================================================================================
Exhibit 4.1

                               PECO ENERGY COMPANY

                                       TO

                  WACHOVIA BANK, NATIONAL ASSOCIATION, TRUSTEE
                      (formerly, First Union National Bank)

                             ______________________

                            NINETY-NINTH SUPPLEMENTAL
                    INDENTURE DATED AS OF SEPTEMBER 15, 2002


                                       TO

                          FIRST AND REFUNDING MORTGAGE

                                       OF

                          THE COUNTIES GAS AND ELECTRIC
                                     COMPANY

                                       TO

                         FIDELITY TRUST COMPANY, TRUSTEE
                                DATED MAY 1, 1923

                               __________________



                              4.75% SERIES DUE 2012
                                  (New Series)

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

<PAGE>

         THIS  SUPPLEMENTAL  INDENTURE  dated as of September  15, 2002,  by and
between PECO ENERGY COMPANY, a corporation organized and existing under the laws
of the Commonwealth of Pennsylvania  (hereinafter called the Company),  party of
the first part, and WACHOVIA BANK,  NATIONAL  ASSOCIATION  (formerly First Union
National Bank), a national banking association  organized and existing under the
laws of the  United  States of America  (hereinafter  called  the  Trustee),  as
Trustee  under the  Mortgage  hereinafter  mentioned,  party of the second part,
Witnesseth that

         WHEREAS,  The  Counties Gas and Electric  Company  (hereinafter  called
Counties Company), a Pennsylvania  corporation and a predecessor to the Company,
duly  executed  and  delivered  to  Fidelity  Trust   Company,   a  Pennsylvania
corporation to which the Trustee is successor,  as Trustee,  a certain indenture
of  mortgage  and  deed of trust  dated  May 1,  1923  (hereinafter  called  the
Mortgage),  to provide for the issue of, and to secure,  its First and Refunding
Mortgage  Bonds,  issuable in series and without  limit as to  principal  amount
except as provided in the Mortgage, the initial series of Bonds being designated
the 6% Series of 1923,  and the terms and  provisions  of other  series of bonds
secured by the Mortgage to be determined as provided in the Mortgage; and

         WHEREAS,  thereafter Counties Company,  Philadelphia  Suburban-Counties
Gas and Electric Company (hereinafter called Suburban Company), and the Company,
respectively,   have  from  time  to  time  executed  and  delivered  indentures
supplemental to the Mortgage, providing for the creation of additional series of
bonds  secured by the  Mortgage  and for  amendment  of certain of the terms and
provisions of the Mortgage and of indentures supplemental thereto, or evidencing
the  succession  of Suburban  Company to Counties  Company and of the Company to
Suburban Company, such indentures  supplemental to the Mortgage,  the respective
dates, parties thereto, and purposes thereof, being as follows:

                                       1
<PAGE>


<TABLE>
<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
First                                 Counties Company to                    Bonds of 5% Series of
September 1, 1926                         Fidelity-Philadelphia                 1926
                                          Trust Company
                                          (Successor to Fidelity
                                          Trust Company)

Second                                Suburban Company to                    Evidencing succession of
     May 1, 1927                          Fidelity-Philadelphia                 Suburban Company to
                                          Trust Company                         Counties Company

Third                                 Suburban Company to                    Bonds of 4-1/2% Series
     May 1, 1927                         Fidelity-Philadelphia                  due 1957; amendment of
                                         Trust Company                          certain provisions of
                                                                                Mortgage

Fourth                                Suburban Company to                    Additional Bonds of
     November 1, 1927                    Fidelity-Philadelphia                  4-1/2% Series due 1957
                                         Trust Company

Fifth                                 Company to                             Evidencing succession of
     January 31, 1931                    Fidelity-Philadelphia                  Company to
                                         Trust Company                          Suburban Company

Sixth                                 Company to                             Bonds of 4% Series
     February 1, 1931                    Fidelity-Philadelphia                  due 1971
                                         Trust Company

Seventh                               Company to                             Bonds of 3-1/2% Series
     March 1, 1937                       Fidelity-Philadelphia                  due 1967; amendment of
                                         Trust Company                          certain provisions of
                                                                                Mortgage

Eighth                                Company to                             Bonds of 2-3/4% Series
     December 1, 1941                    Fidelity-Philadelphia                  due 1971; amendment of
                                         Trust Company                          certain provisions of
                                                                                Mortgage

Ninth                                 Company to                             Bonds of 2-3/4% Series
     November 1, 1944                    Fidelity-Philadelphia                  due 1967 and 2-3/4% Series
                                         Trust Company                          due 1974; amendment of
                                                                                certain provisions of
                                                                                Mortgage

Tenth                                 Company to                             Bonds of 2-3/4% Series
     December 1, 1946                    Fidelity-Philadelphia                  due 1981; amendment of
                                         Trust Company                          certain provisions of
                                                                                Mortgage*


                                       2
<PAGE>
<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
Eleventh                              Company to                             Bonds of 2-7/8% Series
     February 1, 1948                    Fidelity-Philadelphia                  due 1978*
                                         Trust Company

Twelfth                               Company to                             Bonds of 3-1/4% Series
     January 1, 1952                     Fidelity-Philadelphia                  due 1982*
                                         Trust Company

Thirteenth                            Company to                             Bonds of 3-7/8% Series
     May 1, 1953                         Fidelity-Philadelphia                  due 1983*
                                         Trust Company

Fourteenth                            Company to                             Bonds of 3-1/8% Series
     December 1, 1953                    Fidelity-Philadelphia                  due 1983*
                                         Trust Company

Fifteenth                             Company to                             Bonds of 3-1/8% Series
     April 1, 1955                       Fidelity-Philadelphia                  due 1985*
                                         Trust Company

Sixteenth                             Company to                             Bonds of 4-5/8% Series
     September 1, 1957                   Fidelity-Philadelphia                  due 1987; amendment of certain
                                         Trust Company                          provisions of Mortgage*

Seventeenth                           Company to                             Bonds of 3-3/4% Series
     May 1, 1958                         Fidelity-Philadelphia                  due 1988; amendment of certain
                                         Trust Company                          provisions of Mortgage*

Eighteenth                            Company to                             Bonds of 4-3/8% Series
     December 1, 1958                    Fidelity-Philadelphia                  due 1986*
                                         Trust Company

Nineteenth                            Company to                             Bonds of 5% Series
     October 1, 1959                     Fidelity-Philadelphia                  due 1989*
                                         Trust Company

Twentieth                             Company to                             Bonds of 4-1/2% Series
     May 1, 1964                         Fidelity-Philadelphia                  due 1994*
                                         Trust Company

Twenty-first                          Company to                             Bonds of 6% Series due
     October 15, 1966                    Fidelity-Philadelphia                  1968-1973*
                                         Trust Company

Twenty-second                         Company to The Fidelity Bank           Bonds of 5-1/4 % Series due
     June 1, 1967                        (formerly                              1968-1973 and 5-3/4 %
                                         Fidelity-Philadelphia                  Series due 1977*
                                         Trust Company)

Twenty-third                          Company to The Fidelity                Bonds of 6-1/8 % Series
     October 1, 1957                     Bank                                   due 1997*

                                       3
<PAGE>
<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
Twenty-fourth                        Company to The Fidelity                 Bonds of 6-1/2% Series
     March 1, 1968                       Bank                                   due 1993; amendment of
                                                                                Article XIV of
                                                                                Mortgage*

Twenty-fifth                         Company to The Fidelity                 Bonds of 1968 Series due
     September 10, 1968                  Bank                                   1969-1976*

Twenty-sixth                         Company to The Fidelity                 Bonds of 8% Series due
     August 15, 1969                     Bank                                   1975*

Twenty-seventh                       Company to The Fidelity                 Bonds of 9% Series due
     February 1, 1970                    Bank                                   1995*

Twenty-eighth                        Company to The Fidelity                 Bonds of 8-1/2% Series
     May 1, 1970                         Bank                                   due 1976*

Twenty-ninth                         Company to The Fidelity                 Bonds of 7-3/4% Series
     December 15, 1970                   Bank                                   due 2000*

Thirtieth                            Company to The Fidelity                 Bonds of 8-1/4% Series
     August 1, 1971                      Bank                                   due 1996*

Thirty-first                         Company to The Fidelity                 Bonds of 7-3/8% Series
     December 15, 1971                   Bank                                   due 2001; amendment of
                                                                                Article XI of Mortgage*

Thirty-second                        Company to The Fidelity                 Bonds of 7-1/2% Series
     June 15, 1972                       Bank                                   due 1998*

Thirty-third                         Company to The Fidelity                 Bonds of 7-1/2% Series
     January 15, 1973                    Bank                                   due 1999*

Thirty-fourth                        Company to The Fidelity                 Bonds of 8-1/2% Series
     January 15, 1974                    Bank                                   due 2004

Thirty-fifth                         Company to The Fidelity                 Bonds of 11% Series
     October 15, 1974                    Bank                                   due 1980*

Thirty-sixth                         Company to The Fidelity                 Bonds of 11-5/8% Series
     April 15, 1975                      Bank                                   due 2000*

Thirty-seventh                       Company to The Fidelity                 Bonds of 11% Series due
     August 1, 1975                      Bank                                   2000*

Thirty-eighth                        Company to The Fidelity                Bonds of 9-1/8% Series
     March 1, 1976                       Bank                                   due 2006*

Thirty-ninth                         Company to The Fidelity                 Bonds of 9-5/8% Series
     August 1, 1976                      Bank                                   due 2002*

                                       4
<PAGE>
<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
Fortieth                             Company to The Fidelity                 Bonds of Pollution
     February 1, 1977                    Bank                                   Control Series A
                                                                                and Pollution
                                                                                Control Series B*

Forty-first                          Company to The Fidelity                 Bonds of 8-5/8% Series
     March 15, 1977                      Bank                                   due 2007*

Forty-second                         Company to The Fidelity                 Bonds of 8-5/8% Series
     July 15, 1977                       Bank                                   due 2003*

Forty-third                          Company to The Fidelity                 Bonds of 9-1/8% Series
     March 15, 1978                      Bank                                   due 2008*

Forty-fourth                         Company to The Fidelity                 Bonds of 12-1/2% Series
     October 15, 1979                    Bank                                   due 2005*

Forty-fifth                          Company to The Fidelity                 Bonds of 13-3/4% Series
     October 15, 1980                    Bank                                   due 1992*

Forty-sixth                          Company to The Fidelity                 Bonds of 15-1/4% Series
     March 1, 1981                       Bank                                   due 1996; amendment of
                                                                                Article VIII of
                                                                                Mortgage*

Forty-seventh                        Company to The Fidelity                 Bonds of 15% Series due
     March 1, 1981                       Bank                                   1996; amendment of
                                                                                Article VIII of
                                                                                Mortgage*

Forty-eighth                         Company to The Fidelity                 Bonds of 17-5/8% Series
     July 1, 1981                    Bank                                       due 2011*

Forty-ninth                          Company to The Fidelity                 Bonds of 18-3/4% Series
     September 15, 1981              Bank                                       due 2009*

Fiftieth                             Company to The Fidelity                 Bonds of 18% Series due
     April 1, 1982                   Bank                                       2012*

Fifty-first                          Company to The Fidelity                 Bonds of 15-3/8% Series
     October 1, 1982                 Bank                                       due 2010*

Fifty-second                         Company to The Fidelity                 Bonds of 13-3/8% Series
     June 15, 1983                   Bank                                       due 2013*

Fifty-third                          Company to Fidelity Bank,               Bonds of 13.05% Series
     November 15, 1984               National Association                       due 1994; amendment
                                     (formerly The Fidelity Bank)               of Article VIII of
                                                                                Mortgage*


                                       5
<PAGE>
<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
Fifty-fourth                         Company to Fidelity Bank,               Bonds of 14% Series due
     December 1, 1984                National Association                       1988-1994; amendment
                                                                                of Article VIII of
                                                                                Mortgage*

Fifty-fifth                          Company to Fidelity Bank,               Bonds of Pollution
     May 15, 1985                    National Association                       Control Series C*

Fifty-sixth                          Company to Fidelity Bank,               Bonds of Pollution
     October 1, 1985                 National Association                       Control Series D*

Fifty-seventh                        Company to Fidelity Bank,               Bonds of 10-7/8% Series
     November 15, 1985               National Association                       due 1995*

Fifty-eight                          Company to Fidelity Bank,               Bonds of 11-3/4% Series
     November 15, 1985               National Association                       due 2014*

Fifty-ninth                          Company to Fidelity Bank,               Bonds of Pollution
     June 1, 1986                    National Association                       Control Series E*

Sixtieth                             Company to Fidelity Bank,               Bonds of 10-1/4% Series
     November 1, 1986                National Association                       due 2016*

Sixty-first                          Company to Fidelity Bank,               Bonds of 8-3/4% Series
     November 1, 1986                National Association                       due 1994*

Sixty-second                         Company to Fidelity Bank,               Bonds of 9-3/8% Series
     April 1, 1987                   National Association                       due 2017*

Sixty-third                          Company to Fidelity Bank,               Bonds of 11% Series due
     July 15, 1987                   National Association                       2016*

Sixty-fourth                         Company to Fidelity Bank,               Bonds of 10% Series due
     July 15, 1987                   National Association                       1997*

Sixty-fifth                          Company to Fidelity Bank,               Bonds of 10-1/4% Series
     August 1, 1987                  National Association                       due 2007*

Sixty-sixth                          Company to Fidelity Bank,               Bonds of 11% Series due
     October 15, 1987                National Association                       1997*

Sixty-seventh                        Company to Fidelity Bank,               Bonds of 12-1/8% Series
     October 15, 1987                National Association                       due 2016*

Sixty-eighth                         Company to Fidelity Bank,               Bonds of 10% Series due
     April 15, 1988                  National Association                       1998*

Sixty-ninth                          Company to Fidelity Bank,               Bonds of 11% Series due
     April 15, 1988                  National Association                       2018*


                                       6
<PAGE>

<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
Seventieth                           Company to Fidelity Bank,               Bonds of 10% Series due
     June 15, 1989                   National Association                       2019*

Seventy-first                        Company to Fidelity Bank,               Bonds of 9-7/8% Series
     October 1, 1989                 National Association                       due 2019*

Seventy-second                       Company to Fidelity Bank,               Bonds of 9-1/4% Series
     October 1, 1989                 National Association                       due 1999*

Seventy-third                        Company to Fidelity Bank,               Medium-Term Note
     October 1, 1989                 National Association                       Series A*

Seventy-fourth                       Company to Fidelity Bank,               Bonds of 10-1/2% Series
     October 15, 1990                National Association                       due 2020*

Seventy-fifth                        Company to Fidelity Bank,               Bonds of 10% Series due
     October 15, 1990                National Association                       2000*

Seventy-sixth                        Company to Fidelity Bank,               Bonds of Pollution
     April 1, 1991                   National Association                       Control Series F
                                                                                and Pollution
                                                                                Control Series G*

Seventy-seventh                      Company to Fidelity Bank,               Bonds of Pollution
     December 1, 1991                National Association                       Control Series H*

Seventy-eighth                       Company to Fidelity Bank,               Bonds of 7-1/2% 1992
     January 15, 1992                National Association                       Series due 1999*

Seventy-ninth                        Company to Fidelity Bank,               Bonds of 8% Series due
     April 1, 1992                   National Association                       2002*

Eightieth                            Company to Fidelity Bank,               Bonds of 8-3/4% Series
     April 1, 1992                   National Association                       due 2022*

Eighty-first                         Company to Fidelity Bank,               Bonds of Pollution
     June 1, 1992                    National Association                       Control Series I*

Eighty-second                        Company to Fidelity Bank,               Bonds of 8-5/8% Series
     June 1, 1992                    National Association                       due 2022*

Eighty-third                         Company to Fidelity Bank,               Bonds of 7-1/2% Series
     July 15, 1992                   National Association                       due 2002*

Eighty-fourth                        Company to Fidelity Bank,               Bonds of 8-1/4% Series
     September 1, 1992               National Association                       due 2022*

Eighty-fifth                         Company to Fidelity Bank,               Bonds of 7-1/8% Series
     September 1, 1992               National Association                       due 2002*

                                       7
<PAGE>
<CAPTION>
Supplemental Indenture
       and Date                                Parties                              Providing for:
       --------                                -------                              --------------
<S>                                   <C>                                    <C>
Eighty-sixth                         Company to Fidelity Bank,               Bonds of 6-5/8% Series
     March 1, 1993                   National Association                       due 2003*

Eighty-Seventh                       Company to Fidelity Bank,               Bonds of 7-3/4% Series
     March 1, 1993                   National Association                       due 2023*

Eighty-eighth                        Company to Fidelity Bank,               Bonds of Pollution
     March 1, 1993                   National Association                       Control Series J,
                                                                                Pollution Control
                                                                                Series K, Pollution
                                                                                Control Series L
                                                                                and Pollution Control
                                                                                Series M*

Eighty-ninth                         Company to Fidelity Bank,               Bonds of 6-1/2% Series
     May 1, 1993                     National Association                       due 2003*

Ninetieth                            Company to Fidelity Bank,               Bonds of 7-3/4% Series
     May 1, 1993                     National Association                       2 due 2023*

Ninety-first                         Company to First Fidelity Bank,         Bonds of 7-1/8% Series
     August 15, 1993                 N.A., Pennsylvania                         due 2023*

Ninety-second                        Company to First Fidelity Bank,         Bonds of 6-3/8% Series
     August 15, 1993                 N.A., Pennsylvania                         due 2005*

Ninety-third                         Company to First Fidelity Bank,         Bonds of 5-3/8% Series
     August 15, 1993                 N.A., Pennsylvania                         due 1998*

Ninety-fourth                        Company to First Fidelity Bank,         Bonds of 7-1/4% Series
     November 1, 1993                N.A., Pennsylvania                         due 2024*

Ninety-fifth                         Company to First Fidelity Bank,         Bonds of 5-5/8% Series
     November 1, 1993                N.A., Pennsylvania                         due 2001*

Ninety-sixth                         Company to First Fidelity Bank,         Medium Term Note Series B*
     May 1, 1995                     N.A., Pennsylvania

Ninety-seventh                       Company to First Union National Bank    Bonds of  5.95% Series
     October 15, 2001                (formerly First Fidelity Bank, N.A.,       due 2011*
                                     Pennsylvania)

 *And amendment of certain provisions of the Ninth Supplemental Indenture.
</TABLE>


                                       8
<PAGE>

         WHEREAS,  the respective  principal amounts of the bonds of each series
presently outstanding under the Mortgage and the several supplemental indentures
above referred to, are as follows:

                                                                    PRINCIPAL
                         Series                                      AMOUNT
                         ------                                      ------

        6-5/8%  Series due 2003...................................250,000,000
        6-1/2%  Series due 2003...................................200,000,000
        6-3/8%  Series due 2005....................................75,000,000
        Pollution Control Series J due 2012........................50,000,000
        Pollution Control Series K due 2012........................50,000,000
        Pollution Control Series L due 2012........................50,000,000
        Pollution Control Series M due 2012.........................4,200,000
        5.95%   Series due 2011...................................250,000,000
                                           Total   $             $929,200,000
                                                                 ============



         WHEREAS, the Company deems it advisable and has determined, pursuant to
Article XI of the Mortgage,

         (a) to amend  Article  II of the Ninth  Supplemental  Indenture  to the
Mortgage as heretofore amended;

         (b) to  convey,  pledge,  transfer  and  assign to the  Trustee  and to
subject specifically to the lien of the Mortgage additional property not therein
or in any  supplemental  indenture  specifically  described but now owned by the
Company and acquired by it by purchase or otherwise; and

         (c) to  create a new  series  of bonds to be  issued  from time to time
under, and secured by, the Mortgage,  to be designated PECO Energy Company First
and Refunding  Mortgage  Bonds,  4.75% Series Due 2012,  (hereinafter  sometimes
called  the  "bonds of the New  Series"  or the  "bonds of the 4.75%  Series due
2012"); and for the above-mentioned purposes to execute, deliver and record this
Supplemental Indenture;

         WHEREAS, the Company has determined by proper corporate action that the
terms, provisions and form of the bonds of the New Series shall be substantially
as follows:


                                       9
<PAGE>

                             (Form of Face of Bond)

                               PECO ENERGY COMPANY



REGISTERED                                                            REGISTERED
NUMBER

                       FIRST AND REFUNDING MORTGAGE BOND,
                             4.75 % SERIES DUE 2012,
                               DUE OCTOBER 1, 2012

         PECO Energy Company, a Pennsylvania corporation (hereinafter called the
Company), for value received, hereby promises to pay to _____________________ or
registered  assigns,  __________________________  Dollars on October 1, 2012, at
the office or agency of the Company, in the City of Philadelphia,  Pennsylvania,
or, at the option of the holder, at the office or agency of the Company,  in the
Borough of  Manhattan,  The City of New York,  in such coin or  currency  of the
United States of America as at the time of payment shall constitute legal tender
for the payment of public and private  debts,  and to pay interest  (computed on
the  basis of a 360-day  year of twelve  30-day  months)  thereon  from the date
hereof at the rate of 4.75 percent per annum in like coin or  currency,  payable
at either of the offices aforesaid on April 1 and October 1, commencing on April
1, 2003, in each year until the Company's obligation with respect to the payment
of such principal shall have been discharged.

         The Company may fix a date, not more than fourteen  calendar days prior
to any interest  payment date, as a record date for  determining  the registered
holder of this bond  entitled to such interest  payment,  in which case only the
registered holder on such record date shall be entitled to receive such payment,
notwithstanding any transfer of this bond upon the registration books subsequent
to such record date.

         This  bond  shall  not be valid or become  obligatory  for any  purpose
unless it shall have been  authenticated by the certificate of the Trustee under
said Mortgage endorsed hereon.

         The  provisions  of this bond are  continued on the reverse  hereof and
such continued  provisions shall for all purposes have the same effect as though
fully set forth at this place.


                                       10
<PAGE>

         IN WITNESS  WHEREOF,  PECO Energy Company has caused this instrument to
be signed in its  corporate  name with the manual or facsimile  signature of its
President  or a Vice  President  and its  corporate  seal to be  impressed  or a
facsimile  imprinted hereon,  duly attested by the manual or facsimile signature
of its Secretary or an Assistant Secretary.

Dated:

                                                PECO ENERGY COMPANY



                                                By
                                                  ------------------------------
                                                          President



 (SEAL)

                                                Attest:
                                                       -------------------------
                                                          Secretary


                                       11
<PAGE>

                            (Form of Reverse of Bond)

                               PECO ENERGY COMPANY
                       First and Refunding Mortgage Bond,
                   4.75% Series Due 2012, Due October 1, 2012

                                   (CONTINUED)

         This bond is one of a duly  authorized  issue of bonds of the  Company,
unlimited as to amount except as provided in the Mortgage hereinafter  mentioned
or in any indenture  supplemental  thereto, and is one of a series of said bonds
known as First and Refunding  Mortgage  Bonds,  4.75% Series due 2012. This bond
and all other bonds of said issue are issued and to be issued under and pursuant
to and are all secured  equally and ratably by an indenture of mortgage and deed
of trust dated May 1, 1923,  duly executed and delivered by The Counties Gas and
Electric  Company (to which the Company is successor) to Fidelity Trust Company,
as Trustee (to which Wachovia Bank,  National  Association,  a national  banking
association  organized  and  existing  under  the laws of the  United  States of
America,  is  successor  Trustee),  as  amended,  modified  or  supplemented  by
ninety-seven   certain   supplemental   indentures   from  the  Company  or  its
predecessors to said successor Trustee or its predecessors, said mortgage, as so
amended, modified or supplemented being herein called the Mortgage. Reference is
hereby  made to the  Mortgage  for a statement  of the  property  mortgaged  and
pledged,  the nature and extent of the  security,  the rights of the  holders of
said bonds and of the Trustee in respect of such  security,  the rights,  duties
and  immunities  of the Trustee,  and the terms and  conditions  upon which said
bonds are and are to be secured,  and the  circumstances  under which additional
bonds may be issued.

         As  provided  in the  Mortgage,  the bonds  secured  thereby may be for
various  principal  sums and are issuable in series,  which series may mature at
different  times,  may bear interest at different rates, and may otherwise vary.
The bonds of this series  mature on October 1, 2012,  and are  issuable  only in
registered form without coupons in any denomination authorized by the Company.

         Any bond or bonds of this series may be  exchanged  for another bond or
bonds  of  this  series  in a like  aggregate  principal  amount  in  authorized
denominations,  upon  presentation  at the office of the  Trustee in the City of
Philadelphia,  Pennsylvania,  or, at the option of the holder,  at the office or
agency of the Company in the  Borough of  Manhattan,  The City of New York,  all
subject to the terms of the  Mortgage  but without  any charge  other than a sum
sufficient  to  reimburse  the Company  for any stamp tax or other  governmental
charge incident to the exchange.

         The bonds of this series are  redeemable  at the option of the Company,
as a whole or in part,  at any time upon notice sent by the Company  through the
mail,  postage  prepaid,  at least thirty (30) days and not more than forty-five
(45) days prior to the date fixed for  redemption,  to the registered  holder of
each bond to be redeemed, addressed to such holder at his address appearing upon
the  registration  books, at a redemption price equal to the greater of (1) 100%
of the principal  amount of the bonds to be redeemed,  plus accrued  interest to
the redemption date, or (2) as determined by the Quotation Agent, the sum of the
present values of the remaining


                                       12
<PAGE>

scheduled  payments of principal  and interest on the bonds to be redeemed  (not
including any portion of payments of interest accrued as of the redemption date)
discounted to the  redemption  date on a semi-annual  basis  (assuming a 360-day
year  consisting of twelve 30-day months) at the Adjusted  Treasury Rate plus 25
basis points,  plus accrued interest to the redemption date.  Unless the Company
defaults in payment of the redemption  price, on and after the redemption  date,
interest  will cease to accrue on the bonds of this  series or  portions  of the
bonds of this series called for redemption.

         "Adjusted  Treasury Rate" means,  with respect to any redemption  date,
the rate per year equal to the semi-annual  equivalent  yield to maturity of the
Comparable  Treasury Issue,  assuming a price for the Comparable  Treasury Issue
(expressed  as a percentage of its  principal  amount)  equal to the  Comparable
Treasury Price for the redemption date.

          "Business  Day"  means  any  day  that is not a day on  which  banking
institutions in New York City are authorized or required by law or regulation to
close.

         "Comparable  Treasury Issue" means the United States Treasury  security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the bonds of this  series that would be used,  at the time of  selection
and in accordance with customary  financial  practice,  in pricing new issues of
corporate  debt  securities of comparable  maturity to the remaining term of the
bonds of this series.

         "Comparable Treasury Price" means, with respect to any redemption date:

         o        the average of the Reference  Treasury  Dealer  Quotations for
                  that redemption  date,  after excluding the highest and lowest
                  of the Reference Treasury Dealer Quotations; or

         o        if the Trustee  obtains  fewer than three  Reference  Treasury
                  Dealer  Quotations,  the  average  of all  Reference  Treasury
                  Dealer Quotations so received.

         "Quotation Agent" means the Reference  Treasury Dealer appointed by the
Company.

         "Reference Treasury Dealer" means (1) each of Banc One Capital Markets,
Inc. and Salomon Smith Barney Inc. and their respective  successors,  unless any
of them ceases to be a primary  U.S.  Government  securities  dealer in New York
City (a "Primary Treasury  Dealer"),  in which case the Company shall substitute
another  Primary  Treasury  Dealer;  and (2) any other Primary  Treasury  Dealer
selected by the Company.

         "Reference  Treasury  Dealer  Quotations"  means,  with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the  Trustee,  of the bid and asked  prices for the  Comparable  Treasury  Issue
(expressed  in each case as a  percentage  of its  principal  amount)  quoted in
writing to the Trustee by that Reference  Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.

         The  principal  of this bond may be  declared  or may become due on the
conditions,  in the manner and with the effect provided in the Mortgage upon the
happening of an event of default as in the Mortgage provided.

                                       13
<PAGE>

         This bond is transferable by the registered  holder hereof in person or
by attorney,  duly  authorized  in writing,  at the office of the Trustee in the
City of  Philadelphia,  Pennsylvania,  or, at the option of the  holder,  at the
office or agency of the  Company in the  Borough of  Manhattan,  The City of New
York,  in books of the Company to be kept for that purpose,  upon  surrender and
cancellation hereof, and upon any such transfer, a new registered bond or bonds,
without  coupons,  of this series and for the same aggregate  principal  amount,
will be issued to the transferee in exchange  herefor,  all subject to the terms
of the Mortgage but without payment of any charge other than a sum sufficient to
reimburse the Company for any stamp tax or other governmental charge incident to
the transfer.  The Company, the Trustee, and any paying agent may deem and treat
the person in whose name this bond is  registered  as the absolute  owner hereof
for the  purpose of  receiving  payment of or on  account of the  principal  and
interest due hereon and for all other purposes,  and neither the Company nor the
Trustee nor any paying agent shall be affected by any notice to the contrary.

         No  recourse  shall  be had  for the  payment  of the  principal  of or
interest  on this  bond to any  incorporator  or any  past,  present  or  future
stockholder,  officer  or  director  of the  Company  or of any  predecessor  or
successor corporation,  either directly or indirectly,  by virtue of any statute
or by enforcement  of any assessment or otherwise,  and any and all liability of
the said incorporators, stockholders, officers or directors of the Company or of
any  predecessor  or  successor  corporation  in  respect to this bond is hereby
expressly waived and released by every holder hereof,  except to the extent that
such  liability  may not be  waived or  released  under  the  provisions  of the
Securities  Act of 1933 or of the rules and  regulations  of the  Securities and
Exchange Commission thereunder.



                        (End of Form of Reverse of Bond)


                                       14
<PAGE>

and

         WHEREAS,  on the face of each of the bonds of the New Series,  there is
to be endorsed a certificate of the Trustee in substantially the following form,
to wit:

                         (Form of Trustee's Certificate)

         This  bond  is one of the  bonds,  of the  series  designated  therein,
provided  for  in  the   within-mentioned   Mortgage  and  in  the  Ninety-Ninth
Supplemental Indenture dated as of September 15, 2002.

                                             WACHOVIA BANK, NATIONAL ASSOCIATION





                                             By
                                                --------------------------------
                                                    Authorized Officer

and

         WHEREAS,  all acts and  things  necessary  to make the bonds of the New
Series,  when duly executed by the Company and  authenticated  by the Trustee as
provided in the Mortgage and indentures  supplemental thereto, and issued by the
Company,  the valid,  binding and legal  obligations  of the  Company,  and this
Supplemental Indenture a valid and enforceable supplement to the Mortgage,  have
been done,  performed and  fulfilled and the execution and delivery  hereof have
been in all respects duly and lawfully authorized.

         NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

         That in order to secure the payment of the principal of and interest on
all bonds issued and to be issued under the Mortgage  and/or under any indenture
supplemental thereto,  according to their tenor and effect, and according to the
terms of the Mortgage and of any indenture  supplemental  thereto, and to secure
the  performance  of the  covenants  and  obligations  in the  bonds  and in the
Mortgage and any indenture supplemental thereto respectively contained,  and for
the proper assuring,  conveying, and confirming unto the Trustee, its successors
in trust and its and their assigns forever, upon the trusts and for the purposes
expressed in the Mortgage and in any indentures  supplemental  thereto,  all and
singular the estates,  property and franchises of the Company thereby  mortgaged
or intended so to be, the Company,  for and in consideration of the premises and
of the sum of One Dollar ($1.00) in hand paid by the Trustee to the Company upon
the execution and delivery of this  Supplemental  Indenture,  receipt whereof is
hereby acknowledged, and of other good and valuable consideration,  has granted,
bargained, sold, conveyed, released, confirmed,  pledged, assigned,  transferred
and set over and by these presents does grant, bargain,  sell, convey,  release,
confirm,  pledge,  assign,  transfer,  and set over to Wachovia  Bank,  National
Association,  as  Trustee,  and to its  successors  in trust  and its and  their

                                       15
<PAGE>

assigns forever, all the following described property,  real, personal and mixed
of the Company, viz.:

         The real property set forth in Schedule A,  attached  hereto and hereby
made a part  hereof,  with any  improvements  thereon  erected  now owned by the
Company but not  specifically  described  in the  Mortgage  or in any  indenture
supplemental thereto heretofore executed, in the places set forth in Schedule A.

         Together  with  all  gas  works,  electric  works,  plants,  buildings,
structures,  improvements  and  machinery  located  upon such real estate or any
portion  thereof,  and all rights,  privileges  and  easements of every kind and
nature appurtenant  thereto,  and all and singular the tenements,  hereditaments
and appurtenances  belonging to the real estate or any part thereof hereinbefore
described  or  referred  to or  intended  so to be,  or in any way  appertaining
thereto, and the reversions, remainders, rents, issues and profits thereof; also
all the estate, right, title, interest,  property,  possession, claim and demand
whatsoever,  as well in law as in equity, of the Company, of, in and to the same
and any and every part thereof, with the appurtenances.

         Also all the Company's electric transmission and distribution lines and
systems, substations,  transforming stations, structures,  machinery, apparatus,
appliances, devices and appurtenances.

         Also all the Company's gas transmission and distribution  mains, pipes,
pipe lines and systems, storage facilities,  structures,  machinery,  apparatus,
appliances, devices and appurtenances.

         Also all plants, systems, works, improvements,  buildings,  structures,
fixtures,  appliances,  engines, furnaces, boilers,  machinery,  retorts, tanks,
condensers,  pumps, gas tanks, holders,  reservoirs,  expansion tanks, gas mains
and  pipes,  tunnels,  service  pipe,  pipe  lines,  fittings,   gates,  valves,
connections, gas and electric meters, generators, dynamos, fans, supplies, tools
and implements,  tracks,  sidings,  motor and other vehicles, all electric light
lines, electric power lines,  transmission lines,  distribution lines, conduits,
cables, stations,  substations,  and distributing systems,  motors,  conductors,
converters,  switchboards,  shafting,  belting,  wires, mains,  feeders,  poles,
towers, mast arms, brackets, pipes, lamps, insulators,  house wiring connections
and all instruments, appliances, apparatus, fixtures, fittings and equipment and
all stores,  repair  parts,  materials  and  supplies  of every  nature and kind
whatsoever  now or  hereafter  owned  by  the  Company  in  connection  with  or
appurtenant  to its  plants  and  systems  for  production,  purchase,  storage,
transmission,  distribution, utilization and sale of gas and its by-products and
residual products,  and/or for the generation,  production,  purchase,  storage,
transmission,   distribution,   utilization  and  sale  of  electricity,  or  in
connection with such business.

         Also all the goodwill of the  business of the Company,  and all rights,
claims, contracts,  leases, patents, patent rights, and agreements, all accounts
receivable,  accounts, claims, demands, choses in action, books of account, cash
assets,  franchises,   ordinances,  rights,  powers,  easements,  water  rights,
riparian rights, licenses, privileges,  immunities, concessions and consents now
or hereafter  owned by the Company in connection with or appurtenant to its said
business.

                                       16
<PAGE>

         Also all the right,  title and  interest  of the  Company in and to all
contracts  for the  purchase,  sale or supply of gas,  and its  by-products  and
residual products of electricity and electrical energy, now or hereafter entered
into by the  Company  with  the  right  on the  part of the  Trustee,  upon  the
happening of an event of default as defined in the Mortgage as  supplemented  by
any supplemental indenture, to require a specific assignment of any and all such
contracts, whenever it shall request the Company to make the same.

         Also all rents,  tolls,  earnings,  profits,  revenues,  dividends  and
income  arising or to arise from any  property  now owned,  leased,  operated or
controlled or hereafter acquired,  leased, operated or controlled by the Company
and subject to the lien of the Mortgage and indentures supplemental thereto.

         Also all the  estate,  right,  title and  interest of the  Company,  as
lessee,  in and to any and all demised  premises under any and all agreements of
lease  now or at any time  hereafter  in force,  insofar  as the same may now or
hereafter be assignable by the Company.

         Also all other  property,  real,  personal  and mixed not  hereinbefore
specified or referred  to, of every kind and nature  whatsoever,  now owned,  or
which may hereafter be owned by the Company  (except  shares of stock,  bonds or
other  securities not now or hereafter  specifically  pledged under the Mortgage
and indentures  supplemental thereto or required to be pledged thereunder by the
provisions of the Mortgage or any indenture supplemental thereto), together with
all and  singular  the  tenements,  hereditaments  and  appurtenances  thereunto
belonging  or  in  any  way  appertaining  and  the  reversions,   remainder  or
remainders,  rents, issues and profits thereof; and also all the estate,  right,
title,  interest,  property,  claim and demand  whatsoever  as well in law as in
equity of the Company of, in and to the same and every part and parcel thereof.

         It is the  intention  and it is hereby agreed that all property and the
earnings and income thereof  acquired by the Company after the date hereof shall
be as fully embraced within the provisions hereof and subject to the lien hereby
created  for  securing  the  payment of all bonds,  together  with the  interest
thereon,  as if the property were now owned by the Company and were specifically
described herein and conveyed hereby,  provided nevertheless,  that no shares of
stock, bonds or other securities now or hereafter owned by the Company, shall be
subject to the lien of the Mortgage and indentures  supplemental  thereto unless
now or hereafter  specifically  pledged or required to be pledged  thereunder by
the provisions of the Mortgage or any indenture supplemental thereto.

         TO HAVE AND TO HOLD, all and singular the property,  rights, privileges
and  franchises  hereby  conveyed,  transferred or pledged or intended so to be,
including   after-acquired   property,   together  with  all  and  singular  the
reversions,  remainders, rents, revenues, income, issues and profits, privileges
and  appurtenances,  now  or  hereafter  belonging  or in any  way  appertaining
thereto,  unto the Trustee and its successors in the trust hereby  created,  and
its and their assigns forever;

         IN TRUST NEVERTHELESS,  for the equal and pro rata benefit and security
of each and every  person or  corporation  who may be or become  the  holders of
bonds  secured by the  Mortgage and  indentures  supplemental  thereto,  without
preference,  priority or distinction (except as provided in Section 1 of Article
VIII of the  Mortgage) as to lien or otherwise of any bond of



                                       17
<PAGE>

any series over or from any other bond, so that (except as  aforesaid)  each and
every of the bonds issued or to be issued, of whatsoever series,  shall have the
same right,  lien,  privilege  under the  Mortgage and  indentures  supplemental
thereto and shall be equally secured thereby and hereby, with the same effect as
if the bonds had all been made, issued and negotiated simultaneously on the date
of the Mortgage.

         AND THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH:

         It is hereby  covenanted  that all bonds  secured by the  Mortgage  and
indentures  supplemental  thereto  with the coupons  appertaining  thereto,  are
issued to and accepted by each and every holder  thereof,  and that the property
aforesaid  and all  other  property  subject  to the  lien of the  Mortgage  and
indentures  supplemental  thereto is held by or hereby  conveyed to the Trustee,
under and subject to the trusts,  conditions  and  limitations  set forth in the
Mortgage and indentures supplemental thereto and upon and subject to the further
trusts, conditions and limitations hereinafter set forth, as follows, to wit:

                                   ARTICLE I

                             AMENDMENTS OF MORTGAGE

         Article II of the Ninth  Supplemental  Indenture  to the  Mortgage,  as
heretofore amended, is hereby further amended as follows:

         By  adding to  paragraph  (d) of  Section 5 and to the first  clause of
Section 9, the following:

         "4.75% Series due 2012"

                                  ARTICLE II .

                             BONDS OF THE NEW SERIES

         Section  1.  The  bonds  of the  New  Series  shall  be  designated  as
hereinabove  specified for such designation in the recital immediately preceding
the form of bonds of the New  Series,  subject  however,  to the  provisions  of
Section 2 of Article I of the  Mortgage,  as amended,  and are issuable  only as
registered  bonds  without  coupons,  substantially  in  the  form  hereinbefore
recited;  and the issue  thereof  shall be  limited  to  $225,000,000  principal
amount.

         The bonds of the New Series shall bear  interest  from the date thereof
and shall be dated as of the interest  payment  date to which  interest was paid
next  preceding  the date of issue  unless (a) such date of issue is an interest
payment  date to which  interest  was paid,  in which  event such bonds shall be
dated as of such interest payment date, or (b) issued prior to the occurrence of
the first interest  payment date on which interest is to be paid, in which event
such bonds shall be dated  September 23, 2002. The bonds of the New Series shall
mature on October 1, 2012.

         The bonds of the New Series shall bear interest  (computed on the basis
of a 360-day year of twelve  30-day  months) at the rate provided in the form of
bond  hereinbefore  recited,  payable  on  April 1 and  October  1 in each  year
commencing on April 1, 2003 until the Company's


                                       18
<PAGE>

obligation  with  respect to the payment of  principal  thereof  shall have been
discharged.  Both  principal  and  interest on bonds of the New Series  shall be
payable  at the  office or agency of the  Company  in the City of  Philadelphia,
Pennsylvania,  or, at the option of the  holder,  at the office or agency of the
Company in the Borough of Manhattan,  The City of New York, and shall be payable
in such coin or  currency  of the  United  States of  America  as at the time of
payment  shall  constitute  legal  tender for the  payment of public and private
debts.

         The bonds of the New Series shall be in any denomination  authorized by
the Company.

         Any bond or bonds of the New Series shall be  exchangeable  for another
bond or bonds of the New Series in a like aggregate  principal amount.  Any such
exchange may be made upon  presentation at the office of the Trustee in the City
of Philadelphia, Pennsylvania, or, at the option of the holder, at the office or
agency of the Company in the Borough of Manhattan, The City of New York, without
any charge other than a sum  sufficient  to reimburse  the Company for any stamp
tax or other governmental charge incident to the exchange.

         Section 2. (a)  Initially,  the bonds of the New Series shall be issued
pursuant to a book-entry system administered by The Depository Trust Company (or
its successor, referred to herein as the "Depository") as a global security with
no physical  distribution of bond  certificates to be made except as provided in
this  Section 2. Any  provisions  of the Mortgage or the bonds of the New Series
requiring physical delivery of bonds shall, with respect to any bonds of the New
Series held under the book-entry system, be deemed to be satisfied by a notation
on the bond  registration  books  maintained  by the Trustee that such bonds are
subject to the book-entry system.

         (b) So long as the book-entry system is being used, one bond of the New
Series in the  aggregate  principal  amount of the bonds of the New  Series  and
registered  in the name of the  Depository's  nominee  (the  "Nominee")  will be
issued and required to be deposited with the Depository and held in its custody.
The book-entry  system will be maintained by the Depository and its participants
and indirect participants and will evidence beneficial ownership of the bonds of
the New  Series,  with  transfers  of  ownership  effected on the records of the
Depository, the participants and the indirect participants pursuant to rules and
procedures  established by the  Depository,  the  participants  and the indirect
participants.  The  principal  of and any premium on each bond of the New Series
shall  be  payable  to  the  Nominee  or  any  other  person  appearing  on  the
registration  books as the  registered  holder  of such  bond or its  registered
assigns  or legal  representative  at the  office of the office or agency of the
Company in the City of  Philadelphia,  Pennsylvania or the Borough of Manhattan,
The  City of New  York.  So long as the  book-entry  system  is in  effect,  the
Depository  will be  recognized as the holder of the bonds of the New Series for
all  purposes.  Transfers of  principal,  interest  and any premium  payments or
notices to participants and indirect  participants will be the responsibility of
the Depository, and transfers of principal, interest and any premium payments or
notices to beneficial  owners will be the  responsibility  of  participants  and
indirect  participants.  No other party will be  responsible  or liable for such
transfers of payments or notices or for  maintaining,  supervising  or reviewing
such records  maintained by the  Depository,  the  participants  or the indirect
participants.  While the Nominee or the  Depository,  as the case may be, is the
registered  owner of the  bonds of the New  Series,  notwithstanding  any  other
provisions set forth herein,  payments of principal of, redemption  premium,  if
any, and interest on the bonds of the New Series shall be made to the


                                       19
<PAGE>

Nominee or the  Depository,  as the case may be, by wire transfer in immediately
available  funds to the account of such holder.  Without notice to or consent of
the  beneficial  owners,  the  Trustee  with the  consent of the Company and the
Depository may agree in writing to make payments of principal,  redemption price
and interest in a manner  different  from that set forth herein.  In such event,
the Trustee  shall make  payment  with respect to the bonds of the New Series in
such manner as if set forth herein.

         (c)  The  Company  may  at  any  time  elect  (i) to  provide  for  the
replacement  of any Depository as the depository for the bonds of the New Series
with another qualified depository, or (ii) to discontinue the maintenance of the
bonds of the New Series  under  book-entry  system.  In such event,  the Trustee
shall give 30 days prior  notice of such  election  to the  Depository  (or such
fewer number of days acceptable to such Depository).

         (d) Upon the  discontinuance of the maintenance of the bonds of the New
Series under a book-entry  system, the Company will cause the bonds to be issued
directly  to the  beneficial  owners  of the bonds of the New  Series,  or their
designees,  as further  described  below. In such event,  the Trustee shall make
provisions to notify  participants and beneficial owners of the bonds of the New
Series,  by mailing an appropriate  notice to the Depository,  that bonds of the
New Series will be  directly  issued to  beneficial  owners of the bonds as of a
date set forth in such notice (or such fewer number of days  acceptable  to such
Depository).

         (e) In the  event  that  bonds of the New  Series  are to be  issued to
beneficial  owners of the bonds, or their designees,  the Company shall promptly
have bonds of the New Series  prepared in  certificated  form  registered in the
names  of the  beneficial  owners  of such  bonds  shown on the  records  of the
participants  provided  to the  Trustee,  as of the date set forth in the notice
above.   Bonds  issued  to  beneficial  owners,  or  their  designees  shall  be
substantially in the form set forth in this Supplemental Indenture, but will not
include the provision related to global securities.

         (f) If the  Depository is replaced as the  depository  for the bonds of
the New Series with  another  qualified  depository,  the  Company  will issue a
replacement  global  security  substantially  in the  form  set  forth  in  this
Supplemental Indenture.

         (g) The Company and the Trustee shall have no liability for the failure
of any Depository to perform its  obligations to any  participant,  any indirect
participant  or any  beneficial  owner of any bonds of the New  Series,  and the
Company and the Trustee shall not be liable for the failure of any  participant,
indirect  participant or other nominee of any  beneficial  owner or any bonds of
the New  Series  to  perform  any  obligation  that such  participant,  indirect
participant or other nominee may incur to any  beneficial  owner of the bonds of
the New Series.

         (h) Notwithstanding any other provision of the Mortgage, on or prior to
the date of  issuance  of the bonds of the New  Series  the  Trustee  shall have
executed  and  delivered to the initial  Depository a Letter of  Representations
governing  various  matters  relating  to  the  Depository  and  its  activities
pertaining  to the bonds of the New  Series.  The terms and  provisions  of such
Letter of Representations are incorporated herein by reference and, in the event
there shall exist any  inconsistency  between the substantive  provisions of the
said Letter of Representations and any provisions of the Mortgage,  then, for as
long as the initial  Depository


                                       20
<PAGE>

shall serve as depository with respect to the bonds of the New Series, the terms
of the Letter of Representations shall govern.

         (i) The  Company  and the  Trustee  may  rely  conclusively  upon (i) a
certificate  of  the  Depository  as to the  identity  of a  participant  in the
book-entry  system;  (ii) a certificate of any participant as to the identity of
any indirect  participant  and (iii) a  certificate  of any  participant  or any
indirect  participant as to the identity of, and the respective principal amount
of bonds of the New Series owned by, beneficial owners.

         Section  3. So long as the  bonds  of the New  Series  are  held by The
Depository Trust Company,  such bonds of the New Series shall bear the following
legend:

         UNLESS THIS BOND IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY  PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE  OF DTC), ANY
TRANSFER,  PLEDGE OR OTHER USE  HEREOF  FOR  VALUE OR  OTHERWISE  BY A PERSON IS
WRONGFUL  INASMUCH AS THE REGISTERED  OWNER HEREOF,  CEDE & CO., HAS AN INTEREST
HEREIN.

         Section  4. So  long  as any of the  bonds  of the  New  Series  remain
outstanding,  the  Company  shall keep at its office or agency in the Borough of
Manhattan,  The City of New York, as well as at the office of the Trustee in the
City of  Philadelphia,  Pennsylvania,  books for the  registry  and  transfer of
outstanding bonds of the New Series, in accordance with the terms and provisions
of the bonds of the New Series and the  provisions  of Section 8 of Article I of
said Mortgage.

         Section 5. So long as any bonds of the New Series  remain  outstanding,
the  Company  shall  maintain  an office or agency in the City of  Philadelphia,
Pennsylvania,  and an office or agency in the Borough of Manhattan,  The City of
New York,  for the payment upon proper  demand of the principal of, the interest
on, or the redemption price of the outstanding bonds of the New Series, and will
from time to time give notice to the  Trustee of the  location of such office or
agency. In case the Company shall fail to maintain for such purpose an office or
agency in the City of  Philadelphia  or shall  fail to give  such  notice of the
location  thereof,  then  notices,  presentations  and demands in respect of the
bonds of the New  Series  may be given  or made to or upon  the  Trustee  at its
office in the City of  Philadelphia  and the  principal of, the interest on, and
the  redemption  price of said bonds in such event be payable at said  office of
the Trustee. All bonds of the New Series when paid shall forthwith be cancelled.

         Section 6. The Company may fix a date, not more than fourteen  calendar
days prior to any interest  payment date, as a record date for  determining  the
registered  holder  of each bond of the New  Series  entitled  to such  interest
payment,  in which case only the  registered  holder of such bond on such record
date shall be entitled to receive such payment,  notwithstanding any transfer of
such bond upon the registration books subsequent to such record date.

                                       21
<PAGE>


         Section  7. The  bonds of the New  Series  shall be  issued  under  and
subject to all of the terms and  provisions of the Mortgage,  of the  indentures
supplemental thereto referred to in the recitals hereof and of this Supplemental
Indenture  which may be  applicable  to such  bonds or  applicable  to all bonds
issued under the Mortgage and indentures supplemental thereto.

                                 ARTICLE III .

                           ISSUE AND AUTHENTICATION OF
                             BONDS OF THE NEW SERIES

         In addition  to any bonds of any series  which may from time to time be
executed by the Company and  authenticated  and  delivered  by the Trustee  upon
compliance  with  the  provisions  of  the  Mortgage  and/or  of  any  indenture
supplemental  thereto,  bonds of the New Series of an aggregate principal amount
not  exceeding  $225,000,000  shall  forthwith  be  executed  by the Company and
delivered to the Trustee,  and the Trustee shall thereupon,  whether or not this
Supplemental  Indenture shall have been recorded,  authenticate and deliver said
bonds to or upon the written order of the President,  a Vice  President,  or the
Treasurer of the Company,  under the terms and  provisions  of paragraph  (c) of
Section 3 of Article II of the Mortgage, as amended.

                                  ARTICLE IV .

                           REDEMPTION OF BONDS OF THE
                                   NEW SERIES

         Section  1. The bonds of the New  Series  shall be  redeemable,  at the
option of the  Company,  as a whole or in part,  at any time upon notice sent by
the Company through the mail, postage prepaid, at least thirty (30) days and not
more than forty-five  (45) days prior to the date fixed for  redemption,  to the
registered holder of each bond to be redeemed in whole or in part,  addressed to
such  holder  at  his  address  appearing  upon  the  registration  books,  at a
redemption price equal to the greater of (1) 100% of the principal amount of the
bonds to be redeemed,  plus accrued  interest to the redemption  date, or (2) as
determined  by  the  Quotation  Agent,  the  sum of the  present  values  of the
remaining  scheduled  payments  of  principal  and  interest  on the bonds to be
redeemed (not  including  any portion of payments of interest  accrued as of the
redemption  date)  discounted  to the  redemption  date on a  semi-annual  basis
(assuming a 360-day year  consisting  of twelve  30-day  months) at the Adjusted
Treasury  Rate plus 25 basis  points,  plus accrued  interest to the  redemption
date.  Unless the Company  defaults in payment of the redemption  price,  on and
after the  redemption  date,  interest will cease to accrue on the bonds of this
series or portions of the bonds of this series called for redemption.

         "Adjusted  Treasury Rate" means,  with respect to any redemption  date,
the rate per year equal to the semi-annual  equivalent  yield to maturity of the
Comparable  Treasury Issue,  assuming a price for the Comparable  Treasury Issue
(expressed  as a percentage of its  principal  amount)  equal to the  Comparable
Treasury Price for the redemption date.

         "Business  Day"  means  any  day  that  is not a day on  which  banking
institutions in New York City are authorized or required by law or regulation to
close.

                                       22
<PAGE>


         "Comparable  Treasury Issue" means the United States Treasury  security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the bonds of this  series that would be used,  at the time of  selection
and in accordance with customary  financial  practice,  in pricing new issues of
corporate  debt  securities of comparable  maturity to the remaining term of the
bonds of the New Series.

         "Comparable Treasury Price" means, with respect to any redemption date:

         o        the average of the Reference  Treasury  Dealer  Quotations for
                  that redemption  date,  after excluding the highest and lowest
                  of the Reference Treasury Dealer Quotations; or

         o        if the Trustee  obtains  fewer than three  Reference  Treasury
                  Dealer  Quotations,  the  average  of all  Reference  Treasury
                  Dealer Quotations so received.

         "Reference Treasury Dealer" means (1) each of Banc One Capital Markets,
Inc. and Salomon Smith Barney Inc. and their respective  successors,  unless any
of them ceases to be a primary  U.S.  Government  securities  dealer in New York
City (a "Primary Treasury  Dealer"),  in which case the Company shall substitute
another  Primary  Treasury  Dealer;  and (2) any other Primary  Treasury  Dealer
selected by the Company.

         "Reference  Treasury  Dealer  Quotations"  means,  with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the  Trustee,  of the bid and asked  prices for the  Comparable  Treasury  Issue
(expressed  in each case as a  percentage  of its  principal  amount)  quoted in
writing to the trustee by that Reference  Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.

         Section 2. In case the Company  shall desire to exercise  such right to
redeem  and  pay  off  all or any  part of  such  bonds  of the  New  Series  as
hereinbefore  provided  it shall  comply  with all the terms and  provisions  of
Article III of the Mortgage, as amended, applicable thereto, and such redemption
shall be made under and subject to the terms and  provisions  of Article III and
in the manner and with the effect therein provided, but at the time or times and
upon  mailing  of  notice,  all as  hereinbefore  set forth in Section 1 of this
Article.  No  publication  of notice of any  redemption  of any bonds of the New
Series shall be required.

                                   ARTICLE V.
                       CERTAIN EVENTS OF DEFAULT; REMEDIES

         Section 1. So long as any bonds of the New Series  remain  outstanding,
in case one or more of the following events shall happen,  such events shall, in
addition  to the events of  default  heretofore  enumerated  in  paragraphs  (a)
throughout  (d) of  Section 2 of Article  VIII of the  Mortgage,  constitute  an
"event  of  default"  under  the  Mortgage,  as  fully  as if such  events  were
enumerated therein:

                  (e) default  shall be made in the due and punctual  payment of
         the principal  (including  the full amount of any  applicable  optional
         redemption price) of any bond or


                                       23
<PAGE>

         bonds of the New Series whether at the maturity of said bonds,  or at a
         date  fixed  for  redemption  of  said  bonds,  or any of  them,  or by
         declaration as authorized by the Mortgage;

         Section 2. So long as any bonds of the New Series  remain  outstanding,
Section 10 of Article VIII of the  Mortgage,  as heretofore  amended,  is hereby
further  amended  by  inserting  in the  first  paragraph  of such  Section  10,
immediately  after the  words "as  herein  provided,"  at the end of clause  (2)
thereof, the following:

         "or (3) in case default shall be made in any payment of any interest on
any bond or bonds  secured by this  indenture or in the payment of the principal
(including  any  applicable  optional  redemption  price)  of any  bond or bonds
secured by this indenture,  where such default is not of the character  referred
to in clause (1) or (2) of this Section 10 but  constitutes  an event of default
within the meaning of Section 2 of this Article VIII."

                                   ARTICLE VI.

                             CONCERNING THE TRUSTEE

         The Trustee hereby  accepts the trust herein  declared and provided and
agrees  to  perform  the same upon the  terms  and  conditions  set forth in the
Mortgage,  as  amended  and  supplemented,  and upon  the  following  terms  and
conditions:

         The Trustee shall not be responsible in any manner whatsoever for or in
respect of the  validity of this  Supplemental  Indenture  or the due  execution
hereof by the Company or for or in respect of the recitals contained herein, all
of which recitals are made by the Company solely.

                                  ARTICLE VII.

                                  MISCELLANEOUS

         Section 3. Unless otherwise  clearly required by the context,  the term
"Trustee," or any other  equivalent  term used in this  Supplemental  Indenture,
shall be held and  construed to mean the trustee under the Mortgage for the time
being whether the original or a successor trustee.

         Section 4. The headings of the Articles of this Supplemental  Indenture
are inserted for convenience of reference only and are not to be taken to be any
part of this  Supplemental  Indenture or to control or affect the meaning of the
same.

         Section 5. Nothing expressed or mentioned in or to be implied from this
Supplemental Indenture or in or from the bonds of the New Series is intended, or
shall be construed,  to give any person or  corporation,  other than the parties
hereto and their respective successors,  and the holders of bonds secured by the
Mortgage and the indentures  supplemental thereto, any legal or equitable right,
remedy  or claim  under or in  respect  of such  bonds  or the  Mortgage  or any
indenture supplemental thereto, or any covenant,  condition or provision therein
or in this Supplemental Indenture contained.  All the covenants,  conditions and
provisions  thereof  and


                                       24
<PAGE>

hereof are for the sole and  exclusive  benefit of the parties  hereto and their
successors  and of the holders of bonds  secured by the Mortgage and  indentures
supplemental thereto.

         Section  6. This  Supplemental  Indenture  may be  executed  in several
counterparts,  each of which shall be an original and all  collectively  but one
instrument.

         Section 7. This Supplemental  Indenture is dated and shall be effective
as of September 15, 2002,  but was actually  executed and delivered on September
17, 2002.



                [Remainder of this page intentionally left blank]


                                       25
<PAGE>


         IN WITNESS  WHEREOF,  the parties of the first and second  parts hereto
have caused their corporate seals to be hereunto  affixed and the President or a
Vice  President  of the  party of the  first  part and the  President  or a Vice
President of the party of the second part,  under and by the authority vested in
them,  have hereto affixed their  signatures and their  Secretaries or Assistant
Secretaries  have duly attested the execution  hereof the 17th day of September,
2002.



                                     PECO ENERGY COMPANY



                                     By
                                        ----------------------------------------

                                        F. F. Frankowski
                                        Vice President


                                     [SEAL]





                                     Attest
                                           -------------------------------------
                                           T. D. Cutler
                                           Assistant Secretary


                                     WACHOVIA BANK, NATIONAL ASSOCIATION



                                     By
                                        ----------------------------------------
                                        G. J. Rayzis
                                        Vice President


                                     [SEAL]



                                     Attest
                                           -------------------------------------
                                           J. M. Matthews
                                           Assistant Secretary

                                       26
<PAGE>


COMMONWEALTH OF PENNSYLVANIA

                                     ss.

COUNTY OF PHILADELPHIA

         BE IT REMEMBERED, that on the 17th day of September, 2002, before me, a
Notary Public in and for said County and Commonwealth, residing in Philadelphia,
personally came T. D. Cutler,  who being duly sworn according to law deposes and
says that he was personally  present and did see the common or corporate seal of
the above  named  PECO  Energy  Company  affixed to the  foregoing  Supplemental
Indenture,  that the seal so affixed is the common or corporate seal of the said
PECO Energy Company, and was so affixed by the authority of the said corporation
as the act and deed  thereof;  that the above named F. F.  Frankowski  is a Vice
President of the said corporation,  and did sign the said Supplemental Indenture
as such in the  presence  of this  deponent  that  this  deponent  is  Assistant
Secretary of the said corporation; and the name of the deponent, above signed in
attestation of the due execution of the said Supplemental  Indenture, is in this
deponent's own proper handwriting.

         Sworn to and subscribed before me the day and year aforesaid.


                   ___________________________________________

                                  Notarial Seal
                                 _______________
                      Notary Public, City of Philadelphia,
                               Philadelphia County
                       My Commission Expires ______, ____

[SEAL]


                                       27
<PAGE>

COMMONWEALTH OF PENNSYLVANIA

                                     ss.

COUNTY OF PHILADELPHIA

         BE IT REMEMBERED,  that on the 17th day of September,  2002, before me,
the  subscriber,  a Notary  Public  in and for  said  County  and  Commonwealth,
residing in Philadelphia,  personally came J. M. Matthews,  who being duly sworn
according to law deposes and says that he was personally present and did see the
common or corporate seal of the above named Wachovia Bank, National Association,
affixed to the foregoing Supplemental Indenture, that the seal so affixed is the
common or corporate seal of the said Wachovia Bank,  National  Association,  and
was so  affixed by the  authority  of the said  corporation  as the act and deed
thereof,  that the  above  named G. J.  Rayzis is a Vice  President  of the said
corporation,  and  did  sign  the  said  Supplemental  Indenture  as such in the
presence of this deponent;  that this deponent is an Assistant  Secretary of the
said  corporation;  and  that  the  name  of  this  deponent,  above  signed  in
attestation of the due execution of the said Supplemental  Indenture, is in this
deponent's own proper handwriting.

         Sworn to and subscribed before me the day and year aforesaid.

         I hereby  certify that I am not an officer of director of said Wachovia
Bank, National Association.


                   ___________________________________________

                                  Notarial Seal
                          _____________, Notary Public
                    City of Philadelphia, Philadelphia County
                       My Commission Expires ______, ____

[SEAL]


                                       28
<PAGE>

                            CERTIFICATE OF RESIDENCE

         Wachovia  Bank,  National  Association,  Mortgagee  and Trustee  within
named,  hereby certifies that its precise  residence in the City of Philadelphia
is N.E. Cor. Broad and Walnut Streets in the City of Philadelphia, Pennsylvania.







                                     WACHOVIA BANK, NATIONAL ASSOCIATION





                                     By
                                        ----------------------------------------
                                        G. J. Rayzis
                                        Vice President


                                       29
<PAGE>

                                   SCHEDULE A


                          COMMONWEALTH OF PENNSYLVANIA

                               PHILADELPHIA COUNTY

         EIGHTEENTH WARD:                                      (PE 10,560)

         (1) ALL THAT  CERTAIN  lot or piece of ground  with the  buildings  and
improvements  thereon  erected,  Situate  in  the  18th  ward  of  the  City  of
Philadelphia,  Commonwealth of Pennsylvania,  BEGINNING at a point formed by the
intersection of the  Southeasterly  side of Delaware Avenue (variable width) and
the  Northeasterly  side of Palmer  Street (50 feet  wide),  CONTAINING  105,681
square feet or 2.4261 acres.

         BEING  the  same  premises  which  Jerome  Foods,  Inc.  by Deed  dated
1/27/1998 and recorded 2/2/1998 in Philadelphia County in Deed Book JTD 577 Page
46 conveyed unto PIDC Financing Corporation, a Pennsylvania Non-Profit Corp., in
fee. UNDER AND SUBJECT to certain rights as of record.


                                       30