Prepared by: Jeffrey M. Taylor	Exhibit
    4.2


701 Ninth Street, N.W.


Mail Stop EP1300

Washington, D.C. 20068

Phone (202) 872-2246


 


Return to: Jeffrey M. Taylor

Associate General Counsel - PHI

701 Ninth Street, N.W.


Mail Stop EP1300

Washington, D.C. 20068

Phone (202) 872-2246


 


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 August 18, 2014


 




    	 



    	 



    

 


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	6
	APPURTENANCES, ETC.	7
	HABENDUM	7
	ENCUMBRANCES	7
	TRUST	7
	SEC. 1.	Creation of Bonds of the New Series	7
	Date of Maturity	8
	Interest Rate	8
	Redemption	9
	Global Security	9
	SEC. 2.	Issuance of Bonds of the New Series	9
	SEC. 3.	Approval of Supplemental Indenture by Board of Public Utilities,	 
	State of New Jersey not to be construed as approval of other acts	9
	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	10
	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 August
18, 2014 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 (ultimate successor to the Irving Trust Company), a banking 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, an Indenture Supplemental to Mortgage and Deed of Trust, dated as of
March 8, 2006, an Indenture Supplemental to Mortgage and Deed of Trust, dated as of November 6, 2008, and an Indenture Supplemental
to Mortgage and Deed of Trust, dated as of March 29, 2011, 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


 




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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 acknowledged, 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, $761,015,000 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 $150,000,000, to be entitled and designated as the First Mortgage Bonds, 3.375%
Series due September 1, 2024 (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:


 


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. ______	$_________
	 	CUSIP No. ___________


(FORM OF BOND)


(FACE)


ATLANTIC CITY ELECTRIC COMPANY


FIRST MORTGAGE BOND


3.375% Series due September 1, 2024


 


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


 




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sum of __________ Dollars on September 1,
2024, 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 3.375 per centum per year in like money, at said office or agency on March
1 and September 1 in each year, commencing March 1, 2015, 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 2024 Series
(as hereinafter defined) to the first interest payment date, and thereafter will accrue from the last interest payment date to
which interest on the Bonds of 2024 Series 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 (“DTC”) 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 in accordance with DTC’s applicable procedures.


 


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 fifteenth calendar day of the month preceding 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 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, 3.375% Series due September 1,
2024” (hereinafter called “Bonds of 2024 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


 




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thereto, called the Mortgage), dated January
15, 1937, executed by the Company to THE BANK OF NEW YORK MELLON (ultimate successor to the Irving Trust Company), 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 2024 Series are issuable only
as registered bonds without coupons in denominations of $1,000 or integral multiples of $1,000 in excess 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 2024 Series shall be redeemable
at the option of the Company at any time prior to the express date of the maturity hereof, in whole or in part. 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 Date”). If the Company redeems all or any part of the Bonds of 2024 Series pursuant to the provisions
of this paragraph prior to June 1, 2024, it shall pay a redemption price equal to the greater of:


 


(i)         100%
of the principal amount of the Bonds of 2024 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 2024 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 15 basis points,


 


plus, in each case, accrued and unpaid interest
on those Bonds to, but not including, 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). If the Company
redeems all or any part of the Bonds of the 2024 Series pursuant to the provisions of this paragraph on or after June 1, 2024,
it shall pay a redemption price equal to 100% of the principal amount of the Bonds of 2024 Series being redeemed plus accrued and
unpaid interest on those Bonds to, but not including, the Redemption Date.


 


“Comparable
Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the bonds 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 such bonds.


 




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“Comparable
Treasury Price” means, with respect to any redemption date prior to June 1, 2024, (i) the average of the Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii)
if the Independent Investment Banker obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all
such quotations.


 


“Independent
Investment Banker” means an investment banking institution of national standing appointed by the Company that is not the
Reference Treasury Dealer.


 


“Reference Treasury Dealer” means a primary United States Treasury securities dealer appointed
by the Company.


 


“Reference
Treasury Dealer Quotations” means, with respect to any redemption date prior to June 1, 2024, the average, as determined
by the Independent Investment Banker, 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 Independent Investment Banker by the Reference Treasury Dealer
at 5:00 p.m. Eastern time on the third business day preceding such redemption date.


 


“Treasury Rate” means, with respect
to any redemption date prior to June 1, 2024, 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 such redemption date.


 


The Company shall
deliver to the Trustee before any Redemption Date for the Bonds of 2024 Series its calculation of the amount applicable to such
redemption. 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 2024 Series.


 


In lieu of stating the amount applicable
to such redemption, notices of redemption of the Bonds of 2024 Series for a Redemption Date prior to June 1, 2024 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 defined in the Bonds) plus 15 basis points, plus, in each case, (b) accrued and unpaid interest on the
principal amount hereof to, but not including, 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:


 




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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 “2014
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 2014 Supplemental Indenture, according to their tenor and effect, and the performance of all the provisions
of the Original Indenture and this 2014 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
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 29, 2011 (except such property as is hereinafter expressly excepted from the lien
and operation of this 2014 Supplemental Indenture).


 


The property covered by the lien of the
Original Indenture and this 2014 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 29, 2011, 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
2014 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


 




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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 2014 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 2014 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.


 


IN TRUST NEVERTHELESS, upon the terms and
trusts in the Original Indenture and in this 2014 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 2014 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 2014 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-fifth series of bonds to be issued under and secured by the Original Indenture and this 2014 Supplemental
Indenture, to be designated and to be distinguished from the bonds of all other series by the title “First Mortgage Bonds,
3.375% Series due September 1, 2024.”


 




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(b)       The
bonds of the New Series shall mature on September 1, 2024 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 3.375 per centum per year, payable semiannually on March 1 and September 1 each year, commencing March
1, 2015; 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. Interest shall be
payable on the basis of a 360-day year consisting of twelve 30-day months. 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
in accordance with DTC’s applicable procedures.


 


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 fifteenth
calendar day of the month preceding 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 paid, unless such interest payment date is March 1, 2015, 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 2014 Supplemental
Indenture.


 


(e)       Registered
bonds of the New Series shall be transferable 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 prescribed 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.


 




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(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 Depositary, 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 bonds of the New Series 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
exchangeable 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 2014 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 Depositary as to the identity of a participant
in the book-entry system; (b) a certificate of any participant as to the identity of any 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, One Hundred Fifty Million Dollars ($150,000,000) 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 2014 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 State of
New Jersey Board of Public Utilities of the execution and delivery of this 2014 Supplemental Indenture shall not in any way 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


 




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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 2014
Supplemental Indenture, the Original Indenture is in all respects ratified and confirmed and the Original Indenture and this 2014
Supplemental Indenture shall be read, taken and construed as one and the same instrument.


 


Nothing in this 2014 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 2014 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 2014 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 2014 Supplemental
Indenture.


 


This 2014 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.


 


(Signature Pages Follow)


 




    	- 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 and its corporate
seal to be hereunto affixed and attested by a Vice President. Executed and delivered by Atlantic City Electric Company in the City
of Washington, D.C., the 18th day of August, 2014.


 


	 	ATLANTIC CITY ELECTRIC COMPANY
	 	 	 
	(SEAL)	 	 
	 	 	 
	 	By: 	/s/ David M. Velazquez	 
	 	 	David M. Velazquez
	 	 	President and Chief Executive Officer


 


	ATTEST:	 
	 	 
	/s/ Jane K. Storero	 
	Jane K. Storero	 
	Secretary	 


 


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


 


	 	/s/ Andrea Schroepfer	 
	 	 	 
	 	/s/ Deborah Gardner	 


 


Company
Signature Page


 


Indenture
Supplemental to Mortgage and Deed of Trust, dated as of August 18, 2014


To
the Atlantic City Electric Company Mortgage and Deed of Trust, dated January 15, 1937


 




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	 	THE BANK OF NEW YORK MELLON,
	 	as Trustee
	 	 	 
	(SEAL)	 	 
	 	 	 
	 	By:	/s/ Laurence J. O’Brien	 
	 	 	Laurence J. O’Brien
	 	 	Vice President


 


	ATTEST:	 
	 	 
	/s/ Timothy W. Casey	 
	Timothy W. Casey	 
	Vice President	 


 


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


 


	 	/s/ Andrea Schroepfer	 
	 	 	 
	 	/s/ Deborah Gardner	 


 


Trustee
Signature page


 


Indenture
Supplemental to Mortgage and Deed of Trust, dated as of August 18, 2014


To
the Atlantic City Electric Company Mortgage and Deed of Trust, dated January 15, 1937


  




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DISTRICT OF COLUMBIA: SS.


 


BE IT REMEMBERED that on this 18th
day of August, in the year of our Lord two thousand fourteen before me, a Notary Public in and for the District aforesaid, personally
appeared Jane K. Storero, 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 David M. Velazquez 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/ Dorothy M. Bonds
	 	NOTARY PUBLIC OF THE DISTRICT OF COLUMBIA
	 	 
	 	My Commission Expires: October 14, 2016


 


( SEAL )


 




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DISTRICT OF COLUMBIA: SS.


 


BE IT REMEMBERED that on this 18th
day of August, in the year of our Lord two thousand fourteen before me, a Notary Public in and for the State and County aforesaid,
personally appeared Laurence J. O’Brien, who being by me duly sworn on his oath says that he is an authorized 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
Timothy W. Casey is a 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/ Dorothy M. Bonds
	 	NOTARY PUBLIC OF THE DISTRICT OF COLUMBIA
	 	 
	 	My Commission Expires: October 14, 2016


 


( SEAL )




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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/ Laurence J. O’Brien	 
	 	 	Laurence J. O’Brien	 
	 	 	Vice President	 


 




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