ex-4.htm


    
      
        Prepared
by:  Leslie Zimberg Martin

        701 Ninth
Street, NW - Suite 1220

        Washington,
D.C.  20068

        Phone
(202) 872-2585

        


        Return
to: Leslie Zimberg Martin

        Associate
General Counsel - PHI

        701 Ninth
Street, NW - Suite 1220

        Washington,
D.C.  20068

        Phone
(202) 872-2585



      


      


      


      


      


      INDENTURE
SUPPLEMENTAL

      


      TO

      


      MORTGAGE
AND DEED OF TRUST

      


      (Dated
January 15, 1937)

      


      Executed
By

      


      ATLANTIC
CITY ELECTRIC COMPANY

      


      TO

      


      THE BANK
OF NEW YORK MELLON,

      


      Trustee.

      


      _____________________________________

      


      


      Dated as
of November 6, 2008

      


      


      


      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      TABLE OF
CONTENTS*

      


      
        	 
      	 
      	
                Page

              
	
                PARTIES

              	
                1

              
	
                RECITALS

              	
                1

              
	 
      	
                Execution
      of Mortgage

              	
                1

              
	 
      	
                Execution
      of Supplemental Indentures

              	
                1

              
	 
      	
                Acquisition
      of property rights and property

              	
                1

              
	 
      	
                No
      Default under Original Indenture

              	
                2

              
	 
      	
                Provision
      for issuance of bonds in one or more series

              	
                2

              
	 
      	
                Right
      to execute supplemental indenture

              	
                2

              
	 
      	
                Issue
      of other series of bonds

              	
                2

              
	 
      	
                Issue
      of bonds of the New Series

              	
                2

              
	 
      	
                Form
      of bond of the New Series

              	
                2

              
	 
      	
                Trustee’s
      Authentication Certificate

              	
                6

              
	 
      	
                Supplemental
      Indenture

              	
                6

              
	 
      	
                Compliance
      with legal requirements

              	
                6

              
	
                GRANT

              	
                6

              
	
                DESCRIPTION
      OF PROPERTY

              	
                7

              
	
                APPURTENANCES,
      ETC

              	
                7

              
	
                HABENDUM

              	
                7

              
	
                ENCUMBRANCES

              	
                7

              
	
                TRUST

              	
                8

              
	
                SEC.
      1.

              	
                Creation
      of Bonds of the New Series

              	
                8

              
	 
      	 
      	
                Date
      of Maturity

              	
                8

              
	 
      	 
      	
                Interest
      Rate

              	
                8

              
	 
      	 
      	
                Redemption

              	
                9

              
	 
      	 
      	
                Global
      Security

              	
                9

              
	
                SEC.
      2.

              	
                Issuance
      of Bonds of the New Series

              	
                10

              
	
                SEC.
      3.

              	
                Approval
      of Supplemental Indenture by Board of Public Utilities,

                State
      of New Jersey not to be construed as approval of other
acts

              	
                10

              
	
                SEC.
      4.

              	
                Supplemental
      Indenture and Original Indenture to be construed as

                one
      instrument

              	
                10

              
	 
      	 
      	
                Limitation
      on rights of others

              	
                10

              
	 
      	 
      	
                Trustee
      assumes no responsibility for correctness of recitals of
    fact

              	
                10

              
	 
      	 
      	
                Execution
      in counterparts

              	
                10

              
	
                TESTIMONIUM

              	
                11

              
	
                SIGNATURES
      AND SEALS

              	
                11

              
	
                ACKNOWLEDGEMENTS

              	
                13

              


      

      


      


      *The
Table of Contents shall not be deemed to be any part of the Indenture
Supplemental to Mortgage and Deed of Trust.


      
        
          
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      SUPPLEMENTAL
INDENTURE, dated as of November 6, 2008 for convenience of reference, and
effective from the time of execution and delivery hereof, made and entered into
by and between ATLANTIC CITY ELECTRIC COMPANY, a corporation of the State of New
Jersey (hereinafter sometimes called the “Company”), party of the first part,
and THE BANK OF NEW YORK MELLON (formerly known as The Bank of New York and as
successor in such capacity to the Irving Trust Company), a corporation of the
State of New York, as trustee (hereinafter sometimes called the “Trustee”),
party of the second part.

       

      WHEREAS,
the Company has heretofore executed and delivered to the Trustee its Mortgage
and Deed of Trust, dated January 15, 1937 (hereinafter referred to as the
“Mortgage”), for the security of all bonds of the Company outstanding
thereunder, and by said Mortgage conveyed to the Trustee, upon certain trusts,
terms and conditions, and with and subject to certain provisos and covenants
therein contained, all and singular the property, rights and franchises which
the Company then owned or should thereafter acquire, excepting any property
expressly excepted by the terms of the Mortgage; and

       

      WHEREAS,
the Company has heretofore executed and delivered to the Trustee an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of June 1, 1949, an
Indenture Supplemental to Mortgage and Deed of Trust, dated as of July 1,
1950, an Indenture Supplemental to Mortgage and Deed of Trust, dated as of
November 1, 1950, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of March 1, 1952, an Indenture Supplemental to Mortgage and Deed
of Trust, dated as of January 1, 1953, an Indenture Supplemental to
Mortgage and Deed of Trust, dated as of March 1, 1954, an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of March 1, 1955, an
Indenture Supplemental to Mortgage and Deed of Trust, dated as of
January 1, 1957, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of April 1, 1958, an Indenture Supplemental to Mortgage and Deed
of Trust, dated as of April 1, 1959, an Indenture Supplemental to Mortgage
and Deed of Trust, dated as of March 1, 1961, an Indenture Supplemental to
Mortgage and Deed of Trust, dated as of July 1, 1962, an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of March 1, 1963, an
Indenture Supplemental to Mortgage and Deed of Trust, dated as of
February 1, 1966, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of April 1, 1970, an Indenture Supplemental to Mortgage and Deed
of Trust, dated as of September 1, 1970, an Indenture Supplemental to
Mortgage and Deed of Trust, dated as of May 1, 1971, an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of April 1, 1972, an
Indenture Supplemental to Mortgage and Deed of Trust, dated as of June 1,
1973, an Indenture Supplemental to Mortgage and Deed of Trust, dated as of
January 1, 1975, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of May 1, 1975, an Indenture Supplemental to Mortgage and Deed of
Trust, dated as of December 1, 1976, an Indenture Supplemental to Mortgage
and Deed of Trust, dated as of January 1, 1980, an Indenture Supplemental
to Mortgage and Deed of Trust, dated as of May 1, 1981, an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of November 1, 1983,
an Indenture Supplemental to Mortgage and Deed of Trust, dated as of
April 15, 1984, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of July 15, 1984, an Indenture Supplemental to Mortgage and Deed
of Trust, dated as of October 1, 1985, an Indenture Supplemental to
Mortgage and Deed of Trust, dated as of May 1, 1986, an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of July 15, 1987, an
Indenture Supplemental to Mortgage and Deed of Trust, dated as of
October 1, 1989, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of March 1, 1991, an Indenture Supplemental to Mortgage and Deed
of Trust, dated as of May 1, 1992, an Indenture Supplemental to Mortgage
and Deed of Trust, dated as of January 1, 1993, an Indenture Supplemental
to Mortgage and Deed of Trust, dated as of August 1, 1993, an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of September 1, 1993,
an Indenture Supplemental to Mortgage and Deed of Trust, dated as of
November 1, 1993, an Indenture Supplemental to Mortgage and Deed of Trust,
dated as of June 1, 1994, an Indenture Supplemental to Mortgage and Deed of
Trust, dated as of October 1, 1994, an Indenture Supplemental to Mortgage
and Deed of Trust, dated as of November 1, 1994, an Indenture Supplemental
to Mortgage and Deed of Trust, dated as of March 1, 1997, an Indenture Supplemental to
Mortgage and Deed of Trust, dated as of April 1, 2004, an Indenture Supplemental
to Mortgage and Deed of Trust, dated as of August 10, 2004, and an Indenture
Supplemental to Mortgage and Deed of Trust, dated as of March 8, 2006, such
instruments amending and supplementing the Mortgage in certain respects (the
Mortgage, as so amended and supplemented, being hereinafter called the “Original
Indenture”) and conveying to the Trustee, upon certain trusts, terms and
conditions, and with and subject to certain provisos and covenants therein
contained, certain property rights and property therein described;
and

       

      WHEREAS,
in addition to the property described in the Original Indenture, the Company has
acquired certain property rights and property hereinafter described and has
covenanted in Section 42 of the Original

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Indenture
to execute and deliver such further instruments and do such further acts as may
be necessary or proper to make subject to the lien thereof any property
thereafter acquired and intended to be subject to such lien; and

       

      WHEREAS,
the Company represents that no default has occurred under any of the provisions
of the Original Indenture; and

       

      WHEREAS,
the Original Indenture provides that bonds issued thereunder may be issued in
one or more series and further provides that, with respect to each series, the
rate of interest, the date or dates of maturity, the dates for the payment of
interest, the terms and rates of optional redemption, and other terms and
conditions shall be determined by the Board of Directors of the Company prior to
the authentication thereof; and

       

      WHEREAS,
Section 121 of the Original Indenture provides that any power, privilege or
right expressly or impliedly reserved to or in any way conferred upon the
Company by any provision of the Original Indenture, whether such power,
privilege or right is in any way restricted or is unrestricted, may be in whole
or in part waived or surrendered or subjected to any restriction if at the time
unrestricted or to additional restriction if already restricted, and that the
Company may enter into any further covenants, limitations or restrictions for
the benefit of any one or more series of bonds issued under the Original
Indenture and provide that a breach thereof shall be equivalent to a default
under the Original Indenture, or the Company may cure any ambiguity or correct
or supplement any defective or inconsistent provisions contained in the Original
Indenture or in any indenture supplemental to the Original Indenture, by an
instrument in writing, properly executed, and that the Trustee is authorized to
join with the Company in the execution of any such instrument or instruments;
and

       

      WHEREAS,
the Company has heretofore, from time to time in accordance with the provisions
of the Original Indenture, issued bonds of various series and in various amounts
and, of the bonds so issued, $416,115,000 aggregate principal amount is
outstanding at the date of this supplemental indenture; and

       

      WHEREAS,
the Company, by appropriate corporate action in conformity with the terms of the
Original Indenture, has duly determined to create a series of bonds under the
Original Indenture in the aggregate principal amount of $250,000,000, to be
entitled and designated as the First Mortgage Bonds, 7.75% Series due November
15, 2018 (herein sometimes referred to as the “bonds of the New Series”);
and

       

      WHEREAS,
each of the fully registered bonds of the New Series is to be substantially in
the following form, to wit:

       


      
        
          
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      THIS BOND
IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TRUSTEE UNDER THE MORTGAGE AND DEED OF
TRUST, DATED JANUARY 15, 1937, AS SUPPLEMENTED, BETWEEN ATLANTIC CITY ELECTRIC
COMPANY AND THE BANK OF NEW YORK MELLON, AS TRUSTEE

       

      THIS BOND
IS A GLOBAL BOND WITHIN THE MEANING OF THE MORTGAGE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS
BOND MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR BONDS REGISTERED
IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF, AND
NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE MORTGAGE.  EVERY BOND AUTHENTICATED AND DELIVERED
UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS BOND
SHALL BE A GLOBAL BOND THAT IS SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
CIRCUMSTANCES

       

      No.
______                                                                                                                                                     $_________

       

      (FORM OF
BOND)

      (FACE)

      ATLANTIC
CITY ELECTRIC COMPANY

      FIRST
MORTGAGE BOND

      7.75%
Series due November 15, 2018

      


      ATLANTIC
CITY ELECTRIC COMPANY, a corporation of the State of New Jersey (hereinafter
called the “Company”), for value received, hereby promises to pay to
___________, or registered assigns, the principal sum of
$              
Dollars on November 15, 2018, at the office or agency of the Company in the
Borough of Manhattan, The City of New York in lawful money of the United States
of America, and to pay interest thereon at the rate of 7.75 per centum per annum
in like money, at said office or agency on November 15  and May 15 in
each year, commencing May 15, 2009, until the Company’s obligation with respect
to the payment of such principal shall have been discharged.  Interest
on this bond will accrue from [the date of original issuance of Bonds of 2018
Series] to the first interest payment date, and thereafter will accrue from the
last interest payment date to which interest has been paid or duly provided
for.  In the event that any interest payment date is not a business
day, then payment of interest payable on such date will be made on the next
succeeding day which is a business day with the same force and effect as if made
on the interest payment date (and without any interest or other payment in
respect of such delay).  “Business day” means any day, other than a
Saturday or Sunday, which is not a day on which banking institutions or trust
companies in the Borough of Manhattan, The City of New York are generally
authorized or required by law, regulation or executive order to remain
closed.  Interest on this bond payable prior to maturity shall be paid
by check mailed to the address of the person or persons entitled thereto, as
such address shall appear on the bond registration books maintained by the
trustee or by wire transfer to an account designated by the person entitled
thereto.  So long as this bond is registered in the name of The
Depository Trust Company or a nominee thereof, all payments of principal,
premium, if any, and interest in respect of this bond shall be made in
immediately available funds.

       

      Subject
to certain exceptions provided in the Mortgage referred to on the reverse
hereof, the interest payable on any interest payment date shall be paid to the
person in whose name this bond is registered at the close of business on the
first calendar day of the month in which such interest payment date occurs;
provided, however, that interest payable at maturity will be paid to the person
to whom principal is paid.

       

      This bond
shall not become valid or obligatory for any purpose until The Bank of New York
Mellon, the Trustee under the Mortgage, or its successor thereunder, shall have
signed the form of authentication certificate endorsed hereon.

       

      Reference
is made to the further provisions of this bond set forth on the reverse hereof
and such further provisions shall for all purposes have the same effect as
though fully set forth at this place.

       

      IN
WITNESS WHEREOF, ATLANTIC CITY ELECTRIC COMPANY has caused this bond to be
executed in its name by the signature or a facsimile thereof of its President or
one of its Vice Presidents and its

       


      
        
          
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      corporate
seal, or a facsimile thereof, to be impressed or imprinted hereon and attested
by the signature, or a facsimile thereof, of its Secretary or one of its
Assistant Secretaries.

       

      
        	
                Dated,

              	
                ATLANTIC
      CITY ELECTRIC COMPANY

                 

              
	 
      	
                By:  _______________________________

                        [Vice]
      President

              
	
                 

                Attest:

                 

              	 
      
	
                ______________________________

                [Assistant]
      Secretary

                 

              	 
      


      

      


      (FORM OF
BOND)

      (REVERSE)

      


      This bond
is one of an issue of bonds of the Company, issuable in series, and is one of a
series known as its “First Mortgage Bonds, 7.75% Series due November 15, 2018”
(hereinafter called “Bonds of 2018 Series”), all bonds of all series issued and
to be issued under and equally secured (except insofar as any sinking fund,
established in accordance with the provisions of the Mortgage hereinafter
mentioned, may afford additional security for the bonds of any particular
series) by a Mortgage and Deed of Trust (herein, together with any indentures
supplemental thereto, called the Mortgage), dated January 15, 1937, executed by
the Company to THE BANK OF NEW YORK MELLON, as Trustee, to which Mortgage
reference is made for a description of the property mortgaged and pledged, the
nature and extent of the security, the rights of the holders of the bonds in
respect thereof, the duties and immunities of the Trustee, and the terms and
conditions upon which the bonds are secured.  With the consent of the
Company and to the extent permitted by and as provided in the Mortgage, the
rights and obligations of the Company and/or of the holders of the bonds and/or
coupons and/or the terms and provisions of the Mortgage and/or of any
instruments supplemental thereto may be modified or altered by affirmative vote
of the holders of at least seventy-five per centum (75%) in principal amount of
the bonds affected by such modification or alteration then outstanding under the
Mortgage (excluding bonds disqualified from voting by reason of the Company’s
interest therein as provided in the Mortgage); provided that no such
modification or alteration shall permit the extension of the maturity of the
principal of this bond or the reduction in the rate of interest hereon or any
other modification in the terms of payment of such principal or interest without
the consent of the holder hereof.

       

      The
principal hereof may be declared or may become due prior to the express date of
the maturity hereof on the conditions, in the manner and at the time set forth
in the Mortgage, upon the occurrence of a completed default as in the Mortgage
provided.

       

      The Bonds
of 2018 Series are issuable only as registered bonds without coupons in
denominations of $1,000 and authorized multiples thereof.  This bond
is transferable as prescribed in the Mortgage by the registered owner hereof in
person, or by his duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon surrender and
cancellation of this bond, and upon payment, if the Company shall require it, of
the transfer charges prescribed in the Mortgage, and thereupon, a new fully
registered bond of the same series for a like principal amount will be issued to
the transferee in exchange herefor as provided in the Mortgage.

       

      The
Company and the Trustee 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 principal or (subject to the provisions of the Mortgage)
interest hereon and for all other purposes and the Company and the Trustee shall
not be affected by any notice to the contrary.

       

      The Bonds of 2018 Series shall be
redeemable at the option of the Company prior to the express date of the
maturity hereof, in whole or in part, at any time.  The Company shall
give notice of its intent to redeem such Bonds at least 30 days but no more than
60 days prior to the date fixed for such redemption (the
“Redemption

       


      
        
          
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      Date”).  If
the Company redeems all or any part of the Bonds of 2018 Series pursuant to the
provisions of this paragraph, it shall pay an amount equal to the greater
of

       

      (i)          100%
of the principal amount of the Bonds of 2018 Series being redeemed,
and

       

      (ii)          the
sum of the present values of the remaining scheduled payments of principal of
and interest (not including the portion of any scheduled payment of interest
which accrued prior to the Redemption Date) on the Bonds of 2018 Series being
redeemed, discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50
basis points,

       

      plus, in
each case, accrued interest on those Bonds to the Redemption Date (calculated
assuming a 360-day year consisting of twelve 30-day months and for any period
shorter than a full month, on the basis of the actual number of days elapsed in
such period).

       

      “Treasury
Rate” means, with respect to any Redemption Date, the rate per annum 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 such Redemption
Date.

       

      “Comparable
Treasury Issue” means the United States Treasury security selected by the
Reference Treasury Dealer as having a maturity comparable to the remaining term
of the Bonds of 2018 Series to be redeemed that would be utilized, 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 2018 Series.

       

      “Comparable
Treasury Price” means, with respect to any Redemption Date, (i) the yield for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such Redemption Date, as
set forth in the H.15 Daily Update of the Federal Reserve Bank, or (ii) if such
release (or any successor release) is not published or does not contain prices
on such Business Day, the Reference Treasury Dealer Quotations actually obtained
by the Trustee for such Redemption Date.

       

      “H.15
(519)” means the weekly statistical release entitled “H.15 (519) Selected
Interest Rates” or any successor publication published by the Board of Governors
of the Federal Reserve System.

       

      “H.15
Daily Update” means the daily update of H.15 (519) available through the
worldwide website of the Board of Governors of the Federal Reserve System or any
successor site or publication.

       

      “Reference
Treasury Dealer” means Greenwich Capital Markets, Inc. and its successors;
provided, however, that the Company may substitute therefor another primary
United States Treasury securities dealer in New York City.

       

      “Reference
Treasury Dealer Quotations” means, with respect to 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 the Reference Treasury
Dealer at 5:00 p.m. on the third Business Day preceding such Redemption
Date.

      


      The
Company shall deliver to the Trustee before any Redemption Date for the Bonds of
2018 Series its calculation of the amount applicable to such
redemption.  Except with respect to the obligations of the Trustee
expressly set forth in the foregoing definitions of “Comparable Treasury Price”
and “Reference Treasury Dealer Quotations,” the Trustee shall be under no duty
to inquire into, may presume the correctness of, and shall be fully protected in
acting upon, the Company’s calculation of any Redemption Price of the Bonds of
2018 Series.

      


      In lieu
of stating the amount applicable to such redemption, notices of redemption of
the Bonds of 2018 Series shall state substantially the following: “The amount
applicable to the Bonds to be redeemed shall equal the sum of (a) the greater of
(i) 100% of the principal amount of such Bonds, and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest (not
including the portion of any scheduled payment of interest which accrued prior
to the Redemption Date) on the Bonds being redeemed, discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as

       


      
        
          
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      defined
in the Bonds) plus 50 basis points, plus (b) accrued interest on the principal
amount hereof to the Redemption Date.”

       

      If at the
time notice of redemption is given the redemption moneys are not on deposit with
the Trustee, then the redemption shall be subject to the receipt of such moneys
on or before the Redemption Date, and such notice shall be of no effect unless
such moneys are received.

       

      No
recourse shall be had for the payment of the principal of or interest on this
bond against any incorporator or any past, present or future subscriber to the
capital stock, shareholder, officer or director, as such, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of incorporators,
subscribers, shareholders, officers and directors, as such, being released by
the holder or owner hereof by the acceptance of this bond and being likewise
waived and released by the terms of the Mortgage.

       

      


       

      (END OF
FORM)

       

      AND
WHEREAS each of the bonds of the New Series (whether in temporary or definitive
form) is to bear a certificate of the Trustee substantially in the following
form, to wit:

       

      TRUSTEE’S
AUTHENTICATION CERTIFICATE

      


      This bond
is one of the bonds, of the series herein designated, described in the
within-mentioned Mortgage.

       

      
        	
                Dated,

              	
                THE
      BANK OF NEW YORK MELLON,

                     Trustee

                 

              
	 
      	
                By:  _______________________________

                        Authorized
      Officer

              


      

      


      AND
WHEREAS, the Company, in the exercise of the powers and authorities conferred
upon and reserved to it under and by virtue of the provisions of the Original
Indenture, and pursuant to resolutions of its Board of Directors, has duly
resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture, in the form hereof, for the purposes herein provided;
and

       

      WHEREAS,
the Company represents that all conditions and requirements necessary to make
this supplemental indenture (hereinafter sometimes referred to as the “2008
Supplemental Indenture”) a valid, binding and legal instrument in accordance
with its terms, have been done, performed and fulfilled, and the execution and
delivery hereof have been in all respects duly authorized;

       

      NOW,
THEREFORE, THIS INDENTURE WITNESSETH:

       

      That
Atlantic City Electric Company, in consideration of the premises and the sum of
One Dollar ($1.00) and other good and valuable consideration paid to it by the
Trustee at or before the ensealing and delivery of these presents, the receipt
whereof is hereby acknowledged, and in order to secure the payment of both the
principal of and interest and premium, if any, on the bonds from time to time
issued under and secured by the Original Indenture and this 2008 Supplemental
Indenture, according to their tenor and effect, and the performance of all the
provisions of the Original Indenture and this 2008 Supplemental Indenture
(including any further indenture or indentures supplemental to the Original
Indenture and any modification or alteration made as in the Original Indenture
provided) and of said bonds, has granted, bargained, sold, released, conveyed,
assigned, transferred, mortgaged, pledged, set over and confirmed, and by these
presents doth grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge, set over and confirm unto The Bank of New York Mellon, as Trustee, and
to its successor or successors in said trust, and to it and its and their
assigns forever, all of the following described properties of the Company, that
is to say: all property, real, personal and mixed, tangible and intangible,
owned by

       


      
        
          
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      the
Company on the date of the execution hereof and acquired since the execution and
delivery of the Indenture Supplemental to Mortgage and Deed of Trust, dated as
of March 8, 2006 (except such property as is hereinafter expressly excepted from
the lien and operation of this 2008 Supplemental Indenture).

       

      The
property covered by the lien of the Original Indenture and this 2008
Supplemental Indenture shall include particularly, among other property, without
prejudice to the generality of the language hereinbefore or hereinafter
contained, all property, whether real, personal or mixed (except any hereinafter
expressly excepted), and wheresoever situated, now owned by the Company and
acquired since the execution and delivery of the Indenture Supplemental to
Mortgage and Deed of Trust, dated as of March 8, 2006, including (without in
anywise limiting or impairing by the enumeration of the same the scope and
intent of the foregoing or of any general description contained in this 2008
Supplemental Indenture) all lands, rights of way and roads; all plants for the
generation of electricity, power houses, steam heat plants, hot water plants,
substations, transmission lines, distributing systems, bridges, culverts,
tracks, rolling stock, vehicles, automobiles; all offices, buildings and
structures, and the equipment thereof; all machinery, engines, boilers,
turbines, dynamos, machines, regulators, meters, transformers, generators and
motors; all appliances whether electrical or mechanical, conduits, cables and
lines; all pipes, whether for water, steam heat, or other purposes; all mains
and pipes, service pipes, fittings, valves and connections, poles, wires, tools,
implements, apparatus, furniture, chattels, and choses in action; all municipal
franchises and other franchises; all lines for the transmission and/or
distribution of electric current, steam heat or water for any purpose, including
towers, poles, wires, cables, pipes, conduits and all apparatus for use in
connection therewith; all real estate, lands, leases, leaseholds (excepting the
last day of the term of each lease and leasehold); all contracts, whether heat,
light, power or street lighting contracts; all easements, servitudes, licenses,
permits, rights, powers, franchises, privileges, rights of way and other rights
in or relating to real estate or the occupancy of the same and (except as
hereinafter expressly excepted) all the right, title, and interest of the
Company in and to all other property of any kind or nature appertaining to
and/or used and/or occupied and/or enjoyed in connection with any property
hereinbefore described.

       

      TOGETHER
WITH all and singular the tenements, hereditaments and appurtenances belonging
or in any wise appertaining to the aforesaid property or any part thereof, with
the reversion and reversions, remainder and remainders and (subject to the
provisions of Section 57 of the Original Indenture) the tolls, rents, revenues,
issues, earnings, income, product and profits thereof, and all the estate,
right, title and interest and claim whatsoever, at law as well as in equity,
which the Company now has or may hereafter acquire in and to the aforesaid
property and franchises and every part and parcel thereof.

       

      Provided
that, in addition to the reservations and exceptions herein elsewhere contained,
the following are not and are not intended to be now or hereafter granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed hereunder and are hereby expressly excepted from the lien
and operation of the Original Indenture and of this 2008 Supplemental Indenture,
viz.: (1) cash, shares
of stock and obligations (including bonds, notes and other securities) not
hereafter specifically pledged, paid or deposited or delivered hereunder or
under the Original Indenture or hereinafter or therein covenanted so to be; and
(2) any goods, wares, merchandise, equipment, materials or supplies acquired for
the purpose of sale or resale in the usual course of business or for consumption
in the operation of any properties of the Company; materials, supplies and
construction equipment; and all judgments, accounts and choses in action, the
proceeds of which the Company is not obligated as provided in the Original
Indenture or as hereinafter provided to deposit with the Trustee hereunder or
thereunder; provided, however, that the property and rights expressly excepted
from the lien and operation of the Original Indenture and this 2008 Supplemental
Indenture in the above subdivision (2) shall (to the extent permitted by law)
cease to be so excepted, in the event that the Trustee or a receiver or trustee
shall enter upon and take possession of the mortgaged and pledged property in
the manner provided in Article XII of the Original Indenture, by reason of the
occurrence of a completed default, as defined in said Article XII.

       

      TO HAVE
AND TO HOLD all such properties, real, personal and mixed, granted, bargained,
sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over,
or confirmed by the Company as aforesaid, or intended so to be unto the Trustee
and its successors and assigns forever.

       

      SUBJECT,
HOWEVER, as to all property embraced herein to all of the reservations,
exceptions, limitations and restrictions contained in the several deeds, leases,
servitudes, franchises and contracts or other instruments through which the
Company acquired and/or claims title to and/or enjoys the use of the aforesaid
properties; and subject also to the encumbrances of the character defined in
Section 6 of the Original Indenture as “excepted encumbrances”, insofar as the
same may attach to any of the property embraced herein.

       


      
        
          
            - 7 -

          

           


        

        
           


          
            

          

        

        
           


        

      


      IN TRUST
NEVERTHELESS, upon the terms and trusts in the Original Indenture and in this
2008 Supplemental Indenture set forth for the benefit and security of those who
shall hold the bonds and coupons issued and to be issued hereunder and under the
Original Indenture, or any of them, in accordance with the terms of the Original
Indenture and of this 2008 Supplemental Indenture, without preference, priority
or distinction as to lien of any of said bonds or coupons over any others
thereof by reason of priority in the time of the issue or negotiation thereof,
or otherwise howsoever, subject, however, to the conditions, provisions and
covenants set forth in the Original Indenture and in this 2008 Supplemental
Indenture.

       

      AND THIS
INDENTURE FURTHER WITNESSETH:

       

      That in
further consideration of the premises and for the considerations aforesaid, the
Company, for itself and its successors and assigns, hereby covenants and agrees
to and with the Trustee, and its successor or successors in such trust, as
follows:

       

      Section
1.  (a)     The Company hereby creates a
fifty-third series of bonds to be issued under and secured by the Original
Indenture and this 2008 Supplemental Indenture, to be designated and to be
distinguished from the bonds of all other series by the title “First Mortgage
Bonds, 7.75% Series due November 15, 2018”.

       

      (b)      The
bonds of the New Series shall mature on November 15, 2018 and shall be issued in
temporary or definitive form, only as fully registered bonds, without coupons,
in denominations of $1,000 and any multiple or multiples of $1,000 authorized by
the Company; they shall bear interest at the rate of 7.75 per centum per annum,
payable semiannually on November 15 and May 15 each year, commencing May 15,
2009; and the principal of, premium, if any, and interest on each said bond
shall be payable at the office or agency of the Company, in the Borough of
Manhattan, The City of New York, in lawful money of the United States of
America.  In the event that any interest payment date is not a
business day, then payment of interest payable on such date will be made on the
next succeeding day which is a business day with the same force and effect as if
made on the interest payment date (and without any interest or other payment in
respect of such delay).  “Business day” means any day, other than a
Saturday or Sunday, which is not a day on which banking institutions or trust
companies in the Borough of Manhattan, The City of New York are generally
authorized or required by law, regulation or executive order to remain closed.
Interest on the bonds of the New Series payable prior to maturity shall be paid
by check mailed to the address of the person or persons entitled thereto, as
such address shall appear on the bond registration books maintained by the
Trustee or by wire transfer to an account designated by the person entitled
thereto.  So long as the bonds of the New Series are registered in the
name of The Depository Trust Company (“DTC”) or a nominee thereof, as discussed
below, all payments of principal, premium, if any, and interest in respect of
the bonds of the New Series shall be made in immediately available
funds.

       

      Subject
to the preceding paragraph, the person in whose name any bond of the New Series
is registered at the close of business on any record date (as hereinbelow
defined) with respect to any interest payment date shall be entitled to receive
the interest payable on such interest payment date notwithstanding the
cancellation of such bond of the New Series upon any transfer or exchange
thereof (including any exchange effected as an incident to a partial redemption
thereof) subsequent to the record date and prior to such interest payment date,
except that, if and to the extent that the Company shall default in the payment
of the interest due on such interest payment date, then the registered holders
of bonds of the New Series on such record date shall have no further right to or
claim in respect of such defaulted interest as such registered holders on such
record date, and the persons entitled to receive payment of any defaulted
interest thereafter payable or paid on any bonds of the New Series shall be the
registered holders of such bonds of the New Series on the date of payment of
such defaulted interest; and except that interest payable at maturity will be
paid to the person to whom principal is paid.  The term “record date”
as used in this Section 1, and in the form of the bonds of the New Series, shall
mean the first calendar day of the month in which an interest payment date
occurs.

       

      (c)      Except
as provided in this Section 1, every bond of the New Series shall be dated as
provided in Section 10 of the Original Indenture.  However, so long as
there is no existing default in the payment of interest on the bonds of the New
Series, all bonds of the New Series authenticated by the Trustee between the
record date for any interest payment date and such interest payment date shall
be dated as of the day following such interest payment date and shall bear
interest from such interest payment date; provided, however that if and to the
extent that the Company shall default in the interest due on such interest
payment date, then any such bond of the New Series shall bear interest from the
interest payment date next preceding the date of such bond to which interest has
been

       


      
        
          
            - 8 -

          

           


        

        
           


          
            

          

        

        
           


        

      


      paid,
unless such interest payment date is May 15, 2009, in which case from the date
of original issuance of the bonds of the New Series.

       

      (d)      All
of the bonds of the New Series shall be redeemable as set forth in the form of
bond of the New Series set forth in this 2008 Supplemental
Indenture.

       

      (e)      Registered
bonds of the New Series shall be transferrable upon presentation and surrender
thereof, for cancellation, at the office or agency of the Company in the Borough
of Manhattan, The City of New York, by the registered holders thereof, in person
or by duly authorized attorney, in the manner and upon payment of the charges
presecribed in the Original Indenture.  In the manner and upon payment
of the charges prescribed in the Original Indenture, registered bonds of the New
Series may be exchanged for a like aggregate principal amount of registered
bonds without coupons of the New Series of other authenticated denominations,
upon presentation and surrender thereof, for cancellation, at the office or
agency of the Company in the Borough of Manhattan, The City of New
York.

       

      (f)       The
bonds of the New Series initially shall be represented by one or more securities
in registered, global form without interest coupons (a “Global Bond”). The
Company initially appoints DTC to act as depositary with respect to the Global
Bonds (together with any successor, the “Depositary”).   The
bonds of the New Series initially shall be registered in the name of Cede &
Co. as nominee for DTC.

       

      (g)     So
long as the bonds of the New Series are held by the Depository, such bonds of
the New Series shall bear the following legend:

      


      “THIS
BOND IS A GLOBAL BOND WITHIN THE MEANING OF THE MORTGAGE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF.  THIS BOND MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR BONDS REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF, AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE MORTGAGE.  EVERY BOND
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR
OR IN LIEU OF, THIS BOND SHALL BE A GLOBAL BOND THAT IS SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.”

       

       

      Any bonds
of the New Series authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, any Global Bond shall also be a Global Bond
and shall bear the legend specified in this Section 1(g), except for any bond
authenticated and delivered in exchange for, or upon registration of transfer
of, a Global Bond pursuant to Section 1(h).

       

      


      (h)       Notwithstanding
anything herein to the contrary, a Global Bond shall not be exchangeable for
bonds of the New Series registered in the name of, and no transfer of a Global
Bond may be registered to, any person other than the Depositary or its nominee,
unless (i) such Depositary (A) notifies the Company that it is unwilling or
unable to continue as Depositary for the bonds of the New Series or (B) ceases
to be a “clearing agency” registered under the Securities Exchange Act of 1934,
as amended, and the Company within 90 days after it receives such notice or
becomes aware of such ineligibility does not appoint a successor Depositary,
(ii) the Company executes and delivers to the Trustee a notice that the bonds of
the New Series shall be so exchangeable and the transfer thereof so
registerable, or (iii) there shall have occurred a completed default as in the
Mortgage provided with respect to the bonds of the New Series evidenced by such
Global Bond.  Upon the occurrence in respect of the bonds of the New
Series of any one or more of the conditions specified in clause (i), (ii) or
(iii) of the preceding sentence, the Bonds of the New Series shall be exchanged
for bonds registered in the names of, and the transfer of such bond shall be
registered to, the beneficial owners of the bonds of the New Series, or their
designees,  as the Depositary shall direct.  Bonds of the
New Series issued to beneficial owners, or their designees shall be
substantially in the form set forth in this 2008 Supplemental Indenture, but
shall not include the provision related to the Global Bonds.

       

      (i)       The
Company and the Trustee may rely conclusively upon (a) a certificate of the
Depository as to the identity of a participant in the book-entry system;
(b) a certificate of any participant as to the identity of
any


      
        
          
            - 9 -

          

           


        

        
           


          
            

          

        

        
           


        

      


      indirect
participant and (c) 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
2.  In accordance with and in compliance with the provisions of
Article VI of the Original Indenture, Two Hundred Fifty Million Dollars
($250,000,000) principal amount of bonds of the New Series may be executed by
the Company and delivered to the Trustee, and shall be authenticated by the
Trustee and delivered (without awaiting the filing or recording of this 2008
Supplemental Indenture) from time to time in accordance with the order or orders
of the Company, evidenced by a writing or writings signed in the name of the
Company by its President or one of its Vice Presidents and its Treasurer or one
of its Assistant Treasurers.

       

      SECTION
3.  The approval by the Board of Public Utilities, State of New Jersey
of the execution and delivery of this 2008 Supplemental Indenture shall not in
anyway be construed as approval by said Board of any other act, matter or thing
which requires the approval of said Board under the laws of the State of New
Jersey; nor shall said approval bind said Board or any other public body or
authority of the State of New Jersey having jurisdiction in the premises in any
future application for the issue of bonds under the Original Indenture or any
indenture supplemental thereto or otherwise.

       

      SECTION
4.  As supplemented by this 2008 Supplemental Indenture, the Original
Indenture is in all respects ratified and confirmed and the Original Indenture
and this 2008 Supplemental Indenture shall be read, taken and construed as one
and the same instrument.

       

      Nothing
in this 2008 Supplemental Indenture contained shall, or shall be construed to,
confer upon any person other than the holders of bonds issued under the Original
Indenture and this 2008 Supplemental Indenture, the Company and the Trustee, any
right to avail themselves of any benefit of any provision of the Original
Indenture or of this 2008 Supplemental Indenture.

       

      The
Trustee assumes no responsibility for the correctness of the recitals of facts
contained herein and makes no representations as to the validity of this 2008
Supplemental Indenture.

       

      This 2008
Supplemental Indenture may be simultaneously executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same
instrument.

       


      
        
          
            - 10 -

          

           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, ATLANTIC CITY ELECTRIC COMPANY, party hereto of the first part,
has caused this instrument to be signed in its name and behalf by its President
and Chief Executive Officer, and its corporate seal to be hereunto affixed and
attested by its Secretary, and THE BANK OF NEW YORK MELLON, party hereto of the
second part, has caused this instrument to be signed in its name and behalf by a
Vice President or an Assistant Vice President and its corporate seal to be
hereunto affixed and attested by a Vice President or an Assistant Vice
President.  Executed and delivered by Atlantic City Electric Company
in the City of Washington, D.C., the 6th day of November, 2008.

       

      
        	 
      	
                ATLANTIC
      CITY ELECTRIC COMPANY

              
	
                 

                (SEAL)

              	
                 

                 

                 

                By:  /s/ J. M.
      RIGBY                                      

                        Joseph
      M. Rigby

                        President
      and Chief Executive Officer

              
	
                 

                 

                 

                ATTEST:

              	 
      
	
                 

                 

                 

                /s/ ELLEN S.
      ROGERS              

                Ellen
      Sheriff Rogers

                Secretary

              	 
      


      

      


      


      Signed,
sealed and delivered by ATLANTIC CITY ELECTRIC COMPANY in the presence
of:

       

      
        	 
      	
                /s/ VICTORIA
      FRANKLIN   

              
	 
      	
                 

                /s/ LESLIE ZIMBERG
      MARTIN    

              


      

      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      [Signature
page (continued) to Indenture Supplemental to Mortgage and Deed of Trust, dated
as of November 6, 2008, by and between Atlantic City Electric Company and The
Bank of New York Mellon, as Trustee, supplemental to Mortgage and Deed of Trust,
dated January 15, 1937.]

      


      


      


      
        	 
      	
                THE
      BANK OF NEW YORK MELLON,

                        as
      Trustee

                 

              
	
                (SEAL)

                 

              	 
      
	 
      	
                By:  /s/ R. J.
      REALE                                

                        Remo
      J. Reale

                        Vice
      President

              
	
                 

                 

                 

                ATTEST:

                 

                 

                 

              	 
      
	
                /s/
      FRANCA M.
      FERRERA             

                Franca
      M. Ferrera

                Assistant
      Vice President

              	 
      


      

      


      


      


      


      Signed,
sealed and delivered by THE BANK OF NEW YORK MELLON in the presence
of:

       

      


      
        	 
      	
                /s/ MARIA
      ACOSTA                       

              
	 
      	
                 

                /s/ EVA
      HO                                       

              


      

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      DISTRICT
OF COLUMBIA

      ss.:

      


      BE IT
REMEMBERED that on this 6th day of November, in the year of our Lord two
thousand eight before me, a Notary Public in and for the District aforesaid,
personally appeared Ellen Sheriff Rogers, who being by me duly sworn on her oath
says that she is Secretary of Atlantic City Electric Company, the grantor in the
foregoing Indenture Supplemental to Mortgage and Deed of Trust, and that Joseph M.
Rigby is the President and Chief Executive Officer; that deponent knows the
common or corporate seal of said grantor, and the seal annexed to the said
Indenture Supplemental to Mortgage and Deed of Trust is such common or corporate
seal; that the said Indenture Supplemental to Mortgage and Deed of Trust was
signed by the said President and Chief Executive Officer and the seal of said
grantor affixed thereto in the presence of deponent; that said Indenture
Supplemental to Mortgage and Deed of Trust was signed, sealed and delivered as
and for the voluntary act and deed of said grantor for the uses and purposes
therein expressed, pursuant to a resolution of the Board of Directors of said
grantor; and at the execution thereof this deponent subscribed her name thereto
as witness.

       

      Sworn and
subscribed the day and year aforesaid.

       

      


      
        	 
      	
                /s/ LINDA
      J.
      EPPERLY                                                    

                NOTARY
      PUBLIC OF THE DISTRICT OF COLUMBIA

              
	 
      	
                 

                My
      Commission Expires January 1, 2010

              
	
                 

                (
      SEAL )

              	 
      


      

      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      STATE OF
NEW YORK

      ss.:

      COUNTY OF
NEW YORK

      


      BE IT
REMEMBERED that on this 6th day of November, in the year of our Lord two
thousand eight before me, a Notary Public in and for the State and County
aforesaid, personally appeared Remo J. Reale, who being by me duly sworn on his
oath says that he is a Vice President of THE BANK OF NEW YORK MELLON, the
Trustee named in the foregoing Indenture Supplemental to Mortgage and Deed of
Trust, and that Franca M. Ferrera is an Assistant Vice President; that deponent
knows the common or corporate seal of said Trustee, and that the seal annexed to
the said Indenture Supplemental to Mortgage and Deed of Trust is such common or
corporate seal; that the said Indenture Supplemental to Mortgage and Deed of
Trust was signed by the said Vice President and the seal of said Trustee affixed
thereto in the presence of deponent; that said Indenture Supplemental to
Mortgage and Deed of Trust was signed, sealed and delivered as and for the
voluntary act and deed of said Trustee for the uses and purposes therein
expressed, pursuant to authority of the Board of Directors of said Trustee; and
at the execution thereof this deponent subscribed his name thereto as
witness.

      


      Sworn and
subscribed the day and year aforesaid.

       

       

       

      


       

      
        	 	 
      
                /s/
      CARLOS R.
      LUCIANO                              

                NOTARY
      PUBLIC OF NEW YORK

                 

              
	 	 
      
                CARLOS
      R. LUCIANO

                Notary
      Public, State of New York

                No.
      41-4765897

                Qualified
      in Queens County

                Commission
      Expires April 30, 2010

              
	 (SEAL)	 


      
 

      
      

      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      CERTIFICATE
OF RESIDENCE

      


      


      THE BANK
OF NEW YORK MELLON, Mortgagee and Trustee within named, hereby certifies that
its precise residence is 101 Barclay Street, in the Borough of Manhattan, in The
City of New York, in the State of New York.

       

      
        	 
      	
                THE
      BANK OF NEW YORK MELLON,

                     as
      Trustee

                 

                 

              
	 
      	
                By:  /s/ R. J.
      REALE                                        

                       Remo
      J. Reale

                       Vice
      President