Exhibit 4f(8)




                                                                           
                                                                           



                      ATLANTIC CITY ELECTRIC COMPANY



                                    to



                           THE BANK OF NEW YORK



                                  Trustee





                       JUNIOR SUBORDINATED INDENTURE



                        Dated as of October 1, 1996



              8.25% Junior Subordinated Deferrable Interest 
                                Debentures







                                                                           
                                                                           

<PAGE>
                             TABLE OF CONTENTS


                                                                       Page


                                 ARTICLE I
          DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION. . . . .1

    SECTION 1.1.   Definitions . . . . . . . . . . . . . . . . . . . . . .1
    SECTION 1.2.   Compliance Certificates
                     and Opinions. . . . . . . . . . . . . . . . . . . . .9
    SECTION 1.3.   Forms of Documents Delivered to Trustee . . . . . . . .9
    SECTION 1.4.   Acts of Holders.. . . . . . . . . . . . . . . . . . . 10
    SECTION 1.5.   Notices, Etc., to
                     Trustee and Company . . . . . . . . . . . . . . . . 11
    SECTION 1.6.   Notice to Holders;
                     Waiver. . . . . . . . . . . . . . . . . . . . . . . 11
    SECTION 1.7.   Conflict With Trust
                     Indenture Act . . . . . . . . . . . . . . . . . . . 12
    SECTION 1.8.   Effect of Headings and Table of Contents. . . . . . . 12
    SECTION 1.9.   Successors and Assigns. . . . . . . . . . . . . . . . 12
    SECTION 1.10.  Separability Clause . . . . . . . . . . . . . . . . . 12
    SECTION 1.11.  Benefits of Indenture . . . . . . . . . . . . . . . . 12
    SECTION 1.12.  Governing Law.. . . . . . . . . . . . . . . . . . . . 12
    SECTION 1.13.  Non-Business Days . . . . . . . . . . . . . . . . . . 12

                                ARTICLE II
                              SECURITY FORMS . . . . . . . . . . . . . . 13

    SECTION 2.1.   Forms Generally . . . . . . . . . . . . . . . . . . . 13
    SECTION 2.2.   Form of Face of Security. . . . . . . . . . . . . . . 13
    SECTION 2.3.   Form of Reverse of
                     Security. . . . . . . . . . . . . . . . . . . . . . 17
    SECTION 2.4.   Additional Provisions Required in Global
                     Security. . . . . . . . . . . . . . . . . . . . . . 20
    SECTION 2.5.   Form of Trustee's Certificate of
                     Authentication. . . . . . . . . . . . . . . . . . . 20

                                ARTICLE III
                              THE SECURITIES . . . . . . . . . . . . . . 20

    SECTION 3.1.   Title and Terms . . . . . . . . . . . . . . . . . . . 20
    SECTION 3.2.   Denominations . . . . . . . . . . . . . . . . . . . . 22
    SECTION 3.3.   Execution, Authentication, Delivery and
                     Dating. . . . . . . . . . . . . . . . . . . . . . . 23
    SECTION 3.4.   Temporary Securities. . . . . . . . . . . . . . . . . 23
    SECTION 3.5.   Registration, Transfer
                     and Exchange. . . . . . . . . . . . . . . . . . . . 24
    SECTION 3.6.   Mutilated, Destroyed, Lost and Stolen
                     Securities. . . . . . . . . . . . . . . . . . . . . 25
    SECTION 3.7.   Payment of Interest; Interest Rights
                     Preserved . . . . . . . . . . . . . . . . . . . . . 26
    SECTION 3.8.   Persons Deemed Owners . . . . . . . . . . . . . . . . 27
    SECTION 3.9.   Cancellation. . . . . . . . . . . . . . . . . . . . . 27
    SECTION 3.10.  Computation of Interest . . . . . . . . . . . . . . . 27
    SECTION 3.11.  Right of Set-Off. . . . . . . . . . . . . . . . . . . 28
    SECTION 3.12.  Agreed Tax Treatment. . . . . . . . . . . . . . . . . 28
    SECTION 3.13.  Change or Extension of Stated Maturity;
                     Adjustment 
                     of Stated Maturity Upon an Exchange . . . . . . . . 28
    SECTION 3.14.  CUSIP Numbers . . . . . . . . . . . . . . . . . . . . 28

                                ARTICLE IV
                        SATISFACTION AND DISCHARGE . . . . . . . . . . . 29

    SECTION 4.1.   Satisfaction and
                     Discharge of Indenture. . . . . . . . . . . . . . . 29
    SECTION 4.2.   Application of Trust
                     Money . . . . . . . . . . . . . . . . . . . . . . . 29

                                 ARTICLE V
                                 REMEDIES. . . . . . . . . . . . . . . . 30

    SECTION 5.1.   Events of Default . . . . . . . . . . . . . . . . . . 30
    SECTION 5.2.   Acceleration of Maturity; Rescission and
                     Annulment . . . . . . . . . . . . . . . . . . . . . 31
    SECTION 5.3.   Collection of Indebtedness and Suits for 
                     Enforcement by Trustee. . . . . . . . . . . . . . . 33
    SECTION 5.4.   Trustee May File Proofs
                     of Claim. . . . . . . . . . . . . . . . . . . . . . 33
    SECTION 5.5.   Trustee May Enforce Claim Without Possession
                   
                     of Securities . . . . . . . . . . . . . . . . . . . 34
    SECTION 5.6.   Application of Money
                     Collected . . . . . . . . . . . . . . . . . . . . . 34
    SECTION 5.7.   Limitation on Suits . . . . . . . . . . . . . . . . . 35
    SECTION 5.8.   Unconditional Right of Holders to Receive 
                     Principal, Premium and Interest . . . . . . . . . . 36
    SECTION 5.9.   Restoration of Rights and Remedies. . . . . . . . . . 36
    SECTION 5.10.  Rights and Remedies
                     Cumulative. . . . . . . . . . . . . . . . . . . . . 36
    SECTION 5.11.  Delay or Omission Not
                     Waiver. . . . . . . . . . . . . . . . . . . . . . . 36
    SECTION 5.12.  Control by Holders. . . . . . . . . . . . . . . . . . 37
    SECTION 5.13.  Waiver of Past Defaults . . . . . . . . . . . . . . . 37
    SECTION 5.14.  Undertaking for Costs . . . . . . . . . . . . . . . . 38
    SECTION 5.15.  Waiver of Usury, Stay or Extension Laws . . . . . . . 38

                                ARTICLE VI
                               THE TRUSTEE . . . . . . . . . . . . . . . 39

    SECTION 6.1    Certain Duties and Responsibilities . . . . . . . . . 39
    SECTION 6.2.   Notice of Defaults. . . . . . . . . . . . . . . . . . 40
    SECTION 6.3.   Certain Rights of
                     Trustee . . . . . . . . . . . . . . . . . . . . . . 40
    SECTION 6.4.   Not Responsible for Recitals or Issuance 
                     of Securities . . . . . . . . . . . . . . . . . . . 41
    SECTION 6.5.   May Hold Securities . . . . . . . . . . . . . . . . . 41
    SECTION 6.6.   Money Held in Trust . . . . . . . . . . . . . . . . . 41
    SECTION 6.7.   Compensation and Reimbursement. . . . . . . . . . . . 41
    SECTION 6.8.   Disqualification; Conflicting Interests . . . . . . . 42
    SECTION 6.9.   Corporate Trustee Required; Eligibility . . . . . . . 42
    SECTION 6.10.  Resignation and Removal; Appointment of
                   Successor . . . . . . . . . . . . . . . . . . . . . . 43
    SECTION 6.11.  Acceptance of Appointment by Successor. . . . . . . . 44
    SECTION 6.12.  Merger, Conversion, Consolidation or 
                     Succession to Business. . . . . . . . . . . . . . . 45
    SECTION 6.13.  Preferential Collection of Claims Against
                     Company . . . . . . . . . . . . . . . . . . . . . . 45

                                ARTICLE VII
             HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . 45

    SECTION 7.1.   Company to Furnish Trustee Names and 
                     Addresses of Holders. . . . . . . . . . . . . . . . 45
    SECTION 7.2.   Preservation of Information, Communications 
                     to Holders. . . . . . . . . . . . . . . . . . . . . 46
    SECTION 7.3.   Reports by Trustee. . . . . . . . . . . . . . . . . . 46
    SECTION 7.4.   Reports by Company. . . . . . . . . . . . . . . . . . 46

                               ARTICLE VIII
           CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE. . . . . 47

    SECTION 8.1.   Company May Consolidate,
                     Etc., Only on Certain
                     Terms.. . . . . . . . . . . . . . . . . . . . . . . 47
    SECTION 8.2.   Successor Person
                     Substituted.. . . . . . . . . . . . . . . . . . . . 48

                                ARTICLE IX
                          SUPPLEMENTAL INDENTURES. . . . . . . . . . . . 48

    SECTION 9.1.   Supplemental Indentures Without Consent of
                     Holders . . . . . . . . . . . . . . . . . . . . . . 48
    SECTION 9.2.   Supplemental Indentures with Consent of
                     Holders.. . . . . . . . . . . . . . . . . . . . . . 49
    SECTION 9.3.   Execution of Supplemental Indentures. . . . . . . . . 50
    SECTION 9.4.   Effect of Supplemental Indentures.. . . . . . . . . . 50
    SECTION 9.5.   Conformity with Trust Indenture Act.. . . . . . . . . 51
    SECTION 9.6.   Reference in Securities to Supplemental
                     Indentures. . . . . . . . . . . . . . . . . . . . . 51

                                 ARTICLE X
                                 COVENANTS . . . . . . . . . . . . . . . 51

    SECTION 10.1.  Payment of Principal, Premium and Interest. . . . . . 51
    SECTION 10.2.  Maintenance of Office or
                     Agency. . . . . . . . . . . . . . . . . . . . . . . 51
    SECTION 10.3.  Money for Security Payments to be Held in
                     Trust.. . . . . . . . . . . . . . . . . . . . . . . 52
    SECTION 10.4.  Statement as to
                     Compliance. . . . . . . . . . . . . . . . . . . . . 53
    SECTION 10.5.  Additional Sums.. . . . . . . . . . . . . . . . . . . 53
    SECTION 10.6.  Additional Covenants. . . . . . . . . . . . . . . . . 54

                                ARTICLE XI
                         REDEMPTION OF SECURITIES. . . . . . . . . . . . 54

    SECTION 11.1.  Company's Rights of
                     Redemption. . . . . . . . . . . . . . . . . . . . . 54
    SECTION 11.2.  Applicability of This
                     Article.. . . . . . . . . . . . . . . . . . . . . . 55
    SECTION 11.3.  Election to Redeem; Notice to Trustee.. . . . . . . . 55
    SECTION 11.4.  Selection of Securities to be Redeemed. . . . . . . . 55
    SECTION 11.5.  Notice of Redemption. . . . . . . . . . . . . . . . . 56
    SECTION 11.6.  Deposit of Redemption
                     Price.. . . . . . . . . . . . . . . . . . . . . . . 57
    SECTION 11.7.  Payment of Securities Called for Redemption.. . . . . 57

                                ARTICLE XII
                        SUBORDINATION OF SECURITIES. . . . . . . . . . . 57

    SECTION 12.1.  Securities Subordinate to Senior Debt.. . . . . . . . 57
    SECTION 12.2.  Payment Over of Proceeds Upon Dissolution,
                   Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 57
    SECTION 12.3.  Prior Payment to Senior Debt Upon
                     Acceleration 
                     of Securities.  . . . . . . . . . . . . . . . . . . 59
    SECTION 12.4.  No Payment When Senior Debt in Default. . . . . . . . 59
    SECTION 12.5.  Payment Permitted If No
                     Default.. . . . . . . . . . . . . . . . . . . . . . 60
    SECTION 12.6.  Subrogation to Rights of Holders of Senior
                   Debt. . . . . . . . . . . . . . . . . . . . . . . . . 60
    SECTION 12.7.  Provisions Solely to Define Relative Rights.. . . . . 60
    SECTION 12.8.  Trustee to Effectuate Subordination.. . . . . . . . . 61
    SECTION 12.9.  No Waiver of Subordination Provisions.. . . . . . . . 61
    SECTION 12.10. Notice to Trustee.. . . . . . . . . . . . . . . . . . 61
    SECTION 12.11. Reliance on Judicial Order or Certificate 
                     of Liquidating Agent. . . . . . . . . . . . . . . . 62
    SECTION 12.12. Trustee Not Fiduciary
                     for Holders of Senior
                     Debt. . . . . . . . . . . . . . . . . . . . . . . . 62
    SECTION 12.13. Rights of Trustee as Holder of Senior Debt; 
                     Preservation of Trustee's Rights. . . . . . . . . . 62
    SECTION 12.14. Article Applicable to Paying Agents.. . . . . . . . . 62


Annex A  Form of Trust Agreement 
Annex B  Form of Amended and Restated Trust Agreement 
Annex C  Form of Guarantee Agreement



<PAGE>
         JUNIOR SUBORDINATED INDENTURE, dated as of October 1,
1996 between ATLANTIC CITY ELECTRIC COMPANY, a New Jersey
corporation (hereinafter called the "Company") having its
principal office at 6801 Black Horse Pike, Egg Harbor Township,
New Jersey  08234, and THE BANK OF NEW YORK, a New York banking 
corporation, as Trustee (hereinafter called the "Trustee") having
its principal corporate trust office at 101 Barclay Street, New
York, New York 10286. 
 
                         RECITALS OF THE COMPANY 
 
         The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of its
8.25% Junior Subordinated Deferrable Interest Debentures
(hereinafter called the "Securities") of substantially the tenor
hereinafter provided, to evidence loans made to the Company of
the proceeds from the issuance by Atlantic Capital I, a Delaware
statutory business trust ("Atlantic Capital I") of its 8.25%
Cumulative Quarterly Income Preferred Securities (the "Preferred
Securities") and common securities of Atlantic Capital I (the
"Common Securities" and, collectively with the Preferred
Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated,
issued and delivered. 
 
         All things necessary to make the Securities, when
executed by the Company and authenticated and delivered hereunder
and duly issued by the Company, the valid obligations of the
Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done. 
 
         NOW THEREFORE, THIS INDENTURE WITNESSETH: 
 
         For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows: 

                                 ARTICLE I
          DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
 
         SECTION 1.1.  Definitions.  For all purposes of this
Indenture, except as otherwise expressly provided or unless the
context otherwise requires:  
 
         (1)  the terms defined in this Article have the
    meanings assigned to them in this Article and include the
    plural as well as the singular; 
 
         (2)  all other terms used herein which are defined in
    the Trust Indenture Act, either directly or by reference
    therein, have the meanings assigned to them therein; 
 
         (3)  all accounting terms not otherwise defined herein
    have the meanings assigned to them in accordance with
    generally accepted accounting principles, and the term
    "generally accepted accounting principles" with respect to
    any computation required or permitted hereunder shall mean
    such accounting principles which are generally accepted at
    the date or time of such computation; and

         (4)  the words "herein", "hereof" and "hereunder" and
    other words of similar import refer to this Indenture as a
    whole and not to any particular Article, Section or other
    subdivision. 

         Certain terms, used principally in Article Six, are
defined in that Article. 
 
         "Act", when used with respect to any Holder, has the
meaning specified in Section 1.4. 

         "Additional Interest" means the interest, if any, that
shall accrue on any interest on the Securities the payment of
which has not been made (due to deferral of the payment of
interest during an Extension Period or due to default in the
payment thereof) on the applicable Interest Payment Date and
which shall accrue at the Interest Rate and which shall be
payable to the extent permitted by law (whether or not so
stated). 

         "Additional Sums" has the meaning specified in Section
10.5.

         "Additional Taxes" means the sum of any additional
taxes, duties and other governmental charges to which Atlantic
Capital I has become subject from time to time as a result of a
Tax Event. 

         "Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person; provided, however, that an Affiliate of the Company shall
not be deemed to include Atlantic Capital I.  For the purposes of
this definition, "control" when used with respect to any
specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings
correlative to the foregoing. 

         "Atlantic Capital I" has the meaning specified in the
first recital of this Indenture. 
 
         "Authenticating Agent" means any Person authorized by
the Trustee pursuant to Section 6.14 to act on behalf of the
Trustee to authenticate Securities.
 
         "Board of Directors" means either the board of
directors of the Company or any committee of that board duly
authorized to act hereunder. 
 
         "Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors, or
such committee of the Board of Directors or officers 
of the Company to which authority to act on behalf of the Board
of Directors has been delegated, and to be in full force and
effect on the date of such certification, and delivered to the
Trustee.

         "Business Day" means any day other than (i) a Saturday
or Sunday, (ii) a day on which banking institutions in The City
of New York are authorized or required by law or executive order
to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee, or, with respect to Securities which at
the time of determination are registered in the Securities
Register in the name of Atlantic Capital I, the principal office
of the Property Trustee, is closed for business. 
 
         "Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, or if at any time after the
execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.

         "Common Securities" has the meaning specified in the
first recital of this Indenture. 

         "Common Stock" means the common stock of the Company. 

         "Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such
successor Person.

         "Company Guarantee" means the guarantee by the Company
of distributions on the Preferred Securities to the extent
provided in the Guarantee Agreement, substantially in the form
attached hereto as Annex C, as amended from time 
to time.

         "Company Request" and "Company Order" mean,
respectively, the written request or order signed in the name of
the Company by its Chairman of the Board, its Vice Chairman, its
President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Controller, its Secretary or an Assistant
Secretary, and delivered to the Trustee. 

         "Corporate Trust Office" means the principal office of
the Trustee at which at any particular time its corporate trust
business shall be administered, which at the date hereof is 101
Barclay Street, New York, New York  10286. 

         "Corporation" means a corporation, association,
company, joint-stock company or business trust. 

         "Debt" means, with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person
for money borrowed; (ii) every obligation of such Person
evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such Person with respect to letters
of credit, bankers' acceptances or similar facilities issued 
for the account of such Person; (iv) every obligation of such
Person issued or assumed as the deferred purchase price of
property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business);
(v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of
another Person and all dividends of another Person the payment of
which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor or
otherwise. 

         "Defaulted Interest" has the meaning specified in
Section 3.7.

         "Depositary" means, with respect to the Securities
issuable or issued in whole or in part in the form of one or more
Global Securities, the Person designated as Depositary by the
Company pursuant to Section 3.1 (or any successor thereto). 

         "Dollar" means the currency of the United States of
America that, as at the time of payment, is legal tender for the
payment of public and private debts. 

         "Event of Default" has the meaning specified in Article
Five. 

         "Extension Period" has the meaning specified in Section
3.1.

         "Foreign Currency" means any currency issued by the
government of one or more countries other than the United States
of America or by any recognized confederation or association of
such governments.

         "Global Security" means a Security in the form
prescribed in Section 2.4 issued to the Depositary or its nominee
and registered in the name of such Depositary or its nominee. 

         "Government Obligations" means securities which are (i)
direct obligations of the United States of America or (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed by the United
States of America and which, in either case, are full faith and
credit obligations of the United States of America and are not
callable or redeemable at the option of the issuer thereof and
shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of
any such Government Obligation held by such custodian for the
account of the holder of such depository receipt; provided that
(except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced
by such depository receipt. 

         "Holder" means a Person in whose name a Security is
registered in the Securities Register. 
 
         "Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.

         "Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities. 

         "Interest Rate" means the rate of interest specified or
determined as specified in the Security as being the rate of
interest payable on the Security. 

         "Investment Company Event" means the receipt by
Atlantic Capital I of an Opinion of Counsel, rendered by a law
firm having a recognized national tax and securities practice, to
the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency
or regulatory authority (a "Change in 1940 Act Law"), Atlantic
Capital I is or will be considered an "investment company" that
is required to be registered under the 1940 Act, which Change in
1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities.

         "Junior Subordinated Payment" has the meaning specified
in Section 12.2. 

         "Lien" means any mortgage, pledge, lien, security
interest or other encumbrance.

         "Maturity", when used with respect to any Security,
means the date on which the principal of such Security becomes
due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.

         "1940 Act" means the Investment Company Act of 1940, as
amended.

         "Officers' Certificate" means a certificate signed by
the Chairman and Chief Executive Officer, President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee. 

         "Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company, including General
Counsel of the Company.

         "Outstanding" means, when used in reference to 
Securities, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture,
except:
                (A   Securities theretofore canceled by the
    Trustee or delivered to the Trustee for cancellation;

                (B   Securities for whose payment money or
    Government Obligations in the necessary amount has been
    theretofore deposited with the Trustee or any Paying Agent
    in trust for the Holders of such Securities; and 

                (C   Securities in substitution for or in lieu
    of which other Securities have been authenticated and
    delivered or which have been paid pursuant to Section 3.6,
    unless proof satisfactory to the Trustee is presented that
    any such Securities are held by Holders in whose hands such
    Securities are valid, binding and legal obligations of the
    Company; 

provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or
such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so
disregarded.  Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor.  Upon the written request
of the Trustee, the Company shall furnish to the Trustee promptly
an Officers' Certificate listing and identifying all Securities,
if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Securities or
any Affiliate of the Company or such obligor, and, subject to the
provisions of Section 6.1, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not
listed therein are Outstanding for the purpose of any such
determination. 

         "Paying Agent" means the Trustee or any Person
authorized by the Company to pay the principal of (any premium,
if any) or interest on any Securities on behalf of the Company. 

         "Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company
trust, unincorporated organization or government or any agency or
political subdivision thereof.

         "Place of Payment" means the place or places where the
principal of (and premium, if any) and interest on the Securities
are payable pursuant to Section 3.1 or 3.11.

         "Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same
debt as that evidenced by such particular Security; and, for the
purposes of this definition, any security authenticated and
delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.

         "Preferred Securities" has the meaning specified in the
first recital of this Indenture.

         "Proceeding" has the meaning specified in Section 12.2.

         "Property Trustee" means The Bank of New York, solely
in its capacity as Property Trustee of Atlantic Capital I under
the Trust Agreement and not in its individual capacity, or its
successor in interest in such capacity, or any successor property
trustee appointed as therein provided.

         "Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such redemption
by or pursuant to this Indenture.

         "Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture.

         "Regular Record Date" for the interest payable on any
Interest Payment Date means the Business Day next preceding such
Interest Payment Date; provided, however, that in the event that
the Securities are distributed to holders of Preferred Securities
pursuant to a liquidation of the Trust in accordance with Section
9.04 of the Trust Agreement and that at any time thereafter
Securities no longer remain in book-entry-only form, the Regular
Record Date shall be the date (whether or not a Business Day)
which is the fifteenth day of the month in which occurs the
relevant Interest Payment Date.

         "Responsible Officer" when used with respect to the
Trustee means any officer of the Trustee assigned by the Trustee
from time to time to administer its corporate trust matters. 

         "Securities" has the meaning specified in the Recitals
to this instrument.

         "Securities Register" and "Securities Registrar" have
the respective meanings specified in Section 3.5.

         "Senior Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not such claim
for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture
or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding,
it is provided that such obligations are not superior in right of
payment to the Securities or to other Debt which is pari passu
with, or subordinated to, the Securities, provided, however, that
Senior Debt shall not be deemed to include (a) any Debt of the
Company which when incurred and without respect to any election
under Section 1111(b) of the Bankruptcy Reform Act of 1978, was
without recourse to the Company, (b) any Debt of the Company to
any of its Subsidiaries, (c) Debt to any employee of the Company,
(d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Company
or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and
(f) the Securities.

         "Special Event" means a Tax Event or an Investment
Company Event.

         "Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section
3.7.

         "Stated Maturity", when used with respect to any
Security or any installment of interest thereon, means the date
specified pursuant to the terms of the  Security as the date on
which the principal of such Security or such installment of
interest is due and payable.

         "Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries,
or by the Company and one or more other Subsidiaries.  For the
purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.

         "Tax Event" means the receipt by Atlantic Capital I of
an Opinion of Counsel, rendered by a law firm having a recognized
national tax and securities practice, to the effect that, as a
result of any amendment to, change in or announced proposed
change in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof
or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is adopted or
which pronouncement or decision is announced on or after the date
of issuance of the Preferred Securities, there is more than an
insubstantial risk that (i) Atlantic Capital I is, or will be
within 90 days of the date of such Opinion of Counsel, subject to
United States federal income tax with respect to income received
or accrued on the Securities, (ii) interest payable by the
Company on the Securities is not, or within 90 days of the date
of such Opinion of Counsel, will not be, deductible, in whole or
in part, for United States federal income tax purposes or (iii)
Atlantic Capital I is, or will be within 90 days of the date of
such Opinion of Counsel, subject to more than a de minimis amount
of other taxes, duties or other governmental charges.

         "Trust Agreement" means the Trust Agreement in the form
attached hereto as Annex A, as amended and restated by the
Amended and Restated Trust Agreement substantially in the form
attached hereto as Annex B as amended from time to time. 

         "Trustee" means the Person named as the "Trustee" in
the first paragraph of this instrument until a successor Trustee
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean such
successor Trustee. 

         "Trust Indenture Act" means the Trust Indenture Act of
1939 (15 U.S.C.  77aaa-77bbb), as amended and as in effect on
the date as of this Indenture, except as provided in Section 9.5.

         "Trust Securities" has the meaning specified in the
first recital of this Indenture. 

         "Vice President" when used with respect to the Company,
means any duly appointed or elected vice president, whether or
not designated by a number or a word or words added before or
after the title "vice president." 

         SECTION 1.2.  Compliance Certificates and Opinions.
 
         Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent (including covenants,
compliance with which constitutes a condition precedent), if any,
provided for in this Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent
(including covenants compliance with which constitute a condition
precedent), if any, have been complied with, except that in the
case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular
application or request, no additional certificate or 
opinion need be furnished.
 
         Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture
(other than the certificates provided pursuant to Section 10.4)
shall include:
 
         (1)  a statement that each individual signing such
    certificate or opinion has read such covenant or condition
    and the definitions herein relating thereto; 
 
         (2)  a brief statement as to the nature and scope of
    the examination or investigation upon which the statements
    or opinions contained in such certificate or opinion are
    based; 

         (3)  a statement that, in the opinion of each such
    individual, he has made such examination or investigation as
    is necessary to enable him to express an informed opinion as
    to whether or not such covenant or condition has been
    complied with; and

         (4)  a statement as to whether, in the opinion of each
    such individual, such condition or covenant has been
    complied with.

         SECTION 1.3.  Forms of Documents Delivered to Trustee.

         In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents. 
 
         Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to matters upon which his certificate or opinion is based
are erroneous.  Any such certificate or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company,
unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to such matters are erroneous. 

         Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument. 
 
         SECTION 1.4.  Acts of Holders.
 
         (a)  Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given to or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument
or instruments is or are delivered to the Trustee, and, where it
is hereby expressly required, to the Company.  Such instrument or
instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. 

         (b)  The fact and date of the execution by any Person
of any such instrument or writing may be proved by the affidavit
of a witness of such execution or by the certificate of any
notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution
thereof.  Where such execution is by a person acting in other
than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority. 
 
         (c)  The fact and date of the execution by any person
of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which
the Trustee deems sufficient and in accordance with such
reasonable rules as the Trustee may determine. 
 
         (d)  The ownership of Securities shall be proved by the
Securities Register. 

         (e)  Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any
Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the transfer thereof or
in exchange therefor or in lieu thereof in respect of anything
done or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made
upon such Security. 
 
         (f)  The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders
entitled to take any action under this Indenture by vote or
consent.  Except as otherwise provided herein, such record date
shall be the later of 30 days prior to the first solicitation of
such consent or vote or the date of the most recent list of
Securityholders furnished to the Trustee pursuant to Section 7.1
prior to such solicitation.  If a record date is fixed, those
persons who were Securityholders at such record date (or their
duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any
vote or consent previously given, whether or not such persons
continue to be Holders after such record date, provided, however,
that unless such vote or consent is obtained from the Holders (or
their duly designated proxies) of the requisite principal amount
of Outstanding Securities prior to the date which is the 120th
day after such record date, any such vote or consent previously
given shall automatically and without further action by any
Holder be canceled and of no further effect. 
 
         SECTION 1.5.  Notices, Etc., to Trustee and Company.
 
         Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished
to, or filed with, 
 
         (1)  the Trustee by any Holder or by the Company shall
be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, or 
 
         (2)  the Company by the Trustee or by any Holder shall
be sufficient for every purpose (except as otherwise provided in
Section 5.1 hereof) hereunder if in writing and mailed, first
class, postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph
of this instrument or at any other address previously furnished
in writing to the Trustee by the Company. 
 
         SECTION 1.6.  Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first class postage prepaid, to each Holder affected by such
event, at the address of such Holder as it appears in the
Securities Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such
notice.  In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.  Where
this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall
be the equivalent of such notice.  Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver. 
 
         SECTION 1.7.  Conflict With Trust Indenture Act. 

         If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by any of Sections 310 to 317,
inclusive, of the Trust Indenture Act through operation of
Section 318(c) thereof, such imposed duties shall control. 
 
         SECTION 1.8.  Effect of Headings and Table of Contents.

         The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.

         SECTION 1.9.  Successors and Assigns.

         All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so
expressed or not.

         SECTION 1.10.  Separability Clause.

         In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.

         SECTION 1.11.  Benefits of Indenture. 

         Nothing in this Indenture or in the Securities, express
or implied, shall give to any Person, other than the parties
hereto, any Paying Agent and their successors and assigns, the
holders of Senior Debt and the Holders of the Securities, any
benefit or any legal or equitable right, remedy or claim under 
this Indenture.

         SECTION 1.12.  Governing Law.

         This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New
York.

         SECTION 1.13.  Non-Business Days.

         In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture
or the Securities) payment of interest or principal need not be
made on such date, but may be made on the next succeeding
Business Day (except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day), in each case with the same
force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity of principal (and no
interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity of principal, as
the case may be, until such next succeeding Business Day). 


                                ARTICLE II
                              SECURITY FORMS

         SECTION 2.1.  Forms Generally.

         The Securities and the Trustee's certificates of
authentication thereon shall be in substantially the forms set
forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements
placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing
such securities, as evidenced by their execution of the
Securities. 
 
         The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of these
methods, if required by any securities exchange, the Nasdaq
National Market or other applicable interdealer quotation system
or self-regulatory organization on which the Securities may be
listed or traded, on a steel engraved border or steel engraved
borders or may be produced in any other manner permitted by the
rules of any securities exchange, the Nasdaq National Market or
other applicable interdealer quotation system or self- regulatory
organization on which the Securities may be listed or traded, or
otherwise may be typewritten all as determined by the officers
executing such Securities, as evidenced by their execution of
such Securities. 

         SECTION 2.2.     Form of Face of Security

         [IF THE SECURITY IS TO BE A GLOBAL SECURITY - This
Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the
Depository.  This Security is exchangeable for Securities
registered in the name of a person other than the Depository or
its nominee only in the limited circumstances described in the
Indenture and no transfer of this Security (other than a transfer
of this Security as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in
limited circumstances.  Unless this Security is presented by an
authorized representative of The Depository Trust Company (55
Water Street, New York) to Atlantic City Electric Company or its
agent for registration of transfer, exchange or payment, and any
Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]

                      ATLANTIC CITY ELECTRIC COMPANY

        8.25% Junior Subordinated Deferrable Interest Debentures  
                                       

No.                                                      $                 
                                                           CUSIP           

         ATLANTIC CITY ELECTRIC COMPANY, a corporation organized
and existing under the laws of New Jersey (hereinafter called the
"Company", which term includes any successor corporation under
the Indenture hereinafter referred to), for value received,
hereby promises to pay to                 , or registered
assigns, the principal sum of                 Dollars on October
1, 2026;  provided, that the Company may (i) change the maturity
date upon the occurrence of an exchange of the Securities for the
Trust Securities subject to certain conditions set forth in
Section 3.13 of the Indenture, which changed maturity date shall
in no case be earlier than October 1, 2001 or later than October
1, 2045 and/or (ii) extend the maturity date subject to certain
conditions specified in Section 3.13 of the Indenture, which
extended maturity date shall in no case be later than October 1,
2045.  The Company further promises to pay interest on said
principal sum from October 1, 1996 or from the most recent
interest payment date (each such date, an "Interest Payment
Date") on which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on
March 31, June 30, September 30 and December 31 of each year,
commencing December 31, 1996, at the rate of 8.25% per annum,
until the principal hereof shall have become due and payable,
plus Additional Interest, if any, until the principal hereof is
paid or duly provided for or made available for payment and on
any overdue principal and (without duplication and to the extent
that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the rate of 8.25%
per annum, compounded quarterly.  The amount of interest payable
on December 31, 1996 shall be computed on the basis of 89 days in
a 360-day year.  The amount of interest payable on any Interest
Payment Date thereafter shall be computed on the basis of a 360-
day year of twelve 30-day months. In the event that any date on
which interest is payable on this Security 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 (and without any
interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if
made on the date the payment was originally payable.  A "Business
Day" shall mean any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of New York are
authorized or required by law or executive order to remain closed
or (iii) a day on which the Corporate Trust Office of the Trustee
or the principal office of the Property Trustee under the Trust
Agreement (as defined herein), is closed for business.  The
interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date (other than a
Redemption Date or the maturity date) will, as provided in the
Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities, as defined in the Indenture)
is registered at the close of business on the Regular Record Date
for such interest installment, which shall be the close of
business on the Business Day next preceding such Interest Payment
Date (if the Securities are distributed to holders of Preferred
Securities pursuant to a liquidation of the Trust in accordance
with Section 9.4 of the Trust Agreement and at any time
thereafter any such Securities no longer remain in book-entry-
only form, the Regular Record Date shall be the date (whether or
not a business day) which is the fifteenth day of the month in
which occurs the relevant Interest Payment Date).  Any such
interest installment not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders not less than
10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.  So long as no Event of
Default under the Indenture has occurred and is continuing, the
Company shall have the right at any time during the term of this
Security, from time to time, to defer the payment of interest on
such Security for up to 20 consecutive quarters with respect to
each deferral period (each an "Extension Period"), during which
Extension Periods the Company shall have the  right to make full
or partial payments of interest on any Interest Payment Date, and
at the end of which the Company shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to
the extent permitted by applicable law); provided that during any
such Extension Period, the Company will not, and will not permit
any Subsidiary of the Company to (i) declare or pay any dividends
or distributions or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's
outstanding capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem
any debt security that ranks pari passu with or junior in
interest to this Security or make any guarantee payments with
respect to the foregoing (other than (a) dividends or
distributions in Common Stock of the Company, and (b) payments
under the Company Guarantee).  Prior to the termination of any
such Extension Period, the Company may further extend the
interest payment period, provided that no Extension Period shall
exceed 20 consecutive quarters or extend beyond the Maturity of
this Security.  Upon the termination of any such Extension Period
and upon the payment of all accrued and unpaid interest and any
Additional Interest then due, the Company may elect to begin a
new Extension Period, subject to the above requirements.  No
interest shall be due and payable during an Extension Period
except at the end thereof.  The Company shall give the Holder of
this Security and the Trustee notice of its election to begin or
continue an Extension Period at least one Business Day prior to
the earlier of (i) the date the Distributions on the Preferred
Securities are payable or (ii) the date Atlantic Capital I is
required to give notice to any securities exchange, the Nasdaq
National Market or other applicable interdealer quotation system
or self-regulatory organization or to holders of such Preferred
Securities of the record date applicable to such Distributions or
the date such Distributions are payable, but in any event not
less than one Business Day prior to such record date.  Payment of
the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company
maintained for that purpose in the City of New York, in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the
Securities Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the
Securities Register at the relevant Record Date.

         The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in
right of payments to the prior payment in full of all Senior
Debt, and this Security is issued subject to the provisions of
the Indenture with respect thereto.  Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such actions as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.  Each
Holder hereof, by his acceptance hereof, waives all notice of the
acceptance of the subordination provisions contained herein and
in the Indenture by each holder of Senior Debt, whether now
outstanding or hereafter incurred, and waives reliance by each
such holder upon said provisions.  Reference is hereby made to
the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.  Unless the
certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.  
<PAGE>
         IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.  

                              ATLANTIC CITY ELECTRIC COMPANY

 
                              By:                                          
                                 Name:
                                 Title:

Attest:

                          
Name:
Title:

Dated:

          This is one of the Securities referred to in the within
mentioned Indenture.      

                              THE BANK OF NEW YORK
                              as Trustee       

                              By:                                          
                                 Authorized Signatory


          SECTION 2.3.  Form of Reverse of Security.

          This Security is one of a duly authorized issue of
securities of the Company designated as its 8.25% Junior
Subordinated Deferrable Interest Debentures (herein called the
"Securities"), limited in aggregate principal amount to
$72,164,950, issued and to be issued under a Junior Subordinated
Indenture, dated as of October 1, 1996 (herein called the
"Indenture"), between the Company and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered.   

          All terms used in this Security that are defined in the
Indenture or in the Amended and Restated Trust Agreement, dated
as of October 1, 1996 (the  "Trust Agreement"), of Atlantic
Capital I among Atlantic City Electric Company, as Depositor, and
the Trustees named therein, shall have the meanings assigned to
them in the Indenture or the Trust Agreement, as the case may be. 


          On or after October 1, 2001, the Company may at any
time, at its option, subject to the terms and conditions of
Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time, without premium or penalty, at
a redemption price equal to 100% of the principal amount thereof
plus the accrued and unpaid interest, including Additional
Interest, if any, to the date fixed for redemption.    

          If a Special Event shall occur and be continuing, the
Company may, at its option, redeem this Security within 90 days
of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of Section 11.7 and the other
provisions of Article XI of the Indenture.  The redemption price
for this Security if so redeemed shall be equal to 100% of the
principal amount thereof plus accrued and unpaid interest,
including Additional Interest, if any, to the date fixed for
redemption.    

          In the event of redemption of this Security in part
only, a new Security or Securities for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.

          If an Event of Default, as defined in the Indenture,
shall occur and be continuing, the principal of the Securities
may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.    

          The Indenture contains provisions for satisfaction,
discharge and defeasance at any time of the entire indebtedness
of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.  

          The Indenture permits, with certain exceptions as
therein provided, the Company and the Trustee at any time to
enter into a supplemental indenture or indentures for the purpose
of modifying in any manner the rights and obligations of the
Company and of the Holders of the Securities, with the consent of
the Holders of not less than a majority in principal amount of
the Outstanding Securities of each series to be affected by such
supplemental indenture.  The Indenture also contains provisions
permitting Holders of specified percentages in principal amount
of the Securities at the time Outstanding, on behalf of the
Holders of all Securities, to waive certain past defaults under
the Indenture and their consequences.  Any such consent or waiver
by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security. 

          As provided in and subject to the provisions of the
Indenture, if an Event of Default occurs and is continuing, then
and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities may
declare the principal amount of all the Securities to be due and
payable immediately, by a notice in writing to the Company (and
to the Trustee if given by Holders), provided that, if upon an
Event of Default, the Trustee or the Holders of not less than 25%
in principal amount of the Outstanding Securities fail to declare
the principal of all the Securities to be immediately due and
payable, the holders of at least 25% in aggregate liquidation
amount of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and
upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional
Interest) on all the Securities shall become immediately due and
payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall
remain subordinated to the extent provided in Article Twelve of
the Indenture.

          No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of (and premium, if any) and interest on
this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

          As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Securities Register, upon surrender of this
Security for registration of transfer at the office or agency of
the Company in the City of New York maintained for such purpose,
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities
Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated
transferee or transferees.  The Securities of this series are
issuable only in registered form without coupons in denominations
of $25 and any integral multiple thereof.  As provided in the
Indenture and subject to certain limitations therein set forth,
Securities  are exchangeable for a like aggregate principal
amount of Securities of such series of a different authorized
denomination, as requested by the Holder surrendering the same.   
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

          Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for the purpose
of receiving payment as herein provided and for all other
purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by
notice to the contrary. 

          The Company and, by its acceptance of this Security or
a beneficial interest therein, the Holder of, and any Person that
acquires a beneficial interest in, this Security agree that for
United States federal, state and local tax purposes it is
intended that this Security constitute indebtedness.  

          THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. 

          SECTION 2.4.  Additional Provisions Required in Global
Security.

          Any Global Security issued hereunder shall, in addition
to the provisions contained in Sections 2.2 and 2.3 bear a legend
in substantially the following form: 
 
          "This Security is a Global Security within the meaning
     of the Indenture hereinafter referred to and is registered
     in the name of a Depositary or a nominee of a Depositary. 
     This Security is exchangeable for Securities registered in
     the name of a person other than the Depositary or its
     nominee only in the limited circumstances described in the
     Indenture and may not be transferred except as a whole by
     the Depositary to a nominee of the Depositary or by a
     nominee of the Depositary to the Depositary or another
     nominee of the Depositary."
 
          SECTION 2.5.  Form of Trustee's Certificate of
Authentication.

          This is one of the Securities referred to in the
within-mentioned Indenture. 


                                                               
                              as Trustee

                              By:                              
                                   Authorized Signatory


                                ARTICLE III
                              THE SECURITIES

          SECTION 3.1.  Title and Terms.  The principal amount of
the Securities Outstanding (together with any accrued and unpaid
interest (including any Additional Interest, to the extent
permitted by law) thereon) shall be payable in a single
installment on October 1, 2026; provided, that the Company may
(i) change the maturity date upon the occurrence of an exchange
of the Securities for the Preferred Securities subject to certain
conditions set forth in Section 3.13, which changed maturity date
shall in no case be earlier than October 1, 2001 or later than
October 1, 2045 and (ii) extend the maturity date subject to
certain conditions specified in Section 3.13, which extended
maturity date shall in no case be later than October 1, 2045.  

          The rate of interest on each Security shall be 8.25%
per annum, accruing from October 1, 1996 and, subject to the next
paragraph, interest shall be payable, quarterly in arrears, on
March 31, June 30, September 30 and December 31 of each year
(each such date, an "Interest Payment Date"), commencing December
31, 1996.  The rate of any Additional Interest that shall accrue
on each Security shall be at the same rate per annum.  The amount
of interest payable on December 31, 1996 shall be computed on the
basis of 89 days in a 360-day year.  The amount of interest
payable for any period thereafter shall be computed on the basis
of a 360-day year of twelve 30-day months.  In the event that any
date on which interest is payable on a Security is not a Business
Day, then a payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was
originally payable.  The interest installment so payable (other
than interest payable on a Redemption Date or the maturity date),
and punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name such Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest
installment, which, if such Security is a Global Security issued
to the Depositary, shall be the close of business on the Business
Day next preceding such Interest Payment Date.  The interest so
payable on any Security which is not punctually paid or duly
provided for on any Interest Payment Date shall forthwith cease
to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name such  Security (or one
or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any
securities exchange, the Nasdaq National Market or other
applicable interdealer quotation system or self-regulatory
organization on which the Securities may be listed, and upon such
notice as may be required by such exchange or other
self-regulatory organization, all as more fully provided in
Section 3.7.

          So long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time during
the term of the Securities, from time to time, to defer the
payment of interest on the Securities for up to 20 consecutive
quarters with respect to each deferred period (each, an
"Extension Period"), during which Extension Periods the Company
shall have the right to make full or partial payments of interest
on any Interest Payment Date.  At the end of any such Extension
Period the Company shall pay all interest then accrued and unpaid
on the Securities (together with Additional Interest thereon at
the annual rate of 8.25%, compounded quarterly, to the extent
permitted by applicable law), provided, that during any such
Extension Period, the Company will not, and will not permit any
Subsidiary of the Company to (i) declare or pay any dividends or
distributions or redeem, purchase, acquire or make a liquidation
payment with respect to, any of the Company's outstanding capital
stock or (ii) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt security that
ranks pari passu with or junior in interest to the Securities or
make any guarantee payments with respect to the foregoing (other
than (a) dividends or distributions in Common Stock of the
Company, and (b) payments under the Company Guarantee.  Prior to
the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that no
Extension Period shall exceed 20 consecutive quarters or extend
beyond the Maturity of the Securities.  Upon termination of any
such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company
may elect to begin a new Extension Period, subject to the above
requirements.  No interest shall be due and payable during an
Extension Period, except at the end thereof.  The Company shall
give the Holders of the Securities and the Property Trustee, the
Administrative Trustees and the Trustee notice of its election to
begin or continue any such Extension Period at least one Business
Day prior to the earlier of (i) the date the Distributions on the
Preferred Securities are payable or (ii) the date Atlantic
Capital I is required to give notice to any securities exchange,
the Nasdaq National Market or other applicable interdealer
quotation system or self-regulatory organization or to holders of
such Preferred Securities of the record date applicable to such
Distributions or the date such Distributions are payable, but in
any event not less than one Business Day prior to such record
date.  The Trustee shall promptly give notice of the Company's
election to begin or continue any such Extension Period to the
holders of the outstanding Preferred Securities.  

          The Place of Payment where the Securities may be
presented or surrendered for payment, where the Securities may be
surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the
Securities and the Indenture may be served shall be the Corporate
Trust Office of the Trustee.  

          At any time on or after October 1, 2001, the Company
may, at its option, subject to the terms and conditions of
Article Eleven of the Indenture, redeem the Securities in whole
at any time or in part from time to time, without premium or
penalty, at a redemption price equal to 100% of the principal
amount thereof plus the accrued and unpaid interest, including
Additional Interest, if any, to the date fixed for redemption. 
If a Special Event shall occur and be continuing, the Company
may, at its option, redeem the Securities within 90 days of the
occurrence of such Special Event, in whole but not in part,
subject to the provisions of Article Eleven of the Indenture. 
The redemption price for any Security so redeemed shall be equal
to 100% of the principal amount thereof plus accrued and unpaid
interest, including Additional Interest, if any, to the date
fixed for redemption.  

          At any time, the Company may terminate Atlantic Capital
I and cause the Securities to be distributed to Holders of the
Trust Securities in liquidation of Atlantic Capital I.  

          Principal and interest on the Securities shall be
payable in Dollars.

          The Trustee shall initially serve as Securities
Registrar and Paying Agent.  

          The Company has no obligation to redeem or purchase any
Securities pursuant to any sinking fund or analogous requirement
or upon the happening of a specified event or at the option of a
Holder thereof. 

          SECTION 3.2.  Denominations.

          The Securities shall be in registered form without
coupons and shall be issuable in denominations of $25 and any
integral multiple thereof.
<PAGE>
          SECTION 3.3.  Execution, Authentication, Delivery and
Dating.

          The Securities shall be executed on behalf of the
Company by its President or one of its Vice Presidents under its
corporate seal reproduced or impressed thereon and attested by
its Secretary or one of its Assistant Secretaries.  The signature
of any of these officers on the Securities may be manual or
facsimile.

          Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.  At any time
and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a
Company order for the authentication and delivery of such
Securities; and the Trustee in accordance with such Company Order
shall authenticate and deliver such Securities as in this
Indenture provided and not otherwise.

          Each Security shall be dated the date of its
authentication.
 
          No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there
appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the
Trustee by the manual signature of one of its authorized officers
or signatories, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. 

          SECTION 3.4.  Temporary Securities. 

          Pending the preparation of definitive Securities, the
Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in
any denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.

          If temporary Securities are issued, the Company will
cause definitive Securities to be prepared without unreasonable
delay.  After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the
office or agency of the Company in a Place of Payment without
charge to the Holder.  Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of authorized
denominations.  Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities. 

          SECTION 3.5.  Registration, Transfer and Exchange.

          The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register in which, subject to such
reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of
Securities.  Such register is herein sometimes referred to as the
"Securities Register."  The Trustee is hereby appointed
"Securities Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.

          Upon surrender for registration of transfer of any
Security at the office or agency of the Company in a Place of
Payment designated for that purpose the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new
Securities of any authorized denominations, of a like aggregate
principal amount.
 
          At the option of the Holder, Securities may be
exchanged for other Securities of any authorized denominations,
of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency.  Whenever
any securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to
receive. 

          All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such transfer
or exchange.

          Every Security presented or surrendered for transfer or
exchange shall (if so required by the Company or the Securities
Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Securities Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing.

          No service charge shall be made to a Holder for any
transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
transfer or exchange of Securities.

          Notwithstanding any of the foregoing, any Global
Security shall be exchangeable pursuant to this Section 3.5 for
Securities registered in the names of Persons other than the
Depositary for such Security or its nominee only if (i) such
Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time
such Depositary ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, (ii) the Company
executes and delivers to the Trustee a Company Order that such
Global Security shall be so exchangeable or (iii) there shall
have occurred and be continuing an Event of Default with respect
to the Securities of such series.  Any Global Security that is
exchangeable pursuant to the preceding sentence shall be
exchangeable for definitive certificates registered in such names
as such Depositary shall direct. 
 
          Notwithstanding any other provision in this Indenture,
a Global Security may not be transferred except as a whole by the
Depositary with respect to such Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary.

          Neither the Company nor the Trustee shall be required 
(a) to issue, transfer or exchange any Security during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Securities selected for
redemption of Securities pursuant to Article Eleven and ending at
the close of business on the day of mailing of said notice of
redemption or (b) to transfer or exchange any Security so
selected for redemption in whole or in part, except, in the case
of any Security to be redeemed in part, any portion thereof not
to be redeemed. 

          SECTION 3.6.  Mutilated, Destroyed, Lost and Stolen
Securities.

          If any mutilated Security is surrendered to the Trustee
together with such security or indemnity as may be required by
the Company or the Trustee to save each of them harmless, the
Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of like tenor and
principal amount, Security, and bearing a number not
contemporaneously outstanding. 
 
          If there shall be delivered to the Company and to the
Trustee (i) evidence to their satisfaction of the destruction,
loss or theft of any Security, and (ii) such security or
indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the
Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor
and principal amount, and bearing a number not contemporaneously
outstanding.

          In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security,
pay such Security.

          Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith. 

          Every new Security issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

          The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities. 

          SECTION 3.7.  Payment of Interest; Interest Rights
Preserved. 

          Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date, shall be paid to the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, except
that interest payable on the Stated Maturity or the Redemption
Date of a Security shall be paid to the Person to whom principal
is paid.  The initial payment of interest on any Security which
is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Security.

          Any interest on any Security which is payable, but is
not timely paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest"), shall forthwith cease
to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in
each case, as provided in Clause (1) or (2) below:

          (1)  The Company may elect to make payment of any
     Defaulted Interest to the Persons in whose names the
     Securities in respect of which interest is in default (or
     their respective Predecessor Securities) are registered at
     the close of business on a Special Record Date for the
     payment of such Defaulted Interest, which shall be fixed in
     the following manner.  The Company shall notify the Trustee
     in writing of the amount of Defaulted Interest proposed to
     be paid on each Security and the date of the  proposed
     payment, and at the same time the Company shall deposit with
     the Trustee an amount of money equal to the aggregate amount
     proposed to be paid in respect of such Defaulted Interest or
     shall make arrangements satisfactory to the Trustee for such
     deposit prior to the date of the proposed payment, such
     money when deposited to be held in trust for the benefit of
     the Persons entitled to such Defaulted Interest as in this
     Clause provided.  Thereupon the Trustee shall fix a Special
     Record Date for the payment of such Defaulted Interest which
     shall be not more than 15 days and not less than 10 days
     prior to the date of the proposed payment and not less than
     10 days after the receipt by the Trustee of the notice of
     the proposed payment.  The Trustee shall promptly notify the
     Company of such Special Record Date and, in the name and at
     the expense of the Company, shall cause notice of the
     proposed payment of such Defaulted Interest and the Special
     Record Date therefor to be mailed, first class, postage
     prepaid, to each Holder at the address of such Holder as it
     appears in the Securities Register not less than 10 days
     prior to such Special Record Date.  Notice of the proposed
     payment of such Defaulted Interest and the Special Record
     Date therefor having been mailed as aforesaid, such
     Defaulted Interest shall be paid to the Persons in whose
     names the Securities (or their respective Predecessor
     Securities) are registered on such Special Record Date and
     shall no longer be payable pursuant to the following Clause
     (2).

          (2)  The Company may make payment of any Defaulted
     Interest in any other lawful manner not inconsistent with
     the requirements of any securities exchange, the Nasdaq
     National Market or other applicable interdealer quotation
     system or self-regulatory organization on which the
     Securities in respect of which interest is in default may be
     listed or traded and, upon such notice as may be required by
     such exchange or other self-regulatory organization (or by
     the Trustee if the Securities are not listed or traded), if,
     after notice given by the Company to the Trustee of the
     proposed payment pursuant to this Clause, such payment shall
     be deemed practicable by the Trustee.
 
          Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon transfer of or
in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
 
          SECTION 3.8.  Persons Deemed Owners.

          The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.7)
interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. 
 
          SECTION 3.9.  Cancellation.

          All Securities surrendered for payment, redemption,
transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee, and any such
Securities and Securities surrendered directly to the Trustee for
any such purpose shall be promptly canceled by it.  The Company
may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the
Trustee.  No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture.  All canceled
Securities shall be disposed of as directed by a Company Order;
provided, however, that the Trustee shall not be required to
destroy the certificate or certificates representing any of such
canceled Securities.

          SECTION 3.10.  Computation of Interest.

          Interest on the Securities for any period shall be
computed on the basis of a 360-day year of twelve 30-day months.
<PAGE>
          SECTION 3.11.  Right of Set-Off.

          With respect to Securities which at the time of
determination are registered in the Securities Register in the
name of Atlantic Capital I (or the Property Trustee),
notwithstanding anything to the contrary in this Indenture, the
Company shall have the right to set-off any payment it is
otherwise required to make hereunder in respect of such
Securities to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under
the Company Guarantee.

          SECTION 3.12.  Agreed Tax Treatment.

          Each Security issued hereunder shall provide that the
Company and, by its acceptance of a Security or a beneficial
interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Security agree that for United
States federal, state and local tax purposes it is intended that
such Security constitute indebtedness. 

          SECTION 3.13.  Change or Extension of Stated Maturity;
Adjustment of Stated Maturity Upon an Exchange.

          The Company shall have the right to (a) change the
Stated Maturity of principal of the Securities upon the
liquidation of Atlantic Capital I and the exchange of such
Securities for the Preferred Securities pursuant to Section 9.4
of the Trust Agreement and (b) extend the Stated Maturity of
principal of the Securities provided that at the time of any
election of such right to extend the Stated Maturity is made and
at the time of such extension (i) the Company is not in
bankruptcy, otherwise insolvent or in liquidation, (ii) the
Company is not in default in the payment of any interest or
principal on the Securities of such series and no deferred
interest payments thereon have accrued, (iii)  Atlantic Capital I
is not in arrears on payments of Distributions on its Preferred
Securities and no deferred Distributions thereon are accumulated,
(iv) the Securities are rated not less than BBB by Standard &
Poor's or Baa3 by Moody's Investors Service, Inc. or the
equivalent by any other nationally recognized statistical rating
organization and (v) the extended Stated Maturity is no later
than the 49th anniversary of the date of the initial issuance of
the Preferred Securities; and provided, further, that, if the
Company exercises its right to liquidate Atlantic Capital I and
exchange the Securities for the Preferred Securities as specified
in clause (a) above, any changed Stated Maturity of the
Securities shall be (A) no earlier than the date five years after
the initial issuance of the Preferred Securities and (B) no later
than the date 30 years (plus an extended term of up to an
additional 19 years if the above-referenced conditions are
satisfied) after the date of the initial issuance of the
Preferred Securities.  If the Company elects to change or extend
the Stated Maturity of the Securities in accordance herewith, the
Company shall give notice to Holders of the Securities, the
Property Trustee, Atlantic Capital I and the Trustee of such
change or extension at least 90 days before the Stated Maturity.
 
          SECTION 3.14.  CUSIP Numbers.

          The Company in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of
such numbers. 


                                ARTICLE IV
                        SATISFACTION AND DISCHARGE

          SECTION 4.1.  Satisfaction and Discharge of Indenture.

          If at any time: (a) the Company shall have delivered to
the Trustee for cancellation all Securities of a series
theretofore authenticated (other than any Securities which shall
have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 3.6 and Securities for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereupon repaid
to the Company or discharged from such trust, as provided in
Section 10.3); or (b) the Company shall deposit or cause to be
deposited with the Trustee as trust funds (i) the entire amount
in monies or Government Obligations or (ii) a combination of
monies and Government Obligations, sufficient in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay at maturity or upon redemption under arrangements
satisfactory to the Trustee for the giving of notice of
redemption, all Securities not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to their date of maturity
or date fixed for redemption, as the case may be, and if such
deposit shall be made prior to the stated maturity date of the
Securities, the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each to the
effect that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been
complied with, an Opinion of Counsel to the effect that the
holders of Securities will not recognize gain, loss or income for
federal income tax purposes as a result of the satisfaction and
discharge of this Indenture and such holders will be subject to
federal income taxation on the same amounts and in the same
manner and at the same times as if such satisfaction and
discharge had not occurred, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall thereupon cease to be of further effect
except for the provisions of Sections 3.5, 3.6, 6.10 and 10.2
which shall survive until the date of maturity or redemption
date, as the case may be, and Sections 6.7 and 10.3 which shall
survive to such date and thereafter, and the Trustee, on demand
of the Company and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and
discharging this Indenture with respect to such series.
     
          SECTION 4.2.  Application of Trust Money.

          Subject to the provisions of the last paragraph of
Section 10.3, all money or Government Obligations deposited with
the Trustee pursuant to Section 4.1 shall be held in trust and
applied by the Trustee, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and
interest for the payment of which such money or obligations have
been deposited with or received by the Trustee; provided,
however, such moneys or Government Obligations need not be
segregated from other funds except to the extent required by law.

                                 ARTICLE V
                                 REMEDIES


          SECTION 5.1.  Events of Default.

          "Event of Default" means any one of the following
events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or
governmental body):

          (1)  default in the payment of any interest upon any
     Security, including any Additional Interest in respect
     thereof, when it becomes due and payable, and continuance of
     such default for a period of 30 days (subject to the
     deferral of any due date in the case of an Extension
     Period); or 

          (2)  default in the payment of the principal of (or
     premium, if any, on) any Security at its Maturity, provided,
     however, that an extension of the maturity of the Securities
     in accordance with the terms of the Indenture shall not
     constitute an Event of Default; or

          (3)  default in the performance, or breach, in any
     material respect, of any covenant or warranty of the Company
     in this Indenture (other than a covenant or warranty a
     default in the performance of which or the breach of which
     is elsewhere in this Section specifically dealt with), and 
     continuance of such default or breach for a period of 90
     days after there has been given, by registered or certified
     mail, to the Company by the Trustee or to the Company and
     the Trustee by the Holders of at least 25% in principal
     amount of the Outstanding Securities a written notice
     specifying such default or breach and requiring it to be
     remedied; or

          (4)  the entry of a decree or order by a court having
     jurisdiction in the premises adjudging the Company a
     bankrupt or insolvent, or approving as properly filed a
     petition seeking reorganization, arrangement, adjustment or
     composition of or in respect of the Company under any
     applicable federal or state bankruptcy, insolvency,
     reorganization or other similar law, or appointing a
     receiver, liquidator, assignee, trustee, sequestrator (or
     other similar official) of the Company or of any substantial
     part of its property or ordering the winding up or
     liquidation of its affairs, and the continuance of any such
     decree or order unstayed and in effect for a period of 60
     consecutive days; or

          (5)  the institution by the Company of proceedings to
     be adjudicated a bankrupt or insolvent, or the consent by it
     to the institution of bankruptcy or insolvency proceedings
     against it, or the filing by it of a petition or answer or
     consent seeking reorganization or relief under any
     applicable federal or state bankruptcy, insolvency,
     reorganization or other similar law, or the consent by it to
     the filing of any such petition or to the appointment of a
     receiver, liquidator, assignee, trustee, sequestrator (or
     other similar official) of the Company or of any substantial
     part of its property, or the making by it of an assignment
     for the benefit of creditors, or the admission by it in
     writing of its inability to pay its debts generally as they
     become due and its willingness to be adjudicated a bankrupt,
     or the taking of corporate action by the Company in
     furtherance of any such action.

          SECTION 5.2.  Acceleration of Maturity; Rescission and
Annulment.

          If an Event of Default occurs and is continuing, then
and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities  may
declare the principal amount of all the Securities to be due and
payable immediately, by a notice in writing to the Company (and
to the Trustee if given by Holders), provided that, in the case
of Securities registered in the Securities Register in the name
of Atlantic Capital I (or the Property Trustee), if, upon an
Event of Default, the Trustee or the Holders of not less than 25%
in principal amount of the Outstanding Securities fail to declare
the principal of all the Securities to be immediately due and
payable, the holders of at least 25% in aggregate liquidation
amount of the Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee;
and upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional
Interest) on all the Securities shall become immediately due and
payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall
remain subordinated to the extent provided in Article Thirteen.

          At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount
of the Outstanding Securities, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its
consequences if:

          (1)  the Company has paid or deposited with the Trustee
     a sum sufficient to pay

               (A)  all overdue installments of interest
          (including any Additional Interest, to the extent
          permitted by law) on all Securities,

               (B)  the principal of (and premium, if any, on)
          any Securities which have become due otherwise than by
          such declaration of acceleration and interest thereon
          at the rate borne by the Securities, and

               (C)  all sums paid or advanced by the Trustee
          hereunder and the reasonable compensation, expenses,
          disbursements and advances of the Trustee, its agents
          and counsel; and

          (2)  all Events of Default, other than the non-payment
     of the principal of Securities which has become due solely
     by such acceleration, have been cured or waived as provided
     in Section 5.13.

          The holders of a majority in aggregate outstanding
principal amount of the Securities may waive any past default,
except a default in the payment of principal or interest (unless
such default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than
by acceleration has been deposited with the Trustee) or a default
in respect of a covenant or provision which under this Indenture
cannot be modified or amended without the consent of the holder
of each outstanding Security and, in the case of Securities
registered in the Securities Register in the name of Atlantic
Capital I (or the Property Trustee), should the holder of such
Securities fail to annul such declaration and waive such default,
the holders of a majority in aggregate liquidation preference of
the Preferred Securities shall have such right.
 
          No such rescission shall affect any subsequent default
or impair any right consequent thereon. 
 
          Upon receipt by the Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, with
respect to Securities all or part of which are represented by a
Global Security, a record date shall be established for
determining Holders of Outstanding Securities entitled to join in
such notice, which record date shall be at the close of business
on the day the Trustee receives such notice.  The Holders on such
record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided,
that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice
prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further
effect.  Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90-day
period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to
the proviso to the preceding sentence, in which event a new
record date shall be established pursuant to the provisions of
this Section 5.2. 

          SECTION 5.3.  Collection of Indebtedness and Suits for
Enforcement by Trustee.

          The Company covenants that if:

          (1)  default is made in the payment of any installment
     of interest (including any Additional Interest) on any
     Security when such interest becomes due and payable and such
     default continues for a period of 30 days, or

          (2)  default is made in the payment of the principal of
     (and premium, if any, on) any Security at the Maturity
     thereof.

The Company will, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal,
(and premium, if any) and interest (including any Additional
Interest, to the extent permitted by law); and, in addition
thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

          If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, and may prosecute such
proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon the Securities, wherever situated.

          If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect
and enforce any such rights, whether for the specific enforcement
of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other
proper remedy.

          SECTION 5.4.  Trustee May File Proofs of Claim.

          In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the
property of the Company or of such other obligor or their 
creditors,

          (a)  the Trustee (irrespective of whether the principal
     of the Securities shall then be due and payable as therein
     expressed or by declaration or otherwise and irrespective of
     whether the Trustee shall have made any demand on the
     Company for the payment of overdue principal (and premium,
     if any) or interest (including any Additional Interest))
     shall be entitled and empowered, by intervention in such
     proceeding or otherwise,

               (i)  to file and prove a claim for the whole
          amount of principal (and premium, if any) and interest
          (including any Additional Interest) owing and unpaid in
          respect to the Securities and to file such other papers
          or documents as may be necessary or advisable and to
          take any and all actions as are authorized under the
          Trust Indenture Act in order to have the claims of the
          Trustee and any predecessor to the Trustee under
          Section 6.7 and of the Holders allowed in any such
          judicial proceedings; and

               (ii)  and in particular, the Trustee shall be
          authorized to collect and receive any moneys or other
          property payable or deliverable on any such claims and
          to distribute the same in accordance with Section 5.6;
          and

          (b)  any custodian, receiver, assignee, trustee,
     liquidator, sequestrator (or other similar official) in any
     such judicial proceeding is hereby authorized by each Holder
     to make such payments to the Trustee for distribution in
     accordance with Section 5.6, and in the event that the
     Trustee shall consent to the making of such payments
     directly to the Holders, to pay to the Trustee any amount
     due to it and any predecessor Trustee under Section 6.7.

          Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors' or other similar
committee.

          SECTION 5.5.  Trustee May Enforce Claim Without
Possession of Securities.

          All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee
and any predecessor Trustee and their agents and counsel, be for
the ratable benefit of the Holders of the Securities in respect
of which such judgment has been recovered.

          SECTION 5.6.  Application of Money Collected.

          Any money or property collected or to be applied by the
Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money or property on account
of principal (or premium, if any) or interest (including any
Additional Interest), upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

          FIRST:  To the payment of all amounts due the Trustee
and any predecessor Trustee under Section 6.7;

          SECOND:  To the payment of the amounts then due and
unpaid upon Securities for principal (and premium, if any) and
interest (including any Additional Interest), in respect of which
or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to
the amounts due and payable on such Securities for principal (and
premium, if any) and interest (including any Additional
Interest), respectively; and 

          THIRD:  The balance, if any, to the Person or Persons
entitled thereto. 

          SECTION 5.7.  Limitation on Suits.

          No Holder of any Securities shall have any right to
institute any proceeding, judicial or otherwise, with respect to
this Indenture or for the appointment of a receiver, assignee,
trustee, liquidator, sequestrator (or other similar official) or
for any other remedy hereunder, unless: 

          (1)  such Holder has previously given written notice to
     the Trustee of a continuing Event of Default;

          (2)  the Holders of not less than 25% in principal
     amount of the Outstanding Securities shall have made written
     request to the Trustee to institute proceedings in respect
     of such Event of Default in its own name as Trustee
     hereunder;

          (3)  such Holder or Holders have offered to the Trustee
     reasonable indemnity against the costs, expenses and
     liabilities to be incurred in compliance with such request; 
     
          (4)  the Trustee for 60 days after its receipt of such
     notice, request and offer of indemnity has failed to
     institute any such proceeding; and

          (5)  no direction inconsistent with such written
     request has been given to the Trustee during such 60-day
     period by the Holders of a majority in principal amount of
     the Outstanding Securities; 
 
it being understood and intended that no one or more Holders
shall have any right in any manner whatever by virtue of, or by
availing itself of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders of
Securities, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all Holders. <PAGE>
      
    SECTION 5.8.  Unconditional Right of Holders to Receive
Principal, Premium and Interest.

          Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right which is absolute
and unconditional to receive payment of the principal of (and
premium, if any) and (subject to Section 3.7) interest (including
any Additional Interest, to the extent permitted by law) on such
Security on the respective Stated Maturities (or, in the case of
redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.  In the case of
Securities which at the time of determination are registered in
the Securities Register in the name of Atlantic Capital I (or the
Property Trustee), any holder of the Preferred Securities shall
have the right set forth in the preceding sentence to institute a
proceeding directly for enforcement of payment of the principal
of (and premium, if any) and (subject to Section 3.7) interest
(including any Additional Interest) on any Security to such
holder of the principal amount of or interest on the Securities
having a principal amount equal to the aggregate liquidation
preference of the Preferred Securities held of record by such
Holder. 

          SECTION 5.9.  Restoration of Rights and Remedies.

          If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee
and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their
former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

          SECTION 5.10.  Rights and Remedies Cumulative.

          Except as otherwise provided in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.  The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy. 

          SECTION 5.11.  Delay or Omission Not Waiver.

          Except as otherwise provided in the last paragraph of
Section 3.6, no delay or omission of the Trustee or of any Holder
of any Security to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
acquiescence therein.

          Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or
by the Holders, as the case may be.

          SECTION 5.12.  Control by Holders.

          The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power
conferred on the Trustee, provided that:

          (1)  such direction shall not be in conflict with any
     rule of law or with this Indenture,

          (2)  the Trustee may take any other action deemed
     proper by the Trustee which is not inconsistent with such
     direction, and 
 
          (3)  subject to the provisions of Section 6.1, the
     Trustee shall have the right to decline to follow such
     direction if the Trustee in good faith shall, by a
     Responsible Officer or Officers of the Trustee, determine
     that the proceeding so directed would be unjustly
     prejudicial to the Holders not joining in any such direction
     or would involve the Trustee in personal liability.

          Upon receipt by the Trustee of any written notice
directing the time, method or place of conducting any such
proceeding or exercising any such trust or power, with respect to
Securities all or part of which are represented by a Global
Security, a record date shall be established for determining
Holders of Outstanding Securities entitled to join in such
notice, which record date shall be at the close of business on
the day the Trustee receives such notice.  The Holders on such
record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided,
that, unless the Holders of a majority in principal amount of the
Outstanding Securities shall have joined in such notice prior to
the day which is 90 days after such record date, such notice
shall automatically and without further action by any Holder be
canceled and of no further effect.  Nothing in this paragraph
shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new notice identical to
a notice which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 5.12.

          SECTION 5.13.  Waiver of Past Defaults. 

          The Holders of not less than a majority in principal
amount of the Outstanding Securities may on behalf of the Holders
of all the Securities waive any past default hereunder and its
consequences, except a default: 

          (1)  in the payment of the principal of (or premium, if
     any) or interest (including any Additional Interest) on any
     Security, or 

          (2)  in respect of a covenant or provision hereof which
     under Article Nine cannot be modified or amended without the
     consent of the Holder of each Outstanding Security affected.

          Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.

          SECTION 5.14.  Undertaking for Costs.

          All parties to this Indenture agree, and each Holder of
any Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of the payment of the principal
of (or premium, if any) or interest (including any Additional
Interest) on any Security on or after the respective Stated
Maturities expressed in such Securities (or in the case of
redemption on or after the Redemption Date).

          SECTION 5.15.  Waiver of Usury, Stay or Extension Laws. 


          The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been
enacted.

<PAGE>
                                ARTICLE VI
                               THE TRUSTEE 

          SECTION 6.1.  Certain Duties and Responsibilities.

          (a)  Except during the continuance of an Event of
Default,

               (1)  the Trustee undertakes to perform such duties
     and only such duties as are specifically set forth in this
     Indenture, and no implied covenants or obligations shall be
     read into this Indenture against the Trustee; and 
 
               (2)  in the absence of bad faith on its part, the
     Trustee may conclusively rely, as to the truth of the
     statements and the correctness of the opinions expressed
     therein, upon certificates or opinions furnished to the
     Trustee and conforming to the requirements of this
     Indenture; but in the case of any such certificates or
     opinions which by any provisions hereof are specifically
     required to be furnished to the Trustee, the Trustee shall
     be under a duty to examine the same to determine whether or
     not they conform to the requirements of this Indenture.

          (b)  In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own
affairs.

          (c)  No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct except that

          (1)  this Subsection shall not be construed to limit
     the effect of Subsection (a) of this Section;

          (2)  the Trustee shall not be liable for any error of
     judgment made in good faith by a Responsible Officer, unless
     it shall be proved that the Trustee was negligent in
     ascertaining the pertinent facts;

          (3)  the Trustee shall not be liable with respect to
     any action taken or omitted to be taken by it in good faith
     in accordance with the direction of the Holders of a
     majority in principal amount of the Outstanding Securities
     relating to the time, method and place of conducting any
     proceeding for any remedy available to the Trustee, or
     exercising any trust or power conferred upon the Trustee,
     under this Indenture; and 

          (4)  No provision of this Indenture shall require the
     Trustee to expend or risk its own funds or otherwise incur
     any financial liability in the performance of any of its
     duties hereunder, or in the exercise of any of its rights or
     powers, if there shall be reasonable grounds for believing
     that repayment of such funds or adequate indemnity against
     such risk or liability is not reasonably assured to it. 

          (d)  Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section. 

          SECTION 6.2.  Notice of Defaults.

          Within 90 days after a Responsible Officer of the
Trustee obtains actual knowledge of the occurrence of any default
hereunder, the Trustee shall transmit by mail to all Holders, as
their names and addresses appear in the Securities Register,
notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest (including any
Additional Interest) on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board
of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the
interests of the Holders; and provided, further, that, in the
case of any default of the character specified in Section 5.1(3),
no such notice to Holders of Securities shall be given until at
least 30 days after the occurrence thereof.  For the purpose of
this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of
Default.

          SECTION 6.3.  Certain Rights of Trustee.

          Subject to the provisions of Section 6.1:

          (a)  the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;

          (b)  any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution; 
 
          (c)  whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;

          (d)  the Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;

          (e)  the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have 
offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;

          (f)  the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, indenture,
Security or other paper or document, but the Trustee in its
discretion may make such inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine
to make such inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company,
personally or by agent or attorney; and

          (g)  the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.

          SECTION 6.4.  Not Responsible for Recitals or Issuance
of Securities.

          The recitals contained herein and in the Securities,
except the Trustee's certificates of authentication, shall be
taken as the statements of the Company, and the Trustee assumes
no responsibility for their correctness.  The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Securities.  The Trustee shall not be
accountable for the use or application by the Company of the
Securities or the proceeds thereof. 

          SECTION 6.5.  May Hold Securities.
 
          The Trustee, any Paying Agent, Securities Registrar or
any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.8 and 6.13, may otherwise deal with the
Company with the same rights it would have if it were not
Trustee, Paying Agent, Securities Registrar or such other agent. 
 
          SECTION 6.6.  Money Held in Trust.

          Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by
law.  The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with
the Company.
 
          SECTION 6.7.  Compensation and Reimbursement.

          The Company agrees
 
          (1)  to pay to the Trustee from time to time reasonable
     compensation for all services rendered by it hereunder in
     such amounts as the Company and the Trustee shall agree from
     time to time (which compensation shall not be limited by any
     provision of law in regard to the compensation of a trustee
     of an express trust);

          (2)  to reimburse the Trustee upon its request for all
     reasonable expenses, disbursements and advances incurred or
     made by the Trustee in accordance with any provision of this
     Indenture (including the reasonable compensation and the
     expenses and disbursements of its agents and counsel),
     except any such expense, disbursement or advance as may be
     attributable to its negligence or bad faith; and

          (3)  to indemnify the Trustee for, and to hold it
     harmless against, any loss, liability or expense (including
     the reasonable compensation and the expenses and
     disbursements of its agents and counsel) incurred without
     negligence or bad faith on its part, arising out of or in
     connection with the acceptance or administration of this
     trust or the performance of its duties hereunder, including
     the costs and expenses of defending itself against any claim
     or liability in connection with the exercise or performance
     of any of its powers or duties hereunder.  This
     indemnification shall survive the termination of this
     Agreement.

          To secure the Company's payment obligations in this
Section, the Company and the Holders agree that the Trustee shall
have a lien prior to the Securities on all money or property held
or collected by the Trustee.  Such lien shall survive the
satisfaction and discharge of this Indenture.  When the Trustee
incurs expenses or renders services after an Event of Default
specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses
of administration under any Bankruptcy Reform Act of 1978 or a
successor statute.

          SECTION 6.8.  Disqualification; Conflicting Interests.

          The Trustee shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act.  Nothing herein shall
prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of
Section 310(b) of the Trust Indenture Act.

          SECTION 6.9.  Corporate Trustee Required; Eligibility.

          There shall at all times be a Trustee hereunder which
shall be

          (a)  a corporation organized and doing business under
     the laws of the United States of America or of any State,
     Territory or the District of Columbia, authorized under such
     laws to exercise corporate trust powers and subject to
     supervision or examination by federal, state, territorial or
     District of Columbia authority, or

          (b)  a corporation or other Person organized and doing
     business under the laws of a foreign government that is
     permitted to act as Trustee pursuant to a rule, regulation
     or order of the Commission, authorized under such laws to
     exercise corporate trust powers, and subject to supervision
     or examination by authority of such foreign government or a
     political subdivision thereof substantially equivalent to
     supervision or examination applicable to United States
     institutional trustees,

in either case having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal or
state authority.  If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then, for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.  If at anytime the Trustee shall cease to
be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect
hereinafter specified in this Article.  Neither the Company nor
any Person directly or indirectly controlling, controlled by or
under common control with the Company shall serve as Trustee for
the Securities.

          SECTION 6.10.  Resignation and Removal; Appointment of
Successor.

          (a)  No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 6.11.

          (b)  The Trustee may resign at any time by giving
written notice thereof to the Company.  If an instrument of
acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
 
          (c)  The Trustee may be removed at any time by Act of
the Holders of a majority in principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company. 
 
          (d)  If at any time: 

          (1)  the Trustee shall fail to comply with Section 6.8
     after written request therefor by the Company or by any
     Holder who has been a bona fide Holder of a Security for at
     least six months, or

          (2)  the Trustee shall cease to be eligible under
     Section 6.9 and shall fail to resign after written request
     therefor by the Company or by any such Holder, or

          (3)  the Trustee shall become incapable of acting or
     shall be adjudged a bankrupt or insolvent or a receiver of
     the Trustee or of its property shall be appointed or any
     public officer shall take charge or control of the Trustee
     or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company, acting under authority
of a Board Resolution, may remove the Trustee, or (ii) subject to
Section 5.14, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee. 

          (e)  If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee.  If, within one year after
such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Company.  If no
successor Trustee shall have been so appointed by the Company or
the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a
Security for at least six months may, subject to Section 5.14, on
behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a
successor Trustee.

          (f)  The Company shall give notice of each resignation
and each removal of the Trustee and each appointment of a
successor Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Securities
as their names and addresses appear in the Securities Register. 
Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office. 
 
          SECTION 6.11.  Acceptance of Appointment by Successor.

          (a)  Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but,
on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder
subject nevertheless to its lien provided for in Section 6.7.

          (b)  Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all
rights, powers and trusts referred to in paragraph (a) of this
Section.

          (c)  No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article. 

          SECTION 6.12.  Merger, Conversion, Consolidation or
Succession to Business.

          Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part
of any of the parties hereto.  In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name
of any predecessor Trustee or in the name of such successor
Trustee, and in all cases the certificate of authentication shall
have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the
Trustee shall have. 
 
          SECTION 6.13.  Preferential Collection of Claims
Against Company.

          If and when the Trustee shall be or become a creditor
of the Company(or any other obligor upon the Securities), the
Trustee shall be subject to the provisions of the Trust Indenture
Act regarding the collection of claims against the Company (or
any such other obligor).


                                ARTICLE VII
            HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY 

          SECTION 7.1.  Company to Furnish Trustee Names and
Addresses of Holders. 

          The Company will furnish or cause to be furnished to
the Trustee: 

          (a)  semi-annually, not more than 15 days after January
     15 and July 15, a list, in such form as the Trustee may
     reasonably require, of the names and addresses of the
     Holders as of such January 1 and July 1, and

          (b)  at such other times as the Trustee may request in
     writing, within 30 days after the receipt by the Company of
     any such request, a list of similar form and content as of a
     date not more than 15 days prior to the time such list is
     furnished,

excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.

          SECTION 7.2.  Preservation of Information,
Communications to Holders.

          (a)  The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as
provided in Section 7.1 and the names and addresses of Holders
received by the Trustee in its capacity as Securities Registrar. 
The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished. 
 
          (b)  The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or
under the Securities, and the corresponding rights and privileges
of the Trustee, shall be as provided in the Trust Indenture Act. 
 
          (c)  Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any agent of either of
them shall be held accountable by reason of the disclosure of
information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act, regardless of the source
from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust
Indenture Act, or any successor section of such Act. 
 
          SECTION 7.3.  Reports by Trustee.

          (a)  The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act, at the times
and in the manner provided pursuant thereto. 
 
          (b)  Reports so required to be transmitted at stated
intervals of not more than 12 months shall be dated as of July 1
in each calendar year and shall be transmitted no later than 60
days after each such July 1, commencing with the first July 1
after the first issuance of Securities under this Indenture.

          (c)  A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange or self-regulatory organization upon which the
Securities are listed or traded and also with the Commission. 
The Company will notify the Trustee whenever the Securities are
listed or traded on any stock exchange or self-regulatory 
organization.
 
          SECTION 7.4.  Reports by Company.

          The Company shall file with the Trustee and with the
Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the
manner provided in the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with
the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 shall be filed with the Trustee
within 15 days after the same is required to be filed with the
Commission.  Notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the Company shall
continue to file with the Commission and provide the Trustee with
the annual reports and the information, documents and other
reports which are specified in Sections 13 and 15(d) of the
Securities Exchange Act of 1934.  The Company also shall comply
with the other provisions of Trust Indenture Act Section 314(a). 


                               ARTICLE VIII
           CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
 
          SECTION 8.1.  Company May Consolidate, Etc., Only on
Certain Terms.
 
          The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless: 
 
          (1)  the Person formed by such consolidation or into
     which the Company is merged or the Person which acquires by
     conveyance or transfer, or which leases, the properties and 
     assets of the Company substantially as an entirety shall be
     a corporation, partnership or trust, shall be organized and
     existing under the laws of the United States of America or
     any State or the District of Columbia, and shall expressly
     assume, by an indenture supplemental hereto, executed and
     delivered to the Trustee, in form satisfactory to the
     Trustee, the due and punctual payment of the principal of
     (and premium, if any) and interest (including any Additional
     Interest) on all the Securities and the performance of every
     covenant of this Indenture on the part of the Company to be
     performed or observed;

          (2)  immediately after giving effect to such
     transaction, no Event of Default, and no event which, after
     notice or lapse of time, or both, would become an Event of
     Default, shall have happened and be continuing; 
 
          (3)  for so long as Securities registered on the
     Securities Register in the name of Atlantic Capital I (or
     the Property Trustee) are outstanding, such consolidation,
     merger, conveyance, transfer or lease is permitted under the
     Trust Agreement, and the Company Guarantee and does not give
     rise to any breach or violation of the Trust Agreement or
     the Company Guarantee; 

          (4)  any such lease shall provide that it will remain
     in effect so long as any Securities are Outstanding; and
 
          (5)  the Company has delivered to the Trustee an
     Officers' Certificate and an Opinion of Counsel each stating
     that such consolidation, merger, conveyance, transfer or
     lease and any such supplemental indenture  complies with
     this Article and that all conditions precedent herein
     provided for relating to such transaction have been complied
     with; and the Trustee, subject to Section 6.1, may rely upon
     such Officers' Certificate and Opinion of Counsel as
     conclusive evidence that such  transaction complies with
     this Section 8.1. 

          SECTION 8.2.  Successor Person Substituted.

          Upon any consolidation or merger by the Company with or
into any other Person, or any conveyance, transfer or lease by
the Company of its properties and assets substantially as an
entirety to any Person in accordance with Section 8.1, the
successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had
been named as the Company herein; and in the event of any 
such conveyance, transfer or lease the Company shall be
discharged from all obligations and covenants under the Indenture
and the Securities and may be dissolved and liquidated. 

          Such successor Person may cause to be signed, and may
issue either in its own name or in the name of the Company, any
or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of
the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the
Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person
thereafter shall cause to be signed and delivered to the Trustee
on its behalf for the purpose pursuant to such provisions.  All
the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued
at the date of the execution hereof. 
 
          In case of any such consolidation, merger, sale,
conveyance or lease, such changes in phraseology and form may be
made in the Securities thereafter to be issued as may be
appropriate.
 
 
                                ARTICLE IX
                          SUPPLEMENTAL INDENTURES
 
          SECTION 9.1.  Supplemental Indentures Without Consent
of Holders.

          Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any
of the following purposes: 
 
          (1)  to evidence the succession of another Person to
     the Company, and the assumption by any such successor of the
     covenants of the Company herein and in the Securities 
     contained; or 
 
          (2)  to convey, transfer, assign, mortgage or pledge
     any property to or with the Trustee or to surrender any
     right or power herein conferred upon the Company; or 
 
          (3)  to add to the covenants of the Company for the
     benefit of the Holders of Securities or to surrender any
     right or power herein conferred upon the Company; or 
 
          (4)  to add any additional Events of Default; or 
 
          (5)  to cure any ambiguity, to correct or supplement
     any provision herein which may be inconsistent with any
     other provision herein, or to make any other provisions with
     respect to matters or questions arising under this
     Indenture, provided that such action pursuant to this clause
     shall not materially adversely affect the interest of the
     Holders of Securities or, for so long as any of the
     Preferred Securities shall remain outstanding, the holders
     of such Preferred Securities; or 
 
          (6)  to comply with the requirements of the Commission
     in order to maintain the qualification of this Indenture
     under the Trust Indenture Act. 
 
          SECTION 9.2.  Supplemental Indentures with Consent of
Holders.
 
          With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities by Act
of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities
under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder
of each Outstanding Security affected thereby, 
 
          (1)  except to the extent permitted by Section 3.13
     change the Stated Maturity of the principal of, or any
     instalment of interest (including any Additional Interest)
     on, any Security, or reduce the  principal amount thereof or
     the rate of interest thereon or reduce any premium payable
     upon the redemption thereof, or change any Place of Payment
     where, or the coin or currency in which, any Security or
     interest thereon is payable, or impair the right to
     institute suit for the enforcement of any such payment on or
     after the Stated Maturity thereof (or, in the case of
     redemption, on or after the Redemption Date thereof), or 
 
          (2)  reduce the percentage in principal amount of the
     Outstanding Securities, the consent of whose Holders is
     required for any such supplemental indenture, or the consent
     of whose Holders is required for any waiver (of compliance
     with certain provisions of this Indenture or certain
     defaults hereunder and their consequences) provided for in
     this Indenture, or 

          (3)  modify any of the provisions of this Section,
     Section 5.13 or Section 10.5, except to increase any such
     percentage or to provide that certain other provisions of
     this Indenture cannot be modified or waived without the
     consent of the Holder of each Security affected thereby; or 
 
          (4)  modify the provisions in Article XII of this
     Indenture with respect to the subordination of Outstanding
     Securities in a manner adverse to the Holders thereof; 
 
provided that, so long as any of the Preferred Securities remains
outstanding, no such amendment shall be made that adversely
affects the holders of such Preferred Securities in any material
respect, and no termination of this Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant
under this Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate
liquidation preference of such Preferred Securities then
outstanding unless and until the principal (and premium, if any)
of the Securities and all accrued and unpaid interest (including
any Additional Interest) thereon have been paid in full; and
provided, further that, so long as any of the Preferred
Securities remains outstanding, no amendment shall be made to
Section 5.8 under this Indenture without the prior consent of the
holders of each Preferred Security then outstanding unless and
until the principal (and premium, if any) of the Securities and
all accrued and unpaid interest (including any Additional
Interest) thereon have been paid in full. 
          It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. 

          SECTION 9.3.  Execution of Supplemental Indentures.
 
          In executing or accepting the additional trusts created
by any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section
6.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this
Indenture, and that all conditions precedent provided for in this
Indenture with respect to such execution and acceptance
(including any covenants compliance with which constitutes a
condition precedent) have been complied with.  The Trustee may,
but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. 
 
          SECTION 9.4.  Effect of Supplemental Indentures.
 
          Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. 
 
          SECTION 9.5.  Conformity with Trust Indenture Act.
 
          Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect. 
 
          SECTION 9.6.  Reference in Securities to Supplemental
Indentures.
 
          Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article
may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in
such supplemental indenture.  If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the
Trustee and the Company (as evidenced by an Officers'
Certificate), to any such supplemental indenture may be prepared
and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.

                                 ARTICLE X
                                 COVENANTS

 
          SECTION 10.1.  Payment of Principal, Premium and
Interest.

          The Company will duly and punctually pay the principal
of (and premium, if any) and interest on the Securities in
accordance with the terms of the Securities and this Indenture. 
 
          SECTION 10.2.  Maintenance of Office or Agency.
 
          The Company will maintain in each Place of Payment an
office or agency where Securities may be presented or surrendered
for payment and an office or agency where Securities may be
surrendered for transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and
this Indenture may be served.  The Company initially appoints the
Trustee, acting through its Corporate Trust Office, as its agent
for said purposes.  The Company will give prompt written notice
to the Trustee of any change in the location of any such office
or agency.  If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of
the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and
demands. 
 
          The Company may also from time to time designate one or
more other offices or agencies where the Securities may be
presented or surrendered for any or all of such purposes, and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities for such purposes. 
The Company will give prompt written notice to the Trustee of any
such designation and any change in the location of any such
office or agency. 

          SECTION 10.3.  Money for Security Payments to be Held
in Trust.
 
          If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of
(and premium, if any) or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its failure so
to act. 
 
          Whenever the Company shall have one or more Paying
Agents, it will, prior to 10:00 a.m. New York City time on each
due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such
principal and premium (if any) or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its failure so to act. 
 
          The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will: 
 
          (1)  hold all sums held by it for the payment of the
     principal of (and premium, if any) or interest on Securities
     in trust for the benefit of the Persons entitled thereto
     until such sums shall be paid to such Persons or otherwise
     disposed of as herein provided; 
 
          (2)  give the Trustee notice of any default by the
     Company (or any other obligor upon the Securities) in the
     making of any payment of principal (and premium, if any) or
     interest;
 
          (3)  at any time during the continuance of any such
     default, upon the written request of the Trustee, forthwith
     pay to the Trustee all sums so held in trust by such Paying
     Agent; and 
 
          (4)  comply with the provisions of the Trust Indenture
     Act applicable to it as a Paying Agent. 

          The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums or Government Obligations
held in trust by such Paying Agent, such sums or Government
Obligations to be held by the Trustee upon the same trusts as
those upon which such sums or Government Obligations were held by
the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money or
Government Obligations. 
 
          Any money or Government Obligations deposited with the
Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any)
or interest on any Security and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become
due and payable shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed
property law) be paid on Company Request to the Company, or (if
then held by the Company) shall (unless otherwise required by
mandatory provision of applicable escheat or abandoned or
unclaimed property law) be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to
such trust money or Government Obligations, and all liability of
the Company as trustee thereof, shall thereupon cease. 
 
          SECTION 10.4.  Statement as to Compliance.
 
          The Company shall deliver to the Trustee, within 120
days after the end of each calendar year of the Company ending
after the date hereof, an Officers' Certificate which need not
comply with Section 1.2, executed by the principal executive
officer, the principal financial officer or the principal
accounting officer of the Company, as to such officer's knowledge
of the Company's compliance with all conditions and covenants
under this Indenture, such compliance to be determined without
regard to any period of grace or requirement of notice under this
Indenture.
 
          SECTION 10.5.  Additional Sums.
 
          Except as otherwise specified as contemplated by
Section 3.1, in the event that (i) Atlantic Capital I (or the
Property Trustee) is the Holder of all of the Outstanding
Securities, (ii) a Tax Event in respect of such Atlantic Capital
I shall have occurred and be continuing and (iii) the Company
shall not have (x) redeemed the Securities pursuant to Section
11.7 hereof or (y) terminated Atlantic Capital I pursuant to
Section 9.2(b) of the Trust Agreement, the Company shall pay
Atlantic Capital I (and its permitted successors or assigns under
the Trust Agreement) for so long as Atlantic Capital I (or its
permitted successor or assignee) is the Holder of any Securities,
such additional amounts as may be necessary in order that the
amount of distributions (including any Additional Amounts (as
defined in the Trust Agreement)) then due and payable by Atlantic
Capital I on the related Preferred Securities and Common
Securities that at any time remain outstanding in accordance with
the terms thereof shall not be reduced as a result of any
Additional Taxes (the "Additional Sums").  Whenever in this
Indenture or the Securities there is a reference in any context
to the payment of principal of or interest on the Securities,
such reference shall be deemed to include the payments of the
Additional Sums provided for in this paragraph to the extent
that, in such context, Additional Sums are, were or would be
payable in respect thereof pursuant to the provisions of this
paragraph and express mention of the payment of Additional Sums
(if applicable) in any provisions hereof shall not be construed
as excluding Additional Sums in those provisions hereof where
such express mention is not made, provided, however, that the
extension of an interest payment period pursuant to Section 3.1
or the Securities shall not extend the payment of any Additional
Sums that may be due and payable during such interest payment
period.
 
          SECTION 10.6.  Additional Covenants.
 
          The Company covenants and agrees with Atlantic Capital
I that it will not, and it will not permit any Subsidiary of the
Company to, (a) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with
respect to, any shares of the Company's capital stock, or (b)
make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities that rank pari
passu with or junior to the Securities or make any guarantee
payments with respect to the foregoing (other than (a) dividends
or distributions in Common Stock of the Company, and (b) 
payments under the Company Guarantee), if at such time (i) there
shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of time
or both, would constitute an Event of Default hereunder and (b)
in respect of which the Company shall not have taken reasonable
steps to cure, (ii) the Company shall be in default with respect
to its payment of any obligations under the Company Guarantee or
(iii) the Company shall have given notice of its election to
begin an Extension Period as provided herein and shall not have
rescinded such notice, or such period, or any extension thereof,
shall be continuing. 
 
          The Company also covenants with Atlantic Capital I (i)
to maintain directly or indirectly 100% ownership of the Common
Securities of Atlantic Capital I; provided, however, that any
permitted successor of the Company hereunder may succeed to the
Company's ownership of such Common Securities, (ii) not to
voluntarily terminate, wind-up or liquidate Atlantic Capital I,
except (a) in connection with a distribution of the Securities 
to the holders of Preferred Securities in liquidation of Atlantic
Capital I or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement
and (iii) to use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement, to cause Atlantic
Capital I to remain classified as a grantor trust and not as an
association taxable as a corporation for United States federal
income tax purposes. 
 
                                ARTICLE XI
                         REDEMPTION OF SECURITIES


          SECTION 11.1.  Company's Rights of Redemption.
 
          (a)  Unless otherwise specified as contemplated by
Section 3.1 with respect to the Securities and notwithstanding
any additional redemption rights that may be so specified, the
Company may, at its option, redeem the Securities after their
date of issuance in whole at any time or in part from time to
time, subject to the provisions of this clause (a) and the other
provisions of this Article Eleven.  Unless otherwise specified as
contemplated by Section 3.1, the redemption price for any
Security so redeemed pursuant to this clause (a) shall be equal
to 100% of the principal amount of such Securities plus any
accrued and unpaid interest, including any Additional Interest,
to the date fixed for redemption.  The Company shall not redeem
the Securities in part unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all
Securities Outstanding for all interest periods terminating on or
prior to the date fixed for redemption. 
 
          (b)  In the case of Securities in respect of which
Atlantic Capital I (or the Property Trustee) is the Holder,
except as otherwise specified as contemplated by Section 3.1, if
a Special Event shall occur and be continuing, the Company may,
at its option, redeem such Securities within 90 days of the
occurrence of such Special Event, in whole but not in part,
subject to the provisions of this clause (b) and the other
provisions of this Article XI.  The redemption price for any
Security so redeemed pursuant to this clause (b) shall be equal
to 100% of the principal amount of such Securities then
Outstanding plus accrued and unpaid interest, including any
Additional Interest, to the date fixed for redemption. 


          SECTION 11.2.  Applicability of This Article.
 
          Redemption of Securities at the election of the
Company, as permitted by Section 11.1, shall be made in
accordance with the terms of the Securities, Section 3.1 and this
Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this
Article, the provision of the form of Security shall govern. 
Each Security shall be subject to partial redemption only in the
amount of $25 or integral multiples thereof.

          SECTION 11.3.  Election to Redeem; Notice to Trustee.
 
          The election of the Company to redeem any Securities
shall be established by or pursuant to authority of the Board of
Directors as evidenced by a Board Resolution.  In case of any
redemption at the election of the Company of less than all of the
Securities, the Company shall, not less than 30 nor more than 60
days prior to the date fixed for redemption (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee
of such date and of the principal amount of Securities to be
redeemed.  In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in
the terms of such Securities, the Company shall furnish the
Trustee with an Officers' Certificate and an Opinion of
Independent Counsel evidencing compliance with such restriction. 
 
          SECTION 11.4.  Selection of Securities to be Redeemed.

          If less than all the Securities are to be redeemed, the
particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of a portion
of the principal amount of any Security, provided that the
unredeemed portion of the principal amount of any Security shall
be in an authorized denomination for such Security or integral
multiples thereof.

          The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption as aforesaid
and, in case of any Securities selected for partial redemption
and the principal amount thereof to be redeemed.  For all
purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.  If the
Company shall so direct, Securities registered in the name of the
Company, any Affiliate or any Subsidiary thereof shall not be
included in the Securities selected for redemption.
 
          SECTION 11.5.  Notice of Redemption.
 
          Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not later than the thirtieth day,
and not earlier than the sixtieth day, prior to the date fixed
for redemption, to each Holder of Securities to be redeemed, at
the address of such Holder as it appears in the Securities 
Register. 
 
          Each notice of redemption shall state: 
 
          (a)  the Redemption Date;
 
          (b)  the Redemption Price; 
 
          (c)  if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the particular
Securities to be redeemed;
 
          (d)  that on the Redemption Date, the Redemption Price
will become due and payable upon each such Security or portion
thereof, and that interest thereon, if any, shall cease to accrue
on and after said date; and
 
          (e)  the place or places where such Securities are to
be surrendered for payment of the Redemption Price.
 
          Notice of redemption of Securities to be redeemed at
the election of the Company shall be given by the Company or, at
the Company's request, by the Trustee in the name and at the
expense of the Company and shall not be irrevocable.  The notice
if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder
receives such notice.  In any case, a failure to give such notice
by mail or any defect in the notice to the Holder of any Security
designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other
Security. 
 
          SECTION 11.6.  Deposit of Redemption Price.
 
          Prior to 10:00 a.m. New York City time on the
Redemption Date specified in the notice of redemption given as
provided in Section 11.5, the Company will deposit with the
Trustee or with one or more paying agents an amount of money
sufficient to redeem on the Redemption Date all the Securities so
called for redemption at the applicable Redemption Price. 
 
          SECTION 11.7.  Payment of Securities Called for
Redemption.
 
          If any notice of redemption has been given as provided
in Section 11.5, the Securities or portion of Securities with
respect to which such notice has been given shall become due and
payable on the date and at the place or places stated in such
notice at the applicable Redemption Price.  On presentation and
surrender of such Securities at a place of payment in said notice
specified, the said securities or the specified portions thereof
shall be paid and redeemed by the Company at the applicable
redemption price. 
 
          Upon presentation of any Security redeemed in part
only, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of
the Company, a new Security or Securities of the same series, of
authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented.  If a Global
Security is so surrendered, such new Security will also be a new
Global Security.
 
          If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal of and
premium, if any, on such Security shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor
in the Security. 
 
 
                                ARTICLE XII
                        SUBORDINATION OF SECURITIES
 
          SECTION 12.1.  Securities Subordinate to Senior Debt.
 
          The Company covenants and agrees, and each Holder of a
Security, by its acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set
forth in this Article, the payment of the principal of (and
premium, if any) and interest (including any Additional Interest)
on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment
in full of all amounts then due and payable in respect of all
Senior Debt. 

          SECTION 12.2.  Payment Over of Proceeds Upon
Dissolution, Etc.
 
          In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to
the Company (each such event, if any, herein sometimes referred
to as a "Proceeding"), then the holders of Senior Debt shall be
entitled to receive payment in full of principal of (and premium,
if any) and interest, if any, on such Senior Debt, or provision
shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt,
before the Holders of the Securities are entitled to receive or
retain any payment or distribution of any kind or character,
whether in cash, property or securities (including any payment or
distribution which may be payable or deliverable by reason of the
payment of any other Debt of the Company subordinated to the
payment of the Securities, such payment or distribution being
hereinafter referred to as a "Junior Subordinated Payment"), on
account of principal of (or premium, if any) or interest
(including any Additional Interest) on the Securities or on
account of the purchase or other acquisition of Securities by the
Company or any Subsidiary and to that end the holders of Senior
Debt shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character,
whether in cash, property or securities, including any Junior
Subordinated Payment, which may be payable or deliverable in
respect of the Securities in any such Proceeding. 

          In the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of any
Security shall have received any payment or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment
thereof is provided for in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Debt, and if
such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all
Senior Debt in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt. 
 
          For purposes of this Article only, the words "any
payment or distribution of any kind or character, whether in
cash, property or securities" shall not be deemed to include
shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are
subordinated in right of payment to all then outstanding Senior
Debt to substantially the same extent as the Securities are so
subordinated as provided in this Article.  The consolidation of
the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following
the sale of all or substantially all of its properties and assets
as an entirety to another Person or the liquidation or
dissolution of the Company following the sale of all or
substantially all of its properties and assets as an entirety to
another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a Proceeding for the purposes of this
Section if the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by sale such
properties and assets as an entirety, as the case may be, shall,
as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article Eight. 
 
          SECTION 12.3.  Prior Payment to Senior Debt Upon
Acceleration of Securities. 

          In the event that any Securities are declared due and
payable before their Maturity, then and in such event the holders
of the Senior Debt outstanding at the time such Securities so
become due and payable shall be entitled to receive payment in
full of all amounts due on or in respect of such Senior Debt
(including any amounts due upon acceleration), or provision shall
be made for such payment in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Debt, before
the Holders of the Securities are entitled to receive any payment
or distribution of any kind or character, whether in cash,
properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of (or
premium, if any) or interest (including any Additional Interest)
on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary.
 
          In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of
any Security prohibited by the foregoing provisions of this
Section, and if such fact shall, at or prior to the time of such
payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company. 
 
          The provisions of this Section shall not apply to any
payment with respect to which Section 12.2 would be applicable. 
 
          SECTION 12.4.  No Payment When Senior Debt in Default.
 
          (a)  In the event and during the continuation of any
default in the payment of principal of (or premium, if any) or
interest on any Senior Debt, or in the event that any event of
default with respect to any Senior Debt shall have occurred and
be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, unless and
until such event of default shall have been cured or waived or
shall have ceased to exist and such acceleration shall have been
rescinded or annulled, or (b) in the event any judicial
proceeding shall be pending with respect to any such default in
payment or such event or default, then no payment or distribution
of any kind or character, whether in cash, properties or
securities (including any Junior Subordinated Payment) shall be
made by the Company on account of principal of (or premium, if
any) or interest (including any Additional Interest), if any, on
the Securities or on account of the purchase or other acquisition
of Securities by the Company or any Subsidiary.
 
          In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of
any Security prohibited by the foregoing provisions of this
Section, and if such fact shall, at or prior to the time of such
payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company. 
 
          The provisions of this Section shall not apply to any
payment with respect to which Section 12.2 would be applicable. 
 
          SECTION 12.5.  Payment Permitted If No Default.
 
          Nothing contained in this Article or elsewhere in this
Indenture or in any of the Securities shall prevent (a) the
Company, at any time except during the pendency of any Proceeding
referred to in Section 12.2 or under the conditions described in
Sections 12.3 and 12.4, from making payments at any time of
principal of (and premium, if any) or interest on the Securities,
or (b) the application by the Trustee of any money or Government
Obligations deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest
(including any Additional Interest) on the Securities or the
retention of such payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this
Article. 
 
          SECTION 12.6.  Subrogation to Rights of Holders of
Senior Debt.
 
          Subject to the payment in full of all Senior Debt, or
the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt,
the Holders of the Securities shall be subrogated to the extent
of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally
and ratably with the holders of all indebtedness of the Company
which by its express terms is subordinated to Senior Debt of the
Company to substantially the same extent as the Securities are
subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason of any payments or distributions made to
holders of such Senior Debt) to the rights of the holders of such
Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the
principal of (and premium, if any) and interest on the Securities
shall be paid in full.  For purposes of such subrogation or
assignment, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except
for the provisions of this Article, and no payments over pursuant
to the provisions of this Article to the holders of Senior Debt
by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Debt.

          SECTION 12.7.  Provisions Solely to Define Relative
Rights.
 
          The provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the
Holders of the Securities on the one hand and the holders of
Senior Debt on the other hand.  Nothing contained in this Article
or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as between the Company and the Holders of
the Securities, the obligations of the Company, which are
absolute and unconditional, to pay to the Holders of the
Securities the principal of (and premium, if any) and interest
(including any Additional Interest) on the Securities as and when
the same shall become due and payable in accordance with their
terms; or (b) affect the relative rights against the Company of
the Holders of the Securities and creditors of the Company other
than their rights in relation to the holders of Senior Debt; or
(c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law
upon default under this Indenture including, without limitation,
filing and voting claims in any Proceeding, subject to the
rights, if any, under this Article of the holders of Senior Debt
to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder. 
 
          SECTION 12.8.  Trustee to Effectuate Subordination.
 
          Each Holder of a Security by his or her acceptance
thereof authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for
any and all such purposes. 
 
          SECTION 12.9.  No Waiver of Subordination Provisions.
 
          No right of any present or future holder of any Senior
Debt to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such
holder may have or be otherwise charged with. 
 
          SECTION 12.10.  Notice to Trustee.

          The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the
Securities.  Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder
of Senior Debt or from any trustee, agent or representative
therefor (whether or not the facts contained in such notice are
true); provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least two
Business Days prior to the date upon which by the terms hereof
any monies may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any)
or interest (including any Additional Interest) on any Security),
then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary
which may be received by it within two Business Days prior to
such date. 
 
          SECTION 12.11.  Reliance on Judicial Order or
Certificate of Liquidating Agent. 

          Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee, subject to the
provisions of Article Six, and the Holders of the Securities
shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of
the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article. 
 
          SECTION 12.12.  Trustee Not Fiduciary for Holders of
Senior Debt.

          The Trustee, in its capacity as trustee under this
Indenture, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such
holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any
other Person cash, property or securities to which any holders of
Senior Debt shall be entitled by virtue of this Article or
otherwise. 
 
          SECTION 12.13.  Rights of Trustee as Holder of Senior
Debt; Preservation of Trustee's Rights.  

          The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article with respect
to any Senior Debt which may at any time be held by it, to the
same extent as any other holder of Senior Debt, and nothing in
this Indenture shall deprive the Trustee of any of its rights as
such holder.  Nothing in this Article XII shall apply to the
claims of, or payments to, the Trustee under or pursuant to
Section 6.7.
 
          SECTION 12.14.  Article Applicable to Paying Agents.  

          In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in
place of the Trustee. 
 
                              *   *   *   * 
 
          This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.

          IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
 
 
                                   ATLANTIC CITY ELECTRIC COMPANY
                                   
                                   
                                   By:  /s/ L.M. Walters          
                                   L.M. Walters
                                    Vice President, Treasurer
                                      and Secretary
                                   [SEAL]
 

Attest:  /s/ James E. Franklin, II      
      James E. Franklin, II
      Senior Vice President, General
      Counsel and Secretary
 
 
 
                                   THE BANK OF NEW YORK
                                     as Trustee 
                                   
                                   
                                   By:  /s/ Lucille Firrincieli   
                                      Lucille Firrincieli
                                      Assistant Vice President
                                   
                                   
                                   [SEAL]


Attest:  /s/ N. Gill                       
<PAGE>
State of New Jersey : 
                :   ss. 
County of Atlantic  : 
 
 
          On the 1st day of October, 1996 before me personally
came L.M. Walters, to me known, who being duly sworn, did depose
and say that he is Vice President, Treasurer and Assistant
Secretary of Atlantic City Electric Company, one of the
corporations described in and which executed the foregoing
instrument; that the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like
authority. 

 
                                   _____________________________ 
                                   Notary Public 
                                   My Commission Expires: 
                                   State of New York        : 
                    :    ss. 
County of New York  : 
 
 
          On the 1st day of October, 1996 before me personally
came Lucille Firrincieli, to me known, who being duly sworn, did
depose and say that she is Assistant Vice President of The Bank
of New York, a New York banking corporation, described in and
which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she signed her
name thereto by like authority. 
 
 

                                   ______________________________
                                   
                                   Notary Public 
                                   My Commission Expires: 
                                   <PAGE>