exv4w1



 





Exhibit 4.1




 





PECO ENERGY COMPANY




TO




U.S. BANK NATIONAL ASSOCIATION, TRUSTEE




 






ONE HUNDRED AND THIRD SUPPLEMENTAL

INDENTURE DATED AS OF

MARCH 1, 2007




TO




FIRST AND REFUNDING MORTGAGE




OF




THE COUNTIES GAS AND ELECTRIC

COMPANY








TO









FIDELITY TRUST COMPANY, TRUSTEE

DATED MAY 1, 1923




 






5.70% SERIES DUE 2037




 





 









 





     THIS SUPPLEMENTAL INDENTURE dated as of March 1, 2007, 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 U.S. BANK NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the United States of America
(hereinafter called the Trustee), as successor Trustee under the Mortgage hereinafter mentioned,
party of the second part, Witnesseth that



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



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



2









 





	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	First

    September 1, 1926

	 	Counties Company to

Fidelity-Philadelphia
Trust Company
(Successor to Fidelity
Trust Company)

	 	Bonds of 5% Series of
1926
	 
	 	 	 	 
	Second

    May 1, 1927

	 	Suburban Company to

Fidelity-Philadelphia
Trust Company

	 	Evidencing succession of
Suburban Company to
Counties Company

	 
	 	 	 	 
	Third

    May 1, 1927

	 	Suburban Company to

Fidelity-Philadelphia
Trust Company 

	 	Bonds of 4-1/2% Series
due 1957; amendment of
certain provisions of
Mortgage

	 
	 	 	 	 
	Fourth

    November 1, 1927

	 	Suburban Company to

Fidelity-Philadelphia
Trust Company

	 	Additional Bonds of
4-1/2% Series due 1957

	 
	 	 	 	 
	Fifth

    January 31, 1931

	 	Company to

Fidelity-Philadelphia
Trust Company 

	 	Evidencing succession of
Company to
Suburban Company

	 
	 	 	 	 
	Sixth

    February 1, 1931

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 4% Series
due 1971
	 
	 	 	 	 
	Seventh

    March 1, 1937

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 3-1/2% Series
due 1967; amendment of
certain provisions of
Mortgage

	 
	 	 	 	 
	Eighth

    December 1, 1941

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 2-3/4% Series
due 1971; amendment of
certain provisions of
Mortgage

	 
	 	 	 	 
	Ninth

    November 1, 1944

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 2-3/4% Series
due 1967 and 2-3/4% Series
due 1974; amendment of
certain provisions of
Mortgage

	 
	 	 	 	 
	Tenth

    December 1, 1946

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 2-3/4% Series
due 1981; amendment of
certain provisions of
Mortgage*







3









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	Eleventh

    February 1, 1948

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 2-7/8% Series
due 1978*
	 
	 	 	 	 
	Twelfth

    January 1, 1952

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 3-1/4% Series
due 1982*

	 
	 	 	 	 
	Thirteenth

    May 1, 1953

	 	Company to

Fidelity-Philadelphia
Trust Company 

	 	Bonds of 3-7/8% Series
due 1983*
	 
	 	 	 	 
	Fourteenth

    December 1, 1953

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 3-1/8% Series
due 1983*
	 
	 	 	 	 
	Fifteenth

    April 1, 1955

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 3-1/8% Series
due 1985*
	 
	 	 	 	 
	Sixteenth

    September 1, 1957

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 4-5/8% Series
due 1987; amendment of
certain provisions of
Mortgage*

	 
	 	 	 	 
	Seventeenth

    May 1, 1958

	 	Company to

Fidelity-Philadelphia
Trust Company 

	 	Bonds of 3-3/4% Series
due 1988; amendment of
certain provisions of
Mortgage*

	 
	 	 	 	 
	Eighteenth

    December 1, 1958

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 4-3/8% Series
due 1986*
	 
	 	 	 	 
	Nineteenth

    October 1, 1959

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 5% Series
due 1989*
	 
	 	 	 	 
	Twentieth

    May 1, 1964

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 4-1/2% Series
due 1994*
	 
	 	 	 	 
	Twenty-first

    October 15, 1966

	 	Company to

Fidelity-Philadelphia
Trust Company

	 	Bonds of 6% Series due
1968-1973*
	 
	 	 	 	 
	Twenty-second

    June 1, 1967

	 	Company to The Fidelity Bank
(formerly
Fidelity-Philadelphia
Trust Company)

	 	Bonds of 5-1/4 % Series due
1968-1973 and 5-3/4 %
Series due 1977*

	 
	 	 	 	 
	Twenty-third

    October 1, 1957

	 	Company to The Fidelity
Bank
	 	Bonds of 6-1/8 % Series
due 1997*






4









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	Twenty-fourth

    March 1, 1968

	 	Company to 
    The Fidelity
Bank
	 	Bonds of 6-1/2% Series

due 1993; amendment of
Article XIV of
Mortgage*

	 
	 	 	 	 
	Twenty-fifth

    September 10, 1968

	 	Company to The Fidelity
Bank
	 	Bonds of 1968 Series due
1969-1976*
	 
	 	 	 	 
	Twenty-sixth

    August 15, 1969

	 	Company to The Fidelity
Bank
	 	Bonds of 8% Series due
1975*
	 
	 	 	 	 
	Twenty-seventh

    February 1, 1970

	 	Company to The Fidelity
Bank
	 	Bonds of 9% Series due
1995*
	 
	 	 	 	 
	Twenty-eighth

    May 1, 1970

	 	Company to The Fidelity
Bank
	 	Bonds of 8-1/2% Series
due 1976*
	 
	 	 	 	 
	Twenty-ninth

    December 15, 1970

	 	Company to The Fidelity
Bank
	 	Bonds of 7-3/4% Series
due 2000*
	 
	 	 	 	 
	Thirtieth

    August 1, 1971

	 	Company to The Fidelity
Bank
	 	Bonds of 8-1/4% Series
due 1996*
	 
	 	 	 	 
	Thirty-first

    December 15, 1971

	 	Company to The Fidelity
Bank
	 	Bonds of 7-3/8% Series
due 2001; amendment of
Article XI of Mortgage*

	 
	 	 	 	 
	Thirty-second

    June 15, 1972

	 	Company to The Fidelity
Bank
	 	Bonds of 7-1/2% Series
due 1998*
	 
	 	 	 	 
	Thirty-third

    January 15, 1973

	 	Company to The Fidelity
Bank
	 	Bonds of 7-1/2% Series
due 1999*
	 
	 	 	 	 
	Thirty-fourth

    January 15, 1974

	 	Company to The Fidelity
Bank
	 	Bonds of 8-1/2% Series
due 2004
	 
	 	 	 	 
	Thirty-fifth

    October 15, 1974

	 	Company to The Fidelity
Bank
	 	Bonds of 11% Series
due 1980*
	 
	 	 	 	 
	Thirty-sixth

    April 15, 1975

	 	Company to The Fidelity
Bank
	 	Bonds of 11-5/8% Series
due 2000*
	 
	 	 	 	 
	Thirty-seventh

    August 1, 1975

	 	Company to The Fidelity
Bank
	 	Bonds of 11% Series due
2000*
	 
	 	 	 	 
	Thirty-eighth

    March 1, 1976

	 	Company to The Fidelity
Bank
	 	Bonds of 9-1/8% Series
due 2006*
	 
	 	 	 	 
	Thirty-ninth

    August 1, 1976

	 	Company to The Fidelity
Bank
	 	Bonds of 9-5/8% Series
due 2002*






5









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	Fortieth

    February 1, 1977

	 	Company to The Fidelity
Bank
	 	Bonds of Pollution
Control Series A
and Pollution
Control Series B*

	 
	 	 	 	 
	Forty-first

    March 15, 1977

	 	Company to The Fidelity
Bank
	 	Bonds of 8-5/8% Series
due 2007*
	 
	 	 	 	 
	Forty-second

    July 15, 1977

	 	Company to The Fidelity
Bank
	 	Bonds of 8-5/8% Series
due 2003*
	 
	 	 	 	 
	Forty-third

    March 15, 1978

	 	Company to The Fidelity
Bank
	 	Bonds of 9-1/8% Series
due 2008*
	 
	 	 	 	 
	Forty-fourth

    October 15, 1979

	 	Company to The Fidelity
Bank
	 	Bonds of 12-1/2% Series
due 2005*
	 
	 	 	 	 
	Forty-fifth

    October 15, 1980

	 	Company to The Fidelity
Bank
	 	Bonds of 13-3/4% Series
due 1992*
	 
	 	 	 	 
	Forty-sixth

    March 1, 1981

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

    March 1, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 15% Series due
1996; amendment of
Article VIII of
Mortgage*

	 
	 	 	 	 
	Forty-eighth

    July 1, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 17-5/8% Series
due 2011*
	 
	 	 	 	 
	Forty-ninth

    September 15, 1981

	 	Company to The Fidelity
Bank
	 	Bonds of 18-3/4% Series
due 2009*
	 
	 	 	 	 
	Fiftieth

    April 1, 1982

	 	Company to The Fidelity
Bank
	 	Bonds of 18% Series due
2012*
	 
	 	 	 	 
	Fifty-first

    October 1, 1982

	 	Company to The Fidelity
Bank
	 	Bonds of 15-3/8% Series
due 2010*
	 
	 	 	 	 
	Fifty-second

    June 15, 1983

	 	Company to The Fidelity
Bank
	 	Bonds of 13-3/8% Series
due 2013*
	 
	 	 	 	 
	Fifty-third

    November 15, 1984

	 	Company to Fidelity Bank,
National Association
(formerly The Fidelity Bank)

	 	Bonds of 13.05% Series
due 1994; amendment
of Article VIII of
Mortgage*







6









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	Fifty-fourth

    December 1, 1984

	 	Company
to Fidelity Bank, 

National Association

	 	Bonds of 14% Series due
1988-1994; amendment
of Article VIII of
Mortgage*

	 
	 	 	 	 
	Fifty-fifth

    May 15, 1985

	 	Company to Fidelity Bank,

National Association

	 	Bonds of Pollution
Control Series C*

	 
	 	 	 	 
	Fifty-sixth

    October 1, 1985

	 	Company to Fidelity Bank,

National Association

	 	 Bonds of Pollution
Control Series D*

	 
	 	 	 	 
	Fifty-seventh

    November 15, 1985

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 10-7/8% Series
due 1995*
	 
	 	 	 	 
	Fifty-eight

    November 15, 1985

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 11-3/4% Series
due 2014*

	 
	 	 	 	 
	Fifty-ninth

    June 1, 1986

	 	Company to Fidelity Bank,

National Association

	 	Bonds of Pollution
Control Series E*

	 
	 	 	 	 
	Sixtieth

    November 1, 1986

	 	Company to Fidelity Bank,

National Association 

	 	Bonds of 10-1/4% Series
due 2016*

	 
	 	 	 	 
	Sixty-first

    November 1, 1986

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 8-3/4% Series
due 1994*

	 
	 	 	 	 
	Sixty-second

    April 1, 1987

	 	Company to Fidelity Bank, 

National Association 

	 	Bonds of 9-3/8% Series
due 2017*
	 
	 	 	 	 
	Sixty-third

    July 15, 1987

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 11% Series due
2016*
	 
	 	 	 	 
	Sixty-fourth

    July 15, 1987

	 	Company to Fidelity Bank, 

National Association

	 	Bonds of 10% Series due
1997*
	 
	 	 	 	 
	Sixty-fifth

    August 1, 1987

	 	Company to Fidelity Bank, 

National Association

	 	Bonds of 10-1/4% Series
due 2007*
	 
	 	 	 	 
	Sixty-sixth

    October 15, 1987

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 11% Series due
1997*
	 
	 	 	 	 
	Sixty-seventh

    October 15, 1987

	 	Company to Fidelity Bank, 

National Association

	 	Bonds of 12-1/8% Series
due 2016*
	 
	 	 	 	 
	Sixty-eighth

    April 15, 1988

	 	Company to Fidelity Bank,

National Association 

	 	Bonds of 10% Series due
1998*
	 
	 	 	 	 
	Sixty-ninth

    April 15, 1988

	 	Company to Fidelity Bank, 

National Association

	 	Bonds of 11% Series due
2018*






7









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	Seventieth

    June 15, 1989

	 	Company to Fidelity bank,

National Association

	 	Bonds of 10% Series due
2019*
	 
	 	 	 	 
	Seventy-first

    October 1, 1989

	 	Company to Fidelity bank,

National Association

	 	Bonds of 9-7/8% Series
due 2019*
	 
	 	 	 	 
	Seventy-second

    October 1, 1989

	 	Company to Fidelity bank,

National Association 

	 	Bonds of 9-1/4% Series
due 1999*
	 
	 	 	 	 
	Seventy-third

    October 1, 1989

	 	Company to Fidelity bank,

National Association 

	 	Medium-Term Note
Series A*
	 
	 	 	 	 
	Seventy-fourth

    October 15, 1990

	 	Company to Fidelity bank,

National Association

	 	Bonds of 10-1/2% Series
due 2020*
	 
	 	 	 	 
	Seventy-fifth

    October 15, 1990

	 	Company to Fidelity bank,

National Association

	 	Bonds of 10% Series due
2000*
	 
	 	 	 	 
	Seventy-sixth

    April 1, 1991

	 	Company to Fidelity bank,

National Association

	 	Bonds of Pollution
Control Series F
and Pollution
Control Series G*

	 
	 	 	 	 
	Seventy-seventh

    December 1, 1991

	 	Company to Fidelity Bank,

National Association

	 	Bonds of Pollution
Control Series H*

	 
	 	 	 	 
	Seventy-eighth

    January 15, 1992

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 7-1/2% 1992
Series due 1999*

	 
	 	 	 	 
	Seventy-ninth

    April 1, 1992

	 	Company to Fidelity Bank,

National Association 

	 	Bonds of 8% Series due
2002*

	 
	 	 	 	 
	Eightieth

    April 1, 1992

	 	Company to Fidelity Bank,

National Association 

	 	Bonds of 8-3/4% Series
due 2022*

	 
	 	 	 	 
	Eighty-first

    June 1, 1992

	 	Company to Fidelity Bank,

National Association

	 	Bonds of Pollution
Control Series I*
	 
	 	 	 	 
	Eighty-second

    June 1, 1992

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 8-5/8% Series
due 2022*
	 
	 	 	 	 
	Eighty-third

    July 15, 1992

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 7-1/2% Series
due 2002*
	 
	 	 	 	 
	Eighty-fourth

    September 1, 1992

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 8-1/4% Series
due 2022*
	 
	 	 	 	 
	Eighty-fifth

    September 1, 1992

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 7-1/8% Series
due 2002*






8









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	Eighty-sixth

    March 1, 1993

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 6-5/8% Series
due 2003*
	 
	 	 	 	 
	Eighty-Seventh

    March 1, 1993

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 7-3/4% Series
due 2023*
	 
	 	 	 	 
	Eighty-eighth

    March 1, 1993

	 	Company to Fidelity Bank,

National Association

	 	Bonds of Pollution
Control Series J,
Pollution Control
Series K, Pollution
Control Series L
and Pollution Control
Series M*

	 
	 	 	 	 
	Eighty-ninth

    May 1, 1993

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 6-1/2% Series
due 2003*
	 
	 	 	 	 
	Ninetieth

    May 1, 1993

	 	Company to Fidelity Bank,

National Association

	 	Bonds of 7-3/4% Series
2 due 2023*

	 
	 	 	 	 
	Ninety-first

    August 15, 1993

	 	Company to First Fidelity Bank,

N.A., Pennsylvania (formerly
Fidelity Bank, 
National
Association)

	 	Bonds of 7-1/8% Series
due 2023*
	 
	 	 	 	 
	Ninety-second

    August 15, 1993

	 	Company to First Fidelity Bank,

N.A., Pennsylvania

	 	Bonds of 6-3/8% Series
due 2005*
	 
	 	 	 	 
	Ninety-third

    August 15, 1993

	 	Company to First Fidelity Bank,

N.A., Pennsylvania

	 	Bonds of 5-3/8% Series
due 1998*
	 
	 	 	 	 
	Ninety-fourth

    November 1, 1993

	 	Company to First Fidelity Bank,

N.A., Pennsylvania

	 	Bonds of 7-1/4% Series
due 2024*
	 
	 	 	 	 
	Ninety-fifth

    November 1, 1993

	 	Company to First Fidelity Bank,

N.A., Pennsylvania 

	 	Bonds of 5-5/8% Series
due 2001*
	 
	 	 	 	 
	Ninety-sixth

    May 1, 1995

	 	Company to First Fidelity Bank,

N.A., Pennsylvania 

	 	Medium Term Note Series B*
	 
	 	 	 	 
	Ninety-seventh

    October 15, 2001

	 	Company to First Union National Bank 

(formerly First
Fidelity Bank, N.A.,
Pennsylvania)

	 	Bonds of 5.95% Series
due 2011*
	 
	 	 	 	 
	Ninety-eighth

    October 1, 2002

	 	Company to Wachovia Bank,

National Association (formerly
First Union 
National Bank)

	 	Bonds of 5.95% Series
Due 2011*
	 
	 	 	 	 
	Ninety-ninth

    September 15, 2002

	 	Company to Wachovia Bank,

National Association (formerly
First Union 
National Bank)

	 	Bonds of 4.75% Series
Due 2012*






9









 






	 	 	 	 	 
	Supplemental Indenture	 	 	 	 
	and Date 	 	Parties	 	Providing for:
	One Hundredth

    April 15, 2003


	 	Company to Wachovia Bank,

National Association (formerly
First Union National Bank)

	 	Bonds of 3.50% Series
Due 2008*
	 
	 	 	 	 
	One Hundred and First

    April 15, 2004


	 	Company to Wachovia Bank,

National Association (formerly
First Union National Bank)

	 	Bonds of 5.90% Series
Due 2034*

	 
	 	 	 	 
	One Hundred and Second

    September 15, 2006


	 	Company to Wachovia Bank, 

National Association (formerly
First Union National Bank)

	 	Bonds of 5.95% Series
Due 2036; amendment of
certain provisions of
Mortgage*









 




			
	*	 	And amendment of certain provisions of the Ninth Supplemental Indenture.




10









 










     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	 
	3.50% Series due 2008
	 	 	450,000,000	 
	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	 
	4.75% Series due 2012
	 	 	225,000,000	 
	5.95% Series due 2011
	 	 	250,000,000	 
	5.90% Series due 2034
	 	 	75,000,000	 
	5.95% Series due 2036
	 	 	300,000,000	 
	Total
	 	$	1,454,200,000	 
	 
	 	 	 





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



     (a) 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



     (b) 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, 5.70% Series due
2037, (hereinafter sometimes called the “bonds of the New Series” or the “bonds of the 5.70% Series
due 2037”); and for the above-mentioned purposes to execute, deliver and record this Supplemental
Indenture; and



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



11









 




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.




(Form of Face of Bond)




PECO ENERGY COMPANY




			
	 	 	 
	REGISTERED
	 	REGISTERED
	NUMBER	 	 






FIRST AND REFUNDING MORTGAGE BOND,

5.70% SERIES DUE 2037,

DUE March 15, 2037




     PECO Energy Company, a Pennsylvania corporation (hereinafter called the Company), for value
received, hereby promises to pay to or registered
assigns,



     Dollars on March 15, 2037, 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 5.70 percent per annum in like coin or
currency, payable at either of the offices aforesaid on March 15 and September 15, commencing on
September 15, 2007, 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 the Mortgage hereinafter mentioned endorsed
hereon.



12









 





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



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



	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PECO ENERGY COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	President or Vice President	 	 
	 
	 	 	 	 	 	 
	(SEAL)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attest:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Secretary or Assistant Secretary	 	 






13









 






(Form of Reverse of New Series of Bond)




PECO ENERGY COMPANY

First and Refunding Mortgage Bond,

5.70% Series Due 2037

Due March 15, 2037


(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, 5.70% Series due
2037. 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 U.S. 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 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 March 15, 2007, 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



14









 







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 20 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:




	 	•	 	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
	 
	 	•	 	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 J.P. Morgan Securities Inc. and Greenwich
Capital Markets, 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.



15









 





     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)




16









 








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 One Hundred and Third Supplemental Indenture dated as of March
1, 2007.



	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Officer
	 	 






and




     WHEREAS, all acts and things necessary to make the bonds of the New Series in the principal
amount of $175,000,000, 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 U.S. Bank National
Association, as Trustee, and to its successors in trust and its and their assigns forever, all the
following described property, real, personal and mixed of the Company, viz.:



17









 





     The real property set forth in Schedule A, attached hereto and hereby made a part hereof, with
any improvements thereon erected as may be 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.



     All of the real property with any improvements thereon erected as may be owned by the Company
and described in the Mortgage or in any indenture supplemental thereto as may heretofore have been
executed, delivered and recorded, but excluding therefrom all real property heretofore released
from the lien of the Mortgage. The purpose of restating such prior conveyances as security is to
confirm that the obligations of the Company as provided in this Supplemental Indenture are included
within the lien and security of the Mortgage, and that public record be made of such purpose and
fact by the recording of this Supplemental Indenture.



     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 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,



18









 







choses in action, books of account, cash assets, franchises, ordinances, rights, powers,
easements, water rights, riparian rights, licenses, privileges, immunities, concessions and
consents now or hereafter owned by the Company in connection with or appurtenant to its said
business.



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



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



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



     Also all other property, real, personal and mixed not hereinbefore specified or referred to,
of every kind and nature whatsoever, now owned, or which may hereafter be owned by the Company
(except 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;



19









 





     IN TRUST NEVERTHELESS, for the equal and pro rata benefit and security of each and every
person or corporation who may be or become the holders of bonds secured by the Mortgage and
indentures supplemental thereto, without preference, priority or distinction (except as provided in
Section 1 of Article VIII of the Mortgage) as to lien or otherwise of any bond of any series over
or from any other bond, so that (except as aforesaid) each and every of the bonds issued or to be
issued, of whatsoever series, shall have the same right, lien, privilege under the Mortgage and
indentures supplemental thereto and shall be equally secured thereby and hereby, with the same
effect as if the bonds had all been made, issued and negotiated simultaneously on the date of the
Mortgage.



     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




     Section 1. 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:



     5.70% Series due 2037



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. Subject
to the provisions of the Mortgage, the bonds of the New Series shall be issuable without limitation
as to the aggregate principal amount thereof.



     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



20









 




(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 March 19, 2007. The bonds of the New Series shall mature on March 15, 2037.




     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
March 15 and September 15 in each year commencing on September 15, 2007, until the Company’s
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 or more bonds 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



21









 







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 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.



22









 





          (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 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



23









 







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.



     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 of $175,000,000 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 (e) 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 ___ 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.



24









 





     “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 the New Series.



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




	 	•	 	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
	 
	 	•	 	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 J.P. Morgan Securities Inc. and Greenwich
Capital Markets, 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.



25









 





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 bonds of the
5.70% Series due 2037 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 1. Unless otherwise clearly required by the context, the term “Trustee,” or any other
equivalent term used in this Supplemental Indenture, shall be held and construed to mean the
trustee under the Mortgage for the time being whether the original or a successor trustee.



26









 





     Section 2. The headings of the Articles of this Supplemental Indenture are inserted for
convenience of reference only and are not to be taken to be any part of this Supplemental Indenture
or to control or affect the meaning of the same.



     Section 3. Nothing expressed or mentioned in or to be implied from this Supplemental
Indenture or in or from the bonds of the 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 hereof are for the
sole and exclusive benefit of the parties hereto and their successors and of the holders of bonds
secured by the Mortgage and indentures supplemental thereto.



     Section 4. This Supplemental Indenture may be executed in several counterparts, each of which
shall be an original and all collectively but one instrument.



     Section 5. This Supplemental Indenture is dated and shall be effective as of March 1, 2007,
but was actually executed and delivered on March 12, 2007.



[Remainder of this page intentionally left blank]




27









 








     IN WITNESS WHEREOF, the party of the first part hereto has caused its corporate seal 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 12th day of March, 2007.



	 	 	 	 	 	 	 
	 	 	PECO ENERGY COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	Michael R. Metzner

	 	 
	 

	 	 	 	
Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	[SEAL]	 	 
	 
	 	 	 	 	 	 
	 

	 	Attest	 	 	 	 
	 

	 	 	 	Bruce G. Wilson

	 	 
	 

	 	 	 	
Assistant Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
 as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	George Rayzis

	 	 
	 

	 	 	 	
Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	Attest	 	 	 	 
	 

	 	 	 	Ralph E. Jones

	 	 
	 

	 	 	 	Assistant Secretary	 	 






28









 





STATE OF ILLINOIS




ss.




COUNTY OF COOK




     BE IT REMEMBERED, that on the ___th day of March, 2007, before me, a Notary Public in and for
said County and State, residing in Chicago, personally came Bruce G. Wilson, 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 Michael R. Metzner 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 Chicago, Cook County

My Commission Expires                     




[SEAL]




29









 








COMMONWEALTH OF PENNSYLVANIA




ss.




COUNTY OF PHILADELPHIA




     BE IT REMEMBERED, that on the ___th day of March, 2007, before me, the subscriber, a Notary
Public in and for said County and Commonwealth, residing in Philadelphia, personally came Ralph E.
Jones, who being duly sworn according to law deposes and says that he was personally present and
did see that the above named George Rayzis, a Vice President of the said corporation, 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; 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 U.S. Bank National Association.



 




Notarial Seal

                    , Notary Public

City of Philadelphia, Philadelphia County

My Commission Expires                     




[SEAL]




30









 








CERTIFICATE OF RESIDENCE




     U.S. Bank National Association, Mortgagee and Trustee within named, hereby certifies that its
precise residence in the City of Philadelphia is 50 South 16th Street, Suite 2000, Philadelphia,
Pennsylvania 19102.



	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, 	 	 
	 	 	Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

George Rayzis

Vice President
	 	 






31









 






SCHEDULE A




COMMONWEALTH OF PENNSYLVANIA




PE 10,596




Leasehold Interest in and to:



A tract generally locating northwesterly of the Schuylkill River, northeasterly of University
Avenue, and southeasterly of Civic Center Boulevard at Philadelphia, Philadelphia County,
Pennsylvania being more particularly described as follows:



That portion of property owned in fee simple by CSX Transportation, Inc. lying “inside the wye”
known locally as the University Avenue Wye, bounded on all sides by lines that are concentric to
and offset a distance of 50 feet, as measured radially from the centerline of the tracks, to the
inside of the tracks forming said wye, said property being located at Railroad Milepost QHE 0 and
QHW 0 and containing 2.55 acres, more or less, as contained within the boundaries of the following:




ALL THAT CERTAIN lot or piece of ground.




SITUATE in the 27th Ward of the City of Philadelphia, described as follows to wit:



BEGINNING at an interior point, which interior point is measured North 6 degrees 5 minutes 24
seconds East the distance of 53.185 feet from a point, which is measured North 74 degrees 56
minutes 01 second East, 32.265 feet from a point on the Northeasterly side of the right-of-way line
of the Southbound ramp of the Schuylkill Expressway, said last mentioned point being located
Southeastwardly along the right-of-way of the Schuylkill Expressway, on a line curving to the left
with a radius of 209.494 feet, an arc distance of 46.932 feet from a point; said last mentioned
point being located North 68 degrees 52 minutes 50 seconds East, 3.494 feet from a point on the
Northeasterly side of University Avenue (as established upon the confirmed City Plan) said last
mentioned point being located South 21 degrees 7 minutes 10 seconds East, 373.79 feet from the
intersection of the Northeasterly line of University Avenue produced with the Southeasterly line
Southeasterly side of Civic Center Boulevard (80 feet wide); thence extending from said point of
beginning Northeastwardly the distance of 85.927 feet to a point on the Easterly right-of-way for
the West Chester and Philadelphia Rail Road; thence extending Northeastwardly along the said
right-of-way on the arc of a circle curving to the left having a distance of 1279 feet to a point;
thence extending along the Easterly right-of-way of the Delaware Extension of the Pennsylvania
Railroad the following two courses and distances: (1) Southwardly on the arc of a circle curving to
the right having a radius of 675 feet the arc distance of 530.083 feet to a point of compound
curve; (2) Southwardly on the arc of a circle curving to the right having a radius of 725 feet the
arc distance of 331.392 feet more or less to a point; thence extending North 51 degrees 39 minutes
44 seconds West the distance of 173.448 feet to a point of curve; thence extending Westwardly on
the arc of a circle curving to the left having a


A-1









 






radius of 1170.405 feet the arc distance of 241.737 feet to a point of compound curve; thence
extending Westwardly on the arc of a circle curving to the left having a radius of 1368 feet the
arc distance of 735.378 feet to a point of tangent; thence extending South 88 degrees 38 minutes 01
second West the distance of 283.500 feet to a point being the first mentioned point and place of
beginning.



BEING the same premises described in Memorandum of Lease from CSX Transportation, Inc. to PECO
Energy Company dated July 14, 2006 and recorded as Document No. 51504971 in the Philadelphia County
Department of Records.





A-2









 








	 	 	 	 	 
	Prepared by:
	 	 	 	 
	 

	 	 

Ronald Zack

Assistant General Counsel 

PECO Energy Company

2301 Market Street

Philadelphia, PA 19103

(215) 841-4419
	 	 
	Return to
	 	 	 	 
	 

	 	 	 	 
	 

	 	Ronald Zack

Assistant General Counsel 

PECO Energy Company

2301 Market Street

Philadelphia, PA 19103

(215) 841-4419	 	 
	 
	 	 	 	 
	Counterpart ____ of 30	 	 






PECO ENERGY COMPANY




TO




U.S. BANK NATIONAL ASSOCIATION, TRUSTEE




 






ONE HUNDRED AND THIRD SUPPLEMENTAL

INDENTURE DATED AS OF

MARCH 1, 2007




 TO




FIRST AND REFUNDING MORTGAGE




OF




THE COUNTIES GAS AND ELECTRIC

COMPANY




TO




FIDELITY TRUST COMPANY, TRUSTEE

DATED MAY 1, 1923




 






5.70% SERIES DUE 2037