LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

Exhibit 10.3

Execution Version

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

Dated as of May 9, 2008

among

COMMONWEALTH EDISON COMPANY

and

THE FINANCIAL INSTITUTIONS SIGNATORY HERETO,

as L/C Issuers

BARCLAYS BANK PLC, NEW YORK BRANCH

as Administrative Agent

RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL,

as Syndication Agent

and

BANK OF AMERICA, N.A., THE BANK OF NOVA SCOTIA

and SUNTRUST BANK,

as Co-Documentation Agents

and

THE FINANCIAL INSTITUTIONS PARTY HERETO FROM TIME TO TIME

BARCLAYS CAPITAL and

RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL,

as Lead Arrangers and Book Runners

TABLE OF CONTENTS

i

TABLE OF CONTENTS

(continued)

ii

TABLE OF CONTENTS

(continued)

Schedules

Exhibits

iii

THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of May 9, 2008 (this “ Agreement ”), is among COMMONWEALTH EDISON COMPANY, a corporation organized and existing under the laws of the State of Illinois (the “ Company ”), the financial institutions signatory hereto, as L/C Issuers (as hereinafter defined), BARCLAYS BANK PLC, NEW YORK BRANCH, as Administrative Agent (as hereinafter defined), RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL, as Syndication Agent, BANK OF AMERICA, N.A., THE BANK OF NOVA SCOTIA and SUNTRUST BANK, as Co-Documentation Agents, and the financial institutions listed on the signature pages hereof. Unless otherwise indicated, all capitalized terms used herein shall have the meaning referred to or set forth in Article I hereof.

PRELIMINARY STATEMENTS

The Illinois Finance Authority (or its predecessor) (the “ Issuer ”) has previously issued the following series of bonds: (a) $100,000,000 aggregate principal amount Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2002 (the “ Series 2002 Bonds ”), (b) $42,200,000 aggregate principal amount Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2003B (the “ Series 2003B Bonds ”), (c) $50,000,000 aggregate principal amount Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2003C (the “ Series 2003C Bonds ”) and (d) $19,975,000 aggregate principal amount Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2003D (the “ Series 2003D Bonds ”; together with the Series 2002 Bonds, the Series 2003B Bonds and the Series 2003C Bonds, collectively, the “ Existing Bonds ”).

The Issuer and the Company desire to refinance one or more of the Existing Bonds through the issuance by the Issuer of one or more new series of Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company) as more particularly described in the definition of “ Bonds ” herein.

In order to enhance the Bonds by providing a source of payment when due of the principal of and interest on and the purchase price of the Bonds, the L/C Issuers will provide the Letters of Credit pursuant to this Agreement to facilitate such payments.

The Banks party hereto have agreed to purchase Shares of the Reimbursement Obligations (as such terms are defined herein) and the Letters of Credit.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ Adjusted Funds From Operations ” means, for any period, Net Cash Flows From Operating Activities for such period plus Interest Expense for such period minus (x) the portion (but not less than zero) of Net Cash Flows From Operating Activities for such period attributable to any consolidated Subsidiary that has no Debt other than Nonrecourse Indebtedness and (y) After-Tax Transitional Funding Instrument Revenue for such period.

“ Administrative Agent ” means Barclays, in its capacity as Administrative Agent for the Banks hereunder, and any successor Administrative Agent.

“ Administrative Questionnaire ” means, with respect to each Bank, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Bank and returned to the Administrative Agent (with a copy to the Company).

“ Advance ” means any Tender Advance, and “ Advances ” means Tender Advances collectively.

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person.

“ After-Tax Transitional Funding Instrument Revenue ” means, for any period, the portion of consolidated revenue for such period attributable to charges invoiced to customers in respect of Transitional Funding Instruments, after deducting applicable income taxes.

“ Applicable Participation Fee Rate ” means 0.90% per annum.

“ Approved Fund ” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity that administers or manages a Bank.

“ Bank Information ” has the meaning assigned to that term in Section 8.05(a) .

“ Banks ” means the Banks listed on the signature pages hereof and each Eligible Assignee that shall become a party hereto pursuant to Section 2.14(a) .

“ Barclays ” has the meaning assigned to that term in the introductory paragraph of this Agreement.

“ Base Rate ” means a fluctuating interest rate per annum that is the higher of (a) the Federal Funds Rate plus one-half of one percent (l/2%) per annum and (b) the rate of interest announced publicly by the Administrative Agent in New York, New York, from time to time as its prime rate. Each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Federal Funds Rate or such prime rate, as the case may be.

“ Bonds ” means, collectively, the $50,000,000 Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2008D, the $100,000,000 Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2008A, the $42,200,000 Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2008C and the $19,975,000 Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series 2008E; provided that the initial principal balance of any series of Bonds may be less than the amount stated above.

“ Business Day ” means a day of the year on which banks are not required or authorized to close in Chicago, Illinois or New York, New York.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

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“ Commitment ” means $215,872,078.

“ Commitment Expiration Date ” means the earlier of (a) June 30, 2008 and (b) the date on which all Bonds are issued.

“ Company ” has the meaning assigned to that term in the introductory paragraph of this Agreement.

“ Control Agreements ” means, collectively, the Securities Account Control Agreements by and among the Company, the Administrative Agent and the Trustee, as securities intermediary, each substantially in the form of Exhibit B hereto; and “ Control Agreement ” means any of the foregoing as the context may require.

“ Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company, are treated as a single employer under Section 414(b) or 414(c) of the Code.

“ Credit Agreement ” means that certain Credit Agreement dated as of October 3, 2007 among the Company, various financial institutions and JPMorgan Chase Bank, N.A., as administrative agent.

“ Date of Issuance ” means, with respect to each Letter of Credit for any Bonds, the date on which such Letter of Credit is issued.

“ Debt ” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (iv) obligations as lessee under leases that shall have been or are required to be, in accordance with GAAP (as defined in Section 1.03 ), recorded as capital leases, (v) obligations (contingent or otherwise) under reimbursement or similar agreements with respect to the issuance of letters of credit (other than obligations in respect of documentary letters of credit opened to provide for the payment of goods or services purchased in the ordinary course of business) and (vi) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i)  through (v)  above.

“ Default ” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“ Default Rate ” means a fluctuating interest rate determined in accordance with the provisions of Section 2.05(c) of this Agreement.

“ Dollars ” and “ $ ” mean lawful money of the United States of America.

“ Domestic Lending Office ” means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Company and the Administrative Agent.

“ Effective Federal Funds Rate ” has the meaning assigned to that term in Section 2.12(b) .

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“ Eligible Assignee ” means (a) a Bank; (b) an Affiliate of a Bank (other than a natural Person); (c) an Approved Fund; and (d) any other Person (other than a natural Person) consented to by the L/C Issuers and/or the Company, if, in either case, such consent is required pursuant to Section 2.14 ; provided, however, that notwithstanding the foregoing, “ Eligible Assignee ” shall not include the Company or any of the Company’s Affiliates or Subsidiaries.

“ Eligible Successor ” means a Person that (i) is a corporation, limited liability company or business trust duly incorporated or organized, validly existing and in good standing under the laws of one of the states of the United States or the District of Columbia, (ii) as a result of a contemplated acquisition, consolidation or merger, will succeed to all or substantially all of the consolidated business and assets of the Company or Exelon, as applicable, (iii) upon giving effect to such contemplated acquisition, consolidation or merger, will have all or substantially all of its consolidated business and assets conducted and located in the United States and (iv) in the case of the Company, is acceptable to the Majority Banks as a credit matter.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time and the regulations promulgated and the rulings issued thereunder.

“ Event of Default ” has the meaning assigned to that term in Section 6.01 .

“ Execution Date ” means the date this Agreement was executed and delivered by each of the parties hereto.

“ Exelon ” means Exelon Corporation, a Pennsylvania corporation, or any Eligible Successor thereof.

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average (rounded upwards to the nearest 1/100 of one percent) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average (rounded upwards, if necessary, to the nearest 1/100 of one percent) of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent.

“ Fee Letters ” means, collectively, (i) the Administrative Fee Letter, dated as of the date hereof, between the Company and the Administrative Agent, (ii) the Fronting Bank Fee Letter, dated as of May 7, 2008, between the Company and SunTrust Bank and (iii) the Fronting Bank Fee Letter, dated as of the date hereof, between the Company and The Bank of Nova Scotia; and “ Fee Letter ” means any of the foregoing as the context may require.

“ First Mortgage Bonds ” means, collectively, one or more First Mortgage Bonds issued by the Company pursuant to a Loan Agreement for the applicable series of Bonds, which has been assigned to, and registered in the name of, the Trustee under the Indenture for such series of Bonds as collateral security for the payment of such series of Bonds; and “ First Mortgage Bond ” means any of the foregoing as the context may require.

“ Fitch ” means Fitch, Inc., and any successor thereto.

“ Fitch Rating ” means, at any time, the rating issued by Fitch and then in effect with respect to the Company’s senior secured long-term public debt securities without third-party credit enhancement (it

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being understood that if the Company does not have any outstanding debt securities of the type described above but has an indicative rating from Fitch for debt securities of such type, then such indicative rating shall be used for determining the “ Fitch Rating ”).

“ Indentures ” means, collectively, the Bond Indentures between the Issuer and the Trustee, with respect to the Bonds, in each case as amended, restated, supplemented or otherwise modified; and “ Indenture ” means any of the foregoing as the context may require.

“ Intangible Transition Property ” means (i) “intangible transition property,” as defined in Section 18-102 of the Illinois Public Utilities Act, and (ii) any property created pursuant to an order of the Illinois Commerce Commission issued pursuant to state legislation described in clause (ii) of the definition of “Transitional Funding Instruments,” which consists primarily of the right to impose non-bypassable charges to customers of a utility in order to facilitate the utility’s recovery of specified costs and/or deferred rates.

“ Interest Coverage Ratio ” means, for any period of four consecutive fiscal quarters of the Company, the ratio of Adjusted Funds From Operations for such period to Net Interest Expense for such period.

“ Interest Expense ” means, for any period, “interest expense” as shown on a consolidated statement of income of the Company for such period prepared in accordance with GAAP plus Interest Expense to Affiliates for such period.

“ Interest Expense to Affiliates ” means, for any period, “Interest Expense to Affiliates” as shown on a consolidated statement of income of the Company for such period.

“ Issuer ” has the meaning assigned to that term in the introductory paragraph of this Agreement.

“ L/C Expiration Date ” means, with respect to an issued and outstanding Letter of Credit, the earlier of (a) the date that is 365 days from the Date of Issuance of such Letter of Credit and (b) June 30, 2009.

“ L/C Issuer ” means the financial institution signatory hereto in their capacity as issuer of one or more of the Letters of Credit, and “ L/C Issuers ” means all of them collectively.

“ L/C Obligations ” means, at any time, the sum, without duplication, of (a) the aggregate Maximum Credit Amount under all Letters of Credit outstanding at such time, plus (b) the aggregate unpaid amount at such time of all Reimbursement Obligations.

“ Letter of Credit ” means, with respect to a series of Bonds, each letter of credit issued hereunder in connection with such Bonds, in each case as amended or otherwise modified, and “ Letters of Credit ” means all of them collectively.

“ Lien ” means any lien (statutory or other), mortgage, pledge, security interest or other charge or encumbrance, or any other type of preferential arrangement (including the interest of a vendor or lessor under any conditional sale, capitalized lease or other title retention agreement).

“ Liquidity Drawing ” shall have the meaning assigned to that term in the Letters of Credit.

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“ Loan Agreements ” means, collectively, the Loan Agreements between the Issuer and the Company, with respect to the Bonds; and “ Loan Agreement ” means any of the foregoing as the context may require.

“ Majority Banks ” means at any time Banks having at least a majority of the then aggregate unpaid principal amount of the Reimbursement Obligations, or, if no such principal amount is then outstanding, Banks whose Shares equal at least a majority of the aggregate Shares.

“ Material Adverse Change ” and “ Material Adverse Effect ” each means, relative to any occurrence, fact or circumstances of whatsoever nature (including any determination in any litigation, arbitration or governmental investigation or proceeding), (i) any materially adverse change in, or materially adverse effect on, the financial condition, operations, assets or business of the Company and its consolidated Subsidiaries, taken as a whole; or (ii) any materially adverse effect on the validity or enforceability against the Company of this Agreement.

“ Maximum Credit Amount ” means, in respect of the Letters of Credit, the aggregate Stated Amount (as defined in the Letters of Credit) of all such Letters of Credit in effect at any time.

“ Moody’s ” means Moody’s Investors Service, Inc., and any successor thereto.

“ Moody’s Rating ” means, at any time, the rating issued by Moody’s and then in effect with respect to the Company’s senior secured long-term public debt securities without third-party credit enhancement (it being understood that if the Company does not have any outstanding debt securities of the type described above but has an indicative rating from Moody’s for debt securities of such type, then such indicative rating shall be used for determining the “ Moody’s Rating ”).

“ Mortgage ” means the Mortgage, dated July 1, 1923, as amended and supplemented by supplemental indentures, including the Supplemental Indenture, dated August 1, 1944, from the Company to the Mortgage Trustees; provided , that no effect shall be given to any amendment, supplement or refinancing after the date of this Agreement that would broaden the definition of “permitted liens” as defined in the Mortgage as constituted on the date of this Agreement.

“ Mortgage Trustees ” means BNY Midwest Trust Company (as successor to Harris Trust and Savings Bank) and D.G. Donovan, and any other successors thereto, as trustees under the Mortgage.

“ Mortgaged Property ” means all real and personal property of the Company from time to time subject to the lien of the Mortgage.

“ Multiemployer Plan ” means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which Exelon or any other member of the Controlled Group is a party to which more than one employer is obligated to make contributions.

“ Net Cash Flows From Operating Activities ” means, for any period, “Net Cash Flows provided by Operating Activities” as shown on a consolidated statement of cash flows of the Company for such period prepared in accordance with GAAP, excluding any “working capital changes” (as shown on such statement of cash flows) taken into account in determining such Net Cash Flows provided by Operating Activities.

“ Net Interest Expense ” means, for any period, the total of (a) Interest Expense for such period minus (b) Interest Expense to Affiliates for such period to the extent included in the amount referred to in clause (a) and related to (i) interest payments on debt obligations that are subordinated to the obligations of the Company under this Agreement, (ii) interest on Nonrecourse Indebtedness or (iii) Transitional Funding Instrument Interest.

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“ Nonrecourse Indebtedness ” means any Debt that finances the acquisition, development, ownership or operation of an asset in respect of which the Person to which such Debt is owed has no recourse whatsoever to the Company or any of its Affiliates other than:

(i) recourse to the named obligor with respect to such Debt (the “Debtor”) for amounts limited to the cash flow or net cash flow (other than historic cash flow) from the asset;

(ii) recourse to the Debtor for the purpose only of enabling amounts to be claimed in respect of such Debt in an enforcement of any security interest or lien given by the Debtor over the asset or the income, cash flow or other proceeds deriving from the asset (or given by any shareholder or the like in the Debtor over its shares or like interest in the capital of the Debtor) to secure the Debt, but only if the extent of the recourse to the Debtor is limited solely to the amount of any recoveries made on any such enforcement; and

(iii) recourse to the Debtor generally or indirectly to any Affiliate of the Debtor, under any form of assurance, undertaking or support, which recourse is limited to a claim for damages (other than liquidated damages and damages required to be calculated in a specified way) for a breach of an obligation (other than a payment obligation or an obligation to comply or to procure compliance by another with any financial ratios or other tests of financial condition) by the Person against which such recourse is available.

“ Note ” means, to the extent issued, a promissory note of the Company payable to the order of any Bank.

“ Official Statement ” means, with respect to a series of Bonds, the Official Statement executed in connection with such series of Bonds at the time of issuance thereof, as amended or supplemented, together with the documents incorporated therein by reference.

“ Operative Documents ” means, with respect to a series of Bonds, such Bonds and the related Indenture, the Supplemental Indenture (including the Mortgage), the First Mortgage Bond, the Loan Agreement, the Pledge Agreement, the Control Agreement, the Remarketing Agreement and each other operative document or instrument delivered in connection with the issuance, sale and securing of such series of Bonds.

“ Other Taxes ” has the meaning assigned to that term in Section 2.16(b) .

“ Participant ” has the meaning assigned to that term in Section 2.14(b) .

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Permitted Encumbrance ” means (a) any right reserved to or vested in any municipality or other governmental or public authority (i) by the terms of any right, power, franchise, grant, license or permit granted or issued to the Company or (ii) to purchase or recapture or to designate a purchaser of any property of the Company; (b) any easement, restriction, exception or reservation in any property and/or

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right of way of the Company for the purposes of roads, pipelines, transmission lines, distribution lines, transportation lines or removal of minerals or timber or for other like purposes or for the joint or common ownership and/or use of real property, rights of way, facilities and/or equipment, and defects, irregularities and deficiencies in title of any property and/or rights of way, which, in each case described in this clause (b) , whether considered individually or collectively with all other items described in this clause (b) , do not materially impair the use of the relevant property and/or rights of way for the purposes for which such property and/or rights of way are held by the Company; (c) rights reserved to or vested in any municipality or other governmental or public authority to control or regulate any property of the Company or to use such property in a manner that does not materially impair the use of such property for the purposes for which it is held by the Company; and (d) obligations or duties of the Company to any municipality or other governmental or public authority that arise out of any franchise, grant, license or permit and that affect any property of the Company.

“ Permitted Securitization ” means any sale and/or contribution, or series of related sales and/or contributions, by the Company or any Subsidiary of the Company of accounts receivables, payment intangibles, notes receivable and related rights (collectively, “ receivables ”) or interests therein to a trust, corporation or other entity, where (a) the purchase of such receivables or interests therein is funded in whole or in part by the incurrence or issuance by the purchaser or any successor purchaser of Debt or securities that are to receive payments from, or that represent interests in, the cash flow derived primarily from such receivables or interests therein, provided , however , that “Debt” as used in this clause (a) shall not include Debt incurred by a Receivables SPC owed to the Company or to a Subsidiary of the Company which Debt represents all or a portion of the purchase price paid by the Receivables SPC for such receivables or interests therein, (b) any recourse, repurchase, hold harmless, indemnity or similar obligations of the Company or any Subsidiary (other than the Receivables SPC that is a party to such transaction) in respect of receivables or interests therein sold, or payments made in respect thereof, are customary for transactions of this type, and do not prevent the characterization of the transaction as a true sale under applicable laws (including debtor relief laws), and (c) any recourse, repurchase, hold harmless, indemnity or similar obligations of a Receivables SPC in respect of receivables or interests therein sold, or payments made in respect thereof, are customary for transactions of this type.

“ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, limited liability company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Plan ” means an employee pension benefit plan that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the Company or any other member of the Controlled Group may have any liability.

“ Pledge Agreement ” means the Pledge Agreement, dated of even date herewith, between the Company and the Administrative Agent.

“ Pledged Bonds ” has the meaning assigned to that term in the Pledge Agreement.

“ Principal Amount ” has the meaning assigned to that term in Section 2.12(b) .

“ Principal Subsidiary ” means (a) each Utility Subsidiary (other than Commonwealth Edison Company of Indiana, Inc., so long as it does not qualify as a Principal Subsidiary under the following clause (b)) and (b) each other Subsidiary the assets of which, as of the date of any determination thereof, exceeded $250,000,000 in book value at any time during the preceding 12-month period. Notwithstanding the foregoing, Principal Subsidiary shall not include any Receivables SPC or Special Purpose Subsidiary.

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“ Receivables SPC ” means a special purpose, bankruptcy-remote Person formed for the sole and exclusive purpose of engaging in activities in connection with the purchase, sale and financing of accounts receivable, payment intangibles, accounts or notes receivable and related rights in connection with and pursuant to a Permitted Securitization.

“ Regulatory Change ” means, with respect to any Bank, any change effective after the Execution Date in United States Federal, state or foreign law or regulations (including Regulation D) or the adoption or making after such date of any interpretation, directive or request applying to a class of financial institutions including such Bank of or under any United States Federal, state or foreign law or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof.

“ Reimbursement Obligations ” means the obligations of the Company pursuant to Sections 2.03 , 2.04 , 2.05 , 2.06 and 2.07(b) of this Agreement with respect to each drawing under a Letter of Credit and each Advance.

“ Remarketing Agent ” means the Person appointed as the remarketing agent pursuant to the applicable Remarketing Agreement.

“ Remarketing Agreements ” means, collectively, the Remarketing Agreements executed by the Company and the Remarketing Agents with respect to the Bonds; and “ Remarketing Agreement ” means any of the foregoing as the context may require.

“ Reportable Event ” means a reportable event as defined in Section 4043 of ERISA and regulations issued under such section with respect to a Plan, excluding such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding standard of Section 412 of the Code and Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waivers in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

“ S&P Rating ” means, at any time, the rating issued by S&P and then in effect with respect to the Company’s senior secured long-term public debt securities without third-party credit enhancement (it being understood that if the Company does not have any outstanding debt securities of the type described above but has an indicative rating from S&P for debt securities of such type, then such indicative rating shall be used for determining the “ S&P Rating ”).

“ Share ” means, with respect to any Bank, the percentage set forth opposite such Bank’s name on Schedule 1.01 hereto, as adjusted from time to time pursuant to Section 2.14 .

“ Single Employer Plan ” means a Plan maintained by the Company or any other member of the Controlled Group for employees of the Company or any other member of the Controlled Group.

“ Special Purpose Subsidiary ” means a direct or indirect wholly owned Subsidiary, substantially all of the assets of which are Intangible Transition Property, and proceeds thereof, formed solely for the purpose of holding such assets and issuing Transitional Funding Instruments, and which complies with the requirements customarily imposed on bankruptcy-remote entities in receivables securitizations.

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“ Subsidiary ” means, with respect to any Person, any corporation or unincorporated entity of which more than 50% of the outstanding capital stock (or comparable interest) having ordinary voting power (irrespective of whether or not at the time capital stock, or comparable interests, of any other class or classes of such corporation or entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person (whether directly or through one or more other Subsidiaries). Unless otherwise indicated, each reference to a “Subsidiary” means a Subsidiary of the Company.

“ Supplemental Indenture ” means, with respect to a series of Bonds, the Supplemental Indenture which supplements the Mortgage to provide for the creation and issuance of the First Mortgage Bond securing such series of Bonds.

“ Supplement to Official Statement ” means any supplement (including any “sticker” or “wrap”) to any Official Statement prepared in connection with the issuance and delivery or extension of the Letters of Credit.

“ Taxes ” has the meaning assigned to that term in Section 2.16(a) .

“ Tender Advance ” has the meaning assigned to that term in Section 2.04(a) .

“ Tender Agent ” means, with respect to a series of Bonds, the tender agent at the time serving as such under the Indenture for such series of Bonds.

“ Tender Draft ” means a Liquidity Drawing under a Letter of Credit to pay the purchase price of a series of Bonds delivered or deemed delivered to the Trustee, the Tender Agent or the Remarketing Agent pursuant to the Indenture for such series and not remarketed by the Remarketing Agent for such series of Bonds on the date such Bonds are to be purchased.

“ Transitional Funding Instrument ” means any instrument, pass-through certificate, note, debenture, certificate of participation, bond, certificate of beneficial interest or other evidence of indebtedness or instrument evidencing a beneficial interest that (i) (A) is issued pursuant to a “transitional funding order” (as such term is defined in Section 18-102 of the Illinois Public Utilities Act, as amended) issued by the Illinois Commerce Commission at the request of an electric utility and (B) is secured by or otherwise payable solely from non-bypassable cent per kilowatt hour charges authorized pursuant to such order to be applied and invoiced to customers of such utility, or (ii) (A) is issued pursuant to a financing order of a public utilities commission at the request of an electric utility pursuant to state legislation which is enacted to facilitate the recovery of certain specified costs by electric utilities through non-bypassable cent per kilowatt hour charges and/or demand charges authorized pursuant to such order to be applied and invoiced to customers of such utility and (B) is secured by or otherwise payable solely from such non-bypassable charges.

“ Trustee ” means the trustee under the Indenture for a series of Bonds, which as of the date of this Agreement is The Bank of New York Trust Company, N.A.

“ Utility Subsidiary ” means each Subsidiary that is engaged principally in the transmission or distribution of electricity or gas and is subject to rate regulation as a public utility by federal or state regulatory authorities.

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SECTION 1.02. Computation of Time Periods.

In this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each means “ to but excluding ”.

SECTION 1.03. Accounting Terms.

(a) As used in this Agreement, “GAAP” means generally accepted accounting principles in the United States, applied on a basis consistent with the principles used in preparing the Company’s audited consolidated financial statements as of December 31, 2007 and for the fiscal year then ended, as such principles may be revised as a result of changes in GAAP implemented by the Company subsequent to such date. In this Agreement, except to the extent, if any, otherwise provided herein, all accounting and financial terms shall have the meanings ascribed to such terms by GAAP, and all computations and determinations as to accounting and financial matters shall be made in accordance with GAAP. In the event that the financial statements generally prepared by the Company apply accounting principles other than GAAP (including as a result of any event described in Section 1.03(b) ), the compliance certificate delivered pursuant to Section 5.01(b)(iv) accompanying such financial statements shall include information in reasonable detail reconciling such financial statements to GAAP to the extent relevant to the calculations set forth in such compliance certificate.

(b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth herein and the Company or the Majority Banks shall so request, the Administrative Agent, the Banks and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Majority Banks); provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein.

(c) For purposes of any calculation or determination which is to be made on a consolidated basis (including compliance with Section 5.02(c) ), such calculation or determination shall exclude any assets, liabilities, revenues and expenses that are included in Company’s financial statements from “variable interest entities” as a result of the application of FIN No. 46, Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51, as updated through FIN No. 46-R and as modified by FIN No. 94.

SECTION 1.04. Interpretation.

The following rules shall apply to the construction of this Agreement unless the context requires otherwise: (a) the singular includes the plural and the plural the singular; (b) words importing any gender include the other genders; (c) references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute to which reference is made, and all regulations adopted and publications promulgated pursuant to such statutes; (d) references to “ writing ” include printing, photocopy, typing, lithography and other means of reproducing words in a tangible visible form; (e) the words “ including ”, “ includes ” and “ include ” shall be deemed to be followed by the words “ without limitation ”; (f) references to articles, sections (or sub-divisions of sections), exhibits, appendices, annexes or schedules are to those of this Agreement unless otherwise indicated; (g) references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent that such amendments and other modifications are permitted or not limited by the terms of this Agreement; and (h) references to Persons include their respective permitted successors and assigns.

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ARTICLE II

AMOUNT AND TERMS OF THE LETTERS OF CREDIT

SECTION 2.01. The Letters of Credit.

(a) Each L/C Issuer agrees, on the terms and conditions set forth in this Agreement (including the limitations set forth in this Section 2.01 ), upon the request of the Company, (1) to issue direct pay Letters of Credit in favor of the Trustee to provide credit and liquidity support in connection with the related Bonds from time to time from the date of this Agreement to the Commitment Expiration Date and (2) to modify Letters of Credit (“ Modify ,” and each such action a “ Modification ”) from time to time from the Date of Issuance of a Letter of Credit to its L/C Expiration Date; provided that (a) the sum of (x) the Maximum Credit Amount and (y) all Reimbursement Obligations owed by the Company to any L/C Issuer shall not exceed the amount agreed upon in writing between the Company and such L/C Issuer; (b) any Bank’s participation in Letters of Credit shall not exceed such Bank’s Share of the sum of (x) the Maximum Credit Amount and (y) all Reimbursement Obligations; (c) the sum of (x) the Maximum Credit Amount and (y) all Reimbursement Obligations shall not at any time exceed the aggregate Commitment of all Banks; (d) no L/C Issuer shall be obligated to issue or Modify any Letter of Credit if (i) any order, judgment or decree of any court or other governmental authority shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit or (ii) any applicable law, or any request or directive from any governmental authority having jurisdiction over such L/C Issuer, shall prohibit, or request or direct that such L/C Issuer refrain from, the issuance of letters of credit generally or of such Letter of Credit in particular and (e) on the Commitment Expiration Date, any unused Commitment shall be reduced to zero. Unless otherwise terminated in accordance with its terms, each Letter of Credit shall expire on its L/C Expiration Date. Letters of Credit shall not be issued in respect of any obligation other than the Bonds.

(b) Subject to Section 2.01(a) , the Company shall give the applicable L/C Issuer notice prior to 11:00 A.M., New York City time, at least 15 Business Days (or such lesser time as the applicable L/C Issuer may agree) prior to the proposed Date of Issuance or Modification of each Letter of Credit, specifying the name of the Trustee as beneficiary, the series of Bonds to be supported by such Letter of Credit, the proposed date of issuance (or Modification) and the expiry date of such Letter of Credit and describing the proposed terms of such Letter of Credit. Such notice shall also be accompanied by drafts of the proposed Official Statement and the other Operative Documents relating to the series of Bonds to be supported by such Letter of Credit. Upon receipt of such notice, the applicable L/C Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Bank, of the contents thereof and of the amount of such Bank’s participation in such proposed Letter of Credit. The issuance or Modification by an L/C Issuer of any Letter of Credit shall, in addition to the applicable conditions precedent set forth in Article III (the satisfaction of which an L/C Issuer shall have no duty to ascertain; provided that no L/C Issuer shall issue a Letter of Credit if such L/C Issuer shall have received written notice (which has not been rescinded) from the Administrative Agent or any Bank that any applicable condition precedent to the issuance or modification of such Letter of Credit has not been satisfied), be subject to the conditions precedent that such Letter of Credit shall be satisfactory to the applicable L/C Issuer and that the Company shall have executed and delivered such application agreement and/or such other instruments and agreements relating to such Letter of Credit as such L/C Issuer shall have reasonably requested (each a “ Letter of Credit Application ”). In the event of any conflict (including any additional terms requiring the posting of collateral) between the terms of this Agreement and the terms of any Letter of Credit Application, the terms of this Agreement shall control.

(c) Upon the satisfaction of the conditions precedent set forth in this Agreement, on the applicable Date of Issuance, the applicable L/C Issuer hereunder will issue to the Trustee one or more

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Letters of Credit (substantially in the form of Exhibit A hereto) to support the related series of Bonds. The initial face amount may be from time to time reduced and/or reinstated in accordance with the terms of the applicable Letter of Credit. The Banks will use only their own funds in honoring a drawing on the Letters of Credit. The Company irrevocably and unconditionally instructs the applicable L/C Issuer to reduce or reinstate a Letter of Credit in accordance with its terms or in the event the Trustee elects to reduce the stated amount of any Letter of Credit in connection with a redemption of Bonds or otherwise.

SECTION 2.02. Letter of Credit Fees.

(a) The Company hereby agrees to pay the fees specified in the Fee Letters, to the parties, at the times and in the amounts set forth therein.

(b) The Company agrees to pay to the Administrative Agent for the account of the Banks, ratably in accordance with their respective Shares:

(i) a letter of credit fee on the Maximum Credit Amount for the Letters of Credit, computed at a rate per annum equal to the Applicable Participation Fee Rate from the applicable Date of Issuance to the applicable L/C Expiration Date of such Letters of Credit, payable quarterly in arrears on the last day of June 2008 and on the last day of each September, December, March and June thereafter and on each applicable L/C Expiration Date; and

(ii) a commitment fee equal to 0.175% per annum multiplied by the amount by which the Commitment exceeds the average daily Maximum Credit Amount for the Letters of Credit, for the period from the Execution Date to the Commitment Expiration Date, payable in arrears on the Commitment Expiration Date.

(c) Any amount of fees not paid when due shall bear interest, from the date such amount of fees was due until the date of payment in full, at the Default Rate, payable on demand and on the date of payment in full of such amount.

SECTION 2.03. Reimbursement.

Except as otherwise specified in Section 2.04(a) , Company hereby agrees to pay to the Administrative Agent for the account of the applicable L/C Issuer any amount drawn under a Letter of Credit immediately after (and on the same Business Day as) such drawing is paid by an L/C Issuer, plus interest at the Default Rate payable on demand and on the date of payment in full on any such amount remaining unpaid from the date such amount becomes due and payable until payment in full. Each L/C Issuer will pay to the Administrative Agent, for the account of the Banks, all amounts received by it from the Company for application in payment, in whole or in part, of the Reimbursement Obligation in respect of Letters of Credit issued by such L/C Issuer, but only to the extent such Bank has made payment to the Administrative Agent, for the account of such L/C Issuer, in respect of such Letters of Credit pursuant to Section 2.12 .

SECTION 2.04. Tender Advances.

(a) If any L/C Issuer shall make any payments under a Letter of Credit pursuant to a Tender Draft to pay the purchase price of Bonds being purchased upon a tender thereof, and the conditions set forth in Section 3.03 shall have been fulfilled, such payments shall automatically be deemed to constitute and shall be an advance made by such L/C Issuer to the Company on the date and in the amount of such payment, each such advance being a “ Tender Advance ” and collectively the “ Tender Advances ”; provided , that if such conditions are not satisfied the payments made by such L/C Issuer shall immediately become due and payable.

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(b) Subject to Sections 2.07 and 6.02 , the principal amount of each Tender Advance, together with all accrued and unpaid interest thereon, shall be due and payable on the earlier of (i) the date that is thirty (30) days after the making of such Advance (or if such date is not a Business Day, the next succeeding Business Day) and (ii) the applicable L/C Expiration Date.

(c) Upon each Tender Draft there shall be delivered to the Trustee, as agent for the Administrative Agent, registered in the name of the Company but with the Administrative Agent registered as pledgee, in duly transferable form, the Bonds purchased with the proceeds of such Tender Draft, i.e. the Pledged Bonds (or in the alternative, as provided in the Pledge Agreement for certificated Bonds held by The Depository Trust Company or its nominee or a similar securities depository, the Trustee shall cause its records in its capacity as a “DTC participant” or similar capacity with respect to another depository, to reflect beneficial ownership of the Pledged Bonds by the Company subject to the lien and security interest of the Administrative Agent). As security for the payment of each Tender Advance under this Agreement, the Company is pledging to the Administrative Agent pursuant to the Pledge Agreement, and granting to the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuers and the Banks, a security interest in, all of its right, title and interest in and to all Pledged Bonds arising in connection with a Tender Draft.

(d) Upon payment to the Administrative Agent or the applicable L/C Issuer of any Tender Advance (together with all accrued interest thereon), other than payment from the proceeds of a remarketing of the Bonds with respect to which such Tender Advance was made pursuant to the applicable Indenture, and provided that the Administrative Agent shall not have notified the Trustee and the Remarketing Agent that an Event of Default has occurred and is continuing, the Administrative Agent (or the Trustee (as custodian for the Administrative Agent) at the direction of the Administrative Agent) shall release from the pledge and security interest created hereby the Pledged Bonds purchased with the proceeds of such Tender Advance. The Administrative Agent shall have no obligation to release any such Pledged Bonds pursuant to this subsection (d) unless the entire Tender Advance incurred to buy such Pledged Bonds, together with accrued interest thereon, has been paid, and the related Letter of Credit shall have been returned to the applicable L/C Issuer for cancellation. Such Pledged Bonds shall be delivered to the Company or its designee on payment as aforesaid.

(e) In the event Pledged Bonds are remarketed pursuant to the applicable Indenture, and provided that the Administrative Agent shall not have notified the Trustee and Remarketing Agent in writing that an Event of Default has occurred and is continuing, the Administrative Agent (or the Trustee (as custodian for the Administrative Agent) at the direction of the Administrative Agent) shall also release from the pledge and security interest evidenced by the Pledge Agreement a principal amount of Pledged Bonds equal to the principal amount of Bonds so remarketed. The Pledged Bonds shall be released (i) upon notice from the Remarketing Agent to the Administrative Agent one Business Day prior to such release (or such shorter period of time as may be agreed to by the parties) specifying the principal amount of Bonds purchased by and to be delivered to such purchaser, and (ii) upon receipt by the Trustee or Remarketing Agent, as applicable, for the account of the Administrative Agent or L/C Issuer, as applicable, as provided for in the related Indenture, of remarketing proceeds with respect to such remarketed Pledged Bonds in an amount not less than the principal amount of the Pledged Bonds, plus accrued interest thereon to the date of remarketing.

(f) Any interest or any principal received by the Administrative Agent or the applicable L/C Issuer in respect of Pledged Bonds shall be credited against the Reimbursement Obligations and applied first to interest due pursuant to Section 2.05 .

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SECTION 2.05. Interest on Advances.

(a) General . The Company shall pay to the Administrative Agent, for the account of the Banks in proportion to their respective Shares, interest on the unpaid principal amount of each Tender Advance from the date of such Advance until such principal amount is paid in full at the applicable rate set forth below.

(b) Base Rate . The Company shall pay to the Administrative Agent, for the account of the Banks in proportion to their respective Shares, interest on each Advance from the date of such Advance until the date the principal amount of such Advance becomes due or is prepaid, payable quarterly in arrears and on the date such Advance becomes due or is prepaid, at a fluctuating interest rate per annum in effect from time to time equal to the sum of (i) the Base Rate in effect from time to time, plus (ii) 1.00%.

(c) Default Interest . The Company shall pay to the Administrative Agent, for the account of the Banks in proportion to their respective Shares, interest on the unpaid principal amount of each Advance that is not paid when due and, to the extent permitted by law, on the unpaid amount of all interest, fees and other amounts payable hereunder that is not paid when due (including, for the avoidance of doubt, amounts due pursuant to Section 2.03 ) whether at maturity, by acceleration or otherwise, payable on demand, at a rate per annum equal at all times to 2% per annum above the Base Rate in effect from time to time (the “ Default Rate ”).

(d) Notice to Trustee . At any time that Bonds are held under the Pledge Agreement, the Administrative Agent, at the request of the Trustee, shall notify such Trustee of the rate of interest applicable to, and interest payment dates for, outstanding Advances relating to such Pledged Bonds.

SECTION 2.06. Payment of Advances.

Subject to Sections 2.07 and 6.02 , each Tender Advance shall be due and payable as specified in Section 2.04(b) .

SECTION 2.07. Prepayments; Reinstatement of Letter of Credit Amounts.

(a) The Company may, upon same-day notice to the Administrative Agent, prepay the outstanding amount of any Advance in whole or in part with accrued interest to the date of such prepayment on the amount prepaid.

(b) Prior to or simultaneously with the remarketing or redemption of Bonds acquired by any Trustee with the proceeds of one or more draws under the Letters of Credit related to such Bonds by one or more Tender Drafts, or if any Pledged Bonds shall be determined to be invalid, the Company shall prepay or cause the Trustee on behalf of the Company to prepay the then outstanding Tender Advances resulting from such draw or draws (in the order in which they were made) and accrued interest thereon, if any, by paying (or causing to be paid) to the Administrative Agent (if such prepayment is being made by the Company), for the account of the Banks in proportion to their respective Shares, or to the applicable L/C Issuer (if such prepayment is being made by any Trustee), for the account of the Banks in proportion to their respective Shares, an amount equal to the sum of (i) the aggregate principal amount of the Bonds being resold or to be resold or being redeemed or that have been determined to be invalid, plus (ii) accrued interest thereon, for application to the prepayment of such Advances. With respect to payments of Tender Advances made by any Trustee to any L/C Issuer, such payments, when such L/C Issuer shall also have received certificates completed and signed by the Trustee in substantially the form provided in the applicable Letter of Credit, shall be applied by the Administrative Agent in reimbursement of such drawings (and as prepayment of Tender Advances resulting from such drawings in the manner described

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above). Each of the Company and the Banks irrevocably authorizes the L/C Issuers to rely on such certificate and to reinstate the applicable Letters of Credit in accordance therewith, and otherwise to reinstate the applicable Letters of Credit at the times and in the manner specified therein.

SECTION 2.08. Increased Costs.

(a) If any Bank determines that, as a result of any Regulatory Change other than a Regulatory Change that would be governed by Section 2.16 , the amount of capital required or expected to be maintained by such Bank is increased based upon the existence of a Letter of Credit or such Bank’s commitment to make or participate in Advances hereunder, then, upon demand by such Bank, the Company shall immediately pay, from time to time as specified by such Bank, such amounts as such Bank may reasonably determine to be necessary to compensate such Bank for any additional costs or for any reduction in such Bank’s rate of return on its capital to the extent that such Bank reasonably determines that such additional costs or such reduction in such Bank’s rate of return on its capital is attributable to the maintenance by such Bank of capital in respect of a Letter of Credit and such Bank’s commitment to make or participate in Advances hereunder; provided that no Bank shall be entitled to demand such compensation more than 90 days following the last day following the application of such Regulatory Change in respect of which such demand is made and no L/C Issuer shall be entitled to demand such compensation more than 90 days following the expiration or termination (by a drawing or otherwise) of a Letter of Credit in respect of which such demand is made; provided , further , that the foregoing proviso shall in no way limit the right of any Bank or an L/C Issuer to demand or receive such compensation to the extent that such compensation relates to the retroactive application of any Regulatory Change if such demand is made within 90 days after the implementation of such retroactive Regulatory Change.

(b) Each Bank will notify the Company of any Regulatory Change that will entitle such Bank to compensation pursuant to this Section 2.08 as promptly as practicable. Each Bank will furnish to the Company a certificate setting forth in reasonable detail the basis for the amount of each request by such Bank for compensation. Determinations by each Bank of the amounts required to compensate such Bank shall be conclusive, absent manifest error.

SECTION 2.09. Payments and Computations.

(a) The Company shall make each payment hereunder without condition or deduction for any counterclaim, defense, recoupment or setoff (i) in the case of amounts due pursuant to Sections 2.03 and 2.07(b) , not later than 2:00 P.M. (New York City time), and (ii) in all other cases, not later than 12:00 Noon (New York City time) on the day when due in lawful money of the United States of America to the Administrative Agent, for the account of the applicable L/C Issuer or the Banks, as appropriate, at its address referred to in Section 8.02 , in same day funds, except that payments pursuant to Sections 2.08 , 2.16 , 8.06 and 8.07 shall be made directly to the Person entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Computations of the fees hereunder and the Base Rate (if calculated on the basis of the Administrative Agent’s prime rate) and Default Rate shall be made by the Administrative Agent on the basis of a 365/366 day year, as the case may be, for the actual number of days (including the first day but excluding the last day) elapsed. Computations of the Base Rate (if calculated on the basis of the Federal Funds Rate) shall be made by the Administrative Agent on the basis of a 360 day year for the actual number of days (including the first day but excluding the last day) elapsed.

(b) If, after the Administrative Agent has paid to any L/C Issuer or any Bank any amount pursuant to subsection (a) above, such payment is rescinded or must otherwise be returned or must be paid over by the Administrative Agent or any L/C Issuer to any Person, whether pursuant to any bankruptcy or

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insolvency law, or otherwise, such Bank shall, at the request of the Administrative Agent or such L/C Issuer promptly repay to the Administrative Agent or such L/C Issuer, as the case may be, an amount equal to its ratable share of such payment, together with any interest required to be paid by the Administrative Agent or such L/C Issuer with respect to such payment. Upon each Bank’s repayment in full of its ratable share of such payment, the Company agrees that to the extent of such repayment, such Bank shall be deemed to be a direct creditor of the Company.

SECTION 2.10. Non-Business Days.

Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commission, as the case may be.

SECTION 2.11. Evidence of Debt.

The Company shall issue Notes payable to the order of any Bank that shall request such Note. The Administrative Agent shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Company resulting from each drawing under a Letter of Credit and from each Advance made from time to time hereunder and the amounts of principal and interest payable and paid from time to time hereunder and of the respective Shares of the Reimbursement Obligations of the Banks. In any legal action or proceeding in respect of this Agreement, the entries made in such account or accounts shall, in the absence of manifest error, be conclusive evidence of the existence and amounts of the obligations of the Company therein recorded. Upon the written request of the Company, the Administrative Agent agrees to provide to the Company a statement of the amounts owed the Banks under this Agreement.

SECTION 2.12. Syndication; Reimbursement of L/C Issuers.

(a) Each L/C Issuer hereby sells and transfers to each Bank (and upon the issuance or Modification of each Letter of Credit, is deemed to have sold), and each Bank hereby purchases and acquires from each L/C Issuer (and upon the issuance or Modification of each Letter of Credit is deemed to have purchased), an undivided interest and participation, to the extent of such Bank’s Share in and to the Letters of Credit issued by such L/C Issuer, including the obligations of such L/C Issuer under and in respect thereof, the Tender Advances and the Reimbursement Obligations; provided , that such L/C Issuer shall remain the sole party obligated to make payments under the Letters of Credit issued by such L/C Issuer.

(b) In the event that any L/C Issuer shall make any payment under a Letter of Credit and the Company shall not reimburse such L/C Issuer on the same Business Day (including any payment in respect of any Tender Advance) and in full for such payment (the difference between the amount of such payment and the amount reimbursed by the Company being the “ Principal Amount ”), the Administrative Agent will promptly notify each of the other Banks of such Principal Amount and each such Bank will unconditionally pay to the Administrative Agent (i) on the same Business Day if the Administrative Agent provides such Bank with telephonic notice received not later than 3:00 P.M. (New York City time) on such Business Day, or (ii) not later than 12:00 Noon (New York City time) on the Business Day next succeeding the Business Day such notice is received, if such notice is received after 3:00 P.M. (New York City time) on a Business Day, an amount equal to its Share of the Principal Amount in United States dollars and in same day funds in payment for its Share of the Reimbursement Obligations with respect to such Principal Amount, plus an amount, payable on demand, from and including the date when such Principal Amount becomes outstanding to, but not including, the date such Bank’s Share of the Principal

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Amount is paid equal to the Effective Federal Funds Rate plus any applicable amounts pursuant to the Rules of Interbank Compensation of the Council on International Banking or the New York Clearinghouse Compensation Committee, as the case may be, in effect from time to time, for the first three days and, thereafter, at the Base Rate. “ Effective Federal Funds Rate ” means, for any day, the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System, as published for such day by the Federal Reserve Bank of New York. Upon payment in full for its Share of such Reimbursement Obligations pursuant to this Section 2.12(b) , the Company agrees that to the extent of such payment, such Bank shall be deemed to be a direct creditor of the Company.

(c) If any Bank shall default in the payment when due of its Share of any Reimbursement Obligations, in addition to any other claim or remedy the applicable L/C Issuer may have against such Bank, such Bank shall not be entitled to receive any payments pursuant to this Agreement or otherwise have any other rights hereunder until all amounts due and payable by such Bank to such L/C Issuer hereunder shall have been paid in full. In furtherance of the foregoing, if any Bank shall fail to make any payment to any L/C Issuer in accordance with subsection (b) above, and such failure shall continue for five Business Days following written notice of such failure from such L/C Issuer to such Bank, such L/C Issuer may acquire, or, subject to Section 2.14 , transfer to a third party in exchange for the sum or sums due from such Bank, such Bank’s interest in the related Reimbursement Obligations and all other rights of such Bank hereunder in respect thereof, without, however, relieving such Bank from any liability for damages and reasonable costs and expenses suffered by such L/C Issuer as a result of such failure. The purchaser of any such interest shall be deemed to have acquired an interest senior to the interest of such Bank and shall be entitled to receive all subsequent payments which such L/C Issuer or the Administrative Agent would otherwise have made hereunder to such Bank in respect of such interest.

SECTION 2.13. Obligations Absolute.

The payment obligations of the Company under this Agreement to reimburse the L/C Issuers for drawings made under the Letters of Credit and the obligations of the Banks under Section 2.12 shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following circumstances:

(i) any lack of validity or enforceability of the Operative Documents, the Letters of Credit, the Fee Letters, or any other agreement, certificate or instrument relating thereto;

(ii) any amendment or waiver of or any consent to departure from all or any of the Operative Documents;

(iii) the existence of any claim, set-off, defense or other right which the Company may have at any time against any Trustee or any other beneficiary, or any transferee, of the Letters of Credit (or any Persons for whom any Trustee, any such beneficiary or any such transferee may be acting), the Banks, or any other Person whether in connection with this Agreement, the transactions contemplated herein or in the Operative Documents, or any unrelated transaction;

(iv) any statement, draft, demand, certificate or any other document presented under the Letters of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by the L/C Issuers under the Letters of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit; and

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(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

SECTION 2.14. Assignments and Participations.

(a) Each Bank may assign to one or more Eligible Assignees all or a percentage interest of its rights and obligations under this Agreement but if less than all, then such assignment shall be in an amount equal to $5,000,000 or an integral multiple thereof and such assigning Bank shall continue to hold a Share of at least $5,000,000, provided , that (i) no assignment by any Bank may be made to any Eligible Assignee, except with the prior written consent of (A) the Company, which consent shall not be unreasonably withheld or delayed and shall not be required (1) in the case of an assignment to a Bank, an Affiliate of a Bank or an Approved Fund, or (2) if an Event of Default shall have occurred and be continuing and (B) the L/C Issuers, which consent may be given or withheld in the sole discretion of the L/C Issuers; (ii) the L/C Issuers may not assign their direct obligations under the Letters of Credit, and (iii) each such assignment shall be of a constant, and not a varying, percentage of the assignor’s rights and obligations under this Agreement. The parties to each such assignment shall execute and deliver to the Administrative Agent an instrument of assignment in form and substance satisfactory to the Administrative Agent and the Company, and a processing fee of $3,500, and the Administrative Agent will record in a register maintained for such purpose the name of the assignee and the percentage participation interest assigned by the assignor and assumed by the assignee for purposes of the determination of such assignor’s and assignee’s respective Shares. Upon such execution, delivery, fee payment, acceptance and recording, from and after the effective date specified in each assignment, which effective date shall be at least five Business Days after the delivery thereof to the Administrative Agent, the assignee shall, to the extent of such assignment, become a party hereto and have all of the rights and obligations of a Bank hereunder and, to the extent of such assignment, such assigning Bank shall be released from its obligations hereunder but shall continue to be entitled to the benefits of Sections 2.08 , 2.16 , 8.05 , 8.06 and 8.07 (without relieving such Bank from any liability for damages, costs and expenses suffered by the Administrative Agent, the L/C Issuers or the Company as a result of the failure by such Bank to perform its obligations hereunder).

(b) Each Bank may grant participations to one or more Persons in all or any part of, or any interest (undivided or divided) in, such Bank’s rights and/or obligations under this Agreement (any such Person being referred to herein as a “ Participant ”); provided, however, that (i) such Bank’s obligations under this Agreement shall remain unchanged; (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations; (iii) in no event shall such Bank be obligated to the Participant to take or refrain from taking any action hereunder, except that such Bank may agree with the Participant that it will not, without the consent of the Participant, agree to (A) the extension of any L/C Expiration Date or of any date fixed for the payment of principal of or interest, fees (if the Participant is entitled to any part thereof) or any other payment (if the Participant is entitled to any part thereof) pursuant to this Agreement or the Reimbursement Obligations, (B) the reduction of any payment of principal thereof, or (C) the reduction of the rate at which either interest is payable thereon or (if the Participant is entitled to any part thereof) the reduction of the fees payable hereunder to a level below the rate at which the Participant is entitled to receive interest or such fees (as the case may be) in respect to such participation; (iv) the Company, the L/C Issuers and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement; and (v) such Participant shall be entitled to the cost protection provisions provided for in Sections 2.08 and 2.16 ; provided, further, that the amount of such cost protection shall not exceed the amount of cost protection to which such Bank selling such participation would have been entitled under Section 2.08 or 2.16 , as the case may be. Promptly after any Bank grants any such participation, such Bank shall inform the Company of the identity of the Participant and the amount of such participation.

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(c) Notwithstanding any other provision set forth in this Agreement, any Bank may at any time create a security interest in all or any portion of its rights under this Agreement (including the Advances owed to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

SECTION 2.15. Reserved.

SECTION 2.16. Taxes.

(a) All payments by or on behalf of the Company hereunder shall be made, in accordance with Section 2.09 , free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank, each L/C Issuer and the Administrative Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank, such L/C Issuer or the Administrative Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Bank, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction of such Bank’s Domestic Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, “ Taxes ”). If the Company shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Bank, any L/C Issuer or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.16 ) such Bank, such L/C Issuer or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Company shall make such deductions and (iii) the Company shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Company agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies to the extent arising from the execution, delivery or registration of this Agreement (all of the foregoing, “ Other Taxes ”).

(c) No Bank may claim or demand payment or reimbursement in respect of any Taxes or Other Taxes pursuant to this Section 2.16 if such Taxes or Other Taxes, as the case may be, were imposed solely as the result of a voluntary change in the location of the jurisdiction of such Bank’s Domestic Lending Office.

(d) The Company will indemnify each Bank, each L/C Issuer and the Administrative Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.16 ) paid by such Bank, such L/C Issuer or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Bank, such L/C Issuer or the Administrative Agent (as the case may be) makes written demand therefor.

(e) Each Bank organized under the laws of a jurisdiction outside the United States shall provide the Administrative Agent and the Company with the forms prescribed by the Internal Revenue Service of the United States certifying that such Bank is exempt from United States withholding taxes with respect to all payments to be made to such Bank hereunder. If for any reason during the term of this Agreement, any Bank becomes unable to submit the forms referred to above or the information or representations contained therein are no longer accurate in any material respect, such Bank shall notify the Administrative Agent and the Company in writing to that effect. Unless the Company and the Administrative Agent have received forms or other documents satisfactory to them (as set forth above)

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indicating that payments hereunder are not subject to United States withholding tax, the Company or the Administrative Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Bank organized under the laws of a jurisdiction outside the United States and such Bank may not claim or demand payment or reimbursement for such withheld taxes pursuant to this Section 2.16 .

(f) Any Bank claiming any additional amounts payable pursuant to this Section 2.16 shall use its best efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts which may thereafter accrue and would not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.

(g) If the Company makes any additional payment to any Bank pursuant to this Section 2.16 in respect of any Taxes or Other Taxes, and such Bank determines that it has received (i) a refund of such Taxes or Other Taxes or (ii) a credit against or relief or remission for, or a reduction in the amount of, any tax or other governmental charge attributable solely to any deduction or credit for any Taxes or Other Taxes with respect to which it has received payments under this Section 2.16 , such Bank shall, to the extent that it can do so without prejudice to the retention of such refund, credit, relief, remission or reduction, pay to the Company such amount as such Bank shall have determined to be attributable to the deduction or withholding of such Taxes or Other Taxes. If such Bank determines that it was not entitled to such refund, credit, relief, remission or reduction to the full extent of any payment made pursuant to the first sentence of this Section 2.16(g) , the Company shall upon notice and demand of such Bank promptly repay the amount of such overpayment. Any determination made by a Bank pursuant to this Section 2.16(g) shall in the absence of bad faith or manifest error be conclusive, and nothing in this Section 2.16(g) shall be construed as requiring any Bank to conduct its business or to arrange or alter in any respect its tax or financial affairs (except as required by Section 2.16(f) ) so that it is entitled to receive such a refund, credit or reduction or as allowing any Person to inspect any records, including tax returns, of such Bank.

(h) Without prejudice to the survival of any other agreement of the Company or any Bank hereunder, the agreements and obligations of the Company and the Banks contained in this Section 2.16 shall survive the payment in full of principal and interest hereunder and the termination of this Agreement; provided that no Bank shall be entitled to demand any payment from the Company under this Section 2.16 more than one year following the payment to or for the account of such Bank of all other amounts payable by the Company hereunder to such Bank and the termination of such Bank’s Commitment; provided , further , that the foregoing proviso shall in no way limit the right of any Bank to demand or receive any payment under this Section 2.16 to the extent that such payment relates to the retroactive application of any Taxes or Other Taxes if such demand is made within one year after the implementation of such Taxes or Other Taxes.

SECTION 2.17. Reserved.

SECTION 2.18. Substitution of Bank.

If any Bank has demanded compensation under Sections 2.08 or 2.16 , the Company shall have the right at its sole expense, with the assistance of the Administrative Agent, to seek one or more mutually satisfactory Eligible Assignees (which may be one or more of the Banks) to purchase for cash the Share of such Bank in the outstanding Advances and the Commitment and to assume all of such Bank’s other rights and obligations hereunder pursuant to an instrument of assignment in form and substance reasonably acceptable to the Administrative Agent and otherwise in accordance with the provisions of Section 2.14(a) ; provided , that (i) any such assignment shall be without recourse to the assigning Bank,

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(ii) such assigning Bank shall have received payment of an amount equal to the outstanding principal of its Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts) and (iii) such assignment will result in a reduction of such compensation.

ARTICLE III

CONDITIONS OF CLOSING AND ISSUANCE AND ADVANCES

SECTION 3.01. Conditions Precedent to Closing.

This Agreement shall become effective if the Administrative Agent shall have received all of the following each dated a date reasonably satisfactory to the Administrative Agent and otherwise in form and substance reasonably satisfactory to the Administrative Agent:

(a) (i) A counterpart of this Agreement signed on behalf of each party hereto or (ii) written evidence (which may include facsimile transmission of a signed signature page of this Agreement) that each party hereto has signed a counterpart of this Agreement.

(b) Certified copies of resolutions of the Board of Directors or equivalent managing body of the Company approving the transactions contemplated by this Agreement and of all documents evidencing other necessary organizational action of the Company with respect to this Agreement and the documents contemplated hereby.

(c) A certificate of the Secretary or an Assistant Secretary of Company certifying (A) the names and true signatures of the officers of the Company authorized to sign this Agreement and the other documents to be delivered hereunder; (B) that attached thereto are true and correct copies of the organizational documents of the Company, in each case in effect on such date; and (C) that attached thereto are true and correct copies of all governmental and regulatory authorizations and approvals required for the due execution, delivery and performance by the Company of this Agreement and the documents contemplated hereby.

(d) A certificate signed by either the chief financial officer, principal accounting officer or treasurer of the Company stating that (A) the representations and warranties contained in Section 4.01 are correct on and as of the date of such certificate as though made on and as of such date, (B) no Default or Event of Default has occurred and is continuing on the date of such certificate and (C) all required governmental and third party consents and approvals in connection with this Agreement have been obtained and are in full force and effect.

(e) A favorable opinion of Sidley Austin LLP, counsel for the Company, in form and substance reasonably acceptable to the Administrative Agent.

(f) For the account of the parties entitled thereto, payment of all fees and other amounts payable pursuant to the Fee Letters.

(g) A Note, duly executed by or on behalf of the Company and made payable to each Bank that has requested a Note.

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SECTION 3.02. Additional Conditions Precedent to Issuance of Letters of Credit.

The obligations of any L/C Issuer to issue any Letter of Credit in respect of any series of Bonds shall be subject to the further conditions precedent that on or before the Date of Issuance for such Letter of Credit, the Administrative Agent shall have received all of the following each dated a date reasonably satisfactory to the Administrative Agent and otherwise in form and substance reasonably satisfactory to the Administrative Agent and the related L/C Issuer:

(a) A certificate signed by either the chief financial officer, principal accounting officer or treasurer of the Company stating that (i) the representations and warranties contained in Section 4.01 are correct on and as of the Date of Issuance as though made on and as of such date, (ii) no event has occurred and is continuing, or would result from the issuance of such Letter of Credit, that constitutes a Default or an Event of Default, (iii) the representations and warranties of the Company contained in the Operative Documents relating to such series of Bonds to which it is a party are correct in all material respects on and as of the Date of Issuance as though made on and as of such date and (iv) all required governmental and third party consents and approvals in connection with the issuance of such Letter of Credit have been obtained and are in full force and effect.

(b) Executed copies (or duplicates thereof) of each of the Operative Documents relating to such series of Bonds and the final copy of the applicable Official Statement, together with any supplements thereto, for such series of Bonds together with a copy of each opinion, certificate and other document or instrument (in the case of each opinion, addressed to the Administrative Agent either directly or through a reliance letter), including rating letters indicating that the ratings of the related series of Bonds have been rated at least the ratings of the applicable L/C Issuer, required to be delivered pursuant to the applicable Indenture in connection with the issuance of such series of Bonds.

(c) Evidence that the First Mortgage Bond relating to such series of Bonds has been authenticated and issued to the Trustee for such series of Bonds shall be in the aggregate principal amount not less than the principal amount of such series of Bonds being issued.

(d) A certificate of a duly authorized officer of the Company certifying that attached thereto is (i) a true, correct and complete copy of the Mortgage, dated July 1, 1923, as amended and supplemented by supplemental indentures, including the Supplemental Indenture, dated August 1, 1944, from the Company to the Mortgage Trustees, omitting copies of supplemental indentures that provide for the issuance of Debt, (ii) a listing of the supplemental indentures currently in effect and confirming that such supplemental indentures are the only supplemental indentures or other instruments in effect that have amended or supplemented the original Mortgage and (iii) a complete and correct copy of the Supplemental Indenture related to the series of Bonds being issued.

(e) Evidence that all conditions precedent to the issuance of such series of Bonds shall have occurred.

(f) The Company shall have paid any fees and disbursements payable to the Administrative Agent and the Banks pursuant to this Agreement on or prior to the Date of Issuance.

(g) Such other approvals, opinions or documents in connection with such series of Bonds as any Bank may reasonably request in connection with this Agreement or any Operative Document.

(h) A certificate of the Trustee for such series of Bonds as to the principal amount of such series of Bonds outstanding in respect of which it is acting as Trustee.

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(i) A certificate of an authorized officer of the Trustee for such series of Bonds certifying the names, true signatures and incumbency of the officers of such Trustee authorized to make drawings under the Letter of Credit issued in favor of such Trustee and as to such other matters as the Administrative Agent may reasonably request.

The Company shall b