Paying Agent, and the Trustee in turn will pay to the Depositary, such total amount of interest due (other than at Stated Maturity), and the times and in the manner set forth below under "Manner of Payment." Payments at Stated Maturity. On or about the first Business Day of each month, the Trustee will deliver to the Company and the Depositary a written list of principal, premium, if any, and interest to be paid on each Book-Entry Note maturing either at Stated Maturity or on a Redemption Date or repayment date in the following month. The Trustee, the Company and the Depositary will confirm the amounts of such principal, premium (if any) and interest payments with respect to each such Book-Entry Note on or about the fifth Business Day preceding the Stated Maturity of such Book- Entry Note. At such Stated Maturity, the Company will pay to the Trustee, and the Trustee in turn will pay to the Depositary, the principal amount of such Book-Entry Note, together with interest and premium, if any, due at such Stated Maturity, at the times and in the manner set forth below under "Manner of Payment." Promptly after payment to the Depositary of the principal, interest and premium, if any, due at the Stated Maturity of all Book-Entry Notes represented by a particular Global Certificate, the Trustee will cancel such Global Certificate, make appropriate entries in its records and, unless otherwise instructed by the Company, destroy such Global Certificate. II-9 Manner of Payment. The total amount of any principal, premium and interest due on Book- Entry Notes on any Interest Payment Date or at Stated Maturity shall be paid by the Company to the Trustee, as Paying Agent, in funds immediately available for use by the Trustee as of 9:30 A.M., New York City time, on such date. The Company will make such payment on such Book-Entry Notes by wire transfer to the Trustee or by instructing the Trustee to withdraw funds from an account maintained by the Company at the Trustee. The Company will confirm such instructions in writing to the Trustee. For maturity, redemption and other principal payments, prior to 10:00 A.M., New York City time, on each Stated Maturity or other such date or as soon as possible thereafter, the Trustee will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by the Depositary) to an account at the Federal Reserve Bank of New York previously specified by the Depositary, in funds available for immediate use by the Depositary, each payment of interest, principal and premium, if any, due on Book-Entry Notes on such date; and for interest payments, the Trustee will pay the Depositary in same-day funds on the Interest Payment Date in accordance with existing arrangements between the Trustee and the Depositary. Thereafter on each such date, the Depositary will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names such Book-Entry Notes are recorded in the book-entry system maintained by the Depositary. Once payment has been made to the Depositary, neither the Company nor the Trustee shall have any responsibility or liability for the payment by the Depositary of the principal of, or premium, if any, or interest on, the Book-Entry Notes to such Participants. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in the Depositary or other Person responsible for forwarding payments and materials directly to II-10 the beneficial owner of such Book-Entry Note, or as applicable law may otherwise require. Settlement Procedures: Settlement Procedures with regard to each Book- Entry Note sold by each Agent, as agent of the Company will be as follows: A. After the acceptance of an offer by the Company with respect to a Book-Entry Note, the Selling Agent or Purchasing Agent, as the case may be, will communicate the following details of the terms of such offer (the "Book-Entry Sale Information") to the Company by telephone confirmed in writing or by facsimile transmission or other acceptable written means: (1) Principal amount of the Book-Entry Note to be purchased; (2) Interest Rate; (3) Stated Maturity; (4) Issue Date; (5) Issue Price; (6) Selling Agent's commission or Purchasing Agent's discount, as the case may be; (7) Net proceeds to the Company; (8) Settlement Date; (9) If a redeemable Note, such of the following as are applicable: (i) Initial Redemption Date, (ii) Initial Redemption Price (% of par), (iii) Annual Redemption Reduction (% per annum), and (iv) Limitation Date; and (10) The taxpayer identification number of the purchaser. II-11 B. Upon receiving the Book-Entry Sale Information from the Selling Agent or the Purchasing Agent, as the case may be, the Company will assign a CUSIP number to the Global Certificate representing such Book- Entry Note and then as soon as practicable advise the Trustee by telephone (confirmed by facsimile transmission) of the Book- Entry Sale Information received from the Selling Agent or the Purchasing Agent, as the case may be, such CUSIP number and the name of such Agent. C. The Trustee will communicate to the Depositary, such Agent and Standard & Poor's Corporation, through the Depositary's Participant Terminal System, a pending deposit message specifying the following settlement information: 1. The Book-Entry Sale Information. 2. Identification numbers of the participant accounts maintained by the Depositary on behalf of the Trustee and such Agent. 3. Identification as a Fixed Rate Note. 4. Initial Interest Payment Date for such Note, number of days by which such date succeeds the related record date for Depositary purposes and, if then calculable, the amount of interest payable on such Interest Payment Date (which amount shall have been confirmed by the Trustee). 5. CUSIP number of the Global Certificate representing such Book- Entry Note. 6. Whether such Global Certificate will represent any other Book-Entry Notes issued or to be issued (to the extent then known). D. The Company will instruct the Trustee by facsimile transmission or other acceptable written means to complete a Global Certificate representing such Book-Entry Note and to authenticate such Global II-12 Certificate, to register such Global Certificate in the name of Cede & Co., as nominee of the Depositary, and to effect delivery thereof to the Depositary by the Trustee's possession of such authenticated Global Certificate as agent for the Depositary. E. The Trustee will authenticate the Global Certificate representing such Book-Entry Note, register such Global Certificate in the name of Cede & Co., as nominee of the Depositary, and take delivery thereof as agent for the Depositary. F. The Depositary will credit such Book-Entry Note to the participant account of the Trustee maintained by the Depositary. G. The Trustee will enter an SDFS deliver order through the Depositary's Participant Terminal System instructing the Depositary (i) to debit such Book-Entry Note to the Trustee's participant account and credit such Book-Entry Note to the participant account of the Selling Agent or the Purchasing Agent, as the case may be, maintained by the Depositary and (ii) to debit the settlement account of the Selling Agent or the Purchasing Agent, as the case may be, and credit the settlement account of the Trustee maintained by the Depositary, in an amount equal to the price of such Book-Entry Note less such Agent's commission or discount, as the case may be. Any entry of such a deliver order shall be deemed to constitute a representation and warranty by the Trustee to the Depositary that (i) the Global Certificate representing such Book-Entry Note has been issued, authenticated and delivered and (ii) the Trustee is holding such Global Certificate pursuant to the Medium-Term Note Certificate Agreement between Trustee and the Depositary. H. The Selling Agent or the Purchasing Agent, as the case may be, will enter an SDFS deliver order through the Depositary's Participant Terminal System instructing the Depositary (i) to debit such Book- Entry Note to the participant account of II-13 such Agent and credit such Book-Entry Note to the participant accounts of the Participants with respect to such Book- Entry Note maintained by the Depositary and (ii) to debit the settlement accounts of such Participants and credit the settlement account of such Agent maintained by the Depositary in an amount equal to the price of such Book-Entry Note. I. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures G and H will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. J. The Trustee will credit to an account of the Company maintained at the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure G. K. The Trustee will send a copy of the Global Certificate by first-class mail to the Company together with a statement setting forth the principal amount of Book-Entry Notes Outstanding as of the related Settlement Date after giving effect to such transaction and all other offers to purchase Notes of which the Company has advised the Trustee but which have not yet been settled. L. The Selling Agent or the Purchasing Agent, as the case may be, will confirm the purchase of such Book-Entry Note to the purchaser either by transmitting to the Participants with respect to such Book- Entry Note a confirmation order through the Depositary's Participant Terminal System or by mailing a written confirmation to such purchaser. Settlement Procedures Timetable: For orders of Book-Entry Notes accepted by the Company, Settlement Procedures "A" through "L" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below: II-14 Settlement Procedure Time ---------- ---- A 11:00 A.M. on the trade date B 12:00 Noon on the trade date C 2:00 P.M. on the trade date D 3:00 P.M. on the Business Day Settlement Date E 9:00 A.M. on Settlement Date F 10:00 A.M. on Settlement Date G-H 2:00 P.M. on Settlement Date I 4:45 P.M. on Settlement Date J-L 5:00 P.M. on Settlement Date If a sale is to be settled more than one Business Day after the trade date, Settlement Procedures A, B, and C may, if necessary, be completed at any time prior to the specified times on the first Business Day after such sale date. Settlement Procedure I is subject to an extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date. If settlement of a Book-Entry Note is rescheduled or cancelled, the Company will as soon as practicable give the Trustee notice to such effect. The Trustee will deliver to the Depositary through the Depositary's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M., New York City time, on the Business Day immediately preceding the scheduled Settlement Date (provided the Trustee received such notice from the Company by noon on the Business Day immediately preceding the Settlement Date) and in any case as soon as practicable. A copy of such message will be routed through the facilities of the Depositary to the Selling Agent and Standard & Poor's Corporation. Failure to Settle: If the Trustee fails to enter in timely fashion an SDFS deliver order with respect to any portion of a Book-Entry Note pursuant to Settlement Procedure G, or if the Selling Agent or the Purchasing Agent, as the case may be, fails to enter in timely fashion an SDFS deliver order with respect to such Book-Entry Note pursuant to Settlement Procedure H (in II-15 which event the Trustee shall not be liable for damages arising as a consequence of or incident to such Selling Agent's or Purchasing Agent's failure; as the case may be), the Trustee may deliver to the Depositary, through the Depositary's Participant Terminal System, as soon as practicable a withdrawal message instructing the Depositary to debit such Book- Entry Note to the participant account of the Trustee maintained at the Depositary. A copy of such message will be routed through the facilities of the Depositary to such Agent. The Depositary will process the withdrawal message, provided that such participant account contains Book-Entry Notes having the same Terms having an aggregate principal amount that is at least equal to the principal amount to be debited. If withdrawal messages are processed with respect to all the Book-Entry Notes represented by a particular Global Certificate, the Trustee will immediately cancel such Global Certificate, make appropriate entries in its records and, unless otherwise instructed by the Company destroy the Global Certificate. The CUSIP number assigned to such Global Certificate shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If withdrawal messages are processed with respect to only a portion of the Book-Entry Notes represented by a particular Global Certificate, the Trustee will exchange such Global Certificate for two Global Certificates, one of which shall represent the Book-Entry Notes for which withdrawal messages are processed and shall be cancelled and destroyed immediately after issuance, and the other of which shall represent the other Book- Entry Notes previously represented by the surrendered Global Certificate and shall bear the CUSIP number of the surrendered Global Certificate. The Company will reimburse such Agent on an equitable basis for its loss of the use of funds during any period when the funds were credited to the account of the Company in connection with such attempted settlement. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof or by a person, including an indirect participant in the Depositary, acting on behalf of such purchaser (other than the II-16 Purchasing Agent, if any), such Participants and, in turn, the Selling Agent or the Purchasing Agent, as the case may be, may enter SDFS deliver orders through the Depositary's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures G and H, respectively. Immediately thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. The Company will reimburse such Agent on an equitable basis for its loss of the use of funds during any period when the funds were credited to the account of the Company in connection with such attempted settlement. Notwithstanding the foregoing, upon any failure to settle with respect to any portion of a Book-Entry Note, the Depositary may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to any portion of a Book-Entry Note that was to have been represented by a Global Certificate also representing other Book-Entry Notes, the Trustee will provide, in accordance with Settlement Procedures D and E, for the authentication and issuance of a Global Certificate representing the remaining principal amount to have been represented by such Global Certificate and will make appropriate entries in its records. II-17 EX-4.1 3 EXHIBIT 4(B)-96 -- FORM OF 96TH SUPPLEMENTAL INDENTURE EXHIBIT 4(B)-96 =========================================================================== PECO ENERGY COMPANY TO FIRST FIDELITY BANK, NATIONAL ASSOCIATION, TRUSTEE ---------- NINETY-SIXTH SUPPLEMENTAL INDENTURE DATED AS OF JULY 1, 1994 TO FIRST AND REFUNDING MORTGAGE OF THE COUNTIES GAS AND ELECTRIC COMPANY TO FIDELITY TRUST COMPANY, TRUSTEE DATED MAY 1, 1923 ---------- MEDIUM-TERM NOTE SERIES B =========================================================================== 1 THIS SUPPLEMENTAL INDENTURE dated as of July 1, 1994, by and between PECO ENERGY COMPANY, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (hereinafter called the Company), party of the first part, and FIRST FIDELITY BANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (hereinafter called the Trustee), as Trustee under the Mortgage hereinafter mentioned, party of the second part, Witnesseth that WHEREAS, The Counties Gas and Electric Company (hereinafter called Counties Company), a Pennsylvania corporation and a predecessor to the Company, duly executed and delivered to Fidelity Trust Company, a Pennsylvania corporation to which the Trustee is successor, as Trustee, a certain indenture of mortgage and deed of trust dated May 1, 1923 (hereinafter called the Mortgage), to provide for the issue of, and to secure, its First and Refunding Mortgage Bonds, issuable in series and without limit as to principal amount except as provided in the Mortgage, the initial series of Bonds being designated the 6% Series of 1923, and the terms and provisions of other series of bonds secured by the Mortgage to be determined as provided in the Mortgage; and WHEREAS, thereafter Counties Company, Philadelphia Suburban-Counties Gas and Electric Company (hereinafter called Suburban Company), and the Company, respectively, have from time to time executed and delivered indentures supplemental to the Mortgage, providing for the creation of additional series of bonds secured by the Mortgage and for amendment of certain of the terms and provisions of the Mortgage and of indentures supplemental thereto, or evidencing the succession of Suburban Company to Counties Company and of the Company to Suburban Company, such indentures supplemental to the Mortgage, the respective dates, parties thereto, and purposes thereof, being as follows: 2 SUPPLEMENTAL INDENTURE AND DATE PARTIES PROVIDING FOR: - ---------------------- ------- -------------- First Counties Company to Bonds of 5% Series of September 1, 1926 Fidelity-Philadelphia 1926 Trust Company (Successor to Fidelity Trust Company) Second Suburban Company to Evidencing succession of May 1, 1927 Fidelity-Philadelphia Suburban Company to Trust Company Counties Company Third Suburban Company to Bonds of 4-1/2% Series May 1, 1927 Fidelity-Philadelphia due 1957; amendment of Trust Company certain provisions of Mortgage Fourth Suburban Company to Additional bonds of November 1, 1927 Fidelity-Philadelphia 4-1/2% Series due 1957 Trust Company Fifth Company to Evidencing succession of January 31, 1931 Fidelity-Philadelphia Company to Suburban Trust Company Company Sixth Company to Bonds of 4% Series due February 1, 1931 Fidelity-Philadelphia 1971 Trust Company Seventh Company to Bonds of 3-1/2% Series March 1, 1937 Fidelity-Philadelphia due 1967; amendment of Trust Company certain provisions of Mortgage Eighth Company to Bonds of 2-3/4% Series December 1, 1941 Fidelity-Philadelphia due 1971; amendment of Trust Company certain provisions of Mortgage Ninth Company to Bonds of 2-3/4% Series November 1, 1944 Fidelity-Philadelphia due 1967 and 2-3/4% Trust Company Series due 1974; amendment of certain provisions of Mortgage Tenth Company to Bonds of 2-3/4% Series December 1, 1946 Fidelity-Philadelphia due 1981; amendment of Trust Company certain provisions of Mortgage* Eleventh Company to Bonds of 2-7/8% Series February 1, 1948 Fidelity-Philadelphia due 1978* Trust Company Twelfth Company to Bonds of 3-1/4% Series January 1, 1952 Fidelity-Philadelphia due 1982* Trust Company 3 SUPPLEMENTAL INDENTURE AND DATE PARTIES PROVIDING FOR: - ---------------------- ------- -------------- Thirteenth Company to Bonds of 3-7/8% Series May 1, 1953 Fidelity-Philadelphia due 1983* Trust Company Fourteenth Company to Bonds of 3-1/8% Series December 1, 1953 Fidelity-Philadelphia due 1983* Trust Company Fifteenth Company to Bonds of 3-1/8% Series April 1, 1955 Fidelity-Philadelphia due 1985* Trust Company Sixteenth Company to Bonds of 4-5/8% Series September 1, 1957 Fidelity-Philadelphia due 1987; amendment of Trust Company certain provisions of Mortgage* Seventeenth Company to Bonds of 3-3/4% Series May 1, 1958 Fidelity-Philadelphia due 1988; amendment of Trust Company certain provisions of Mortgage* Eighteenth Company to Bonds of 4-3/8% Series December 1, 1958 Fidelity-Philadelphia due 1986* Trust Company Nineteenth Company to Bonds of 5% Series October 1, 1959 Fidelity-Philadelphia due 1989* Trust Company Twentieth Company to Bonds of 4-1/2% Series May 1, 1964 Fidelity-Philadelphia due 1994* Trust Company Twenty-first Company to Bonds of 6% Series due October 15, 1966 Fidelity-Philadelphia 1968-1973* Trust Company Twenty-second Company to The Fidelity Bonds of 5-1/4% Series June 1, 1967 Bank (formerly due 1968-1973 and Fidelity-Philadelphia 5-3/4% Series due Trust Company) 1977* Twenty-third Company to The Fidelity Bonds of 6-1/8% Series October 1, 1967 Bank due 1997* Twenty-fourth Company to The Fidelity Bonds of 6-1/2% Series March 1, 1968 Bank due 1993; amendment of Article XIV of Mortgage* Twenty-fifth Company to The Fidelity Bonds of 1968 Series September 10, 1968 Bank due 1969-1976* Twenty-sixth Company to The Fidelity Bonds of 8% Series due August 15, 1969 Bank 1975* 4 SUPPLEMENTAL INDENTURE AND DATE PARTIES PROVIDING FOR: - ---------------------- ------- -------------- Twenty-seventh Company to The Fidelity Bonds of 9% Series due February 1, 1970 Bank 1995* Twenty-eighth Company to The Fidelity Bonds of 8-1/2% Series May 1, 1970 Bank due 1976* Twenty-ninth Company to The Fidelity Bonds of 7-3/4% Series December 15, 1970 Bank due 2000* Thirtieth Company to The Fidelity Bonds of 8-1/4% Series August 1, 1971 Bank due 1996* Thirty-first Company to The Fidelity Bonds of 7-3/8% Series December 15, 1971 Bank due 2001; amendment of Article XI of Mortgage* Thirty-second Company to The Fidelity Bonds of 7-1/2% Series June 15, 1972 Bank due 1998* Thirty-third Company to The Fidelity Bonds of 7-1/2% Series January 15, 1973 Bank due 1999* Thirty-fourth Company to The Fidelity Bonds of 8-1/2% Series January 15, 1974 Bank due 2004* Thirty-fifth Company to The Fidelity Bonds of 11% Series due October 15, 1974 Bank 1980* Thirty-sixth Company to The Fidelity Bonds of 11-5/8% Series April 15, 1975 Bank due 2000* Thirty-seventh Company to The Fidelity Bonds of 11% Series due August 1, 1975 Bank 2000* Thirty-eighth Company to The Fidelity Bonds of 9-1/8% Series March 1, 1976 Bank due 2006* Thirty-ninth Company to The Fidelity Bonds of 9-5/8% Series August 1, 1976 Bank due 2002* Fortieth Company to The Fidelity Bonds of Pollution February 1, 1977 Bank Control Series A and Pollution Control Series B* Forty-first Company to The Fidelity Bonds of 8-5/8% Series March 15, 1977 Bank due 2007* Forty-second Company to The Fidelity Bonds of 8-5/8% Series July 15, 1977 Bank due 2003* Forty-third Company to The Fidelity Bonds of 9-1/8% Series March 15, 1978 Bank due 2008* Forty-fourth Company to The Fidelity Bonds of 12-1/2% Series October 15, 1979 Bank due 2005* Forty-fifth Company to The Fidelity Bonds of 13-3/4% Series October 15, 1980 Bank due 1992* 5 SUPPLEMENTAL INDENTURE AND DATE PARTIES PROVIDING FOR: - ---------------------- ------- -------------- Forty-sixth Company to The Fidelity Bonds of 15-1/4% Series March 1, 1981 Bank due 1996; amendment of Article VIII of Mortgage* Forty-seventh Company to The Fidelity Bonds of 15% Series due March 1, 1981 Bank 1996; amendment of Article VIII of Mortgage* Forty-eighth Company to The Fidelity Bonds of 17-5/8% Series July 1, 1981 Bank due 2011* Forty-ninth Company to The Fidelity Bonds of 18-3/4% Series September 15, 1981 Bank due 2009* Fiftieth Company to The Fidelity Bonds of 18% Series due April 1, 1982 Bank 2012* Fifty-first Company to The Fidelity Bonds of 15-3/8% Series October 1, 1982 Bank due 2010* Fifty-second Company to The Fidelity Bonds of 13-3/8% Series June 15, 1983 Bank due 2013* Fifty-third Company to Fidelity Bank, Bonds of 13.05% Series November 15, 1984 National Association due 1994; amendment (formerly The Fidelity of Article VIII of Bank) Mortgage* Fifty-fourth Company to Fidelity Bank, Bonds of 14% Series due December 1, 1984 National Association 1988-1994; amendment of Article VIII of Mortgage* Fifty-fifth Company to Fidelity Bank, Bonds of Pollution May 15, 1985 National Association Control Series C* Fifty-sixth Company to Fidelity Bank, Bonds of Pollution October 1, 1985 National Association Control Series D* Fifty-seventh Company to Fidelity Bank, Bonds of 10-7/8% Series November 15, 1985 National Association due 1995* Fifty-eighth Company to Fidelity Bank, Bonds of 11-3/4% Series November 15, 1985 National Association due 2014* Fifty-ninth Company to Fidelity Bank, Bonds of Pollution June 1, 1986 National Association Control Series E* Sixtieth Company to Fidelity Bank, Bonds of 10-1/4% Series November 1, 1986 National Association due 2016* Sixty-first Company to Fidelity Bank, Bonds of 8-3/4% Series November 1, 1986 National Association due 1994* Sixty-second Company to Fidelity Bank, Bonds of 9-3/8% Series April 1, 1987 National Association due 2017* 6 SUPPLEMENTAL INDENTURE AND DATE PARTIES PROVIDING FOR: - ---------------------- ------- -------------- Sixty-third Company to Fidelity Bank, Bonds of 11% Series due July 15, 1987 National Association 2016* Sixty-fourth Company to Fidelity Bank, Bonds of 10% Series due July 15, 1987 National Association 1997* Sixty-fifth Company to Fidelity Bank, Bonds of 10-1/4% Series August 1, 1987 National Association due 2007* Sixty-sixth Company to Fidelity Bank, Bonds of 11% Series due October 15, 1987 National Association 1997* Sixty-seventh Company to Fidelity Bank, Bonds of 12-1/8% Series October 15, 1987 National Association due 2016* Sixty-eighth Company to Fidelity Bank, Bonds of 10% Series due April 15, 1988 National Association 1998* Sixty-ninth Company to Fidelity Bank, Bonds of 11% Series due April 15, 1988 National Association 2018* Seventieth Company to Fidelity Bank, Bonds of 10% Series due June 15, 1989 National Association 2019* Seventy-first Company to Fidelity Bank, Bonds of 9-7/8% Series October 1, 1989 National Association due 2019* Seventy-second Company to Fidelity Bank, Bonds of 9-1/4% Series October 1, 1989 National Association due 1999* Seventy-third Company to Fidelity Bank, Medium-Term Note October 1, 1989 National Association Series A* Seventy-fourth Company to Fidelity Bank, Bonds of 10-1/2% Series October 15, 1990 National Association due 2020* Seventy-fifth Company to Fidelity Bank, Bonds of 10% Series due October 15, 1990 National Association 2000* Seventy-sixth Company to Fidelity Bank, Bonds of Pollution April 1, 1991 National Association Control Series F and Pollution Control Series G* Seventy-seventh Company to Fidelity Bank, Bonds of Pollution December 1, 1991 National Association Control Series H* Seventy-eighth Company to Fidelity Bank, Bonds of 7-1/2% 1992 January 15, 1992 National Association Series due 1999* Seventy-ninth Company to Fidelity Bank, Bonds of 8% Series due April 1, 1992 National Association 2002* Eightieth Company to Fidelity Bank, Bonds of 8-3/4% Series April 1, 1992 National Association due 2022* Eighty-first Company to Fidelity Bank, Bonds of Pollution June 1, 1992 National Association Control Series I* Eighty-second Company to Fidelity Bank, Bonds of 8-5/8% Series June 1, 1992 National Association due 2022* 7 SUPPLEMENTAL INDENTURE AND DATE PARTIES PROVIDING FOR: - ---------------------- ------- -------------- Eighty-third Company to Fidelity Bank, Bonds of 7-1/2% Series July 15, 1992 National Association due 2002* Eighty-fourth Company to Fidelity Bank, Bonds of 8-1/4% Series September 1, 1992 National Association due 2022* Eighty-fifth Company to Fidelity Bank, Bonds of 7-1/8% Series September 1, 1992 National Association due 2002* Eighty-sixth Company to Fidelity Bank, Bonds of 6-5/8% Series March 1, 1993 National Association due 2003* Eighty-seventh Company to Fidelity Bank, Bonds of 7-3/4% Series March 1, 1993 National Association due 2023* Eighty-eighth Company to Fidelity Bank, Bonds of Pollution March 1, 1993 National Association Control Series J, Pollution Control Series K, Pollution Control Series L and Pollution Control Series M* Eighty-ninth Company to Fidelity Bank, Bonds of 6-1/2% Series March 1, 1993 National Association due 2003* Ninetieth Company to Fidelity Bank, Bonds of 7-3/4% Series May 1, 1993 National Association 2 due 2023* Ninety-first Company to First Fidelity Bonds of 7-1/8% Series August 15, 1993 Bank, N.A., Pennsylvania due 2023* Ninety-second Company to First Fidelity Bonds of 6-3/8% Series August 15, 1993 Bank, N.A., Pennsylvania due 2005* Ninety-third Company to First Fidelity Bonds of 5-3/8% Series August 15, 1993 Bank, N.A., Pennsylvania due 1998* Ninety-fourth Company to First Fidelity Bonds of 7-1/4% Series November 1, 1993 Bank, N.A., Pennsylvania due 2024* Ninety-fifth Company to First Fidelity Bonds of 5-5/8% Series November 1, 1993 Bank, N.A., Pennsylvania due 2001* *And amendment of certain provisions of the Ninth Supplemental Indenture. 8 WHEREAS, the respective principal amounts of the bonds of each series presently outstanding under the Mortgage and the several supplemental indentures above referred to, are as follows: PRINCIPAL SERIES AMOUNT ------ --------- 13.05 % Series due 1994 ..................... $ 20,000,000 8-3/4% Series due 1994 ..................... 100,000,000 6-1/8% Series due 1997 ..................... 75,000,000 5-3/8% Series due 1998 ..................... 225,000,000 7-1/2% 1992 Series due 1999 ................ 250,000,000 9-1/4% Series due 1999 ..................... 75,000,000 10 % Series due 2000 ..................... 30,069,000 5-5/8% Series due 2001 ..................... 250,000,000 7-3/8% Series due 2001 ..................... 80,000,000 8 % Series due 2002 ..................... 200,000,000 7-1/8% Series due 2002 ..................... 200,000,000 7-1/2% Series due 2002 ..................... 100,000,000 6-5/8% Series due 2003 ..................... 250,000,000 6-1/2% Series due 2003 ..................... 200,000,000 6-3/8% Series due 2005 ..................... 75,000,000 10-1/4% Series due 2007 ..................... 56,875,000 Pollution Control Series J due 2012 ......... 50,000,000 Pollution Control Series K due 2012 ......... 50,000,000 Pollution Control Series L due 2012 ......... 50,000,000 Pollution Control Series M due 2012 ......... 4,200,000 8-7/8% Pollution Control Series E due 2016.. 34,000,000 10-3/4% Series due 2019 ..................... 71,000,000 9-7/8% Series due 2019 ..................... 40,281,000 Medium-Term Note Series A ................... 85,000,000 10-1/2% Series due 2020 ..................... 58,150,000 7-3/8% Pollution Control Series F due 2021.. 90,000,000 7.60 % Pollution Control Series G due 2021.. 27,030,000 6.70 % Pollution Control Series H due 2021.. 160,560,000 8-3/4% Series due 2022 ..................... 150,000,000 6-5/8% Pollution Control Series I due 2022.. 29,540,000 8-1/4% Series due 2022 ..................... 250,000,000 8-5/8% Series due 2022 ..................... 125,000,000 7-1/8% Series due 2023 ..................... 200,000,000 7-3/4% Series due 2023 ..................... 100,000,000 7-3/4% Series 2 due 2023 ................... 250,000,000 7-1/4% Series due 2024 ..................... 225,000,000 -------------- Total ................................. $4,236,705,000 ============== 9 and WHEREAS, the Company deems it advisable and has determined, pursuant to Article XI of the Mortgage, (a) to amend Article II of the Ninth Supplemental Indenture to the Mortgage as heretofore amended; (b) to convey, pledge, transfer and assign to the Trustee and to subject specifically to the lien of the Mortgage additional property not therein or in any supplemental indenture specifically described but now owned by the Company and acquired by it by purchase or otherwise; and (c) to create a new series of bonds to be issued from time to time under, and secured by, the Mortgage, to be designated PECO Energy Company First and Refunding Mortgage Bonds, Medium-Term Note Series B (hereinafter sometimes called the "bonds of the Medium-Term Note Series B"); and for the above-mentioned purposes to execute, deliver and record this Supplemental Indenture; and WHEREAS, the Company has determined by proper corporate action that the terms, provisions and form of the bonds of the New Series shall be substantially as follows: (Form of Face of Bond) PECO ENERGY COMPANY REGISTERED REGISTERED NUMBER FIRST AND REFUNDING MORTGAGE BOND, MEDIUM-TERM NOTE SERIES B PECO Energy Company, a Pennsylvania corporation (hereinafter called the Company), for value received, hereby promises to pay to First Fidelity Bank, National Association as trustee (in such capacity, hereinafter called the Note Trustee) under the Company's Collateralized Note Indenture dated as of October 1, 1989, as previously amended, and as further supplemented by a Second Supplemental Indenture dated as of July 1,1994 (hereinafter called the Collateralized Note Indenture) or registered assigns, Dollars on July 1, 2025, at the office or agency of the Company, in the City of Philadelphia, Pennsylvania, or, at the option of the holder, at the office or agency of the Company, in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment shall constitute legal tender for the payment of 10 public and private debts, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) thereon from the date hereof at the rate of ten percent per annum in like coin or currency, payable at either of the offices aforesaid on January 1 and July 1 in each year until the Company's obligation with respect to the payment of such principal shall have been discharged; provided, however, that if the date of authentication of a bond is between the fifteenth day of the calendar month preceding an interest payment date and the interest payment date, interest payment on such bond shall commence on the second interest payment date following the date of authentication. The Company may fix a date, not more than fourteen calendar days prior to any interest payment date, as a record date for determining the registered holder of this bond entitled to such interest payment, in which case only the registered holder on such record date shall be entitled to receive such payment, notwithstanding any transfer of this bond upon the registration books subsequent to such record date. This bond shall not be valid or become obligatory for any purpose unless it shall have been authenticated by the certificate of the Trustee under said Mortgage endorsed hereon. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, PECO Energy Company has caused this instrument to be signed in its corporate name with the manual or facsimile signature of its President or a Vice President and its corporate seal to be impressed or a facsimile imprinted hereon, duly attested by the manual or facsimile signature of its Secretary or an Assistant Secretary. Dated: PECO ENERGY COMPANY By _____________________________________ President [SEAL] Attest: ________________________________________ Secretary 11 (Form of Reverse of Bond) PECO ENERGY COMPANY First and Refunding Mortgage Bond, Medium-Term Note Series B (CONTINUED) This bond is one of a duly authorized issue of bonds of the Company, unlimited as to amount except as provided in the Mortgage hereinafter mentioned or in any indenture supplemental thereto, and is one of a series of said bonds known as First and Refunding Mortgage Bonds, Medium-Term Note Series B. This bond and all other bonds of said issue are issued and to be issued under and pursuant to and are all secured equally and ratably by an indenture of mortgage and deed of trust dated May 1, 1923, duly executed and delivered by The Counties Gas and Electric Company (to which the Company is successor) to Fidelity Trust Company, as Trustee (to which First Fidelity Bank, National Association, a national banking association organized and existing under the laws of the United States of America, is successor Trustee), as amended, modified or supplemented by ninety-six certain supplemental indentures from the Company or its predecessors to said successor Trustee or its predecessors, said mortgage, as so amended, modified or supplemented being herein called the Mortgage. Reference is hereby made to the Mortgage for a statement of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of said bonds and of the Trustee in respect of such security, the rights, duties and immunities of the Trustee, and the terms and conditions upon which said bonds are and are to be secured, and the circumstances under which additional bonds may be issued. As provided in the Mortgage, the bonds secured thereby may be for various principal sums and are issuable in series, which series may mature at different times, may bear interest at different rates, and may otherwise vary. The bonds of this series mature on July 1, 2025, and are issuable only in registered form without coupons to the Note Trustee in any denomination authorized by the Company. The bonds of this series are being issued solely to provide security for the Company's notes (the "Series B Notes") issued under the Collateralized Note Indenture. Any bond or bonds of this series may be exchanged for another bond or bonds of this series in a like aggregate principal amount in authorized denominations, upon presentation at the principal office of the Trustee in the City of Philadelphia, Pennsylvania, or, at the option of the holder, at the office or agency of the Company in the 12 Borough of Manhattan, The City of New York, all subject to the terms of the Mortgage but without any charge other than a sum sufficient to reimburse the Company for any stamp tax or other governmental charge incident to the exchange. The bonds of this series are redeemable at the option of the Company, as a whole or in part at any time upon notice sent by the Company through the mail, postage prepaid, at least thirty days and not more than forty-five days prior to the date fixed for redemption, to the registered holder of each bond to be redeemed, addressed to such holder at his address appearing upon the registration books, at a redemption price of 100% of the principal amount together with accrued interest to the date fixed for redemption. The principal of this bond may be declared or may become due on the conditions, in the manner and with the effect provided in the Mortgage upon the happening of an event of default as in the Mortgage provided. This bond is transferable by the registered holder hereof in person or by attorney, duly authorized in writing, at the principal office of the Trustee in the City of Philadelphia, Pennsylvania, or, at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, The City of New York, in books of the Company to be kept for that purpose, upon surrender and cancellation hereof, and upon any such transfer, a new registered bond or bonds, without coupons, of this series and for the same aggregate principal amount, will be issued to the transferee in exchange herefor, all subject to the terms of the Mortgage but without payment of any charge other than a sum sufficient to reimburse the Company for any stamp tax or other governmental charge incident to the transfer. The Company, the Trustee, and any paying agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or interest on this bond to any incorporator or any past, present or future stockholder, officer or director of the Company or of any predecessor or successor corporation, either directly or indirectly, by virtue of any statute or by enforcement of any assessment or otherwise, and any and all liability of the said incorporators, stockholders, officers or directors of the Company or of any predecessor or successor corporation in respect to this bond is hereby expressly waived 13 and released by every holder hereof, except to the extent that such liability may not be waived or released under the provisions of the Securities Act of 1933 or of the rules and regulations of the Securities and Exchange Commission thereunder. (End of Form of Reverse of Bond) and WHEREAS, on the face of each of the bonds of the Medium-Term Note Series B, there is to be endorsed a certificate of the Trustee in substantially the following form, to wit: (Form of Trustee's Certificate) This bond is one of the bonds, of the series designated therein, provided for in the within-mentioned Mortgage and in the Ninety-sixth Supplemental Indenture dated as of July 1, 1994. FIRST FIDELITY BANK, NATIONAL ASSOCIATION, TRUSTEE By _________________________________ Authorized Officer and WHEREAS, all acts and things necessary to make the bonds of the Medium-Term Note Series B, when duly executed by the Company and authenticated by the Trustee as provided in the Mortgage and indentures supplemental thereto, and issued by the Company, the valid, binding and legal obligations of the Company, and this Supplemental Indenture a valid and enforceable supplement to the Mortgage, have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly and lawfully authorized. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That in order to secure the payment of the principal of and interest on all bonds issued and to be issued under the Mortgage and/or under any indenture supplemental thereto, according to their tenor and effect, and according to the terms of the Mortgage and of any indenture supplemental thereto, and to secure the performance of the covenants and obligations in the bonds and in the Mortgage and any indenture supplemental thereto respectively contained, and for the proper assuring, conveying, and confirming unto the Trustee, its successors in trust and its and their assigns forever, upon the trusts and for the purposes expressed in the Mortgage and in any indentures supplemental thereto, all and singular the estates, prop- 14 erty and franchises of the Company thereby mortgaged or intended so to be, the Company, for and in consideration of the premises and of the sum of One Dollar ($1.00) in hand paid by the Trustee to the Company upon the execution and delivery of this Supplemental Indenture, receipt whereof is hereby acknowledged, and of other good and valuable consideration, has granted, bargained, sold, conveyed, released, confirmed, pledged, assigned, transferred and set over and by these presents does grant, bargain, sell, convey, release, confirm, pledge, assign, transfer, and set over to First Fidelity Bank, National Association, as Trustee, and to its successors in trust and its and their assigns forever, all the following described property, real, personal and mixed of the Company, viz.: The real property set forth in Schedule A, attached hereto and hereby made a part hereof, with any improvements thereon erected now owned by the Company but not specifically described in the Mortgage or in any indenture supplemental thereto heretofore executed, in the places set forth in Schedule A. Together with all gas works, electric works, plants, buildings, structures, improvements and machinery located upon such real estate or any portion thereof, and all rights, privileges and easements of every kind and nature appurtenant thereto, and all and singular the tenements, hereditaments and appurtenances belonging to the real estate or any part thereof hereinbefore described or referred to or intended so to be, or in any way appertaining thereto, and the reversions, remainders, rents, issues and profits thereof; also all the estate, right, title, interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the Company, of, in and to the same and any and every part thereof, with the appurtenances. Also all the Company's electric transmission and distribution lines and systems, substations, transforming stations, structures, machinery, apparatus, appliances, devices and appurtenances. Also all the Company's gas transmission and distribution mains, pipes, pipe lines and systems, storage facilities, structures, machinery, apparatus, appliances, devices and appurtenances. Also all plants, systems, works, improvements, buildings, structures, fixtures, appliances, engines, furnaces, boilers, machinery, retorts, tanks, condensers, pumps, gas tanks, holders, reservoirs, expansion tanks, gas mains and pipes, tunnels, service pipe, pipe lines, fittings, gates, valves, connections, gas and electric meters, generators, dynamos, fans, supplies, tools and implements, tracks, sidings, motor and other vehicles, all electric light lines, electric power lines, transmission lines, distribution lines, conduits, cables, 15 stations, substations, and distributing systems, motors, conductors, converters, switchboards, shafting, belting, wires, mains, feeders, poles, towers, mast arms, brackets, pipes, lamps, insulators, house wiring connections and all instruments, appliances, apparatus, fixtures, fittings and equipment and all stores, repair parts, materials and supplies of every nature and kind whatsoever now or hereafter owned by the Company in connection with or appurtenant to its plants and systems for production, purchase, storage, transmission, distribution, utilization and sale of gas and its by-products and residual products, and/or for the generation, production, purchase, storage, transmission, distribution, utilization and sale of electricity, or in connection with such business. Also all the goodwill of the business of the Company, and all rights, claims, contracts, leases, patents, patent rights, and agreements, all accounts receivable, accounts, claims, demands, choses in action, books of account, cash assets, franchises, ordinances, rights, powers, easements, water rights, riparian rights, licenses, privileges, immunities, concessions and consents now or hereafter owned by the Company in connection with or appurtenant to its said business. Also all the right, title and interest of the Company in and to all contracts for the purchase, sale or supply of gas, and its by-products and residual products of electricity and electrical energy, now or hereafter entered into by the Company with the right on the part of the Trustee, upon the happening of an event of default as defined in the Mortgage as supplemented by any supplemental indenture, to require a specific assignment of any and all such contracts, whenever it shall request the Company to make the same. Also all rents, tolls, earnings, profits, revenues, dividends and income arising or to arise from any property now owned, leased, operated or controlled or hereafter acquired, leased, operated or controlled by the Company and subject to the lien of the Mortgage and indentures supplemental thereto. Also all the estate, right, title and interest of the Company, as lessee, in and to any and all demised premises under any and all agreements of lease now or at any time hereafter in force, insofar as the same may now or hereafter be assignable by the Company. Also all other property, real, personal and mixed not hereinbefore specified or referred to, of every kind and nature whatsoever, now owned, or which may hereafter be owned by the Company (except 16 shares of stock, bonds or other securities not now or hereafter specifically pledged under the Mortgage and indentures supplemental thereto or required to be pledged thereunder by the provisions of the Mortgage or any indenture supplemental thereto), together with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in any way appertaining and the reversions, remainder or remainders, rents, issues and profits thereof; and also all the estate, right, title, interest, property, claim and demand whatsoever as well in law as in equity of the Company of, in and to the same and every part and parcel thereof. It is the intention and it is hereby agreed that all property and the earnings and income thereof acquired by the Company after the date hereof shall be as fully embraced within the provisions hereof and subject to the lien hereby created for securing the payment of all bonds, together with the interest thereon, as if the property were now owned by the Company and were specifically described herein and conveyed hereby, provided nevertheless, that no shares of stock, bonds or other securities now or hereafter owned by the Company, shall be subject to the lien of the Mortgage and indentures supplemental thereto unless now or hereafter specifically pledged or required to be pledged thereunder by the provisions of the Mortgage or any indenture supplemental thereto. TO HAVE AND TO HOLD, all and singular the property, rights, privileges and franchises hereby conveyed, transferred or pledged or intended so to be, including after-acquired property, together with all and singular the reversions, remainders, rents, revenues, income, issues and profits, privileges and appurtenances, now or hereafter belonging or in any way appertaining thereto, unto the Trustee and its successors in the trust hereby created, and its and their assigns forever; IN TRUST NEVERTHELESS, for the equal and pro rata benefit and security of each and every person or corporation who may be or become the holders of bonds secured by the Mortgage and indentures supplemental thereto, without preference, priority or distinction (except as provided in Section 1 of Article VIII of the Mortgage) as to lien or otherwise of any bond of any series over or from any other bond, so that (except as aforesaid) each and every of the bonds issued or to be issued, of whatsoever series, shall have the same right, lien, privilege under the Mortgage and indentures supplemental thereto and shall be equally secured thereby and hereby, with the same effect as if the bonds had all been made, issued and negotiated simultaneously on the date of the Mortgage. 17 AND THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH: It is hereby covenanted that all bonds secured by the Mortgage and indentures supplemental thereto with the coupons appertaining thereto, are issued to and accepted by each and every holder thereof, and that the property aforesaid and all other property subject to the lien of the Mortgage and indentures supplemental thereto is held by or hereby conveyed to the Trustee, under and subject to the trusts, conditions and limitations set forth in the Mortgage and indentures supplemental thereto and upon and subject to the further trusts, conditions and limitations hereinafter set forth, as follows, to wit: ARTICLE I. AMENDMENTS OF MORTGAGE Article II of the Ninth Supplemental Indenture to the Mortgage, as heretofore amended, is hereby further amended as follows: By deleting from paragraph (d) of Section 5 and from the first clause of Section 9, the following: "or 5-5/8% Series due 2001" and by inserting in lieu thereof, in both instances, the following: ", 5-5/8% Series due 2001 or Medium-Term Note Series B" ARTICLE II. BONDS OF THE MEDIUM-TERM NOTE SERIES B Section 1. The bonds of the Medium-Term Note Series B shall be designated as "PECO Energy Company First and Refunding Mortgage Bonds, Medium-Term Note Series B," subject however, to the provisions of Section 2 of Article I of the Mortgage, as amended, and are issuable only as registered bonds without coupons, substantially in the form hereinbefore recited; and the issue thereof shall be limited to $250,000,000 principal amount. The bonds of said series shall be redeemable as provided in Article IV of this Supplemental Indenture. The bonds of such series shall bear interest from the date thereof and shall be dated as of the interest payment date to which interest was paid on the bond or bonds in exchange for which such bond is being issued unless (a) such date of issue is an interest payment date to which interest was paid or (b) issued prior to the occurrence of the first interest payment date for such bond, in which event such bonds shall be dated the date of authentication. The bonds of said series shall mature on July 1, 2025. 18 The bonds of the Medium-Term Note Series B shall bear interest (computed on the basis of a 360-day year of twelve 30-day months) at the rate of 10 percent per annum, payable on January 1 and July 1 (each, an interest payment date) of each year commencing with the interest payment date following the date of authentication, until the Company's obligation with respect to the payment of the principal thereof shall have been discharged; provided, however, that if the date of authentication of a bond is between the fifteenth day of the calendar month preceding an interest payment date and the interest payment date, interest payments on such bond shall commence on the second interest payment date following the date of authentication. Both principal and interest on bonds of such series shall be payable at the office or agency of the Company in the City of Philadelphia, Pennsylvania, or, at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, The City of New York, and shall be payable in such coin or currency of the United States of America as at the time of payment shall constitute legal tender for the payment of public and private debts. The bonds of the Medium-Term Note Series B shall be in denominations of $1,000 and any larger amount in integral multiples of $1,000. Section 2. The Company may fix a date, not more than fourteen calendar days prior to any interest payment date, as a record date for determining the registered holder of each bond of Medium-Term Note Series B entitled to such interest payment, in which case only the registered holder of such bond on such record date shall be entitled to receive such payment, notwithstanding any transfer of such bond upon the registration books subsequent to such record date. Section 3. The bonds of the Medium-Term Note Series B shall be issued under and subject to all of the terms and provisions of the Mortgage, of the indentures supplemental thereto referred to in the recitals hereof and of this Supplemental Indenture which may be applicable to said bonds or applicable to all bonds issued under the Mortgage and indentures supplemental thereto. ARTICLE III. ISSUE AND AUTHENTICATION OF BONDS OF THE MEDIUM-TERM NOTE SERIES B In addition to any bonds of any series which may from time to time be executed by the Company and authenticated and delivered by the Trustee upon compliance with the provisions of the Mortgage and/or of any indenture supplemental thereto, bonds of the Medium-Term Note Series B of an aggregate principal amount not exceeding 19 $250,000,000 shall forthwith be executed by the Company and deposited with the Trustee for safekeeping in accordance with Section 6 of Article II of the Mortgage, as amended, pursuant to a resolution of the Board of Directors of the Company and the written order of the President, a Vice President, or the Treasurer of the Company, under the terms and provisions of paragraph (c) of Section 3 of Article II of the Mortgage, as amended; provided, that the Trustee shall have obtained all documents required for the authentication and delivery of such bonds pursuant to paragraph (c) of Section 3 of Article II of the Mortgage, as amended, except the opinion required by paragraph (4) of Section 6 of Article II of the Mortgage, as amended; and in lieu of such opinion, the Trustee shall have received the opinion specified in such paragraph to be given when bonds are to be deposited with the Trustee. Section 2. After such deposit, the Trustee, whether or not this Supplemental Indenture shall have been recorded, shall authenticate bonds of such series upon receipt of (i) a written order of the President, a Vice President, or the Treasurer of the Company specifying the principal amount of bonds of such series to be authenticated and the authentication date, (ii) an opinion of counsel pursuant to paragraphs (4) and (6) of Section 6 of Article II of the Mortgage, as amended, which opinion shall also confirm the opinion of counsel delivered to the Trustee in connection with said deposit, (iii) a Secretary's certificate, as of the date of such authentication, confirming that the resolutions delivered to the Trustee in connection with said deposit have not been rescinded and remain in full force and effect, and (iv) certificates of appropriate officers pursuant to paragraphs (3) and (6) of Section 6 of Article II of the Mortgage, as amended, or as otherwise needed to confirm the correctness of the documents delivered as of the date of such deposit of such bonds; provided, that if any of such documents are incorrect as of any such date of authentication or must otherwise be modified to meet the requirements of authentication and delivery pursuant to paragraph (c) of Section 3 of Article II of the Mortgage, as amended, such correction and modification shall be made by the Company in order to deliver to the Trustee the documents required by this Article III and the other applicable provisions of the Mortgage, as amended. ARTICLE IV. REDEMPTION OF BONDS OF THE MEDIUM-TERM NOTE SERIES B Section 1. The bonds of the Medium-Term Note Series B shall be redeemable, at the option of the Company, as a whole or in part, at any time upon notice sent by the Company through the mail, postage prepaid, at least thirty days and not more than forty-five 20 days prior to the date fixed for redemption, to the registered holder of each bond to be redeemed in whole or in part, addressed to such holder at his address appearing upon the registration books, at a redemption price (of 100% of the principal amount), together with accrued interest to the date fixed for redemption. Section 2. In case the Company shall desire to exercise such right to redeem and pay off all or any part of such bonds of the Medium-Term Note Series B as hereinbefore provided it shall comply with all the terms and provisions of Article III of the Mortgage, as amended, applicable thereto, and such redemption shall be made under and subject to the terms and provisions of Article III and in the manner and with the effect therein provided, but at the time or times and upon mailing of notice, all as hereinbefore set forth in Section 1 of this Article. No publication of notice of any redemption of any bonds of the Medium-Term Note Series B shall be required. ARTICLE V. CERTAIN EVENTS OF DEFAULT; REMEDIES Section 1. So long as any bonds of the Medium-Term Note Series B remain outstanding, in case one or more of the following events shall happen, such events shall, in addition to the events of default heretofore enumerated in paragraphs (a) through (d) of Section 2 of Article VIII of the Mortgage, constitute an "event of default" under the Mortgage, as fully as if such events were enumerated therein: (e) default shall be made in the due and punctual payment of the principal (including the full amount of any applicable optional redemption price) of the bond or bonds of the Medium-Term Note Series B, whether at the maturity of said bonds, or at a date fixed for redemption of said bonds, or any of them, or by declaration as authorized by the Mortgage; Section 2. So long as any bonds of the Medium-Term Note Series B remain outstanding, Section 10 of Article VIII of the Mortgage, as heretofore amended, is hereby further amended by inserting in the first paragraph of such Section 10, immediately after the words "as herein provided," at the end of clause (2) thereof, the following: "or (3) in case default shall be made in any payment of any interest on any bond or bonds secured by this indenture or in the payment of the principal (including the applicable optional redemption price) of any bond or bonds secured by this indenture, where such default is not of the character referred to in clause (1) or (2) of this Section 10 but constitutes an event of default within the meaning of Section 2 of this Article VIII." 21 ARTICLE VI. CREDITS WITH RESPECT TO PRINCIPAL OF AND INTEREST ON BONDS OF THE MEDIUM-TERM NOTE SERIES B AUTHORIZED HEREBY Section 1. In addition to any other credit, payment or satisfaction to which the Company is entitled with respect to the bonds of the Medium-Term Note Series B, the Company shall be entitled to credits against amounts otherwise payable in respect of the bonds of the Medium-Term Note Series B in an amount corresponding to (i) the principal amount of any Series B Notes surrendered to the Note Trustee by the Company, or purchased by the Note Trustee, for cancellation, (ii) the amount of money held by the Note Trustee and available and designated for the payment of principal or redemption price (other than premium) of, and/or interest on, the Series B Notes, regardless of the source of payment to the Note Trustee of such moneys and (iii) interest due on the bonds of the Medium-Term Note Series B in excess of interest due on the Series B Notes. The Note Trustee shall make notation on such bonds authorized hereby of any such credit under clause (iii) above. Section 2. The cancellation and delivery by the Note Trustee to the Trustee of bonds of the Medium-Term Note Series B under clause (i) or (ii) of Section 1 of Article VI hereof, or the notation on such bonds under clause (iii) of Section 1 of Article VI hereof shall be conclusive evidence of a credit under Section 1 of Article VI hereof, and the Trustee shall accept such cancellation and delivery or notation as such evidence without further investigation or verification of the matters stated herein. ARTICLE VII. CONCERNING THE TRUSTEE The Trustee hereby accepts the trust herein declared and provided and agrees to perform the same upon the terms and conditions set forth in the Mortgage, as amended and supplemented, and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. 22 ARTICLE VIII. MISCELLANEOUS Section 1. Unless otherwise clearly required by the context, the term "Trustee," or any other equivalent term used in this Supplemental Indenture, shall be held and construed to mean the trustee under the Mortgage for the time being whether the original or a successor trustee. Section 2. The headings of the Articles of this Supplemental Indenture are inserted for convenience of reference only and are not to be taken to be any part of this Supplemental Indenture or to control or affect the meaning of the same. Section 3. Nothing expressed or mentioned in or to be implied from this Supplemental Indenture or in or from the bonds of the Medium-Term Note Series B is intended, or shall be construed, to give any person or corporation, other than the parties hereto and their respective successors, and the holders of bonds secured by the Mortgage and the indentures supplemental thereto, any legal or equitable right, remedy or claim under or in respect of such bonds or the Mortgage or any indenture supplemental thereto, or any covenant, condition or provision therein or in this Supplemental Indenture contained. All the covenants, conditions and provisions thereof and hereof are for the sole and exclusive benefit of the parties hereto and their successors and of the holders of bonds secured by the Mortgage and indentures supplemental thereto. Section 4. This Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. Section 5. This Supplemental Indenture is dated and shall be effective as of July 1, 1994, but was actually executed and delivered on , 1994. 23 IN WITNESS WHEREOF, the parties of the first and second parts hereto have caused their corporate seals to be hereunto affixed and the President or a Vice President of the party of the first part and the President or a Vice President of the party of the second part, under and by the authority vested in them, have hereto affixed their signatures and their Secretaries or Assistant Secretaries have duly attested the execution hereof the day of , 1994. PECO ENERGY COMPANY By _______________________________________ M. W. Rimerman Vice President [SEAL] Attest ___________________________________ T. D. Cutler Assistant Secretary FIRST FIDELITY BANK, NATIONAL ASSOCIATION, By _______________________________________ G. J. Rayzis Vice President [SEAL] Attest ___________________________________ J. H. Clapham Assistant Secretary 24 COMMONWEALTH OF PENNSYLVANIA ss. COUNTY OF PHILADELPHIA BE IT REMEMBERED, that on the day of , 1994, before me, the subscriber, a Notary Public in and for said County and Commonwealth, residing in Philadelphia, personally appeared M. W. Rimerman and T. D. Cutler, who being duly sworn according to law deposed and said that they are a Vice President and an Assistant Secretary, respectively, of PECO Energy Company, a corporation, and that they, being authorized to do so, in due form of law acknowledged the foregoing Supplemental Indenture to be their act and deed and desired that the same might be recorded as such. WITNESS my hand and seal the day and year aforesaid. 25 COMMONWEALTH OF PENNSYLVANIA ss. COUNTY OF PHILADELPHIA BE IT REMEMBERED, that on the day of , 1994, before me, the subscriber, a Notary Public in and for said County and Commonwealth, residing in Philadelphia, personally appeared G. J. Rayzis and J. H. Clapham, who being duly sworn according to law deposed and said that they are a Vice President and an Assistant Secretary of First Fidelity Bank, National Association, a corporation, and that they, being authorized to do so, in due form of law acknowledged the foregoing Supplemental Indenture to be their act and deed and desired that the same might be recorded as such. WITNESS my hand and seal the day and year aforesaid. I hereby certify that I am not an officer or director of said First Fidelity Bank, National Association. 26 CERTIFICATE OF RESIDENCE First Fidelity Bank, National Association, Mortgagee and Trustee within named, hereby certifies that its precise residence in the City of Philadelphia is N.E. Cor. Broad and Walnut Streets in the City of Philadelphia, Pennsylvania. FIRST FIDELITY BANK, NATIONAL ASSOCIATION By ____________________________________________ G. J. Rayzis Vice President EX-4.2 4 EXHIBIT 4(F)-1 -- 1ST SUPPLEMENTAL INDENTURE Exhibit 4(f)-1 =========================================================================== PECO ENERGY COMPANY (formerly Philadelphia Electric Company) TO FIRST FIDELITY BANK, NATIONAL ASSOCIATION (formerly Fidelity Bank, National Association) ____________________ FIRST SUPPLEMENTAL INDENTURE DATED AS OF JULY 1, 1994 TO COLLATERALIZED NOTE INDENTURE OF PHILADELPHIA ELECTRIC COMPANY TO FIDELITY BANK, NATIONAL ASSOCIATION TRUSTEE DATED AS OF OCTOBER 1, 1989 ____________________ =========================================================================== THIS SUPPLEMENTAL INDENTURE dated as of July 1, 1994, by and between PECO ENERGY COMPANY, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (hereinafter called the "Company"), and FIRST FIDELITY BANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (hereinafter called the "Trustee"), as Trustee under the Indenture hereinafter mentioned, W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company duly executed and delivered to the Trustee a certain indenture dated as of October 1, 1989 (herein called the "Indenture"), to provide for the issue of one or more series of collateralized notes (herein sometimes called the "Notes"), issuable as in the Indenture provided, the initial series of Notes being designated therein as the Collateralized Series A Medium-Term Notes; and WHEREAS, effective January 1, 1994, the Company changed its name from PHILADELPHIA ELECTRIC COMPANY to PECO ENERGY COMPANY; and WHEREAS, since the time the Company executed and delivered the Indenture, the Trustee has restructured and changed its name to FIRST FIDELITY BANK, NATIONAL ASSOCIATION effective January 10, 1994; and WHEREAS, both the Company and the Trustee desire to amend the Indenture to reflect their current names. NOW, THEREFORE, this First Supplemental Indenture Witnesseth: That for and in consideration of the premises and of the sum of One Dollar ($1.00) lawful money of the United States of America to it in hand paid by the Trustee at or before the execution and delivery of this First Supplemental Indenture, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee, for the equal benefit of all the present and future holders of the Notes, without preference, priority or distinction of any of the Notes by reason of difference in series or priority in time of issuance, negotiation or maturity thereof, or otherwise, except as permitted by the Indenture and this First Supplemental Indenture, as follows: ARTICLE I AMENDMENT OF FORM OF NOTE The following language and form of note shall be added to the end of Exhibit A of the Indenture: The following form of note shall apply to all Series A Notes issued after January 1, 1994: Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. [Form of Face] CUSIP NO. PRINCIPAL REGISTERED NO. AMOUNT $__________ PECO ENERGY COMPANY COLLATERALIZED MEDIUM-TERM NOTE, SERIES A Issue Date: Maturity Date: Interest Rate: per annum Initial Redemption Date: Refunding Rate: per annum Limitation Date: The Redemption Price shall initially be __________ of the principal amount of this Note and shall decline on each anniversary of the Initial Redemption Date by _______________ of the principal amount of this Note until the Redemption Price is equal to 100% of such principal amount of this Note. PECO ENERGY COMPANY a corporation duly organized and existing under the laws of The Commonwealth of Pennsylvania (hereinafter called the "Company," which term includes any 2 successor corporation under the Indenture hereinafter referred to), for value received hereby promises to pay to or registered assigns, the principal sum of DOLLARS on the Maturity Date stated above and to pay interest thereon from the Issue Date stated above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on April 1 and October 1 (an Interest Payment Date) in each year and on the Maturity Date stated above, commencing on the first Interest Payment Date succeeding the Issue Date (provided that if the Issue Date of this Note is between the Regular Record Date for an Interest Payment Date and the Interest Payment Date, interest payments on this Note will commence on the second Interest Payment Date following the Issue Date), at the Interest Rate per annum shown above until the principal or Redemption Price hereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at the Interest Rate stated on the face of this Note on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more Predecessor Note) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Interest payable on the Maturity Date (except when the Maturity Date occurs on April 1 or October 1) will be payable upon surrender of the Note to the Trustee to the registered Holder. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of and interest on this Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest other than interest payable on the Maturity Date will be made by check 3 mailed to the registered Holder hereof at the address shown in the Note Register or, at the option of the registered Holder hereof, to such other place in the United States of America as the registered Holder hereof shall designate to the Trustee in writing. At the request of a registered Holder of at least $10,000,000 aggregate principal amount of Notes, interest on such Notes will be payable by wire transfer within the continental United States in immediately available funds to the bank account number of such Holder appearing on the Note Register. The payment amount hereof and interest due on the Maturity Date (except when such Maturity Date occurs on April 1 or October 1,) will be paid upon Maturity of this Note upon surrender of this Note at the principal corporate trust office of First Fidelity Bank, National Association, as Paying Agent, in Philadelphia, Pennsylvania, or at such other office or agency of the Paying Agent as the Company shall designate by written notice to the registered Holder of this Note. The Company and the Trustee may treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payments of principal and interest on this Note and for all purposes whatsoever. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereof has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed in its corporate name with the manual or facsimile signature of its Treasurer or Assistant Treasurer and to be countersigned with the manual or facsimile signature of its President or Vice President. Dated:____________________ PECO ENERGY COMPANY By:___________________________ Treasurer or Assistant Treasurer 4 Countersigned: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes ___________________________ of the series designated President or Vice President herein referred to in the within mentioned Indenture. FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as Trustee By:___________________________ 5 [Form of Reverse of Note] PECO ENERGY COMPANY COLLATERALIZED MEDIUM-TERM NOTE, SERIES A This Collateralized Medium-Term Note, Series A is one of a duly authorized issue of notes of the Company (herein called the "Series A Notes"), issued and to be issued under a Collateralized Note Indenture, dated as of October 1, 1989, as supplemented by a First Supplemental Indenture dated as of July 1, 1994 (said Indenture, as so supplemented, being herein called the "Indenture"), between Philadelphia Electric Company (former name of the Company) and Fidelity Bank, National Association (predecessor to First Fidelity Bank, National Association), as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture). Concurrently with each issuance of the Series A Notes, the Company will deliver to the Trustee its First and Refunding Mortgage Bonds, Medium-Term Note Series A in the principal amount equal to such Series A Notes and with payment provisions corresponding to the Series A Notes. Except as otherwise specified in the Indenture, this Series A Note is entitled to the benefit of the Indenture equally and ratably both as to principal (and Redemption Price) and interest with all Notes issued and to be issued under the Indenture, to which reference is made for a description of the rights of the holders of the Notes; the rights, duties and obligations of the Trustee; the provisions relating to amendments to and modifications of the Indenture; and the terms and conditions upon which additional Notes may be issued thereunder. The holder of this Series A Note shall have no right to enforce the provisions of the Indenture or the First and Refunding Mortgage Bonds of the Company pledged to the Trustee thereunder or to institute action to enforce the covenants thereof or rights or remedies thereunder except as provided in the Indenture. This Note is subject to redemption upon not less than 30 nor more than 45 days' notice prior to the date fixed for redemption by mail, at any time as a whole or in part, on or after the Initial Redemption Date, if any, specified on the face hereof, at the option of the Company, at the Redemption Prices, if any, specified on the face hereof (expressed in percentages of the principal amount), and thereafter at a Redemption Price equal to 100% of the principal amount of this Note, together with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of this Note, or one or more Predecessor Notes, of record at the close of business 6 on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. Unless an Initial Redemption Date is specified on the face hereof, this Note is not subject to redemption prior to maturity at the option of the Company. Notwithstanding the foregoing, the Company may not, prior to the Limitation Date specified on the face hereof, if any, redeem this Note as contemplated by the next preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of monies borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than the Refunding Rate specified on the face hereof, if any. In any case where any Interest Payment Date or the Maturity Date of this Note shall not be a Business Day, then (notwithstanding any other provision hereof or of the Indenture) the payment of interest and/or of principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or at the Maturity Date, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date or Maturity Date to such next succeeding Business Day. If an Event of Default with respect to Notes issued under the Indenture shall occur and be continuing, the principal of all of the Notes issued under the Indenture may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding, if all series of Notes Outstanding are affected, or the Holders of a majority in aggregate principal amount of all series to be affected in case one or more, but less than all, of the series of Outstanding Notes are affected. The Indenture also contains provisions permitting the Holders of a majority in principal amount of all Notes Outstanding of all series affected, to waive compliance by the Company with certain provisions of the Indenture. Certain past defaults in payments of principal or interest can be waived by a majority in aggregate principal amount of all Notes Outstanding with respect to which such default exists and other events of default can be waived by a majority in aggregate principal amount of all Notes Outstanding. The Trustee may also, in its discretion, waive certain defaults and their consequences. Any such consent or 7 waiver by the Holder of this Note or the Trustee shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registerable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more Series A Notes, of like tenor and authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Series A Notes are issuable only in registered form without coupons in minimum denominations of $100,000 and any integral multiple of $1,000 if in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Series A Notes are exchangeable for a like aggregate principal amount of Series A Notes of like tenor and a different authorized denomination, as requested by the Holder surrendering the same; provided, however, that the Company shall not be required to issue any Series A Notes of a denomination less than $1,000. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Note shall be governed by and construed in accordance with the laws of The Commonwealth of Pennsylvania. 8 ARTICLE II MISCELLANEOUS ------------- SECTION 1. Unless otherwise clearly required by the context, the term, "Trustee," or any other equivalent term used in this First Supplemental Indenture shall be held and construed to mean the trustee under the Indenture for the time being whether the original or a successor trustee. SECTION 2. The headings of the Articles of this First Supplemental Indenture are inserted for convenience of reference only and are not to be taken to be any part of this First Supplemental Indenture or to control or affect the meaning of the same. SECTION 3. Nothing expressed or mentioned in or to be implied from this First Supplemental Indenture or in or from the Series A Notes is intended, or shall be construed, to give any person or corporation, other than the parties hereto and their respective successors and the holders of Notes issued under the Indenture and the indentures supplemental thereto, any legal or equitable right, remedy or claim under or in respect of such Notes or the Indenture or any indenture supplemental thereto, or any covenant, condition or provision therein or in this First Supplemental Indenture contained; all the covenants, conditions and provisions thereof and hereof being for the sole and exclusive benefit of the parties hereto and their successors and of the holders of Notes issued under the Indenture and the indentures supplemental thereto. SECTION 4. This First Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. SECTION 5. This First Supplemental Indenture is dated as of July 1, 1994, but was actually executed and delivered on July 5, 1994. 9 IN WITNESS WHEREOF, PECO Energy Company and First Fidelity Bank, National Association, have caused this First Supplemental Indenture to be duly executed, their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. PECO ENERGY COMPANY /s/ MORTON W. RIMERMAN By:___________________________ Morton W. Rimerman Vice President Attest: /s/ TODD D. CUTLER ______________________________ Todd D. Cutler, Assistant Secretary [SEAL] FIRST FIDELITY BANK, NATIONAL ASSOCIATION /s/ J. H. CLAPHAM By:____________________________ J. H. Clapham Assistant Vice President Attest: /s/ ALAN G. FINN _________________________________ Alan G. Finn Assistant Secretary [SEAL] 10 COMMONWEALTH OF PENNSYLVANIA : : ss. COUNTY OF PHILADELPHIA : BE IT REMEMBERED, that on the 1st day of July, 1994, before me, the undersigned officer, personally appeared Todd D. Cutler, who being duly sworn according to law doth depose and say that she was personally present and did see the common or corporate seal of the above named PECO Energy Company affixed to the foregoing First Supplemental Indenture, that the seal so affixed is the common or corporate seal of the said PECO Energy Company, and was so affixed by the authority of the said corporation as the act and deed thereof; that the above named Morton W. Rimerman, is Vice-President of the said corporation, and did sign the said First Supplemental Indenture as such in the presence of this deponent. That this deponent is Assistant Secretary of the said corporation, and that the name of this deponent, above signed in attestation of the due execution of the said First Supplemental Indenture is of this deponent's own proper handwriting. Sworn to and subscribed before me the day and year aforesaid. [SEAL] /s/ CAROL A. WALTON ___________________________ Carol A. Walton Notary Public, Philadelphia, Philadelphia Co. My Commission Expires August 26, 1996 11 COMMONWEALTH OF PENNSYLVANIA : : ss. COUNTY OF PHILADELPHIA : BE IT REMEMBERED, that on the 5th day of July, 1994, before me, the undersigned officer, personally appeared John H. Clapham, who being duly sworn according to law doth depose and say that he was personally present and did see the common or corporate seal of the above named First Fidelity Bank, National Association, affixed to the foregoing First Supplemental Indenture, that the seal so affixed is the common or corporate seal of the said First Fidelity Bank, National Association, and was so affixed by the authority of the said corporation as the act and deed thereof; that the above named Alan G. Finn is Assistant Vice President of the said corporation, and did sign the said First Supplemental Indenture as such in the presence of this deponent. That this deponent is an Assistant Secretary of the said corporation, and that the name of this deponent, above signed in attestation of the due execution of the said First Supplemental Indenture is of this deponent's own proper handwriting. Sworn to and subscribed before me the day and year aforesaid. I hereby certify that I am not a stockholder, officer or director of said First Fidelity Bank, National Association. [SEAL] /s/ AIDA B. DALES ___________________________ Aida B. Dales Notary Public, Philadelphia, Philadelphia Co. My Commission Expires November 22, 1997 12 EX-4.3 5 EXHIBIT 4(F)-2 -- FORM OF 2ND SUPPLEMENTAL INDENTURE Exhibit 4(F)-2 =========================================================================== PECO ENERGY COMPANY TO FIRST FIDELITY BANK, NATIONAL ASSOCIATION -------------------- SECOND SUPPLEMENTAL INDENTURE DATED AS OF JULY 1, 1994 TO COLLATERALIZED NOTE INDENTURE OF PHILADELPHIA ELECTRIC COMPANY TO FIDELITY BANK, NATIONAL ASSOCIATION TRUSTEE DATED AS OF OCTOBER 1, 1989 -------------------- MEDIUM-TERM NOTES, SERIES B =========================================================================== TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . 2 ARTICLE II THE SERIES B NOTES SECTION 2.01. Terms of The Series B Notes . . . . . . . . . . 3 SECTION 2.02 Compliance with Terms of Indenture. . . . . . . 5 ARTICLE III ISSUANCE OF SERIES B NOTES SECTION 3.01. Issuance of Series B Notes. . . . . . . . . . . 5 ARTICLE IV REDEMPTION OF NOTES SECTION 4.01. Redemption of Series B Notes. . . . . . . . . . 7 SECTION 4.02. Compliance with Terms of Indenture. . . . . . . 7 ARTICLE VIII CONCERNING THE TRUSTEE SECTION 8.01. Not Responsible for Recitals. . . . . . . . . . 7 SECTION 8.02. Qualification Under Trust Indenture Act of 1939. . . . . . . . . . . . . . . . . . 7 ARTICLE XIII MISCELLANEOUS SECTION 13.01. Use of Term "Trustee". . . . . . . . . . . . . 8 SECTION 13.02. Confirmation of Indenture. . . . . . . . . . . 8 SECTION 13.03. Headings . . . . . . . . . . . . . . . . . . . 8 (i) SECTION 13.04. Benefits of Indenture. . . . . . . . . . . . . 8 SECTION 13.05. Counterparts . . . . . . . . . . . . . . . . . 8 SECTION 13.06. Date of Indenture. . . . . . . . . . . . . . . 8 - --------------- NOTE: This table of contents shall not, for any purpose, be deemed to be part of the Second Supplemental Indenture to the Collateralized Note Indenture. (ii) THIS SUPPLEMENTAL INDENTURE dated as of July 1, 1994, by and between PECO ENERGY COMPANY, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (hereinafter called the "Company"), and FIRST FIDELITY BANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (hereinafter called the "Trustee"), as Trustee under the Indenture hereinafter mentioned, RECITALS: --------- A. The Company duly executed and delivered to the Trustee a Collateralized Note Indenture dated as of October 1, 1989 (the "Original Indenture"), as amended by a First Supplemental Indenture dated as of July 1, 1994 (the Original Indenture, as so amended, and as supplemented by this Second Supplemental Indenture, herein called the "Indenture"), to provide for the issue of one or more series of collateralized notes (herein sometimes called the "Notes"), issuable as in the Indenture provided, the initial series of Notes being designated therein as the Collateralized Medium-Term Notes, Series A; and B. The only Notes presently outstanding under the Indenture are $85,000,000 principal amount of the collateralized Medium-Term Notes, Series A; and C. The Company deems it necessary to borrow money for its corporate purposes and to issue its Notes therefor, and has determined, pursuant to Article III of the Original Indenture, to create a new series of Notes to be issued under the Indenture, such series to be designated the Company's Collateralized Medium-Term Notes, Series B (hereinafter sometimes called the "Series B Notes"); and D. The Company has determined by proper corporate action that the terms, provisions and form of the Series B Notes shall be substantially as set forth in Exhibit A hereto; and E. In accordance with Section 3.02(a)(ii) of the Original Indenture, the Company has delivered to the Trustee an executed counterpart of the Ninety-sixth Supplemental Indenture to the Company's Mortgage creating a series of Mortgage Bonds meeting the requirements of Section 3.02(a)(ii) of the Original Indenture; and F. All acts and things necessary to make the Series B Notes, when duly executed by the Company and authenticated and delivered by the Trustee as provided in the Indenture, and issued by the Company, the valid, binding, and legal obligations of the Company, and this Second Supplemental Indenture a valid and enforceable supplement to the Indenture, have been done and performed: NOW, THEREFORE, this Second Supplemental Indenture Witnesseth: The Company, to provide for the payment of principal or redemption price (as the case may be) in respect of all Notes issued and to be issued and outstanding under the Indenture and any indentures supplemental thereto, together with interest thereon, the rights of the holders thereof and the performance of the covenants contained in the Notes and the Indenture, will deliver to the Trustee, registered in the Trustee's name, the Company's First and Refunding Mortgage Bonds, Medium-Term Note, Series B, as required under Article III of the Original Indenture and the Company does hereby, in confirmation of the Original Indenture, sell, assign, transfer, set over, pledge unto and grant a first priority security interest in its First and Refunding Mortgage Bonds, Medium-Term Note, Series B, issued from time to time and in such other Mortgage Bonds as are delivered to the Trustee from time to time under the Indenture. NOW, THEREFORE, this Second Supplemental Indenture further Witnesseth: That for and in consideration of the premises and of the sum of One Dollar ($1.00) lawful money of the United States of America to it in hand paid by the Trustee at or before the execution and delivery of this Second Supplemental Indenture, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee, for the equal benefit of all the present and future holders of the Notes, without preference, priority or distinction of any of the Notes by reason of difference in series or priority in time of issuance, negotiation or maturity thereof, or otherwise, except as permitted by the Indenture, as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. For purposes of this Second Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) each of the terms defined in this Article has the meaning assigned to it in this Article and includes the plural as well as the singular; 2 (2) each of the other terms used herein which is defined in the Trust Indenture Act, either directly or by reference therein, has the meaning assigned to it therein; (3) each accounting term not otherwise defined herein has the meaning assigned to it in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; and (4) the words, "herein", "hereof" and "hereunder" and other words of similar import refer to this Second Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision. Each other capitalized terms used herein and not defined in this Article I has the meaning set forth in the Indenture. "Regular Record Date" for the Series B Notes means June 15 and December 15 of each year. "Series B First Mortgage Bonds" means the Company's First and Refunding Mortgage Bonds, Medium-Term Note, Series B, issued pursuant to the Mortgage and delivered to the Trustee in accordance with Section 3.01 hereof. "Series B Notes" means the Company's Collateralized Medium-Term Notes, Series B, issued from time to time in accordance with Section 2.01 hereof. ARTICLE II THE SERIES B NOTES SECTION 2.01. Terms of The Series B Notes. The Series B Notes shall be designated "PECO Energy Company Collateralized Medium-Term Notes, Series B" and shall be substantially in the form set forth in Exhibit A to this Second Supplemental Indenture. The aggregate principal amount of the Series B Notes shall be limited to Two Hundred and Fifty Million Dollars ($250,000,000) to be initially authenticated and delivered from time to time upon delivery to the Trustee of the items specified in Section 3.01 hereof. Each Series B Note shall have the Issue Date, bear interest at the fixed rate to maturity 3 and have the Stated Maturity specified in the Company Request delivered pursuant to Section 3.01 hereof for that Series B Note; provided that no Series B Note shall bear interest at a stated rate in excess of 10% per annum or have a Stated Maturity of less than nine months after its Issue Date or later than July 1, 2025. All of the Series B Notes shall be substantially identical except for the items specified in Section 3.01 hereof. The Interest Payment Dates for each Series B Note shall be January 1 and July 1 of each year after the issuance of such Series B Note and on the Stated Maturity (unless January 1 and July 1) of such Series B Note; provided that if the Issue Date of a Series B Note is between the Regular Record Date for an Interest Payment Date and the Interest Payment Date, interest payments on such Series B Note will commence on the second Interest Payment Date following the Issue Date. The "Paying Agent" for the Series B Notes shall be First Fidelity Bank, National Association and the Place of Payment shall be the principal corporate trust office of First Fidelity Bank, National Association. The "Note Registrar" for the purpose of registering the Series B Notes and transfers of the Series B Notes as provided in the Indenture shall be First Fidelity Bank, National Association. Each Series B Note shall bear interest from its Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for with respect to such Series B Note; except that, so long as there is no existing Defaulted Interest on the Series B Notes, any Series B Note authenticated by the Trustee between the Regular Record Date for any Interest Payment Date and such Interest Payment Date shall bear interest from such Interest Payment Date; provided, however, that if and to the extent the Company shall default in payment of the interest due on such Interest Payment Date, then any such Series B Notes shall bear interest to that extent from the most recent Interest Payment Date to which interest has been paid or duly provided for with respect to such Series B Note, or, if no interest has been paid, then from the Issue Date of such Series B Note. Overdue principal and interest on any Series B Note shall bear interest (to the extent that the payment of such interest shall be legally enforceable) at a rate per annum equal to the interest rate per annum payable on such Series B Note. Interest on the Series B Notes shall be computed on the basis of a 360-day year of twelve 30-day months. 4 The Series B Notes shall be issuable only in registered form in denominations of $1,000 and any integral multiples thereof. SECTION 2.02. Compliance with Terms of Indenture. The Series B Notes shall be issued under and subject to all of the terms and provisions of the Indenture and of this Second Supplemental Indenture which may be applicable to the Series B Notes or applicable to all Notes issued under the Indenture. ARTICLE III ISSUANCE OF SERIES B NOTES SECTION 3.01. Issuance of Series B Notes. In accordance with Section 3.02(b) of the Original Indenture, the Series B Notes may be issued from time to time by the Company, and the Trustee shall authenticate such Series B Notes, but only upon receipt of the following: (a) a Company Request specifying the following matters with respect to the Series B Notes to be issued: (i) the principal amount; (ii) the interest rate; (iii) the Issue Date; (iv) the Stated Maturity; (v) the redemption periods and Redemption Prices, if any; (vi) the periods during which the Series B Notes will not be refundable, if any; Unless otherwise specified in the Company Request, the Series B Notes shall be issued as global Notes to The Depository Trust Company or its nominee. If any Series B Notes are not to be so issued, the Company request shall also specify: (vii) the registered Holder; and (viii) delivery instructions. (b) an Officer's Certificate stating that no Event of Default has occurred and is continuing and that the 5 conditions precedent under the Indenture for the issuance of such Series B Notes have been met; (c) an Opinion of Counsel that the Series B Notes to be issued have been duly authorized, executed and delivered by the Company and, when authenticated by the Trustee, will be legal, valid and binding obligations of the Company, entitled to the benefits of the Indenture and that the conditions precedent under the Indenture for the issuance of such Series B Notes have been met; and (d) Series B First Mortgage Bonds in the principal amount of the Series B Notes to be issued registered in the name of the Trustee. ARTICLE IV REDEMPTION OF SERIES B NOTES SECTION 4.01. Redemption of Series B Notes. The Series B Notes issued from time to time pursuant to Section 3.01 hereof shall be redeemable at the option of the Company, in accordance with the terms hereof, as a whole or in part, as provided in the form of Series B Notes, at the times, if any, and the Redemption Prices, if any, and with the nonrefunding periods, if any, specified in the Company Request. SECTION 4.02. Compliance with Terms of Indenture. In case the Company shall desire to exercise such right to redeem and pay off all or any part of said Series B Notes as hereinbefore provided, it shall comply with all the terms and provisions of Article IV of the Indenture applicable thereto, and such redemption shall be made under and subject to the terms and provisions of said Article IV and in the manner and with the effect therein provided, but at the time or times and at the respective redemption rates and upon mailing of notice, all as hereinbefore set forth in Section 4.01 of this Article. ARTICLE IV CONCERNING THE TRUSTEE The Trustee hereby accepts the trust herein declared and provided and agrees to perform the same upon the terms and conditions set forth in the Indenture, as supplemented by this Second Supplemental Indenture, and upon the following terms and conditions: 6 SECTION 5.01. Not Responsible for Recitals. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or the due execution thereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company. SECTION 5.02. Qualification Under Trust Indenture Act of 1939. The Trustee hereby acknowledges that the Company proposes to qualify this Second Supplemental Indenture under the Trust Indenture Act of 1939. ARTICLE XIII MISCELLANEOUS SECTION 13.01. Use of Term "Trustee". Unless otherwise clearly required by the context, the term, "Trustee," or any other equivalent term used in this Second Supplemental Indenture shall be held and construed to mean the trustee under the Indenture for the time being whether the original or a successor trustee. SECTION 13.02. Confirmation of Indenture. As supplemented by this Second Supplemental Indenture, the Indenture, as previously amended and supplemented, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be read, taken and construed as a part of the Indenture so that all of the rights, remedies, terms, conditions, covenants and agreements of the Indenture shall apply and remain in full force and effect with respect to this Second Supplemental Indenture and to the Series B Notes issued hereunder. SECTION 13.03. Headings. The headings of the Articles and Sections of this Second Supplemental Indenture and the Table of Contents are inserted for convenience of reference only and are not to be taken to be any part of this Second Supplemental Indenture or to control or affect the meaning of the same. SECTION 13.04. Benefits of Indenture. Nothing expressed or mentioned in or to be implied from this Second Supplemental Indenture or in or from the Series B Notes is intended, or shall be construed, to give any person or corporation, other than the parties hereto and their respective successors and the holders of Notes issued under the Indenture and the indentures supplemental thereto, any legal or equitable right, remedy or claim under or in respect of such Series B Notes or the Indenture or any indenture supplemental thereto, or any covenant, condition or provision therein or in this Second 7 Supplemental Indenture contained; all the covenants, conditions and provisions thereof and hereof being for the sole and exclusive benefit of the parties hereto and their successors and of the holders of Notes issued under the Indenture and the indentures supplemental thereto. SECTION 13.05. Counterparts. This Second Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. SECTION 13.06. Date of Indenture. This Second Supplemental Indenture is dated as of July 1, 1994, but was actually executed and delivered on ________, 1994. 8 IN WITNESS WHEREOF, PECO Energy Company and First Fidelity Bank, National Association, have caused this Second Supplemental Indenture to be duly executed, their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. PECO ENERGY COMPANY By:___________________________ M.W. Rimerman, Vice President Attest: ______________________________ T.D. Cutler, Assistant Secretary [SEAL] FIRST FIDELITY BANK, NATIONAL ASSOCIATION By:___________________________ G.J. Rayzis, Vice President Attest: ______________________________ J.H. Clapham, Assistant Secretary [SEAL] 9 COMMONWEALTH OF PENNSYLVANIA ss. COUNTY OF PHILADELPHIA BE IT REMEMBERED, that on the ____ day of __________, 1994, before me, the subscriber, a Notary Public in and for said County and commonwealth, residing in Philadelphia, personally appeared M.W. Rimerman and T.D. Cutler, who being duly sworn according to law deposed and said that they are a Vice President and an Assistant Secretary, respectively, of PECO Energy Company, a corporation, and that they, being authorized to do so, in due form of law acknowledged the foregoing Supplemental Indenture to be their act and deed and desired that the same might be recorded as such. WITNESS my hand and seal the day and year aforesaid. 10 COMMONWEALTH OF PENNSYLVANIA : : ss. COUNTY OF PHILADELPHIA : BE IT REMEMBERED, that on the ____ day of ______________, 1994, before me, the subscriber, a Notary Public in and for said County and Commonwealth, residing in Philadelphia, personally appeared G.J. Rayzis and J.H. Clapham, who being duly sworn according to law deposed and said that they are a Vice President and an Assistant Secretary of First Fidelity Bank, National Association, a corporation, and that they, being authorized to do so, in due form of law acknowledged the foregoing Supplemental Indenture to be their act and deed and desired that the same might be recorded as such. WITNESS my hand and seal the day and year aforesaid. I hereby certify that I am not an officer or director of said First Fidelity Bank, National Association. 11 EXHIBIT A Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. [Form of Face] CUSIP NO. PRINCIPAL REGISTERED NO. AMOUNT $__________ PECO ENERGY COMPANY COLLATERALIZED MEDIUM-TERM NOTE, SERIES B Issue Date: Maturity Date: Interest Rate: per annum Initial Redemption Date: Refunding Rate: per annum Limitation Date: The Redemption Price shall initially be __________ of the principal amount of this Note and shall decline on each anniversary of the Initial Redemption Date by _______________ of the principal amount of this Note until the Redemption Price is equal to 100% of such principal amount of this Note. PECO ENERGY COMPANY, a corporation duly organized and existing under the laws of The Commonwealth of Pennsylvania (hereinafter called the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received hereby promises to pay to or registered assigns, the principal sum of DOLLARS on the Maturity Date stated above and to pay interest thereon from the Issue Date stated above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 1 and July 1 (an Interest Payment Date) in each year and on the Maturity Date stated above, A-1 commencing on the first Interest Payment Date succeeding the Issue Date (provided that if the Issue Date of this Note is between the Regular Record Date for an Interest Payment Date and the Interest Payment Date, interest payments on this Note will commence on the second Interest Payment Date following the Issue Date), at the Interest Rate per annum shown above until the principal or Redemption Price hereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at the Interest Rate stated on the face of this Note on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be the June 15 or December 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Interest payable on the Maturity Date (except when the Maturity Date occurs on January 1 or July 1) will be payable upon surrender of the Note to the Trustee to the registered Holder. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of and interest on this Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest other than interest payable on the Maturity Date will be made by check mailed to the registered Holder of this Note on the Regular Record Date preceding such Interest Payment Date at the address shown in the Note Register or, at the option of the registered Holder hereof, to such other place in the United States of America as the registered Holder hereof shall designate to the Trustee in writing. At the request of a registered Holder of at least $10,000,000 aggregate principal amount of Notes, interest on such Notes will be payable by wire transfer within the continental United States in immediately available funds to the bank account number of such Holder appearing on the Note Register. A-2 The payment amount hereof and interest due on the Maturity Date (except when such Maturity Date occurs on January 1 or July,) will be paid upon Maturity of this Note upon surrender of this Note at the principal corporate trust office of First Fidelity Bank, National Association, as Paying Agent, in Philadelphia, Pennsylvania, or at such other office or agency of the Paying Agent as the Company shall designate by written notice to the registered Holder of this Note. The Company and the Trustee may treat the Person in whose name this Note is registered on the Maturity Date as the owner of such Note for the purpose of receiving payments of principal and interest on this Note and for all purposes whatsoever. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereof has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed in its corporate name with the manual or facsimile signature of its Treasurer or Assistant Treasurer and to be countersigned with the manual or facsimile signature of its President or Vice President. Dated:____________________ PECO ENERGY COMPANY By:___________________________ Treasurer or Assistant Treasurer Countersigned: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes ___________________________ of the series designated President or Vice President herein referred to in the within mentioned Indenture. FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as Trustee By:___________________________ A-3 [Form of Reverse of Note] PECO ENERGY COMPANY COLLATERALIZED MEDIUM-TERM NOTE, SERIES B This Collateralized Medium-Term Note, Series B, is one of a duly authorized issue of notes of the Company (herein called the "Series B Notes"), issued and to be issued under a Collateralized Note Indenture, dated as of October 1, 1989, as amended by a First Supplemental Indenture dated as of July 1, 1994 and as supplemented by a Second Supplemental Indenture dated as of July 1, 1994 (said Indenture, as so amended and supplemented, being herein called the "Indenture"), between PECO Energy Company and First Fidelity Bank, National Association, as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture). Concurrently with each issuance of the Series B Notes, the Company will deliver to the Trustee its First and Refunding Mortgage Bonds, Medium-Term Note, Series B, in the principal amount equal to such Series B Notes and with payment provisions corresponding to the Series B Notes. Except as otherwise specified in the Indenture, this Series B Note is entitled to the benefit of the Indenture equally and ratably both as to principal (and Redemption Price) and interest with all Notes issued and to be issued under the Indenture, to which reference is made for a description of the rights of the holders of the Notes; the rights, duties and obligations of the Trustee; the provisions relating to amendments to and modifications of the Indenture; and the terms and conditions upon which additional Notes may be issued thereunder. The holder of this Series B Note shall have no right to enforce the provisions of the Indenture or the First and Refunding Mortgage Bonds of the Company pledged to the Trustee thereunder or to institute action to enforce the covenants thereof or rights or remedies thereunder except as provided in the Indenture or as otherwise provided by The Trust Indenture Act of 1939, as amended. This Note is subject to redemption upon not less than 30 nor more than 45 days' notice prior to the date fixed for redemption by mail, at any time as a whole or in part, on or after the Initial Redemption Date, if any, specified on the face hereof, at the option of the Company, at the Redemption Prices, if any, specified on the face hereof (expressed in percentages of the principal amount), and thereafter at a Redemption Price equal to 100% of the principal amount of this Note, together with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of this Note, or one or more Predecessor Notes, of record at the close of business A-4 on the relevant Regular Record Dates referred to on the face hereof, all as provided in the Indenture. Unless an Initial Redemption Date is specified on the face hereof, this Note is not subject to redemption prior to maturity at the option of the Company. Notwithstanding the foregoing, the Company may not, prior to the Limitation Date specified on the face hereof, if any, redeem this Note as contemplated by the next preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of monies borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than the Refunding Rate specified on the face hereof, if any. In any case where any Interest Payment Date or the Maturity Date of this Note shall not be a Business Day, then (notwithstanding any other provision hereof or of the Indenture) the payment of interest and/or of principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or at the Maturity Date, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date or Maturity Date to such next succeeding Business Day. If an Event of Default with respect to Notes issued under the Indenture shall occur and be continuing, the principal of all of the Notes issued under the Indenture may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding, if all series of Notes Outstanding are affected, or the Holders of a majority in aggregate principal amount of all series to be affected in case one or more, but less than all, of the series of Outstanding Notes are affected. The Indenture also contains provisions permitting the Holders of a majority in principal amount of all Notes Outstanding of all series affected, to waive compliance by the Company with certain provisions of the Indenture. Certain past defaults in payments of principal or interest can be waived by a majority in aggregate principal amount of all Notes Outstanding with respect to which such default exists and other events of default can be waived by a majority in aggregate principal amount of all Notes Outstanding. The Trustee may also, in its discretion, waive A-5 certain defaults and their consequences. Any such consent or waiver by the Holder of this Note or the Trustee shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registerable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more Series B Notes, of like tenor and authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Series B Notes are issuable only in registered form without coupons in minimum denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Series B Notes are exchangeable for a like aggregate principal amount of Series B Notes of like tenor and a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Note shall be governed by and construed in accordance with the laws of The Commonwealth of Pennsylvania. A-6 EX-5 6 EXHIBIT 5 -- OPINION OF COUNSEL EXHIBIT 5 BALLARD, SPAHR, ANDREWS & INGERSOLL BALTIMORE, MD 1735 MARKET STREET, 51ST FLOOR CAMDEN, NJ PHILADELPHIA, PENNSYLVANIA 19103-7599 DENVER, CO 215-665-8500 SALT LAKE CITY, UT FAX: 215-864-8999 WASHINGTON, DC August 4, 1994 PECO Energy Company 2301 Market Street Philadelphia, Pennsylvania 19103 Re: $250,000,000 principal amount of PECO Energy Company Collateralized Medium-Term Notes, Series B ---------------------------------- Ladies and Gentlemen: We have acted as counsel to you in connection with the proposed issuance of $250,000,000 principal amount of PECO Energy Company Collateralized Medium-Term Notes, Series B (the "Notes") and the registration of the Notes under the Securities Act of 1933, as amended. The Notes will be issued under the Collateralized Note Indenture dated as of October 1, 1989 between PECO Energy Company (the "Company") and First Fidelity Bank, National Association as amended by a First Supplemental Indenture dated as of July 1, 1994 and as supplemented by a Second Supplemental Indenture dated as of July 1, 1994 (as so amended and supplemented the "Indenture"). The opinions expressed below are based on the following assumptions: (a) The proposed transactions are carried out on the basis set forth in the Registration Statement and in conformity with the authorizations, approvals, consents or exemptions under the securities laws of the various States and other jurisdictions of the United States; (b) The Registration Statement filed by the Company with the Securities and Exchange Commission concurrently with the date of this letter will become effective; (c) The Company will fix the maturity dates, the interest rates, the redemption provisions and other terms of the Notes in accordance with the provisions of the Indenture; (d) The Notes will be executed, authenticated and delivered as provided in the Indenture; and (e) The Second Supplemental Indenture will be qualified in accordance with the provisions of the Trust Indenture Act of 1939, as amended, and duly completed, executed and delivered pursuant to the authority granted by the Board of Directors of the Company. Based on the foregoing, we are of the opinion that when properly authenticated and delivered as provided in the Indenture, the Notes will be legally issued, valid and binding obligations of the Company. We consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the references to this firm under the heading "Legal Matters" in the Prospectus included in the Registration Statement. Very truly yours, /s/ BALLARD, SPAHR, ANDREWS & INGERSOLL _______________________________________ Ballard, Spahr, Andrews & Ingersoll EX-23.1 7 EXHIBIT 23-1 -- CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23-1 CONSENT OF INDEPENDENT ACCOUNTANTS To The Board of Directors, PECO Energy Company: We consent to the incorporation by reference in the registration statement of PECO Energy Company, formerly known as Philadelphia Electric Company, on Form S-3, with respect to the registration of $250,000,000 of collateralized medium-term notes, of our reports dated January 31, 1994, on our audits of the consolidated financial statements and financial statement schedules of PECO Energy Company and Subsidiary Companies as of December 31, 1993 and 1992, and for each of the three years in the period ended December 31, 1993, listed in Item 14 of the 1993 Annual Report of PECO Energy Company on Form 10-K. We also consent to the reference to our firm under the heading "EXPERTS". /s/ COOPERS & LYBRAND --------------------------------------- COOPERS & LYBRAND, L.L.P. Philadelphia, Pennsylvania August 4, 1994 EX-23.2 8 EXHIBIT 23-2 -- CONSENT OF CAHILL, WILINSKI & CAHILL EXHIBIT 23-2 CONSENT OF CAHILL, WILINSKI & CAHILL To The Board of Directors, PECO Energy Company: We hereby consent to all references to our firm included in or made a part of the Registration Statement. /s/ CAHILL, WILINSKI & CAHILL --------------------------------------------- CAHILL, WILINSKI & CAHILL Haddonfield, New Jersey August 4, 1994 EX-24 9 EXHIBIT 24 -- POWERS OF ATTORNEY EXHIBIT 24 PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, SUSAN W. CATHERWOOD, of Bryn Mawr, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/SUSAN W. CATHERWOOD _________________________________________ SUSAN W. CATHERWOOD, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, M. WALTER D'ALESSIO, of Philadelphia, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/ M. WALTER D'ALESSIO _________________________________________ M. WALTER D'ALESSIO, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, RICHARD G. GILMORE, of Sarasota, FL, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/RICHARD G. GILMORE _________________________________________ RICHARD G. GILMORE, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, RICHARD H. GLANTON, of Philadelphia, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/RICHARD H. GLANTON _________________________________________ RICHARD H. GLANTON, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, JAMES A. HAGEN, of Villanova, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/JAMES A. HAGEN _________________________________________ JAMES A. HAGEN, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, NELSON G. HARRIS, of Lafayette Hill, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/NELSON G. HARRIS _________________________________________ NELSON G. HARRIS, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, JOSEPH C. LADD, of Rosemont, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/JOSEPH C. LADD _________________________________________ JOSEPH C. LADD, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, EDITHE J. LEVIT, of Philadelphia, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/EDITHE J. LEVIT _________________________________________ EDITHE J. LEVIT, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, KINNAIRD R. MCKEE, of Oxford, MD, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/KINNAIRD R. MCKEE _________________________________________ KINNAIRD R. MCKEE, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, JOSEPH J. MCLAUGHLIN, of Rosemont, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/JOSEPH J. MCLAUGHLIN _________________________________________ JOSEPH J. MCLAUGHLIN, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, DR. JOHN M. PALMS, of Columbia, SC, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/DR. JOHN M. PALMS _________________________________________ DR. JOHN M. PALMS, PECO ENERGY COMPANY ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS That I, RONALD RUBIN, of Narberth, PA, do hereby appoint J. F. Paquette, Jr., C. A. McNeill, Jr., and K. G. Lawrence, or any of them, attorney for me and in my name and on my behalf TO SIGN THE REGISTRATION STATEMENT, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933 with respect to the issue and sale of not more than $250,000,000 principal amount of the Company's Medium Term Notes, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: April 13, 1994 /s/RONALD RUBIN _________________________________________ RONALD RUBIN, EX-25 10 EXHIBIT 25 -- FORM T-1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) __ FIRST FIDELITY BANK, NATIONAL ASSOCIATION (formerly First Fidelity Bank, National Association, Pennsylvania) (Exact Name of Trustee as Specified in its Charter) 22-1147033 (I.R.S. Employer Identification No.) 175 WEST BROADWAY, SALEM, NEW JERSEY (Address of Principal Executive Offices) 08079 (Zip Code) FIRST FIDELITY BANK, NATIONAL ASSOCIATION 123 SOUTH BROAD STREET PHILADELPHIA, PA 19109 ATTENTION: CORPORATE TRUST ADMINISTRATION (215) 985-6000 (Name, address and telephone number of Agent for Service) PECO ENERGY COMPANY (Exact Name of Obligor as Specified in its Charter) PENNSYLVANIA (State or other jurisdiction of Incorporation or Organization) 23-0970240 (I.R.S. Employer Identification No.) P.O. BOX 8699 2301 MARKET STREET, PHILADELPHIA, PA (Address of Principal Executive Offices) 19101 (Zip Code) $250,000,000 COLLATERALIZED MEDIUM TERM NOTES, SERIES B % DUE Application relates to all securities registered pursuant to the delayed offering registration statement. (Title of Indenture Securities) 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervisory authority to which it is subject: Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank (3rd District) Philadelphia, Pennsylvania 19106 Federal Deposit Insurance Corporation Washington, D.C. 20429 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 3. VOTING SECURITIES OF THE TRUSTEE. Furnish the following information as to each class of voting securities of the trustee: Not applicable - see answer to Item 13. 4. TRUSTEESHIPS UNDER OTHER INDENTURES. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: Not applicable - see answer to Item 13. 2 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR UNDERWRITERS. If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Not applicable - see answer to Item 13. 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS. Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner, and executive officer of the obligor: Not applicable - see answer to Item 13. 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR OFFICIALS. Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner, and executive officer of each such underwriter: Not applicable - see answer to Item 13. 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE. Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee: Not applicable - see answer to Item 13. 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information 3 as to each class of securities of such underwriter any of which are so owned or held by the trustee: Not applicable - see answer to Item 13. 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR. If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting stock of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: Not applicable - see answer to Item 13. 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such person any of which are so owned or held by the trustee: Not applicable - see answer to Item 13. 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE. Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: Not applicable - see answer to Item 13. 13. DEFAULTS BY THE OBLIGOR. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. None. (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are 4 outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. None. 14. AFFILIATIONS WITH THE UNDERWRITERS. If any underwriter is an affiliate of the trustee, describe each such affiliation. Not applicable - see answer to Item 13. 15. FOREIGN TRUSTEE. Identify the order or rule pursuant to which the trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not applicable - trustee is a national banking association organized under the laws of the United States. 16. LIST OF EXHIBITS. List below all exhibits filed as part of this statement of eligibility. ___ 1. Copy of Articles of Association of the trustee as now in effect.* ___ 2. Copy of the Certificate of the Comptroller of the Currency dated January 11, 1994, evidencing the authority of the trustee to transact business.* ___ 3. Copy of the authorization of the trustee to exercise fiduciary powers.* ___ 4. Copy of existing by-laws of the trustee.* ___ 5. Copy of each indenture referred to in Item 4, if the obligor is in default, not applicable. _X_ 6. Consent of the trustee required by Section 321(b) of the Act. 5 _X_ 7. Copy of report of condition of the trustee at the close of business on March 31, 1994, published pursuant to the requirements of its supervising authority. ___ 8. Copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. - Not applicable. ___ 9. Consent to service of process required of foreign trustees pursuant to Rule 10a-4 under the Act. - Not applicable. _____________________ *Previously filed with the Securities and Exchange Commission on February 11, 1994 as an exhibit to Form T-1 in connection with Registration Statement No. 22-73340 and incorporated herein by reference. NOTE The trustee disclaims responsibility for the accuracy or completeness of information contained in this Statement of Eligibility and Qualification not known to the trustee and not obtainable by it through reasonable investigation and as to which information it has obtained from the obligor and has had to rely or will obtain from the principal underwriters and will have to rely. 6 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, First Fidelity Bank, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility and Qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Philadelphia and Commonwealth of Pennsylvania, on the 29th day of July, 1994. FIRST FIDELITY BANK, NATIONAL ASSOCIATION By:/s/George J. Rayzis ------------------------------ George J. Rayzis Vice President EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of PECO Energy Company Collaterialized Medium Term Notes, Series B, First Fidelity Bank, National Association hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. FIRST FIDELITY BANK, NATIONAL ASSOCIATION By:/s/George J. Rayzis ------------------------------- George J. Rayzis Vice President Philadelphia, Pennsylvania July 29, 1994 EXHIBIT T-7 REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the First Fidelity Bank, National Association of Salem in the state of New Jersey, at the close of business on March 31, 1994, published in response to call made by Comptroller of the Currency, under title 12, United States Code, Section 161. Charter Number 33869 Comptroller of the Currency Northeastern District. STATEMENT OF RESOURCES AND LIABILITIES ASSETS Thousand of Dollars ------------------- Cash and balance due from depository institutions: Noninterest-bearing balances and currency and coin......... 1,857,291 Interest-bearing balances.................................. 611,096 Securities................................................... ///////// Hold-to-maturity securities................................ 3,619,115 Available-for-sale securities.............................. 2,501,401 Federal funds sold and securities purchased under agreements ////////// to resell in domestic offices of the bank and of it ////////// Edge and Agreement subsidiaries, and in IBFs: ////////// Federal funds sold..................................... 191,180 Securities purchased under agreements to resell........ 367,414 Loans and lease financing receivables: Loan and leases, net of unearned income......18,393,675 LESS: Allowance for loan and lease losses.......526,109 LESS: Allocated transfer risk reserve.................0 Loans and leases, net of unearned income, allowance, and reserve................................................. 17,867,566 Assets held in trading accounts............................... 183,757 Premises and fixed assets (including capitalized leases)...... 342,058 Other real estate owned....................................... 135,644 Investment in unconsolidated subsidiaries and associated ////////// companies..................................................... 6,778 Customer's liability to this bank on acceptances outstanding... 188,605 Intangible assets............................................. 234,601 Other assets.................................................. 472,266 Total assets.................................................. 28,578,772 LIABILITIES Deposits: In domestic offices..................................... 23,577,518 Noninterest-bearing..........................5,083,582 Interest-bearing............................18,493,936 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................................ 269,371 Noninterest-bearing.............................13,796 Interest-bearing...............................255,573 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and IBFs Federal fund purchased.................................. 375,427 Securities sold under agreements to repurchase.......... 1,077,572 Demand notes issued to the U.S. Treasury...................... 0 Trading liabilities........................................... 0 Other borrowed money:......................................... ///////// With original maturity of one year or less.............. 5,424 With original maturity of more than one year............ 846 Mortgage indebtedness and obligations under capitalized leases 7,123 Bank's liability on acceptances executed and outstanding..... 191,659 Subordinated notes and debentures............................ 175,000 Other liabilities............................................ 418,775 Total liabilities............................................ 26,098,715 Limited-life preferred stock and related surplus............. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................. 0 Common Stock.................................................. 430,000 Surplus....................................................... 918,675 Undivided profits and capital reserves........................ 1,135,806 Net unrealized holding gains (losses) on available-for-sale ///////// securities................................................... (4,424) Cumulative foreign currency translation adjustments........... 0 Total equity capital.......................................... 2,480,037 Total liabilities, limited-life preferred stock and equity.... ////////// capital..................................................... 28,578,772 -----END PRIVACY-ENHANCED MESSAGE-----