Ex H-3
Exelon General Services Agreement
GENERAL SERVICES AGREEMENT
BETWEEN
_________ SERVICES COMPANY
AND
EXELON CORPORATION, COMMONWEALTH EDISON COMPANY AND ITS SUBSIDIARIES, UNICOM
ENTERPRISES AND ITS SUBSIDIARIES, UNICOM RESOURCES AND ITS SUBSIDIARIES, PECO
ENERGY COMPANY AND ITS SUBSIDIARIES, AND [A GENERATION COMPANY TO BE NAMED AT A
LATER DATE]
THIS AGREEMENT, made and entered into this __ day of _________, 2000,
by and between the following Parties: _________ SERVICES COMPANY (hereinafter
sometimes referred to as "Service Company"), a ________ corporation; EXELON
CORPORATION, a Pennsylvania corporation; COMMONWEALTH EDISON COMPANY and its
subsidiaries, UNICOM ENTERPRISES and its subsidiaries, UNICOM RESOURCES and its
subsidiaries, PECO ENERGY COMPANY and its subsidiaries, and [A GENERATION
COMPANY TO BE NAMED AT A LATER DATE], (hereinafter sometimes referred to
collectively as "Client Companies");
WITNESSETH:
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WHEREAS, Client Companies, including EXELON CORPORATION, which has
filed for registration under the terms of the Public Utility Holding Company Act
of 1935 (the "Act") and its other subsidiaries, desire to enter into this
agreement providing for the performance by Service Company for the Client
Companies of certain services as more particularly set forth herein;
WHEREAS, Service Company is organized, staffed and equipped and has
filed with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Act to render to EXELON CORPORATION, and
other subsidiaries of EXELON CORPORATION, certain services as herein provided;
and
WHEREAS, to maximize efficiency, and to achieve merger related savings,
the Client Companies desire to avail themselves of the advisory, professional,
technical and other services of persons employed or to be retained by Service
Company, and to compensate Service Company appropriately for such services;
NOW, THEREFORE, in consideration of these premises and of the mutual
agreements set forth herein, the Parties agree as follows:
Section 1. Agreement to Provide Services
Service Company agrees to provide to Client Companies and their
subsidiaries, if any, upon the terms and conditions set forth herein, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to provide to Client Companies such services so long as it is
authorized to do so by the appropriate federal and state regulatory agencies. In
providing such services, Service Company may arrange, where it deems
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appropriate, for the services of such experts, consultants, advisers and other
persons with necessary qualifications as are required for or pertinent to the
provision of such services.
Section 2. Services to be Provided
The services expected to be provided by Service Company hereunder may,
upon request by a Client Company, include the services as set out in Schedule 2,
attached hereto and made a part hereof. In addition to those identified in
Schedule 2, Service Company shall provide such additional general or special
services, whether or not now contemplated, as Client Companies may request from
time to time and Service Company determines it is able to provide.
Notwithstanding the foregoing paragraph, no change in the organization
of the Service Company, the type and character of the companies to be serviced,
the factors for allocating costs to associate companies, or in the broad general
categories of services to be rendered subject to Section 13 of the Act, or any
rule, regulation or order thereunder, shall be made unless and until the Service
Company shall first have given the SEC written notice of the proposed change not
less than 60 days prior to the proposed effectiveness of any such change. If,
upon the receipt of any such notice, the SEC shall notify the Service Company
within the 60-day period that a question exists as to whether the proposed
change is consistent with the provisions of Section 13 of the Act, or of any
rule, regulation or order thereunder, then the proposed change shall not become
effective unless and until the Service Company shall have filed with the SEC an
appropriate declaration regarding such proposed change and the SEC shall have
permitted such declaration to become effective.
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Section 3. New Subsidiaries
New direct or indirect subsidiaries of EXELON CORPORATION, which may
come into existence after the effective date of this Service Agreement, may
become additional client companies of Service Company and subject to this
General Services Agreement with Service Company. The parties hereto shall make
such changes in the scope and character of the services to be provided and the
method of assigning, distributing or allocating costs of such services as may
become necessary to achieve a fair and equitable assignment, distribution, or
allocation of Service Company costs among associate companies including the new
subsidiaries.
Section 4. Compensation of Service Company
As compensation for the services to be rendered hereunder, Client
Companies listed in Attachment A hereto, as amended from time to time, shall pay
to Service Company all costs which reasonably can be identified and related to
particular services provided by Service Company for or on Client Company"s
behalf (except as may otherwise be permitted by the SEC). Client Companies
listed in Attachment B hereto, as amended from time to time, shall pay to
Service Company charges for services that are to be no less than cost (except as
may otherwise be permitted by the SEC), insofar as costs can reasonably be
identified and related by Service Company to its performance of particular
services for or on behalf of Client Company.
The factors for assigning or allocating Service Company costs to Client
Company, as well as to other associate companies, are set forth in Schedules 1
and 2 attached hereto. Attachments A and B and Schedules 1 and 2 are each
expressly incorporated herein and made a part hereof.
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Section 5. Securities and Exchange Commission Rules
It is the intent of the Parties that the determination of the costs as
used in this Agreement shall be consistent with, and in compliance with, the
rules and regulations of the SEC, as they now read or hereafter may be modified
by the Commission.
Section 6. Service Requests
The services described herein or contemplated to be provided hereunder
shall be directly assigned, distributed or allocated by activity, project,
program, work order or other appropriate basis.
Section 7. Payment
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies involved. Invoices
shall be prepared on a monthly basis for services provided hereunder.
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Section 8. EXELON CORPORATION
Except as authorized by rule, regulation, or order of the SEC, nothing
in this Agreement shall be read to permit EXELON CORPORATION, or any person
employed by or acting for EXELON CORPORATION, to provide services for other
Parties, or any companies associated with said Parties.
Section 9. Effective Date and Termination
This Agreement is executed subject to the consent and approval of all
applicable regulatory agencies, and if so approved in its entirety, shall become
effective as of the date the merger between PECO ENERGY COMPANY and UNICOM
CORPORATION is consummated, and shall remain in effect from said date unless
terminated by mutual agreement or by any Party giving at least 60 days" written
notice to the other Parties prior to the beginning of any calendar year, each
Party fully reserving the right to so terminate this Agreement.
This Agreement may also be terminated or modified to the extent that
performance may conflict with any rule, regulation or order of the SEC adopted
before or after the making of this Agreement.
Section 10. Access to Records
For the seven years following a transaction under this Agreement, the
Client Company may request access to and inspect the accounts and records of the
Service Company, provided that the scope of access and inspection is limited to
accounts and records that are related to such transaction.
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Section 11. Assignment
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
and attested by their authorized officers as of the day and year first above
written.
______________ SERVICES COMPANY
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
EXELON CORPORATION
By ______________________________
Title ___________________________
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ATTEST:
By ______________________
Title ___________________
[INSERT NAMES OF AND SIGNATURE BLOCKS FOR COMMONWEALTH EDISON COMPANY
AND ITS SUBSIDIARIES, UNICOM ENTERPRISES AND ITS SUBSIDIARIES, UNICOM
RESOURCES AND ITS SUBSIDIARIES, PECO ENERGY COMPANY AND ITS
SUBSIDIARIES, AND A GENERATION COMPANY TO BE NAMED AT A LATER DATE]
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Service Agreement Schedule 1
Allocation Ratios:
General:
Direct charges shall be made so far as costs can be identified and
related to the particular transactions involved without excessive
effort or expense. Other elements of cost, including taxes, interest,
other overhead, and compensation for the use of capital procured by the
issuance of capital stock, shall be fairly and equitably allocated
using the ratios set forth below.
Revenue Related Ratios:
Revenues_
Sales - Units sold and/or transported
Number of Customers
Expenditure Related Ratios:
Total Expenditures
Operations and Maintenance Expenditures
Construction Expenditures
Labor/Payroll Related Ratios:
Labor / Payroll
Number of Employees
Units Related Ratios:
Usage (for example: CPU's, square feet , number of vendor
invoice payments)
Consumption (for example: tons of coal, gallons of oil, MMBTU's)
Capacity (for example: nameplate generating capacity, peak load,
gas throughput)
Other units related
Assets Related Ratios:
Total Assets
Current Assets
Gross Plant
Composite Ratios:_
Total Average Assets and 12 months ended Gross Payroll
Other composite ratios
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Service Agreement Schedule 2
Services Including But Not Limited To:
General:
Direct charges shall be made so far as costs can be identified and
related to the particular transactions involved without excessive
effort or expense. Other elements of cost, including taxes, interest,
other overhead, and compensation for the use of capital procured by the
issuance of capital stock, shall be fairly and equitably allocated
using the ratios set forth in Schedule 1.
Administrative & management services including but not limited to:
accounting
bookkeeping
billing
accounts receivable
accounts payable
financial reporting
audit
executive
finance
insurance
information systems services
investment advisory services
legal
library
record keeping
secretarial & other general office support
real estate management
security holder services
tax
treasury
other administration & management services
Expected allocation ratios: Revenue Related, Expenditure Related, Labor/Payroll
Related, Units Related, Assets Related, Composite
Personnel services including but not limited to:
recruiting
training & evaluation services
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payroll processing
employee benefits administration & processing
labor negotiations & management
other personnel services
Expected allocation ratios: Labor/Payroll Related, Units Related, Composite
Purchasing services including but not limited to:
preparation & analysis of product specifications
requests for proposals & similar solicitations
vendor & vendor-product evaluations
purchase order processing
receipt, handling, warehousing and disbursement of purchased items
contract negotiation & administration inventory management
& disbursement
other purchasing services
Expected allocation ratios: Expenditure Related, Labor/Payroll Related, Units
Related, Assets Related, Composite
Facilities management services including but not limited to:
office space
warehouse & storage space
transportation facilities (including dock & port, rail sidings and
truck facilities) repair facilities
manufacturing & production facilities
fixtures, office furniture & equipment
Expected allocation ratios: Expenditure Related, Labor/Payroll Related, Units
Related, Composite
Computer services including but not limited to:
computer equipment & networks
peripheral devices
storage media
software
Expected allocation ratios: Expenditure Related, Labor/Payroll Related, Units
Related, Assets Related, Composite
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Communications services including but not limited to:
communications equipment
audio & video equipment
radio equipment
telecommunications equipment & networks
transmission & switching capability
Expected allocation ratios: Expenditure Related, Labor/Payroll Related, Units
Related, Assets Related, Composite
Machinery management services including but not limited to:
equipment
tools
parts & supplies
Expected allocation ratios: Expenditure Related, Labor/Payroll Related, Units
Related, Composite
Vehicle management services including but not limited to:
automobiles
trucks
vans_____
trailers
railcars
marine vessels
aircraft
transport equipment
material handling equipment
construction equipment
Expected allocation ratios: Expenditure Related, Labor/Payroll Related, Units
Related, Composite
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Operational services including but not limited to:
drafting & technical specification, development & evaluation
consulting
engineering
environmental
nuclear
construction
design
resource planning
economic & strategic analysis
research
testing
training
customer solicitation
support & other marketing related services
public & governmental relations
other operational services
Expected allocation ratios: Revenue Related, Expenditure Related, Labor/Payroll
Related, Units Related, Assets Related, Composite
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