Document:

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                           PEOPLES ENERGY CORPORATION

                                       TO

                 [BANK ONE TRUST COMPANY NATIONAL ASSOCIATION,]
                                   as Trustee

                                  -------------

                                    INDENTURE

                         Dated as of _____________, 2002

                                  -------------

                             Senior Debt Securities

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                           PEOPLES ENERGY CORPORATION
   RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED, AND
                    INDENTURE, DATED AS OF ____________, 2002

<Table>
<Caption>
TRUST INDENTURE                                                     INDENTURE
ACT SECTION                                                         SECTION(S)

<S>                                                                  <C>
Section310 (a)(1)....................................................609
           (a)(2)....................................................609
           (a)(3)....................................................Not Applicable
           (a)(4)....................................................Not Applicable
           (a)(5)....................................................609
           (b).......................................................608, 610
           (c).......................................................Not Applicable
Section311 (a).......................................................613
           (b).......................................................613
           (c).......................................................613
Section312 (a).......................................................701,702(a)
           (b).......................................................702(a)
           (c).......................................................702(b)
Section313 (a).......................................................703(a)
           (b).......................................................703(b)
           (c).......................................................703(c)
           (d).......................................................703(c)
Section314 (a).. ....................................................704
           (a)(4)....................................................101, 1009
           (b).......................................................Not Applicable
           (c)(1)....................................................102
           (c)(2)....................................................102
           (c)(3)....................................................Not Applicable
           (d).......................................................Not Applicable
           (e).......................................................102
           (f).......................................................Not Applicable
Section315 (a).......................................................601
           (b).......................................................602
           (c).......................................................601
           (d).......................................................601
           (e).......................................................514
Section316 (a)(1)(A).................................................502, 512
           (a)(1)(B).................................................513
           (a)(2)....................................................Not Applicable
           (b).......................................................508
           (c).......................................................104
</Table>

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<Table>
<Caption>
TRUST INDENTURE                                                      INDENTURE
ACT SECTION                                                          SECTION(S)

<S>                                                                  <C>
Section317 (a)(1)....................................................503
           (a)(2)....................................................504
           (b).......................................................1003
Section318 (a).......................................................108
</Table>

NOTE: This  Reconciliation and Tie shall not, for any purpose, be deemed to be a
      part of the Indenture.
                                      -ii-
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                               TABLE OF CONTENTS

<Table>
<Caption>
SECTION                                           HEADING                                  PAGE

<S>                    <C>                                                                  <C>
ARTICLE ONE            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...............1

       Section 101.    Definitions...........................................................1
       Section 102.    Compliance Certificates and Opinions..................................8
       Section 103.    Form of Documents Delivered to Trustee................................8
       Section 104.    Acts of Holders; Record Dates.........................................9
       Section 105.    Notices, etc., to Trustee, PEC.......................................11
       Section 106.    Notice to Holders of Securities; Waiver..............................11
       Section 107.    Language of Notices, etc.............................................12
       Section 108.    Conflict with Trust Indenture Act....................................12
       Section 109.    Effect of Headings and Table of Contents.............................13
       Section 110.    Successors and Assigns...............................................13
       Section 111.    Separability Clause..................................................13
       Section 112.    Benefits of Indenture................................................13
       Section 113.    Governing Law........................................................13
       Section 114.    Legal Holidays.......................................................13
       Section 115.    Appointment of Agent for Service.....................................13
       Section 116.    No Adverse Interpretation of Other Agreements........................14
       Section 117.    Execution in Counterparts............................................14

ARTICLE TWO            SECURITY FORMS.......................................................14

       Section 201.    Forms Generally......................................................14
       Section 202.    Form of Trustee's Certificate of Authentication......................15
       Section 203.    Securities in Global Form............................................15
       Section 204.    Form of Legend for Global Securities.................................15
       Section 205.    Form of Legend for Bearer Securities.................................15

ARTICLE THREE          THE SECURITIES.......................................................16

       Section 301.    Amount Unlimited; Issuable in Series.................................16
       Section 302.    Denominations........................................................18
       Section 303.    Execution, Authentication, Delivery and Dating.......................19
       Section 304.    Temporary Securities.................................................21
       Section 305.    Registration, Registration of Transfer and Exchange..................22
       Section 306.    Mutilated, Destroyed, Lost and Stolen Securities.....................25
       Section 307.    Payment of Interest; Interest Rights Preserved.......................26
       Section 308.    Persons Deemed Owners................................................28
       Section 309.    Cancellation.........................................................28
       Section 310.    Computation of Interest..............................................29
       Section 311.    Form of Certification by a Person Entitled to Receive a
                         Bearer Security....................................................29
</Table>

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<Table>
<S>                    <C>                                                                  <C>
       Section 312.    CUSIP, ISIN and Common Code Numbers..................................31

ARTICLE FOUR           SATISFACTION AND DISCHARGE...........................................31

       Section 401.    Satisfaction and Discharge of Securities.............................31
       Section 402.    Satisfaction and Discharge of Indenture..............................33
       Section 403.    Application of Trust Money...........................................34
       Section 404.    Reinstatement........................................................34

ARTICLE FIVE           REMEDIES.............................................................35

       Section 501.    Events of Default....................................................35
       Section 502.    Acceleration of Maturity; Rescission and Annulment...................36
       Section 503.    Collection of Indebtedness and Suits for Enforcement by Trustee......37
       Section 504.    Trustee May File Proofs of Claim.....................................38
       Section 505.    Trustee May Enforce Claims Without Possession of Securities
                         or Coupons.........................................................38
       Section 506.    Application of Money Collected.......................................39
       Section 507.    Limitation on Suits..................................................39
       Section 508.    Unconditional Right of Holders to Receive Principal, Premium and
                         Interest...........................................................40
       Section 509.    Restoration of Rights and Remedies...................................40
       Section 510.    Rights and Remedies Cumulative.......................................40
       Section 511.    Delay or Omission Not Waiver.........................................40
       Section 512.    Control by Holders of Securities.....................................40
       Section 513.    Waiver of Past Defaults..............................................41
       Section 514.    Undertaking for Costs................................................41

ARTICLE SIX            THE TRUSTEE..........................................................41

       Section 601.    Certain Duties and Responsibilities..................................41
       Section 602.    Notice of Defaults...................................................43
       Section 603.    Certain Rights of Trustee............................................43
       Section 604.    Not Responsible for Recitals or Issuance of Securities...............44
       Section 605.    May Hold Securities..................................................44
       Section 606.    Money Held in Trust..................................................44
       Section 607.    Compensation and Reimbursement.......................................44
       Section 608.    Disqualification; Conflicting Interests..............................45
       Section 609.    Corporate Trustee Required; Eligibility..............................45
       Section 610.    Resignation and Removal; Appointment of Successor....................46
       Section 611.    Acceptance of Appointment by Successor...............................47
       Section 612.    Merger, Conversion, Consolidation or Succession to Business..........48
       Section 613.    Preferential Collection of Claims Against Company....................49
       Section 614.    Appointment of Authenticating Agent..................................49
</Table>

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<Table>
<S>                    <C>                                                                  <C>
ARTICLE SEVEN          HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY....................51

       Section 701.    Company to Furnish Trustee Names and Addresses of Holders............51
       Section 702.    Preservation of Information; Communications to Holders...............51
       Section 703.    Reports by Trustee...................................................51
       Section 704.    Reports by PEC.......................................................52

ARTICLE EIGHT          CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.................52

       Section 801.    PEC May Consolidate, Etc., Only on Certain Terms.....................52
       Section 802.    Successor Corporation Substituted....................................53

ARTICLE NINE           SUPPLEMENTAL INDENTURES..............................................53

       Section 901.    Supplemental Indentures without Consent of Holders...................53
       Section 902.    Supplemental Indentures with Consent of Holders......................54
       Section 903.    Execution of Supplemental Indentures.................................56
       Section 904.    Effect of Supplemental Indentures....................................56
       Section 905.    Conformity with Trust Indenture Act..................................56
       Section 906.    Reference in Securities to Supplemental Indentures...................56

ARTICLE TEN            COVENANTS............................................................56

       Section 1001.   Payment of Principal, Premium and Interest...........................56
       Section 1002.   Maintenance of Office or Agency......................................56
       Section 1003.   Money for Securities Payments to Be Held in Trust....................57
       Section 1004.   Additional Amounts...................................................59
       Section 1005.   Corporate Existence..................................................59
       Section 1006.   Maintenance of Properties............................................59
       Section 1007.   Payment of Taxes and Other Claims....................................60
       Section 1008.   Intentionally Omitted................................................60
       Section 1009.   Statement as to Default..............................................60
       Section 1010.   Waiver of Certain Covenants..........................................60

ARTICLE ELEVEN         REDEMPTION OF SECURITIES.............................................60

       Section 1101.   Applicability of Article.............................................60
       Section 1102.   Election to Redeem; Notice to Trustee................................61
       Section 1103.   Selection by Trustee of Securities to Be Redeemed....................61
       Section 1104.   Notice of Redemption.................................................61
       Section 1105.   Deposit of Redemption Price..........................................62
       Section 1106.   Securities Payable on Redemption Date................................62
       Section 1107.   Securities Redeemed in Part..........................................63

ARTICLE TWELVE         SINKING FUNDS........................................................64

       Section 1201.   Applicability of Article.............................................64
</Table>

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<Table>
<S>                        <C>                                                                  <C>
       Section 1202.   Satisfaction of Sinking Fund Payments with Securities................64
       Section 1203.   Redemption of Securities for Sinking Fund............................64

ARTICLE THIRTEEN       MEETINGS OF HOLDERS OF SECURITIES....................................65

       Section 1301.   Purposes for Which Meetings May be Called............................65
       Section 1302.   Call Notice and Place of Meeting.....................................65
       Section 1303.   Persons Entitled to Vote at Meetings.................................65
       Section 1304.   Quorum; Action.......................................................65
       Section 1305.   Determination of Voting Rights; Conduct and Adjournment
                         of Meetings........................................................66
       Section 1306.   Counting Votes and Recording Action of Meetings......................67
       Section 1307.   Action Without Meeting...............................................67

ARTICLE FOURTEEN       IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS,
                       DIRECTORS AND EMPLOYEES..............................................67

       Section 1401.   Liability Solely Corporate...........................................67
</Table>

                                      -vi-
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     INDENTURE, dated as of __________, 2002, between Peoples Energy
Corporation, a corporation duly organized and existing under the laws of the
State of Illinois (herein called "PEC"), having its principal office at 130 East
Randolph Drive, Chicago, Illinois 60601 and [Bank One Trust Company National
Association,] a corporation duly organized and existing under the laws of the
State of [New York,] having its principal corporate trust office at [1 Bank One
Plaza, Mail Code IL1-0823, Chicago, Illinois 60670,] as trustee (herein called
the "TRUSTEE").

                                 RECITALS OF PEC

     PEC has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of PEC's unsecured, unsubordinated
debentures, notes or other evidences of indebtedness (herein collectively called
the "SECURITIES," and individually called a "SECURITY"), to be issued in one or
more series as provided in this Indenture.

     All things necessary to make this Indenture a valid agreement of PEC, in
accordance with its terms, have been done.

     This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.

     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 series thereof, as
follows:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

   SECTION 101. 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 in the Trust Indenture Act;

                                       -1-
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          (3) all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with generally accepted accounting
     principles in the United States of America, and, except as otherwise herein
     expressly provided, the term "generally accepted accounting principles"
     with respect to any computation required or permitted hereunder shall mean
     such accounting principles as are generally accepted in the United States
     of America at the date of such computation;

          (4) the words "herein," "hereof," "hereto" 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; and

          (5) the word "or" is always used inclusively (for example, the phrase
     "A or B" means "A or B or both," not "either A or B but not both").

     Certain terms used principally in certain Articles are defined in those
Articles.

     "ACT," when used with respect to any Holder of a Security, has the meaning
specified in Section 104.

     "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. 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.

     "AUTHENTICATING AGENT" means any Person or Persons authorized by the
Trustee to act on behalf of the Trustee to authenticate one or more series of
Securities.

     "AUTHORIZED NEWSPAPER" means a newspaper, in an official language of the
country of publication or in the English language, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

     "BANKRUPTCY LAW" means Title 11 of the United States Code or any similar
United States federal or state law for the relief of debtors.

     "BEARER SECURITY" means any Security in the form for Bearer Securities set
forth in Section 203 or established pursuant to Section 201 which is payable to
bearer and shall bear the legend specified in Section 205.

                                       -2-
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     "BOARD OF DIRECTORS" means the board of directors of PEC, or any duly
authorized committee thereof.

     "BOARD RESOLUTION" means a copy of a resolution certified by the Corporate
Secretary or an Assistant Corporate Secretary of PEC, to have been duly adopted
by the Board of Directors 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 a Saturday or Sunday or a day on
which banking institutions in the City of New York, New York or Chicago,
Illinois are authorized or required by law or executive order to remain closed
or a day on which the 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, as amended,
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 at such time.

     "CORPORATE TRUST OFFICE" means the corporate trust office of the Trustee of
a series of Securities at which at any particular time its corporate trust
business shall be administered, which office on the date of execution of this
Indenture is located at [1 Bank One Plaza, Mail Code IL1-0823, Chicago, Illinois
60670, Attention: Global Corporate Trust Services.]

     "CORPORATION" includes any corporation, association, company, limited
liability company or business trust.

     "DEFAULTED INTEREST" has the meaning specified in Section 307.

     "DEPOSITARY" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, specified for that purpose as contemplated by Section 301 or any
successor clearing agency registered under such Act as contemplated by Section
305, and if at any time there is more than one such Person, the term
"Depositary" as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of such series.

     "DOLLAR" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.

     "ELIGIBLE OBLIGATIONS" means:

     (a) with respect to Securities denominated in Dollars, Government
Obligations; or

                                       -3-
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     (b) with respect to Securities denominated in a currency other than Dollars
or in a composite currency, such other obligations or instruments as shall be
specified with respect to such Securities, as contemplated by Section 301.

     "EVENT OF DEFAULT" has the meaning specified in Section 501.

     "GLOBAL SECURITY" means a Security bearing the legend specified in Section
204 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
nominee.

     "GOVERNMENTAL OBLIGATIONS" means securities which are (a) (i) direct
obligations of the United States where the payment or payments thereunder are
supported by the full faith and credit of the United States or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States where the timely payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by the United States or (b) depository receipts issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of a depositary 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 or other amount with respect
to the Government Obligation evidenced by such depository receipt.

     "HOLDER," when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.

     "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," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

     "INTEREST PAYMENT DATE," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

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

                                       -4-
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     "OFFICER" means, with respect to any Person, the Chairman of the Board, the
President, the Chief Financial Officer, a Vice President, the Treasurer, an
Assistant Treasurer, the Controller or Assistant Controller and the Corporate
Secretary or an Assistant Corporate Secretary.

     "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the President, the Chief Financial Officer or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller,
the Corporate Secretary or an Assistant Corporate Secretary, of PEC, that
complies with the requirements of Section 314(c) of the Trust Indenture Act and
is delivered to the Trustee.

     "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel
for PEC, and who shall be acceptable to the Trustee, that complies with the
requirements of Section 314(c) of the Trust Indenture Act and Section 102 of
this Indenture.

     "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

     "OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

          (i) Securities theretofore canceled by the Trustee or delivered to the
     Trustee for cancellation;

          (ii) Securities for whose payment or redemption money in the necessary
     amount has been theretofore deposited with the Trustee or any Paying Agent
     (other than PEC) in trust or set aside and segregated in trust by PEC (if
     PEC shall act as its own Paying Agent) for the Holders of such Securities
     and any coupons thereto appertaining; PROVIDED, that if such Securities are
     to be redeemed, notice of such redemption has been duly given pursuant to
     this Indenture or provision therefor satisfactory to the Trustee has been
     made; and

          (iii) Securities which have been paid pursuant to Section 306 or in
     exchange for or in lieu of which other Securities have been authenticated
     and delivered pursuant to this Indenture, other than any such Securities in
     respect of which there shall have been presented to the Trustee proof
     satisfactory to it that such Securities are held by a bona fide purchaser
     in whose hands such Securities are valid obligations of PEC;

and PROVIDED FURTHER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have been given any request,
demand, authorization, direction, notice, consent or waiver hereunder or are
present at a meeting of Holders of Securities for quorum purposes, Securities
owned by PEC, or any other obligor upon the Securities or any Affiliate of PEC,
or of 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

                                       -5-
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request, demand, authorization, direction, notice, consent or waiver or upon any
such determination as to the presence of a quorum, 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 PEC, or any other
obligor upon the Securities or any Affiliate of PEC, or of such other obligor.

     "PAYING AGENT" means any Person authorized by PEC to pay the principal of
(and premium, if any) or interest on any Securities on behalf of PEC.

     "PERSON" means any individual, Corporation, limited liability company,
partnership, joint venture, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.

     "PLACE OF PAYMENT," when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.

     "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 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "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.

     "REGISTERED SECURITY" means any Security established pursuant to Section
201 which is registered in the Security Register.

     "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.

     "REQUEST" or "ORDER" means a written request or order signed in the name of
PEC, by its Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its
Corporate Secretary or an Assistant Corporate Secretary, and delivered to the
Trustee.

     "RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
Vice President, any assistant secretary, any assistant treasurer, any cashier,
any assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, any assistant controller or any other officer of

                                       -6-
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the Trustee customarily performing corporate trust functions on behalf of the
Trustee and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

     "SECURITIES" AND "SECURITY" have the meanings stated in the first recital
of this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; PROVIDED, that if at any time there is more than
one Person acting as Trustee under this Indenture, the term "SECURITIES," with
respect to any such Person, shall mean Securities authenticated and delivered
under this Indenture, exclusive, however, of Securities of any series as to
which such Person is not Trustee.

     "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305.

     "SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.

     "STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or 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 PEC or by one or more other
Subsidiaries, or by PEC and one or more other Subsidiaries. For the purposes of
this definition, the term "VOTING STOCK" means stock or other equity interest
which ordinarily has voting power for the election of directors or managers,
whether at all times or only so long as no senior class of stock or other equity
interest has such voting power by reason of any contingency.

     "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Trust Indenture Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rules or regulations adopted by the Commission under or in furtherance of the
purposes of such Trust Indenture Act or provision, as the case may be.

     "TRUSTEE" means the Person named as the "TRUSTEE" in the first paragraph of
this instrument until a successor Trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
Indenture, and thereafter the term "TRUSTEE" shall mean or include each Person
who is then a Trustee hereunder and, if at any time there is more than one such
Person, the term "TRUSTEE," as used with respect to the Securities of any
series, shall mean the Trustee with respect to Securities of that series.

     "UNITED STATES" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.

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     "UNITED STATES ALIEN" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

     "VICE PRESIDENT," when used with respect to PEC or the Trustee, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "VICE PRESIDENT" and shall also include the Chief
Financial Officer of PEC.

   SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or
request by PEC to the Trustee to take any action under any provision of this
Indenture, PEC shall furnish to the Trustee an Officers' Certificate stating
that all conditions 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, 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 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 103. FORM 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.

                                       -8-
<Page>

     Any certificate or opinion of an Officer 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
the 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, stating that the information with respect to such factual
matters is in the possession of PEC, 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 104. ACTS OF HOLDERS; RECORD DATEs. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given 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. If
Securities of a series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given or taken by Holders may,
alternatively, be embodied in and evidenced by the record of Holders of
Securities voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities duly called and
held in accordance with the provisions of Article Thirteen, or a combination of
such instrument or instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to PEC. Such instrument or instruments and any such
record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 601) conclusive in favor of the Trustee and PEC if made in
the manner provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 1306.

     Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent PEC, the Trustee, or any agent of PEC or the Trustee, from
giving effect to any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be given or taken by a
Depositary or impair, as between a Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Security.

     Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depositary that
is a Holder of a Global Security, may make, give or take, by a proxy or proxies
duly appointed in writing, any request, demand,

                                       -9-
<Page>

authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Security may give its proxy or proxies
to the Depositary's participants or the beneficial owners of interests in any
such Global Security, as the case may be, through such Depositary's standing
instructions and customary practices.

     Subject to the next succeeding paragraph, PEC may, in the circumstances
permitted by the Trust Indenture Act, fix any day as the record date for the
purpose of determining the Holders of Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be given
or taken by Holders of Securities of such series. If not set by PEC prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day prior to
such first solicitation or vote, or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701, as the case may be.
With regard to any record date for action to be taken by the Holders of one or
more series of Securities, only the Holders of Securities of such series on such
date (or their duly designated proxies) shall be entitled to give or take, or
vote on, the relevant action.

     The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interests in any permanent Global Security
held by a Depositary and who are entitled under the procedures of such
Depositary to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in or pursuant to this Indenture to be made, given or
taken by Holders. If such a record date is fixed, the Holders on such record
date or their duly appointed proxy or proxies, and only such Persons, shall be
entitled to make, give or take such request, demand, authorization, direction,
notice, consent, waiver or other action, whether or not such Holders remain
Holders after such record date. No such request, demand, authorization,
direction, notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient.

     (c) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.

     (d) The principal amount and serial numbers of Bearer Securities held by
any Person executing any such instrument or writing as a Holder of Securities,
and the date of his holding the same, may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person executing such instrument
or writing as a Holder of Securities, if such certificate or

                                      -10-
<Page>

affidavit is deemed by the Trustee to be satisfactory. The Trustee and PEC may
assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding.

     (e) The fact and date of execution of any such instrument or writing, the
authority of the Person executing the same, the principal amount and serial
numbers of Bearer Securities held by the Person so executing such instrument or
writing and the date of holding the same may also be proved in any other
reasonable manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.

     (f) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
PEC in reliance thereon, whether or not notation of such action is made upon
such Security.

   SECTION 105. NOTICES, ETC., TO TRUSTEE AND PEC. Any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of
Holders of a series of Securities or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

          (1) the Trustee of such series by any Holder of a Security of such
     series or by PEC shall be sufficient for every purpose hereunder if made,
     given, furnished or filed in writing to or with the Trustee of such series
     at its Corporate Trust Office, or

          (2) PEC, by the Trustee of such series or by any Holder of a Security
     of such series shall be sufficient for every purpose hereunder (unless
     otherwise herein expressly provided) if in writing and mailed, first-class
     postage prepaid, to PEC, addressed to the attention of its Treasurer, at
     130 East Randolph Drive, Chicago, Illinois 60601, or at any other address
     previously furnished in writing to the Trustee of such series by PEC.

   SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER. Except as otherwise
expressly provided herein, where this Indenture provides for notice to Holders
of Securities (of any series) of any event,

          (1) such notice shall be sufficiently given to Holders of Registered
     Securities of such series if in writing and mailed, first-class postage
     prepaid, to each Holder of a Registered Security of such series affected by
     such event, at his address as it appears in the Security Register, not
     later than the latest date, and not earlier than the earliest date,
     prescribed for the giving of such Notice; and

                                      -11-
<Page>

          (2) such notice shall be sufficiently given to Holders of Bearer
     Securities of such series if published in an Authorized Newspaper in the
     Borough of Manhattan, The City of New York and, if the Securities of such
     series are then listed on The Stock Exchange of the United Kingdom and the
     Republic of Ireland and such stock exchange shall so require, in London
     and, if the Securities of such series are then listed on the Luxembourg
     Stock Exchange and such stock exchange shall so require, in Luxembourg and,
     if the Securities of such series are then listed on any other stock
     exchange outside the United States and such stock exchange shall so
     require, in any other required city outside the United States or, if not
     practicable, in Europe, on a Business Day at least twice, the first such
     publication to be not earlier than the earliest date and not later than the
     latest date prescribed for the giving of such notice.

     In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder. In any case where notice
to Holders of Registered Securities is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder of a Registered Security shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities or the sufficiency of any
notice by publication to Holders of Bearer Securities given as provided above.

     In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities of any
series as provided above, then such notification to Holders of such Bearer
Securities as shall be given with the approval of the Trustee for such series
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither failure to give notice by publication to Holders of Bearer Securities as
provided above, nor any defect in any notice so published, shall affect the
sufficiency of any notice mailed to Holders of Registered Securities as provided
above.

     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 of Securities 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 107. LANGUAGE OF NOTICES, ETC. Any request, demand, authorization,
direction, notice, consent, election or waiver required or permitted under this
Indenture shall be in the English language, except that any published notice may
be in an official language of the country of publication.

   SECTION 108. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with any duties under any required provision of
the Trust Indenture Act deemed included herein by Section 318(c) thereof, such
required provision shall control.

                                      -12-
<Page>

   SECTION 109. 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 110. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture by PEC shall bind their respective successors and assigns, whether so
expressed or not.

   SECTION 111. SEPARABILITY CLAUSE. In case any provision in this Indenture or
the Securities or coupons 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 112. BENEFITS OF INDENTURE. Nothing in this Indenture or the
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, their successors hereunder and the Holders of Securities and
coupons, any benefit or any legal or equitable right, remedy or claim under this
Indenture.

   SECTION 113. GOVERNING LAW. This Indenture and the Securities and coupons
shall be governed by and construed in accordance with the internal law of the
State of Illinois, without giving effect to any contrary conflict of laws or
choice of law provisions of the law of the State of Illinois or any other
jurisdiction.

   SECTION 114. LEGAL HOLIDAYS. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities or coupons) payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity; PROVIDED, that no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

   SECTION 115. APPOINTMENT OF AGENT FOR SERVICE. By the execution and delivery
of this Indenture, PEC hereby appoints the Trustee as its agent upon which
process may be served in any legal action or proceeding which may be instituted
in any Federal or State court in the Borough of Manhattan, The City of New York,
arising out of or relating to the Securities, the coupons or this Indenture.
Service of process upon such agent at the office of such agent at [1 Bank One
Plaza, Mail Code IL1-0823, Chicago, Illinois 60670, Attention: Global Corporate
Trust Services] (or such other address in the Borough of Manhattan, The City of
New York, as may be the Corporate Trust Office of the Trustee), and written
notice of said service to PEC, by the Person serving the same addressed as
provided in Section 105, shall be deemed in every respect effective service of
process upon PEC, in any such legal action or proceeding, and PEC hereby submits
to the jurisdiction of any such court in which any such legal action or
proceeding is so instituted. Such appointment shall be irrevocable so long as
the Holders of Securities or coupons shall have any rights pursuant to the terms
thereof or of this Indenture until the appointment of a successor by PEC, with
the consent of the Trustee and such successor's

                                      -13-
<Page>

acceptance of such appointment. PEC further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
such agent or successor.

     By the execution and delivery of this Indenture, the Trustee hereby agrees
to act as such agent and undertakes promptly to notify PEC of receipt by it of
service of process in accordance with this Section.

   SECTION 116. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture
may not be used to interpret another indenture, loan or debt agreement of PEC or
any Affiliate. No such indenture, loan or debt agreement may be used to
interpret this Indenture.

   SECTION 117. EXECUTION IN COUNTERPARTS. 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.

                                   ARTICLE TWO

                                 SECURITY FORMS

   SECTION 201. FORMS GENERALLY. The Registered Securities, if any, of each
series and the Bearer Securities, if any, of each series and related coupons and
the Global Securities, if any, issued pursuant to this Indenture shall be in
such form as shall be established by or pursuant to a Board Resolution or in one
or more indentures supplemental hereto, in each case 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 the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or coupons, as evidenced by their execution of the Securities or coupons (but
which do not affect the rights or duties of the Trustee). If the forms of
Securities or coupons of any series are established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Corporate Secretary or an Assistant Corporate Secretary of PEC
and delivered to the Trustee at or prior to the delivery of the Order
contemplated by Section 303 for the authentication and delivery of such
Securities or coupons.

     The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article or Article Six.

     Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
global and registered form without coupons. If so provided as contemplated by
Section 301, the Securities of a series also shall be issuable in bearer form,
with or without interest coupons attached.

     The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner permitted by the rules of any

                                      -14-
<Page>

applicable securities exchange, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities or coupons.

   SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. Subject to
Section 614, the Trustee's certificate of authentication shall be in
substantially the following form:

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

                                                [Bank One Trust Company National
                                                    Association, as Trustee]

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

   SECTION 203. SECURITIES IN GLOBAL FORM. If Securities of a series are
issuable in global form, any such Security may provide that it or any number of
such Securities shall represent the aggregate amount of all Outstanding
Securities of such series (or such lesser amount as is permitted by the terms
thereof) from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be increased or reduced to reflect exchanges. Any endorsement of any
Security in global form to reflect the amount, or any increase or decrease in
the amount, or changes in the rights of Holders, of Outstanding Securities
represented thereby shall be made in such manner and by such Person or Persons
as shall be specified therein or in the Order to be delivered pursuant to
Sections 303 or 304 with respect thereto. Subject to the provisions of Section
303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Order. If the Order
pursuant to Sections 303 or 304 has been, or simultaneously is, delivered, any
instructions by PEC with respect to a Security in global form shall be in
writing but need not be accompanied by or contained in an Officers' Certificate
and need not be accompanied by an Opinion of Counsel.

   SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES. Any Global Security
authenticated and delivered hereunder shall bear a legend in substantially the
following form, or in such other form that is acceptable to the Depositary and
the Trustee:

          "Unless and until it is exchanged in whole or in part for Securities
     in definitive registered form, this Security 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 or
     by the Depositary or any such nominee to a successor Depositary or a
     nominee of such successor Depositary."

   SECTION 205. FORM OF LEGEND FOR BEARER SECURITIES. Any Bearer Security
authenticated and delivered hereunder shall bear a legend in substantially the
following form:

                                      -15-
<Page>

          "Any United States person who holds this Security will be subject to
     limitations under the United States income tax laws, including the
     limitation provided in Sections 165(j) and 1287(a) of the Internal Revenue
     Code of 1986, as amended."

                                  ARTICLE THREE

                                 THE SECURITIES

   SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.

     The Securities may be issued in one or more series. Prior to the issuance
of Securities of any series, there shall be set forth in an Officers'
Certificate pursuant to a Board Resolution, or established in one or more
indentures supplemental hereto approved in or pursuant to a Board Resolution,

          (1) the title of the Securities of the series (which shall distinguish
     the Securities of the series from Securities of all other series issued by
     PEC);

          (2) any limit upon the aggregate principal amount of the Securities of
     the series which may be authenticated and delivered under this Indenture
     (except for Securities authenticated and delivered upon registration of
     transfer of, or in exchange for, or in lieu of, other Securities of the
     series pursuant to Section 304, 305, 306, 906 or 1107);

          (3) the date or dates on which the principal of the Securities of the
     series is payable or how to determine such dates;

          (4) the right, if any, to extend the Stated Maturity on which PEC will
     pay any installment of principal of or interest on the Securities of the
     series;

          (5) the rate or rates at which the Securities of the series shall bear
     interest, if any, or any method by which such rate or rates shall be
     determined, the basis upon which interest will be computed if other than
     that specified in Section 310, the date or dates from which such interest
     shall accrue, the Interest Payment Dates on which such interest shall be
     payable, the Regular Record Date for the interest payable on Registered
     Securities on any Interest Payment Date, and any right to extend or defer
     Interest Payment Dates and the duration of the extension.

          (6) the place or places where the principal of (and premium, if any)
     and interest, if any, on Securities of the series shall be payable;

          (7) whether Securities of such series may be redeemed, and if so, the
     period or periods within which, the price or prices at which and the terms
     and conditions upon which Securities of the series may be redeemed, in
     whole or in part, at the option of PEC;

                                      -16-
<Page>

          (8) the obligation or option, if any, of PEC to redeem, purchase, or
     repay Securities of the series pursuant to any sinking fund or analogous
     provisions or at the option of a Holder thereof and the period or periods
     within which, the price or prices at which and the terms and conditions
     upon which Securities of the series shall be redeemed or purchased, in
     whole or in part, pursuant to such obligation or option;

          (9) the right, if any, of PEC or a third party to redeem or purchase
     Securities of the series and the period or periods within which, the price
     or prices at which and the terms and conditions upon which Securities of
     the series shall be redeemed or purchased, in whole or in part, pursuant to
     such right;

          (10) whether Bearer Securities of the series are to be issuable;

          (11) if Bearer Securities of the series are to be issuable, whether
     interest in respect of any portion of a temporary Bearer Security in global
     form (representing all of the Outstanding Bearer Securities of the series)
     payable in respect of an Interest Payment Date prior to the exchange of
     such temporary Bearer Security for definitive Securities of the series
     shall be paid to any clearing organization with respect to the portion of
     such temporary Bearer Security held for its account and, in such event, the
     terms and conditions (including any certification requirements) upon which
     any such interest payment received by a clearing organization will be
     credited to the Persons entitled to interest payable on such Interest
     Payment Date;

          (12) the date as of which any Bearer Securities of the series, any
     temporary Bearer Security in global form and any Global Securities shall be
     dated if other than the date of original issuance of the first Security of
     the series to be issued;

          (13) the denominations in which Registered Securities of the series,
     if any, shall be issuable if other than denominations of $1,000 and any
     integral multiple thereof, and the denominations in which Bearer Securities
     of the series, if any, shall be issuable if other than the denomination of
     $5,000;

          (14) the currency or currencies, including composite currencies, in
     which payment of the principal of (and premium, if any) and interest, if
     any, on the Securities of the series shall be payable (if other than the
     currency of the United States of America);

          (15) if the amount of payments of principal of (and premium, if any)
     or interest on the Securities of the series may be determined with
     reference to an index, the manner in which such amounts shall be
     determined;

          (16) if other than the principal amount thereof, the portion of the
     principal amount of Securities of the series which shall be payable upon
     declaration of acceleration of the Maturity thereof pursuant to Section
     502;

                                      -17-
<Page>

          (17) any additional Events of Default or additional covenants of PEC
     pertaining to the Securities of the series;

          (18) whether and under what circumstances PEC will pay additional
     amounts on the Securities of the series held by a Person who is a United
     States Alien in respect of taxes or similar charges withheld or deducted
     and, if so, whether PEC will have the option to redeem such Securities
     rather than pay such additional amounts;

          (19) whether any Securities of the series are to be issuable in whole
     or in part in the form of one or more Global Securities and, if so, (a) the
     Depositary with respect to such Global Security or Securities and (b) the
     circumstances under which beneficial owners of interests in any such Global
     Security may exchange such interest for Securities of the same series and
     of like tenor and of any authorized form and denomination, and the
     circumstances under which any such exchange may occur, if other than as set
     forth in Section 305;

          (20) if any of such Securities are to be issued in global form and are
     to be issuable in definitive form (whether upon original issue or upon
     exchange of a temporary Security) only upon receipt of certain certificates
     or other documents or satisfaction of other conditions, then the form and
     terms of such certificates, documents, or conditions;

          (21) whether such Securities are convertible into other securities and
     the terms thereof;

          (22) whether Section 401 shall apply to such Securities; and

          (23) any other terms of the series (which terms shall not be
     inconsistent with the terms of this Indenture).

     All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental hereto.

     If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Corporate Secretary or an Assistant Corporate Secretary of PEC
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series. Such Board Resolution may
provide general terms or parameters for Securities of such series and may
provide that the specific terms of particular Securities of such series, and the
Persons authorized to determine such terms or parameters, may be determined in
accordance with or pursuant to the Order referred to in the third paragraph of
Section 303.

   SECTION 302. DENOMINATIONS. Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, the Registered Securities
of each series shall be issuable

                                      -18-
<Page>

in denominations of $1,000 or any integral multiple thereof and the Bearer
Securities of each series, if any, shall be issuable in the denomination of
$5,000.

   SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities
shall be executed on behalf of PEC by its Chairman of the Board, its President
or one of its Vice Presidents or its Treasurer, attested by its Corporate
Secretary or one of its Assistant Corporate Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile. Coupons shall bear
the facsimile signature of the Treasurer or any Assistant Treasurer of PEC.

     Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time relevant to the authorization thereof the
proper officers of PEC shall bind PEC, 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, PEC may deliver Securities of any series executed on behalf of PEC to
the Trustee for authentication by the Trustee together with an Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Order shall authenticate and deliver such Securities; PROVIDED, that
in connection with its original issuance, a Bearer Security may be delivered
only outside the United States and only if the Trustee shall have received from
the Person entitled to receive such Bearer Security a certificate in the form
required by Section 311; and PROVIDED FURTHER, that, with respect to Securities
of a series constituting a medium term note program, the Trustee shall
authenticate and deliver Securities of such series for original issue from time
to time in the aggregate principal amount established for such series pursuant
to such procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by an Order. The maturity dates, original issue
dates, interest rates and any other terms of the Securities of a subseries of
any medium term note program shall be determined by or pursuant to such Order
and procedures.

     In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Sections 315(a) through
315(d) of the Trust Indenture Act) shall be fully protected in relying upon:

          (a) the Board Resolution or indenture supplemental hereto establishing
     the form of the Securities of that series pursuant to Section 201 and the
     terms of the Securities of that series pursuant to Section 301 (or, in the
     case of a Board Resolution, pursuant to which such form and terms are
     established);

          (b) an Officer's Certificate pursuant to Sections 201 and 301 and
     complying with Section 102; and

          (c) an Opinion of Counsel complying with Section 102 stating,

                                      -19-
<Page>

          (i) that the forms of such Securities and coupons, if any, have been
     established by or pursuant to a Board Resolution or by an indenture
     supplemental hereto, as permitted by Section 201 and in conformity with the
     provisions of this Indenture;

          (ii) that the terms of such Securities have been established by or
     pursuant to a Board Resolution or by an indenture supplemental hereto, as
     permitted by Sections 201 and 301 and in conformity with the provisions of
     this Indenture;

          (iii) that such Securities, together with the coupons, if any,
     appertaining thereto, when authenticated and delivered by the Trustee and
     issued by PEC in the manner and subject to any customary conditions
     specified in such Opinion of Counsel, will constitute valid and legally
     binding obligations of PEC entitled to the benefits provided by the
     Indenture, enforceable in accordance with their respective terms, except to
     the extent that the enforcement of such obligations may be subject to
     bankruptcy laws or insolvency laws or other similar laws, general
     principles of equity and such other qualifications as such counsel shall
     conclude are customary or do not materially affect the rights of the
     Holders of such Securities;

          (iv) that all laws and requirements in respect of the execution and
     delivery of the Securities have been complied with; and

          (v) such other matters as the Trustee may reasonably request.

     With respect to Securities of a subseries of a medium term note program,
the Trustee may conclusively rely on the documents and opinion delivered
pursuant to Sections 201 and 301 and this Section 303, as applicable (unless
revoked by superseding comparable documents or opinions), with respect to the
establishment of the medium term note program as to the authorization of the
Board of Directors of any Securities delivered hereunder, the form thereof and
the legality, validity, binding effect and enforceability thereof.

     Notwithstanding the provisions of Section 301 and of the preceding two
paragraphs, if not all the Securities of any series are to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the documents otherwise required pursuant to
the preceding clauses (a), (b) or (c) prior to or at the time of issuance of
each Security, but such documents shall be delivered prior to or at the time of
issuance of the first Security of such series and shall pertain to all of the
Securities of such series. After any such first delivery, any separate Request
that the Trustee authenticate Securities of such series for original issue will
be deemed to be a certification by PEC that all conditions precedent provided
for in this Indenture relating to authentication and delivery of such Securities
continue to have been complied with.

                                      -20-
<Page>

     If such forms or terms have been so established by or pursuant to a Board
Resolution or by an indenture supplemental hereto as permitted by Sections 201
and 301, the Trustee shall have the right to decline to authenticate and deliver
any Securities of such series:

          (i) if the Trustee, being advised by counsel, determines that such
     action may not lawfully be taken;

          (ii) if the Trustee, being advised by its board of directors,
     executive committee or a committee of directors or Responsible Officers of
     the Trustee, in good faith determines that such action would expose the
     Trustee to personal liability to Holders of any Outstanding series of
     Securities; or

          (iii) if the issue of such Securities pursuant to this Indenture will
     affect the Trustee's own rights, duties and immunities under the Securities
     and this Indenture or otherwise in a manner which is not reasonably
     acceptable to the Trustee.

     If PEC shall establish pursuant to Section 301 that the Securities of a
series are to be issued in whole or in part in the form of one or more Global
Securities, then it shall execute and the Trustee shall, in accordance with this
Section and the Order with respect to such series, authenticate and deliver one
or more Global Securities in permanent form that (i) shall represent and shall
be denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by such Global Security
or Securities, (ii) shall be registered, if in registered form, in the name of
the Depositary for such Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction and (iv) shall bear a legend as
required by Section 204.

     Each Registered Security shall be dated the date of its authentication.
Each Global Security, each Bearer Security and any temporary Bearer Security in
global form shall be dated as of the date specified as contemplated by Section
301.

     No Security or related coupon 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 manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Except as permitted by Section 306 or 307, the
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured and paid or payment duly provided
for have been detached and canceled.

   SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, PEC may execute, and upon an Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or

                                      -21-
<Page>

more coupons or without coupons, 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
(but which do not affect the rights or duties of the Trustee). In the case of
Bearer Securities of any series, such temporary Securities may be in global
form, representing all of the Outstanding Bearer Securities of such series.

     Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities of
any series are issued, PEC will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of PEC in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any unmatured coupons appertaining thereto), PEC shall execute and the
Trustee shall authenticate and deliver in exchange therefor (at an office or
agency of PEC in the case of Bearer Securities) a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor; PROVIDED, that no definitive Bearer Security shall be delivered in
exchange for a temporary Registered Security; and PROVIDED FURTHER, that no
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security unless the Trustee shall have received from the Person entitled to
receive the definitive Bearer Security a certificate in the form required by
Section 311. Until so exchanged, the temporary Securities of any series,
including temporary Securities in global form, shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities of such
series.

   SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. PEC shall
cause to be kept at one of its offices or agencies designated pursuant to
Section 1002 a register (referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, PEC shall provide
for the registration of Registered Securities of each series and of transfers
and exchanges of Registered Securities of such series. Said office or agency is
hereby appointed the security registrar (referred to as the "Security
Registrar") for the purpose of registering Registered Securities of each series
and transfers and exchanges of Registered Securities of such series as herein
provided.

     Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency in a Place of Payment maintained for such
purpose for such series, PEC shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Registered Securities of the same series, Stated Maturity and original
issue date, of any authorized denominations and of like tenor and aggregate
principal amount.

     At the option of the Holder, Registered Securities of any series (except a
Global Security representing all or a portion of such series) may be exchanged
for Registered Securities of the same series, Stated Maturity and original issue
date, of any authorized denominations and of like tenor and aggregate principal
amount, upon surrender of the Securities to be exchanged at any such office or
agency.

                                      -22-
<Page>

     At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series, Stated Maturity and
original issue date, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, such exchange may be effected if the Bearer
Securities are accompanied by payment in funds acceptable to PEC and the Trustee
in an amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by PEC and the Trustee
if there be furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; PROVIDED, that except as
otherwise provided in Section 1002, interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside the United States. Notwithstanding the foregoing, in case
a Bearer Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be.

     Whenever any Securities are so surrendered for exchange, PEC 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 registration of transfer or exchange of
Securities shall be the valid obligations of PEC, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

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

     No service charge shall be made for any registration of transfer or
exchange of Securities, but PEC may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.

     PEC shall not be required (i) to issue, to register the transfer of or to
exchange Securities of any series during a period of 15 Business Days
immediately preceding the date notice is given identifying the serial numbers of
the Securities of that series called for redemption, or (ii) to

                                      -23-
<Page>

issue, to register the transfer of or to exchange any Registered Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series, PROVIDED, that such Registered Security
shall be immediately surrendered for redemption with written instruction for
payment consistent with the provisions of this Indenture.

     Notwithstanding the foregoing, except as otherwise specified as provided by
Section 301, any Global Security shall be exchangeable pursuant to this Section
305 or Sections 304, 306, 906 or 1107 for Securities registered in the name of,
and a transfer of a Global Security of any series may be registered to, any
Person other than the Depositary for such Global Security or its nominee only
if:

          (i) such Depositary notifies PEC 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, and a successor Depositary is not
     appointed by PEC within 90 days;

          (ii) PEC executes and delivers to the Trustee an Order that such
     Global Security shall be so exchangeable and the transfer thereof so
     registrable; or

          (iii) there shall have occurred and be continuing an Event of Default
     or an event which, with the giving of notice or lapse of time, would
     constitute an Event of Default with respect to the Securities of such
     series.

Upon the occurrence in respect of any Global Security of any series of any one
or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence or such other conditions as may be specified as contemplated
by Section 301 for such series, then without unnecessary delay, but in any event
not later than the earliest date on which such interests may be so exchanged,
PEC shall deliver to the Trustee definitive Securities of that series in
aggregate principal amount equal to the principal amount of such Global Security
executed by PEC.

     On or after the earliest date on which such interests may be so exchanged,
such Global Securities shall be surrendered from time to time by the Depositary
and in accordance with instructions given to the Trustee and the Depositary
(which instructions shall be in writing but need not be contained in or
accompanied by an Officers' Certificate or be accompanied by an Opinion of
Counsel), as shall be specified in the Order with respect thereto to the
Trustee, as PEC's agent for such purpose, to be exchanged, in whole or in part,
for definitive Securities of the same series without service charge. The Trustee
shall authenticate and make available for delivery, in exchange for each portion
of such surrendered Global Security, a like aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such Global Security to be exchanged which (unless the
Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, in which case the definitive Securities exchanged for the
Global Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 301) shall be in the

                                      -24-
<Page>

form of Bearer Securities or Registered Securities, or any combination thereof,
as shall be specified by the beneficial owner thereof; PROVIDED, that no such
exchanges may occur during a period beginning at the opening of business 15
Business Days before any selection of Securities of that series to be redeemed
and ending on the relevant Redemption Date; and PROVIDED FURTHER, that (unless
otherwise specified as contemplated by Section 301) no Bearer Security delivered
in exchange for a portion of a Global Security shall be mailed or otherwise
delivered to any location in the United States.

     Promptly following any such exchange in part, such Global Security shall be
returned by the Trustee to the Depositary in accordance with the instructions
referred to above. If a Registered Security is issued in exchange for any
portion of a Global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date for such Security and
before the opening of business at such office or agency on the next Interest
Payment Date, or (ii) any Special Record Date for such Security and before the
opening of business at such office or agency on the related proposed date for
payment of interest or Defaulted Interest, as the case may be, interest shall
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Registered Security, but shall be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such Global
Security is payable in accordance with the provisions of this Indenture.

   SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee, PEC shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series, Stated
Maturity and original issue date, and of like tenor and principal amount and
bearing a number not contemporaneously outstanding, with coupons corresponding
to the coupons, if any, appertaining to the surrendered Security.

     If there shall be delivered to PEC and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security or coupon and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to PEC
or the Trustee that such Security or coupon has been acquired by a bona fide
purchaser, PEC shall execute and upon its Request the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security or in
exchange for the Security to which a destroyed, lost or stolen coupon appertains
(with all appurtenant coupons not destroyed, lost or stolen), a new Security of
the same series, Stated Maturity and original issue date, and of like tenor and
principal amount and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost or
stolen coupon appertains.

     In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, PEC in its discretion may,
instead of issuing a new Security, pay such Security or coupon; PROVIDED, that
payment of principal of (and premium, if any) and any interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States; and PROVIDED FURTHER,
that with

                                      -25-
<Page>

respect to any such coupons, interest represented thereby (but not any
additional amounts payable as PROVIDED in Section 1004), shall be payable only
upon presentation and surrender of the coupons appertaining thereto.

     Upon the issuance of any new Security under this Section, PEC 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 of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any mutilated, destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
PEC, whether or not the mutilated, destroyed, lost or stolen Security and its
coupons, if any, or the mutilated, destroyed, lost or stolen coupon shall be at
any time enforceable by anyone, and any such new Security and coupons, if any,
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, 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 or coupons.

   SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Registered 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. Interest, if any, is paid on Bearer Securities to Holders of
coupons. In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.

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

          (1) PEC may elect to make payment of any Defaulted Interest to the
     Persons in whose names the Registered Securities of such series (or their
     respective Predecessor

                                      -26-
<Page>

     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. PEC shall notify the Trustee in writing of the amount
     of Defaulted Interest proposed to be paid on each Registered Security of
     such series and the date of the proposed payment, and at the same time PEC
     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
     provided in this clause. 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 PEC of
     such Special Record Date and, in the name and at the expense of PEC, 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 of Registered Securities of such series at the address of such
     Holder as it appears in the Security Register, not less than 10 days prior
     to such Special Record Date. The Trustee may, in its discretion, in the
     name and at the expense of PEC, cause a similar notice to be published at
     least once in an Authorized Newspaper in each Place of Payment, but such
     publication shall not be a condition precedent to the establishment of such
     Special Record Date. Notice of the proposed payment of such Defaulted
     Interest and the Special Record Date therefor having been so mailed, such
     Defaulted Interest shall be paid to the Persons in whose names the
     Registered Securities of such series (or their respective Predecessor
     Securities) are registered at the close of business on such Special Record
     Date and shall no longer be payable pursuant to the following clause (2).
     In case a Bearer Security of any series is surrendered at the office or
     agency in a Place of Payment for such series in exchange for a Registered
     Security of such series after the close of business at such office or
     agency on any Special Record Date and before the opening of business at
     such office or agency on the related proposed date for payment of Defaulted
     Interest, such Bearer Security shall be surrendered without the coupon
     relating to such proposed date of payment and Defaulted Interest will not
     be payable on such proposed date of payment in respect of the Registered
     Security issued in exchange for such Bearer Security, but will be payable
     only to the Holder of such coupon when due in accordance with the
     provisions of this Indenture.

          (2) PEC may make payment of any Defaulted Interest on the Securities
     of any series in any other lawful manner not inconsistent with the
     requirements of any securities exchange on which such Securities may be
     listed, and upon such notice as may be required by such exchange, if, after
     notice given by PEC to the Trustee of the proposed payment pursuant to this
     clause, such manner of payment shall be deemed practicable by the Trustee.

     Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall

                                      -27-
<Page>

carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.

   SECTION 308. PERSONS DEEMED OWNERS. Prior to due presentment of a Registered
Security for registration of transfer, PEC, the Trustee and any agent of PEC or
the Trustee may deem and treat the Person in whose name such Registered Security
is registered as the absolute owner of such Registered Security for the purpose
of receiving payment of principal of (and premium, if any) and (subject to
Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither PEC, the Trustee nor any
agent of PEC or the Trustee shall be affected by any notice to the contrary.

     PEC, the Trustee and any agent of PEC or the Trustee may treat the bearer
of any Bearer Security and the bearer of any coupon as the absolute owner of
such Security or coupon for the purpose of receiving payment thereof or on
account thereof and for all other purposes whatsoever, whether or not such
Security or coupon be overdue, and neither PEC, the Trustee nor any agent of PEC
or the Trustee shall be affected by notice to the contrary.

     No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary (or its nominee) shall have any rights under this
Indenture with respect to such Global Security or any Security represented
thereby, and such Depositary may be treated by PEC, the Trustee, and any agent
of PEC or the Trustee as the owner of such Global Security or any Security
represented thereby for all purposes whatsoever. None of PEC, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

   SECTION 309. CANCELLATION. All Securities and coupons surrendered for
payment, redemption, registration of transfer or exchange or for credit against
any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by the
Trustee. PEC may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which PEC 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 and
coupons held by the Trustee shall be destroyed and certification of their
destruction delivered to PEC, unless an Order shall direct that canceled
Securities be returned to PEC.

     The repayment of any principal amount of Securities pursuant to such option
of the Holder to require repayment of Securities before their Stated Maturity,
for purposes of this Section 309, shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
PEC, at its option, shall deliver or surrender the same to the Trustee with an
Order that such Securities be canceled.

                                      -28-
<Page>

   SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 301(4) for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.

   SECTION 311. FORM OF CERTIFICATION BY A PERSON ENTITLED TO RECEIVE A BEARER
SECURITY. Whenever any provision of this Indenture or the form of Security
contemplates that certification be given by a Person entitled to receive a
Bearer Security, such certification shall be provided substantially in the form
of the following certificate, with only such changes as shall be approved by PEC
and of which PEC shall have given written notice to the Trustee:

                                      -29-
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                       [FORM OF CERTIFICATE TO BE GIVEN BY
                   PERSON ENTITLED TO RECEIVE BEARER SECURITY]

                                   Certificate

                               [Name of Security]

     This is to certify that the above-captioned Security is not being acquired
by or on behalf of a United States person, or for offer to resell or for resale
to a United States person, or, if a beneficial interest in the Security is being
acquired by a United States person, that such person is a financial institution
or is acquiring through a financial institution and that the Security is held by
a financial institution that has agreed in writing to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder and that such person or
financial institution is not purchasing for offer to resell or for resale within
the United States. If this certificate is being provided by a clearing
organization, it is based on statements provided to it by its member
organizations. As used herein, "UNITED STATES" means the United States of
America (including the States and the District of Columbia), its territories and
possessions and other areas subject to its jurisdiction, and "UNITED STATES
PERSON" means any citizen or resident of the United States, any corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source. If the undersigned is a dealer, the undersigned agrees to obtain
a similar certificate from each person entitled to delivery of any of the
above-captioned Securities in bearer form purchased from it; PROVIDED, that if
the undersigned has actual knowledge that the information contained in such a
certificate is false, the undersigned will not deliver a Security in temporary
or definitive bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the undersigned.

     We undertake to advise you by telecopy if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.

     We understand that this certificate is required in connection with certain
tax legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.

Dated:  __________, 20__                ________________________________________

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   SECTION 312. CUSIP, ISIN AND COMMON CODE NUMBERS. PEC, in issuing the
Securities, may use "CUSIP", "ISIN" or "Common Code" numbers (if then generally
in use) and, if so, the Trustee shall use "CUSIP", "ISIN" or "Common Code"
numbers in notices of redemption as a convenience to Holders; PROVIDED, however,
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 FOUR

                           SATISFACTION AND DISCHARGE

   SECTION 401.SATISFACTION AND DISCHARGE OF SECURITIES. Unless otherwise
specified in an Officers' Certificate or indenture supplemental hereto provided
pursuant to Section 301, any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for all purposes of
this Indenture, and the entire indebtedness of PEC in respect thereof shall be
satisfied and discharged, if there shall have been irrevocably deposited with
the Trustee or any Paying Agent (other than PEC), in trust:

     (a) money in an amount which shall be sufficient, or

     (b) in the case of a deposit made prior to the Maturity of such Securities
or portions thereof, Eligible Obligations, which shall not contain provisions
permitting the redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which when due, without any
regard to reinvestment thereof, will provide moneys which, together with the
money, if any, deposited with or held by the Trustee or such Paying Agent, shall
be sufficient, or

     (c) a combination of (a) or (b) which shall be sufficient,

to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof; PROVIDED, however,
that in the case of the provision for payment or redemption of less than all the
Securities of any series, such Securities or portions thereof shall have been
selected by the Trustee as provided herein and, in the case of a redemption, the
notice requisite to the validity of such redemption shall have been given or
irrevocable authority shall have been given by PEC to the Trustee to give such
notice, under arrangements satisfactory to the Trustee; and PROVIDED, further,
that PEC shall have delivered to the Trustee and such Paying Agent:

          (x) if such deposit shall have been made prior to the Maturity of such
     Securities, an Order stating that the money and Eligible Obligations
     deposited in accordance with this Section shall be held in trust, as
     provided in Section 1003;

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          (y) if Eligible Obligations shall have been deposited, an Opinion of
     Counsel to the effect that such obligations constitute Eligible Obligations
     and do not contain provisions permitting the redemption or other prepayment
     thereof at the option of the issuer thereof, and an opinion of an
     independent public accountant of nationally recognized standing, selected
     by PEC, to the effect that the other requirements set forth in clause (b)
     and (c) above have been satisfied; and

          (z) if such deposit shall have been made prior to the Maturity of such
     Securities, an Officers' Certificate stating PEC's intention that, upon
     delivery of such Officers' Certificate, its indebtedness in respect of such
     Securities or portions thereof will have been satisfied and discharged as
     contemplated in this Section.

     Upon the deposit of money or Eligible Obligations, or both, in accordance
with this Section, together with the documents required by clauses (x), (y) and
(z) above, the Trustee shall, upon a Request, acknowledge in writing that such
Securities or portions thereof are deemed to have been paid for all purposes of
this Indenture, that the entire indebtedness of PEC in respect thereof has been
satisfied and discharged as contemplated in this Section and that such
Securities are no longer deemed to be Outstanding under this Indenture. In the
event that all of the conditions set forth in the preceding paragraph shall have
been satisfied in respect of any Securities or portions thereof except that, for
any reason, the Officers' Certificate specified in clause (z) (if otherwise
required) shall not have been delivered, such Securities or portions thereof
shall nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof shall
nevertheless be no longer entitled to the benefits provided by this Indenture or
of any of the covenants of PEC under Article Ten (except the covenants contained
in Sections 1002 and 1003) or any other covenants made in respect of such
Securities or portions thereof as contemplated by Section 301 or Section 901(2),
but the indebtedness of PEC in respect of such Securities or portions thereof
shall not be deemed to have been satisfied and discharged prior to Maturity for
any other purpose; and, upon a Request, the Trustee shall acknowledge in writing
that such Securities or portions thereof are deemed to have been paid for all
purposes of this Indenture.

     If payment at Stated Maturity of less than all of the Securities of any
series is to be provided for in the manner and with the effect provided in this
Section, the Trustee shall select such Securities, or portions of principal
amount thereof, in the manner specified by Section 1103 for selection for
redemption of less than all the Securities of a series.

     In the event that the Securities which shall be deemed to have been paid
for purposes of this Indenture and, if such is the case, in respect of which
PEC's indebtedness shall have been satisfied and discharged and which are no
longer deemed to be Outstanding under this Indenture, all as provided in this
Section, do not mature and are not to be redeemed within the sixty (60) day
period commencing with the date of the deposit of moneys or Eligible
Obligations, as aforesaid, PEC shall, as promptly as practicable, give a notice,
in the same manner as a notice of redemption with respect to such Securities, to
the Holders of such Securities to the effect that such deposit has been made and
the effect thereof.

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     Notwithstanding that any Securities shall be deemed to have been paid and
no longer Outstanding for purposes of this Indenture, as aforesaid, the
obligations of PEC and the Trustee in respect of such Securities under Sections
304, 305, 306, 607, 614, 1002, 1003 and 1104 and this Article shall survive.

     PEC shall pay, and shall indemnify the Trustee or any Paying Agent with
which Eligible Obligations shall have been deposited as provided in this Section
against, any tax, fee or other charge imposed on or assessed against such
Eligible Obligations or the principal or interest received in respect of such
Eligible Obligations, including, but not limited to, any such tax payable by any
entity deemed, for tax purposes, to have been created as a result of such
deposit.

     Anything herein to the contrary notwithstanding, (a) if, at any time after
a Security would be deemed to have been paid for purposes of this Indenture,
and, if such is the case, PEC's indebtedness in respect thereof would be deemed
to have been satisfied and discharged and which are no longer deemed to be
Outstanding under this Indenture, pursuant to this Section (without regard to
the provisions of this paragraph), the Trustee or any Paying Agent, as the case
may be, (i) shall be required to return the money or Eligible Obligations, or
combination thereof, deposited with it as aforesaid to PEC or its representative
under any applicable Federal or State bankruptcy, insolvency or other similar
law, or (ii) are unable to apply any money in accordance with this Article with
respect to any Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, such Security shall thereupon be deemed retroactively not to have
been paid and any satisfaction and discharge of PEC's indebtedness in respect
thereof shall retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any satisfaction and
discharge of PEC's indebtedness in respect of any Security shall be subject to
the provisions of the last paragraph of Section 1003.

   SECTION 402.SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall
upon a Request cease to be of further effect (except as hereinafter expressly
provided), and the Trustee, at the expense of PEC, shall execute such
instruments as PEC shall reasonably request to evidence and acknowledge the
satisfaction and discharge of this Indenture, when:

     (a) no Securities remain Outstanding hereunder; and

     (b) PEC has paid or caused to be paid all other sums payable hereunder by
         PEC;

PROVIDED, however, that if, in accordance with the last paragraph of Section
401, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and PEC shall
execute and deliver such instruments as the Trustee shall reasonably request to
evidence and acknowledge the same.

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     Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of PEC and the Trustee under Sections 304, 305, 306,
607, 614, 1002, 1003 and 1104 and this Article shall survive.

     Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall turn over to PEC any and all money, securities and
other property then held by the Trustee for the benefit of the Holders of the
Securities (other than money and Eligible Obligations held by the Trustee
pursuant to Section 403) and shall execute and deliver to PEC such instruments
as, in the judgment of PEC, shall be necessary, desirable or appropriate to
effect or evidence the satisfaction and discharge of this Indenture.

   SECTION 403. APPLICATION OF TRUST MONEY.

     Neither the Eligible Obligations nor the money deposited pursuant to
Section 401, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of and premium, if any, and
interest, if any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 1003; PROVIDED, however, that any cash received from such principal
or interest payments on such Eligible Obligations, if not then needed for such
purpose, shall, to the extent practicable and upon a Request and delivery to the
Trustee of the documents referred to in clause (y) in the first paragraph of
Section 401, be invested in Eligible Obligations of the type described in clause
(b) in the first paragraph of Section 401 maturing at such times and in such
amounts as shall be sufficient, together with any other moneys and the proceeds
of any other Eligible Obligations then held by the Trustee, to pay when due the
principal of and premium, if any, and interest, if any, due and to become due on
such Securities or portions thereof on and prior to the Maturity thereof, and
interest earned from such reinvestment shall be paid over to PEC as received,
free and clear of any trust, lien or pledge under this Indenture (except the
lien provided by Section 607); and PROVIDED FURTHER, that any moneys held in
accordance with this Section on the Maturity of all such Securities in excess of
the amount required to pay the principal of and premium, if any, and interest,
if any, then due on such Securities shall be paid over to PEC free and clear of
any trust, lien or pledge under this Indenture (except the lien provided by
Section 607); and PROVIDED FURTHER, that if an Event of Default shall have
occurred and be continuing, moneys to be paid over to PEC pursuant to this
Section shall be held until such Event of Default shall have been waived or
cured.

   SECTION 404. REINSTATEMENT.

     If the Trustee is unable to apply any money or Eligible Obligations in
accordance with Section 401 or 402, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
PEC's obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 401 or 402, as
the case may be, until such time as the Trustee is permitted to apply all such
money or Eligible Obligations in accordance with Section 401 or 402, as the case
may be; PROVIDED that, if PEC has

                                      -34-
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made payment of principal of, or interest on, any Securities because of the
reinstatement of its obligations, PEC shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money or Eligible
Obligations held by the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

   SECTION 501. EVENTS OF DEFAULT. "Event of Default," wherever used herein with
respect to Securities of any series, 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) PEC defaults in the payment of any interest (including any
     additional amounts due under Section 1004 as specified therein) upon any
     Security of that series when it becomes due and payable and continuance of
     such default for a period of 60 days; or

          (2) PEC defaults in the payment of the principal (including any
     additional amounts due under Section 1004 as specified therein) of (or
     premium, if any, on) any Security of that series at its Maturity or in the
     deposit of any sinking fund payment when and as due by the terms of a
     Security of that series and in any such case, continuance of such default
     for a period of three Business Days thereafter; or

          (3) PEC defaults in the performance of or breaches any covenant or
     warranty of PEC in this Indenture (other than a covenant or warranty a
     default in whose performance or whose breach is elsewhere in this Section
     specifically dealt with or which has expressly been included in or pursuant
     to this Indenture solely for the benefit of one or more series of
     Securities other than that series), and continuance of such default or
     breach for a period of 90 days after there has been given, by registered or
     certified mail, to PEC by the Trustee, or to PEC and the Trustee by the
     Holders of at least 33% in principal amount of the Outstanding Securities
     of that series, a written notice specifying such default or breach and
     requiring it to be remedied and stating that such notice is a "Notice of
     Default" hereunder; or

          (4) the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of PEC in an involuntary case or
     proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or (B) a decree or order adjudging PEC
     as bankrupt or insolvent, or approving as properly filed a petition by one
     or more Persons other than PEC, or any of its Affiliates, seeking
     reorganization, arrangement, adjustment or composition of or in respect of
     PEC under any applicable Federal or State law, or appointing a custodian,
     receiver, liquidator, assignee, trustee, sequestrator or other similar
     official for PEC, or for any substantial part of the property of PEC, or
     ordering the liquidation or winding up of the affairs of PEC,

                                      -35-
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     and the continuance of any such decree or order for relief or any such
     other decree or order unstayed and in effect for a period of 90 consecutive
     days; or

          (5) the commencement by PEC of a case or proceeding under any
     applicable Federal or State bankruptcy, insolvency, reorganization or other
     similar law or of any other case or proceeding to be adjudicated a bankrupt
     or insolvent, or the consent by it to the entry of a decree or order for
     relief in respect of it in a case or proceeding under any applicable
     Federal or State bankruptcy, insolvency, reorganization or other similar
     law or to the commencement of any bankruptcy or insolvency case or
     proceeding against it, or the filing by it of a petition or answer or
     consent seeking reorganization or relief under any applicable Federal or
     State law, or the consent by it to the filing of such petition or to the
     appointment of or taking possession by a custodian, receiver, liquidator,
     assignee, trustee, sequestrator or similar official in respect of it or any
     substantial part of its property, or the making by it of an assignment for
     the benefit of creditors, or its admission in writing of its inability to
     pay its debts generally as they become due, or its taking of corporate
     action in furtherance of any such action; or

          (6) any other Event of Default provided with respect to Securities of
     that series.

   SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event
of Default with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 33% in principal amount of the Outstanding Securities of that
series may declare the principal amount (or, if the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all of the Securities of that
series to be due and payable immediately, by a notice in writing to PEC (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.

     At any time after such a declaration of acceleration with respect to
Securities of any series 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, such declaration and its consequences shall be rescinded and
annulled if:

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

               (A) all overdue interest on all Securities of that series;

               (B) the principal of (and premium, if any, on) any Securities of
          that series which have become due otherwise than by such declaration
          of acceleration and interest thereon at the rate or rates prescribed
          therefor in such Securities;

               (C) to the extent that payment of such interest is lawful,
          interest upon overdue interest at the rate or rates prescribed
          therefor in such Securities; and

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               (D) 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 any other amounts due to the
          Trustee under Section 607;

     and

          (2) all Events of Default with respect to Securities of that series,
     other than the non-payment of the principal of Securities of that series
     which have become due solely by such declaration of acceleration, have been
     cured or waived as provided in Section 513.

     No such rescission and annulment shall affect any subsequent default or
impair any right consequent thereon.

   SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
PEC covenants that if:

          (1) default is made in the payment of any interest on any Security
     when such interest becomes due and payable and such default continues for a
     period of 60 days, or

          (2) default is made in the payment of the principal of (or premium, if
     any, on) any Security at the Maturity thereof and such default continues
     for a period of three Business Days,

PEC will, upon demand of the Trustee, pay to it, for the benefit of the Holders
of such Securities and coupons, the whole amount then due and payable on such
Securities and coupons for principal (and premium, if any) and interest, with
interest on any overdue principal (and premium, if any) and on any overdue
interest, to the extent that payment of such interest shall be legally
enforceable, at the rate or rates prescribed therefor in such Securities, 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, and
any other amounts due to the Trustee under Section 607.

     If PEC 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, may prosecute such
proceeding to judgment or final decree, and may enforce the same against PEC or
any other obligor upon such Securities and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of PEC
or any other obligor upon such Securities, wherever situated.

     If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights,

                                      -37-
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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 504. 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 PEC or any
other obligor upon the Securities or the property of PEC or of such other
obligor or their creditors, 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 PEC or any other obligor for the payment of overdue principal or
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 owing and unpaid in respect of the Securities
     and to file such other papers or documents as may be necessary or advisable
     in order to have the claims of the Trustee (including any claim for the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel, and any other amounts due to the Trustee
     under Section 607) and of the Holders of Securities and coupons allowed in
     such judicial proceeding; and

          (ii) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.

   SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS. All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons 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, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.

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   SECTION 506. APPLICATION OF MONEY COLLECTED. Any money collected 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 on account of principal (or premium, if any) or interest, upon
presentation of the Securities or coupons, or both, as the case may be, 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 under Section
     607; and

          SECOND: To the payment of the amounts then due and unpaid for
     principal of (and premium, if any) and interest on the Securities and
     coupons 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 and coupons for principal
     (and premium, if any) and interest, respectively; and

          THIRD: To PEC.

   SECTION 507. LIMITATION ON SUITS. No Holder of any Security of any series or
any related coupons shall have any right to institute any proceeding, judicial
or otherwise with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:

          (1) such Holder has previously given written notice to the Trustee of
     a continuing Event of Default with respect to the Securities of that
     series;

          (2) the Holders of not less than a majority in principal amount of the
     Outstanding Securities of that series 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 of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.

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   SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST. Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security or payment of such coupon on
the Stated Maturity or Maturities expressed in such Security or coupon (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

   SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder
of a Security or coupon 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, subject to any determination in such
proceeding, PEC, the Trustee and the Holders of Securities and coupons shall 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 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities or coupons 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 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Security or coupon 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 of Securities or coupons may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders of Securities
or coupons, as the case may be.

   SECTION 512. CONTROL BY HOLDERS OF SECURITIES. The Holders of a majority in
principal amount of the Outstanding Securities of any series 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, with respect to the Securities of such series; PROVIDED, that:

          (1) such direction shall not be in conflict with any rule of law or
     with this Indenture, expose the Trustee to personal liability or be unduly
     prejudicial to Holders not joined therein; and

                                      -40-
<Page>

          (2) the Trustee may take any other action deemed proper by the Trustee
     which is not inconsistent with such direction.

   SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of not less than a majority
in principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series and any related coupons waive
any past default hereunder with respect to such series and its consequences,
except a default:

          (1) in the payment of the principal of (or premium, if any) or
     interest on any Security of such series; 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 of such series 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 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and
each Holder of any Security or coupon 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, suffered 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 of any series, or to any suit instituted by any Holder of
any Security or coupon for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Security or the payment of any coupon on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).

                                   ARTICLE SIX

                                   THE TRUSTEE

   SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.

     (a) Except during the continuance of an Event of Default with respect to
Securities of any series:

          (1) the Trustee undertakes to perform, with respect to Securities of
     such series, such duties and only such duties as are specifically set forth
     in this Indenture, and

                                      -41-
<Page>

     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, with
     respect to Securities of such series, 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 provision 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 with respect to Securities of any series
has occurred and is continuing, the Trustee shall exercise, with respect to
Securities of such series, 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 man 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 of any series 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 with respect to the Securities of such series; 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 it shall have 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.

                                      -42-
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   SECTION 602. NOTICE OF DEFAULTS. Within 90 days after the occurrence of any
default hereunder with respect to the Securities of any series, the Trustee
shall transmit, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, notice of all such defaults hereunder known to the
Trustee, unless such default shall have been cured or waived; PROVIDED, that
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
PROVIDED FURTHER, that in the case of any default of the character specified in
Section 501(3) with respect to Securities of such series, no such notice to
Holders shall be given until at least 75 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 with
respect to Securities of such series.

   SECTION 603. CERTAIN RIGHTS OF TRUSTEE. Subject to Sections 315(a) through
315(d) of the Trust Indenture Act:

          (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, note, coupon, other evidence of indebtedness 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 PEC mentioned herein shall be
     sufficiently evidenced by a Request or Order and any resolution of the
     Board of Directors shall 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 of Securities of any series 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;

                                      -43-
<Page>

          (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, note, coupon, other evidence of indebtedness or other
     paper or document, but the Trustee, in its discretion, may make such
     further inquiry or investigation into such facts or matters as it may see
     fit, and, if the Trustee shall determine to make such further inquiry or
     investigation, it shall be entitled to examine the books, records and
     premises of PEC personally or by agent or attorney;

          (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; and

          (h) except as otherwise provided in Section 501(5), the Trustee shall
     not be charged with knowledge of any Event of Default with respect to the
     Securities of any series for which it is acting as Trustee unless either
     (1) a Responsible Officer of the Trustee assigned to Global Corporate Trust
     Services (or any successor division or department of the Trustee) shall
     have actual knowledge of the Event of Default or (2) written notice of such
     Event of Default shall have been given to the Trustee by PEC, any other
     obligor on such Securities or by any Holder of such Securities.

   SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) and in any coupons shall be taken as the
statements of PEC, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities or coupons,
except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to PEC are true and accurate, subject to the
qualifications set forth therein. The Trustee or any Authenticating Agent shall
not be accountable for the use or application by PEC of Securities or the
proceeds thereof.

   SECTION 605. MAY HOLD SECURITIES. The Trustee, any Authenticating Agent, any
Paying Agent, any Security Registrar or any other agent of PEC, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with PEC or an Affiliate of either with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

   SECTION 606. 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 PEC.

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<Page>

   SECTION 607. COMPENSATION AND REIMBURSEMENT. PEC agrees:

          (1) to pay to the Trustee and each Authenticating Agent from time to
     time reasonable compensation for all services rendered by it hereunder
     (which compensation shall not be limited by any provision of law in regard
     to the compensation of a trustee of an express trust);

          (2) except as otherwise expressly provided herein, 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 and any Authenticating Agent),
     except any such expense, disbursement or advance as may be attributable to
     its negligence, willful misconduct or bad faith; and

          (3) to indemnify the Trustee for, and to hold it harmless against, any
     loss, liability or expense incurred without negligence, willful misconduct
     or bad faith on its part, arising out of or in connection with the
     acceptance or administration of the trust or trusts hereunder, including
     the reasonable 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.

     As security for the performance of the obligations of PEC under this
Section, the Trustee shall have a lien prior to the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the payment of principal of, premium, if any, or interest, if any, on
particular Securities.

   SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS. If at any time the
Trustee shall fail to comply with the obligations imposed upon it by the
provisions of Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by PEC or by any Holder
of a Security of such series who has been a bona fide Holder of a Security of
such series for at least six months then, (i) PEC, by or pursuant to a Board
Resolution, may remove the Trustee with respect to all Securities or the
Securities of such series, or (ii) subject to Section 315(e) of the Trust
Indenture Act, any Holder who has been a bona fide Holder of a Security of such
series 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 with respect to all Securities of such series and the appointment
of a successor Trustee or Trustees. The Trustee shall comply with the terms of
Section 310(b) of the Trust Indenture Act.

   SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee hereunder that is a Person organized and doing business under
the laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers, or any
other Person permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the Trust
Indenture Act) of at least $50,000,000, is subject to supervision or examination
by Federal, State or District of Columbia authority and is not otherwise
ineligible under Section 310(a)(5) of the Trust Indenture Act. If such Person
publishes reports of condition at least annually, pursuant to law or to the

                                      -45-
<Page>

requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time 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.

   SECTION 610. 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 in accordance with the
applicable requirements of Section 611.

     (b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to PEC. If the instrument of
acceptance by a successor Trustee required by Section 611 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 with respect to the
Securities of such series.

     (c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and PEC.

     (d) Except during the continuance of an Event of Default, the Trustee may
be removed at any time by PEC by Board Resolution with no less than thirty days
notice to the Trustee.

     (e) If at any time:

          (1) the Trustee shall fail to comply with Section 608 after written
     request therefor by PEC or by any Holder of a Security 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 609 and shall
     fail to resign after written request therefor by PEC 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) PEC by Board Resolution of each may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder of a Security who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all other
similarly situated Holders, petition any court of competent jurisdiction for

                                      -46-
<Page>

the removal of the Trustee with respect to all Securities and the appointment of
a successor Trustee or Trustees.

     (f) 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, with respect
to the Securities of one or more series, PEC, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to PEC and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by PEC. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by PEC or the Holders of
Securities and accepted appointment in the manner required by Section 611, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

     (g) PEC shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issuable as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

   SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to PEC and to the retiring Trustee an instrument accepting such appointment.
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 PEC or on the request of 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; PROVIDED, that such property and money shall
continue to be subject to any lien in favor of the retiring Trustee provided for
in Section 607.

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     (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, PEC, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each 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 with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
PEC or on the request of any successor Trustee, such retiring Trustee 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 607, with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

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

     (d) 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 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, if such Person 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

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<Page>

deliver  the  Securities  so  authenticated  with  the  same  effect  as if such
successor Trustee had itself authenticated such Securities.

   SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and when
the Trustee shall be or become a creditor of PEC (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions of Section 311 and
any other provision of the Trust Indenture Act regarding the collection of
claims against PEC.

   SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT. At any time when any of the
Securities remain Outstanding, the Trustee may appoint an Authenticating Agent
or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to PEC and shall at all times be a Corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the Trust Indenture Act) of not less than $50,000,000 and
subject to supervision or examination by Federal, State or District of Columbia
authority. If such Corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes 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
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.

     Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, if such Corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to PEC. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to PEC. Upon receiving such a notice of resignation or
upon such termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,

                                      -49-
<Page>

the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to PEC and shall (i) mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Registered Securities, if
any, of the series with respect to which such Authenticating Agent will serve,
as their names and addresses appear in the Security Register, and (ii) if
Securities of the series are issuable as Bearer Securities, publish notice of
such appointment at least once in an Authorized Newspaper in the place where
such successor Authenticating Agent has its principal office if such office is
located outside the United States. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

     The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.

     If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:

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

                                                [Bank One Trust Company National
                                                   Association,] as Trustee

                                                 By
                                                    ----------------------------
                                                 As Authenticating Agent

                                                 By
                                                    ----------------------------
                                                 Authorized Signatory

                                      -50-
<Page>

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

   SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. In
accordance with Section 312(a) of the Trust Indenture Act, PEC will furnish or
cause to be furnished to the Trustee:

          (a) semi-annually, not later than June 1 and December 1, in each year,
     a list, in such form as the Trustee may reasonably require, containing all
     the information in the possession or control of PEC, or any of its Paying
     Agents other than the Trustee, as to the names and addresses of the Holders
     of Securities as of the preceding May 15 or November 15, as the case may
     be, and

          (b) at such other times as the Trustee may request in writing, within
     30 days after the receipt by PEC 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;

PROVIDED, that no such list need be furnished if the Trustee shall be the
Security Registrar.

   SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. (a) The
Trustee shall comply with the obligations imposed upon it pursuant to Section
312 of the Trust Indenture Act.

     (b) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with PEC and the Trustee that neither PEC nor the Trustee nor any
agent of any of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders of Securities
in accordance with Section 312 of 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 of the Trust Indenture Act.

   SECTION 703. REPORTS BY TRUSTEE. (a) Within 60 days after May 15 of each year
commencing with the first May 15 following the first issuance of Securities
pursuant to Section 301, if required by Section 313(a) of the Trust Indenture
Act, the Trustee shall transmit, pursuant to Section 313(c) of the Trust
Indenture Act, a brief report dated as of such May 15 with respect to any of the
events specified in said Section 313(a) which may have occurred since the later
of the immediately preceding May 15 and the date of this Indenture.

     (b) The Trustee shall transmit the reports required by Section 313(b) of
the Trust Indenture Act at the times specified therein.

     (c) Reports pursuant to this Section shall be transmitted in the manner and
to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.

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   SECTION 704. REPORTS BY PEC. PEC, pursuant to Section 314(a) of the Trust
Indenture Act, shall:

          (1) file with the Trustee, within 15 days after PEC is required to
     file the same with the Commission, copies of the annual reports and of the
     information, documents and other reports (or copies of such portions of any
     of the foregoing as the Commission may from time to time by rules and
     regulations prescribe) which PEC may be required to file with the
     Commission pursuant to Section 13 or Section 15(d) of the Securities
     Exchange Act of 1934, as amended; or, if PEC is not required to file
     information, documents or reports pursuant to either of said sections, then
     it shall file with the Trustee and the Commission, in accordance with rules
     and regulations prescribed from time to time by the Commission, such of the
     supplementary and periodic information, documents and reports which may be
     required pursuant to Section 13 of the Securities Exchange Act of 1934, as
     amended, in respect of a security listed and registered on a national
     securities exchange as may be prescribed from time to time in such rules
     and regulations;

          (2) file with the Trustee and the Commission, in accordance with rules
     and regulations prescribed from time to time by the Commission, such
     additional information, documents and reports with respect to compliance by
     PEC with the conditions and covenants of this Indenture as may be required
     from time to time by such rules and regulations; and

          (3) transmit, within 30 days after the filing thereof with the
     Trustee, to the Holders of Securities, in the manner and to the extent
     provided in Section 313(c) of the Trust Indenture Act, such summaries of
     any information, documents and reports required to be filed by PEC pursuant
     to paragraphs (1) and (2) of this Section as may be required by rules and
     regulations prescribed from time to time by the Commission.

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

   SECTION 801. PEC MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. PEC 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) (A) PEC is the surviving or resulting entity, or (B) the Person
     formed by any such consolidation or into which it is merged or the Person
     which acquires by conveyance or transfer, or which leases, its properties
     and assets substantially as an entirety shall be organized and existing
     under the laws of the United States of America, any State thereof or the
     District of Columbia and shall expressly assume the due and punctual
     payment of the principal of (and premium, if any) and interest on all the
     Securities and the performance of every covenant of this Indenture to be
     performed or observed on the part of PEC;

                                      -52-
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          (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; and

          (3) PEC has delivered to the Trustee an Officers' Certificate and an
     Opinion of Counsel, each stating that such consolidation, merger,
     conveyance, transfer or lease complies with this Section 801 and that all
     conditions precedent herein provided for relating to such transaction have
     been complied with.

   SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation by PEC
with or merger by PEC into any other Person or any conveyance, transfer or lease
of PEC's properties and assets substantially as an entirety in accordance with
Section 801, the successor formed by such consolidation or into which it 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, PEC under
this Indenture with the same effect as if such successor had been named as PEC
herein, and thereafter, except in the case of a lease, the predecessor shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

   SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders of Securities or coupons, PEC, 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 one or more of the following purposes only:

          (1) to evidence the succession of another Corporation to PEC and the
     assumption by any such successor of the covenants of PEC herein and in the
     Securities and coupons; or

          (2) to add to the covenants of PEC for the benefit of the Holders of
     all or any series of Securities (and if such covenants are to be for the
     benefit of less than all series of Securities, stating that such covenants
     are expressly being included solely for the benefit of such series) or to
     surrender any right or power herein conferred upon PEC; or

          (3) to add any additional Events of Default; or

          (4) to add to or change any of the provisions of this Indenture to
     provide that Bearer Securities may be registrable as to principal, to
     change or eliminate any restrictions on the payment of principal (or
     premium, if any) on Registered Securities or of principal (or premium, if
     any) or any interest on Bearer Securities, to permit Registered Securities
     to be exchanged for Bearer Securities or to permit the issuance of
     Securities in uncertificated form; PROVIDED, that any such action shall not
     adversely affect the interests

                                      -53-
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     of the Holders of Securities of any series or any related coupons in any
     material respect; or

          (5) to change or eliminate any of the provisions of this Indenture;
     PROVIDED, that any such change or elimination shall become effective only
     when there is no Security Outstanding of any series created prior to the
     execution of such supplemental indenture which is entitled to the benefit
     of such provision; or

          (6) to secure the Securities; or

          (7) to establish the form or terms of Securities of any series and any
     related coupons as permitted by Sections 201 and 301; or

          (8) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series, to contain such provisions as shall be deemed necessary or
     desirable to confirm that all the rights, powers, trusts and duties of the
     predecessor Trustee with respect to the Securities of any series as to
     which the predecessor Trustee is not retiring shall continue to be vested
     in the predecessor Trustee, and to add to or change any of the provisions
     of this Indenture as shall be necessary to provide for or facilitate the
     administration of the trusts hereunder by more than one Trustee, pursuant
     to the requirements of Section 611(b); or

          (9) to cure any ambiguity, to correct or supplement any provision
     herein which may be defective or 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 change shall
     not be inconsistent with the provisions of this Indenture and shall not
     adversely affect the interests of the Holders of Securities of any series
     or any related coupons in any material respect; or

          (10) to provide for issuance of Bearer Securities; or

          (11) to change any place or places where (a) PEC and Trust may pay
     principal, premium and interest, (b) Securities may be surrendered for
     transfer or exchange, and (c) notices and demands to or upon PEC may be
     served; or

          (12) to conform this Indenture to any amendments to the Trust
     Indenture Act.

   SECTION 902. 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 of each series affected by such supplemental indenture,
by Act of said Holders delivered to PEC and the Trustee, PEC, 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 modifying
in any manner the rights of the Holders of Securities of such series and any
related coupons under

                                      -54-
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this Indenture; PROVIDED that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security or coupon affected thereby:

          (1) change the Stated Maturity of the principal of, or of any
     installment of principal of or interest on, any Security, or reduce the
     principal amount thereof or the rate of interest thereon or any premium
     payable upon the redemption thereof, or change the method of calculating
     the rate of interest thereon, or change any obligation of PEC to pay
     additional amounts pursuant to Section 1004 (except as contemplated by
     Section 801(1) and permitted by Section 901(1)), or reduce the amount of
     the principal of an Original Issue Discount Security that would be due and
     payable upon a declaration of acceleration of the Maturity thereof pursuant
     to Section 502, or change any Place of Payment in the United States where,
     or the coin or currency in which, any Security or any premium or the
     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);

          (2) reduce the percentage in principal amount of the Outstanding
     Securities of any series, 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 reduce the requirements of Section 1304 for quorum or voting;

          (3) change any obligation of PEC to maintain an office or agency in
     each Place of Payment, or any obligation of PEC to maintain an office or
     agency outside the United States pursuant to Section 1002;

          (4) modify any of the provisions of this Section, Section 513 or
     Section 1010, 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 Outstanding Security affected
     thereby.

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

     It shall not be necessary for any Act of Holders of Securities 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.

     PEC shall have the right to set a record date for the solicitation of any
consents under this Article Nine, which record date shall be set in accordance
with Section 104.

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   SECTION 903. 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 315 of the
Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties, immunities or liabilities under this Indenture or otherwise.

   SECTION 904. 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 and of any coupons appertaining
thereto shall be bound thereby.

   SECTION 905. 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 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities
of any series 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 PEC shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and PEC, to any such supplemental indenture may be prepared and executed
by PEC and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.

                                   ARTICLE TEN

                                    Covenants

   SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. PEC covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay the principal of (and premium, if any) and interest on the
Securities of that series in accordance with the terms of the Securities, any
coupons appertaining thereto and this Indenture. Any interest due on Bearer
Securities on or before Maturity, other than additional amounts, if any, payable
as provided in Section 1004 in respect of principal of (or premium, if any, on)
such a Security, shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby as they
severally mature.

   SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. PEC will maintain in each
Place of Payment for any series of Securities an office or agency where
Securities of that series (but, except as otherwise provided below, unless such
Place of Payment is located outside the United States, not Bearer Securities)
may be presented or surrendered for payment, where Securities of that series may
be surrendered for registration of transfer or exchange and where notices and

                                      -56-
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demands to or upon PEC in respect of the Securities of that series and this
Indenture may be served. PEC initially hereby appoints the Trustee its office or
agency for each of said purposes. If Securities of a series are issuable as
Bearer Securities, PEC will maintain, subject to any laws or regulations
applicable thereto, an office or agency in a Place of Payment for such series
which is located outside the United States where Securities of such series and
the related coupons may be presented and surrendered for payment (including
payment of any additional amounts payable on Securities of such series pursuant
to Section 1004); PROVIDED, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, PEC will maintain a Paying
Agent in London or Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of such series are
listed on such exchange. PEC will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time PEC shall fail to maintain any such required office or agency in
respect of any series of Securities or shall fail to furnish the Trustee with
the address thereof, such presentations and surrenders of Securities of that
series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Bearer Securities of
that series pursuant to Section 1004) at the place specified for the purpose
pursuant to Section 301 or, if no such place is specified, at the main office of
the Trustee in London, and PEC hereby appoints the Trustee as its agent to
receive such respective presentations, surrenders, notices and demands.

     No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of PEC in the United States or by check mailed to
any address in the United States or by transfer to an account maintained with a
bank located in the United States; PROVIDED, that payment of principal of and
any premium and interest in U.S. dollars (including additional amounts payable
in respect thereof) on any Bearer Security may be made at the Corporate Trust
Office of the Trustee in the Borough of Manhattan, The City of New York if (but
only if) payment of the full amount of such principal, premium, interest or
additional amounts at all offices outside the United States maintained for the
purpose by PEC in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.

     PEC may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, that no such designation or rescission shall in any
manner relieve PEC of its obligation to maintain an office or agency in each
Place of Payment in accordance with the requirements set forth above for
Securities of any series for such purposes. PEC will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

   SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If PEC shall
at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Securities of that series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient

                                      -57-
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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 action or failure so to
act.

     Whenever PEC shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, 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, premium or interest, and (unless such Paying
Agent is the Trustee) PEC will promptly notify the Trustee of its action or
failure so to act.

     PEC will cause each Paying Agent for any series of Securities 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 of that series 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 PEC (or any other
     obligor upon the Securities of that series) in the making of any payment of
     principal of (and premium, if any) or interest on the Securities of that
     series; and

          (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.

     PEC may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Order direct
any Paying Agent to pay, to the Trustee all sums held in trust by PEC or such
Paying Agent, such sums to be held by the Trustee upon the same terms as those
upon which such sums were held by PEC 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 sums.

     Any sums deposited with the Trustee or any Paying Agent, or then held by
PEC, in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to PEC on Request, or (if then held by PEC) shall be
discharged from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to PEC for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of PEC as trustee
thereof, shall thereupon cease; PROVIDED, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of PEC
cause to be published once in an Authorized Newspaper in each Place of Payment
or mailed to each such

                                      -58-
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Holder, or both, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to PEC.

   SECTION 1004. ADDITIONAL AMOUNTS. If the Securities of a series provide for
the payment of additional amounts, PEC will pay to the Holder of any Security of
any series or any coupon appertaining thereto additional amounts as provided
therein. Whenever in this Indenture there is mentioned, in any context, the
payment of principal of (or premium, if any) or interest on, or in respect of,
any Security of any series or any related coupon or the net proceeds received on
the sale or exchange of any Security of any series, such mention shall be deemed
to include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context, additional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.

     If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
PEC will furnish the Trustee and PEC's principal Paying Agent or Paying Agents,
if other than the Trustee, with an Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal of (and
premium, if any) or interest on the Securities of that series shall be made to
Holders of Securities of that series or the related coupons who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities or coupons and PEC will pay to the Trustee or such
Paying Agent the additional amounts required by this Section. PEC covenants to
indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.

   SECTION 1005. CORPORATE EXISTENCE. Subject to Article Eight, PEC will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and its rights (charter and statutory).

   SECTION 1006. MAINTENANCE OF PROPERTIES. PEC will cause all properties used
or useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted

                                      -59-
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at all times; PROVIDED, that nothing in this Section shall prevent PEC from
discontinuing the operation or maintenance of any of such properties or
disposing of them if such discontinuance or disposal is, in the judgment of PEC,
desirable in the conduct of its business or the business of the Subsidiaries and
not disadvantageous in any material respect to the Holders of Securities.

   SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS. PEC will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon PEC, or upon
the income, profits or property of PEC or any of the Subsidiaries, and (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of PEC or any of the Subsidiaries; PROVIDED,
that none of PEC or any of the Subsidiaries shall be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.

   SECTION 1008. INTENTIONALLY OMITTED.

   SECTION 1009. STATEMENT AS TO DEFAULT. (a) PEC will deliver to the Trustee,
within 120 days after the end of each fiscal year of PEC ending after the date
hereof, a certificate, signed by the principal executive officer, principal
financial officer or principal accounting officer of PEC, stating whether or not
to the best knowledge of the signers thereof PEC, is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if PEC shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

     (b) PEC will deliver to the Trustee, within five days after the occurrence
thereof, written notice of any event which after notice or lapse of time would
become an Event of Default pursuant to clause (4) of Section 501.

   SECTION 1010. WAIVER OF CERTAIN COVENANTS. PEC may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1006 and 1007 if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities considered as one
class, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of PEC and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

   SECTION 1101. APPLICABILITY OF ARTICLE. Securities of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as

                                      -60-
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otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

   SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of PEC to
redeem any Securities shall be evidenced by a Board Resolution. In case of any
redemption at the election of PEC of all of the Securities of any series, PEC
shall, at least 60 days prior to the Redemption Date fixed by PEC (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date. In case of any redemption at the election of
PEC of less than all the Securities of any series, PEC shall, at least 60 days
prior to the Redemption Date fixed by PEC (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities (i) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, or (ii) pursuant to an election of PEC which is
subject to a condition specified in the terms of such Securities, PEC shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction or condition. The elected redemption is conditional upon the
receipt by the Trustee or Paying Agent, on or prior to the dated fixed for
redemption, of money sufficient to pay the Redemption Price plus accrued
interest. If the Trustee or Paying Agent has not received such money by the date
fixed for redemption, PEC will not be required to redeem such Securities.

   SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less than
all the Securities of any series 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 of such series (other than
Securities of such series held by PEC), 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 portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the Securities of a series, partial redemptions must be in
an amount not less than $1,000,000 principal amount of Securities.

     The Trustee shall promptly notify PEC in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, 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 Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

   SECTION 1104. NOTICE OF REDEMPTION. Notice of redemption shall be given in
the manner provided in Section 106 to the Holders of Securities to be redeemed
not less than 30 nor more than 60 days prior to the Redemption Date.

                                      -61-
<Page>

     All notices of redemption shall state:

          (1) the Redemption Date,

          (2) the Redemption Price,

          (3) if less than all the Outstanding Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption,
     the principal amounts) of the particular Securities to be redeemed,

          (4) that on the Redemption Date the Redemption Price will become due
     and payable upon each such Security to be redeemed and, if applicable, that
     interest thereon will cease to accrue on and after said date,

          (5) the place or places where such Securities, together in the case of
     Bearer Securities with all coupons appertaining thereto, if any, maturing
     after the Redemption Date, are to be surrendered for payment of the
     Redemption Price, which shall be the office or agency maintained by PEC in
     each Place of Payment pursuant to Section 1002, and

          (6) that the redemption is for a sinking fund, if such is the case.

A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.

     Notice of redemption of Securities to be redeemed at the election of PEC
shall be given by PEC or, at PEC's request, by the Trustee in the name and at
the expense of PEC.

   SECTION 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to any Redemption
Date, PEC shall deposit with the Trustee or with a Paying Agent (or, if PEC is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest, if any, on, all the Securities which are to be redeemed on that date.

   SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, and the conditions, if any, set forth in such
notice having been satisfied, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless PEC shall default in the payment
of the Redemption Price and accrued interest) such Securities shall cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with said
notice, together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security shall be paid by PEC at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; PROVIDED, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable

                                      -62-
<Page>

only upon presentation and surrender of coupons for such interest (at an office
or agency located outside the United States except as otherwise provided in
Section 1002); and PROVIDED FURTHER, that installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

     If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by PEC and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; PROVIDED, that interest represented
by coupons shall be payable only upon presentation and surrender of those
coupons at an office or agency located outside of the United States except as
otherwise provided in Section 1002.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.

   SECTION 1107. SECURITIES REDEEMED IN PART. Any Security which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor (with,
if PEC or the Trustee so requires with respect to any Registered Security, due
endorsement by, or a written instrument of transfer in form satisfactory to PEC
and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and PEC shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series, Stated Maturity and of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

     Except as otherwise specified as contemplated by Section 301, if a Global
Security is so surrendered, PEC shall execute, and the Trustee shall
authenticate and deliver to the Depositary in global form, without service
charge, a new Global Security or Securities of the same series, Stated Maturity
and of any authorized denomination as requested by the Depositary, in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered.

                                      -63-
<Page>

                                 ARTICLE TWELVE

                                  SINKING FUNDS

   SECTION 1201. APPLICABILITY OF ARTICLE. The provisions of this Article shall
be applicable to any sinking fund for the retirement of Securities of a series
except as otherwise specified as contemplated by Section 301 for Securities of
such series.

     The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.

   SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. PEC (1)
may deliver Outstanding Securities of a series (other than any previously called
for redemption), together in the case of any Bearer Securities of such series
with all unmatured coupons appertaining thereto, and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of PEC
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; PROVIDED, that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.

   SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60
days prior to each sinking fund payment date for any series of Securities, PEC
will deliver to the Trustee an Officers' Certificate specifying the amount of
the next ensuing sinking fund payment for that series pursuant to the terms of
that series, the portion thereof, if any, which is to be satisfied by payment of
cash and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 1202 and stating the
basis for such credit and that such Securities have not previously been so
credited and will also deliver to the Trustee any Securities to be so delivered.
Not less than 30 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of PEC in the manner
provided in Section 1104. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.

                                      -64-
<Page>

                                ARTICLE THIRTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

   SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. If Securities of a
series are issuable as Bearer Securities, a meeting of Holders of Securities of
such series may be called at any time and from time to time pursuant to this
Article to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be made,
given or taken by Holders of Securities of such series.

   SECTION 1302. CALL NOTICE AND PLACE OF MEETING. (a) The Trustee may at any
time call a meeting of Holders of Securities of any series for any purpose
specified in Section 1301, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, or in London as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.

     (b) In case at any time PEC, pursuant to a Board Resolution, or the Holders
of at least 10% in principal amount of the Outstanding Securities of any series
shall have requested the Trustee to call a meeting of the Holders of Securities
of such series for any purpose specified in Section 1301, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made the first publication of the notice
of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then PEC
or the Holders of Securities of such series in the amount above specified, as
the case may be, may determine the time and the place in the Borough of
Manhattan, The City of New York, or in London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in subsection (a)
of this Section.

   SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to vote at
any meeting of Holders of Securities of any series, a Person shall be (1) a
Holder of one or more Outstanding Securities of such series, or (2) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of PEC and each of their respective counsel.

   SECTION 1304. QUORUM; ACTION. The Persons entitled to vote a majority in
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series. In the absence of
a quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities of such
series, be dissolved. In any other case the meeting may be adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such

                                      -65-
<Page>

adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1305(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1302(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.

     Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
PROVIDED, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.

     Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.

   SECTION 1305. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS. (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of such series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 104 or other proof.

     (b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by PEC or by
Holders of Securities as provided in Section 1302(b), in which case PEC or the
Holders of Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting.

                                      -66-
<Page>

     (c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of Securities of such
series held or represented by him; PROVIDED, that no vote shall be cast or
counted at any meeting in respect of any Security challenged as not Outstanding
and ruled by the chairman of the meeting to be not Outstanding. The chairman of
the meeting shall have no right to vote, except as a Holder of a Security of
such series or proxy.

     (d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 1302 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.

   SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. The vote upon
any resolution submitted to any meeting of Holders of Securities of any series
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Securities of such series or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Securities of such
series held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in triplicate of all votes cast at
the meeting. A record, at least in triplicate, of the proceedings of each
meeting of Holders of Securities of any series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 1302 and, if applicable, Section 1304. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to PEC, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

   SECTION 1307. ACTION WITHOUT MEETING. In lieu of a vote of Holders at a
meeting as hereinbefore contemplated in this Article, any request, demand,
authorization, direction, notice, consent, waiver or other action may be made,
given or taken by Holders by written instruments as provided in Section 104.

                                ARTICLE FOURTEEN

   IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES

   SECTION 1401. LIABILITY SOLELY CORPORATE. No recourse shall be had for the
payment of the principal of or premium, if any, or interest, if any, on any
Securities, or any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement under this Indenture, against any
incorporator, stockholder, officer, director or employee, as such, past, present
or future of PEC or

                                      -67-
<Page>

of any predecessor or successor Corporation (either directly or through PEC or a
predecessor or successor Corporation of either of them), whether by virtue of
any constitutional provision, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Securities are solely corporate obligations, and
that no personal liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer, director or employee, past, present or
future, of PEC or of any predecessor or successor Corporation of either of them,
either directly or indirectly through PEC or any predecessor or successor
Corporation of either of them, because of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants or agreements contained
in this Indenture or in any of the Securities or to be implied herefrom or
therefrom, and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issuance of the Securities.

                                  -------------

                                      -68-
<Page>

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and attested, all as of the day and year first above written.

                                                PEOPLES ENERGY CORPORATION

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

                                                   Name:
                                                   Title:

Attest:

By:
    --------------------------

                                      -69-
<Page>

                                                [BANK ONE TRUST COMPANY NATIONAL
                                                  ASSOCIATION, as Trustee

                                                By:
                                                    ----------------------------
                                                    Name:
                                                    Title:

                                      -70-<Page>

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

                           PEOPLES ENERGY CORPORATION

                                       TO

                 [BANK ONE TRUST COMPANY NATIONAL ASSOCIATION,]
                                   as Trustee

                              --------------------

                                    INDENTURE

                         Dated as of _____________, 2002

                              --------------------

                          Subordinated Debt Securities

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

<Page>

                           PEOPLES ENERGY CORPORATION
   RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED, AND
                    INDENTURE, DATED AS OF ____________, 2002
<Table>
<Caption>
TRUST INDENTURE                                                          INDENTURE
ACT SECTION                                                              SECTION(S)

<S>                                                                      <C>
Section 310  (a)(1)......................................................609
             (a)(2)......................................................609
             (a)(3)......................................................Not Applicable
             (a)(4)......................................................Not Applicable
             (a)(5)......................................................609
             (b).........................................................608, 610
             (c).........................................................Not Applicable
Section 311  (a).........................................................613
             (b).........................................................613
             (c).........................................................613
Section 312  (a).........................................................701, 702(a)
             (b).........................................................702(a)
             (c).........................................................702(b)
Section 313  (a).........................................................703(a)
             (b).........................................................703(b)
             (c).........................................................703(c)
             (d).........................................................703(c)
Section 314  (a).........................................................704
             (a)(4)......................................................101, 1009
             (b).........................................................Not Applicable
             (c)(1)......................................................102
             (c)(2)......................................................102
             (c)(3)......................................................Not Applicable
             (d).........................................................Not Applicable
             (e).........................................................102
             (f).........................................................Not Applicable
Section 315  (a).................................................... ....601
             (b).........................................................602
             (c).........................................................601
             (d).........................................................601
             (e).........................................................514
Section 316  (a)(1)(A)...................................................502, 512
             (a)(1)(B)...................................................513
             (a)(2)......................................................Not Applicable
             (b).........................................................508
             (c).........................................................104
</Table>

                                       -i-
<Page>

<Table>
<Caption>
TRUST INDENTURE                                                          INDENTURE
ACT SECTION                                                              SECTION(S)

<S>                                                                      <C>
Section 317  (a)(1)......................................................503
             (a)(2)......................................................504
             (b).........................................................1003
Section 318  (a).........................................................108

</Table>

NOTE: This Reconciliation and Tie shall not, for any purpose, be deemed to be a
      part of the Indenture.

                                      -ii-
<Page>

                                TABLE OF CONTENTS
<Table>
<Caption>
SECTION                             HEADING                                                     PAGE

<S>               <C>                                                                           <C>
ARTICLE ONE       DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........................1

    Section 101.  Definitions....................................................................1
    Section 102.  Compliance Certificates and Opinions...........................................8
    Section 103.  Form of Documents Delivered to Trustee.........................................9
    Section 104.  Acts of Holders; Record Dates..................................................9
    Section 105.  Notices, etc., to Trustee, PEC................................................11
    Section 106.  Notice to Holders of Securities; Waiver.......................................12
    Section 107.  Language of Notices, etc......................................................13
    Section 108.  Conflict with Trust Indenture Act.............................................13
    Section 109.  Effect of Headings and Table of Contents......................................13
    Section 110.  Successors and Assigns........................................................13
    Section 111.  Separability Clause...........................................................13
    Section 112.  Benefits of Indenture.........................................................13
    Section 113.  Governing Law.................................................................13
    Section 114.  Legal Holidays................................................................13
    Section 115.  Appointment of Agent for Service..............................................14
    Section 116.  No Adverse Interpretation of Other Agreements.................................14
    Section 117.  Execution in Counterparts.....................................................14

ARTICLE TWO       SECURITY FORMS................................................................14

    Section 201.  Forms Generally...............................................................14
    Section 202.  Form of Trustee's Certificate of Authentication...............................15
    Section 203.  Securities in Global Form.....................................................15
    Section 204.  Form of Legend for Global Securities..........................................16
    Section 205.  Form of Legend for Bearer Securities..........................................16

ARTICLE THREE     THE SECURITIES................................................................16

    Section 301.  Amount Unlimited; Issuable in Series..........................................16
    Section 302.  Denominations.................................................................19
    Section 303.  Execution, Authentication, Delivery and Dating................................19
    Section 304.  Temporary Securities..........................................................22
    Section 305.  Registration, Registration of Transfer and Exchange...........................22
    Section 306.  Mutilated, Destroyed, Lost and Stolen Securities..............................25
    Section 307.  Payment of Interest; Interest Rights Preserved................................26
    Section 308.  Persons Deemed Owners.........................................................28
    Section 309.  Cancellation..................................................................29
    Section 310.  Computation of Interest.......................................................29
    Section 311.  Form of Certification by a Person Entitled to Receive
                    a Bearer Security...........................................................29
</Table>

                                      -iii-
<Page>

<Table>
<S>               <C>                                                                           <C>
    Section 312.  CUSIP, ISIN and Common Code Numbers...........................................31

ARTICLE FOUR      SATISFACTION AND DISCHARGE....................................................31

    Section 401.  Satisfaction and Discharge of Securities......................................31
    Section 402.  Satisfaction and Discharge of Indenture.......................................33
    Section 403.  Application of Trust Money....................................................34
    Section 404.  Reinstatement.................................................................34

ARTICLE FIVE      REMEDIES......................................................................35

    Section 501.  Events of Default.............................................................35
    Section 502.  Acceleration of Maturity; Rescission and Annulment............................36
    Section 503.  Collection of Indebtedness and Suits for Enforcement by Trustee...............37
    Section 504.  Trustee May File Proofs of Claim..............................................38
    Section 505.  Trustee May Enforce Claims Without Possession of Securities or Coupons........38
    Section 506.  Application of Money Collected................................................39
    Section 507.  Limitation on Suits...........................................................39
    Section 508.  Unconditional Right of Holders to Receive Principal, Premium and Interest.....40
    Section 509.  Restoration of Rights and Remedies............................................40
    Section 510.  Rights and Remedies Cumulative................................................40
    Section 511.  Delay or Omission Not Waiver..................................................40
    Section 512.  Control by Holders of Securities..............................................40
    Section 513.  Waiver of Past Defaults.......................................................41
    Section 514.  Undertaking for Costs.........................................................41

ARTICLE SIX       THE TRUSTEE...................................................................41

    Section 601.  Certain Duties and Responsibilities...........................................41
    Section 602.  Notice of Defaults............................................................43
    Section 603.  Certain Rights of Trustee.....................................................43
    Section 604.  Not Responsible for Recitals or Issuance of Securities........................44
    Section 605.  May Hold Securities...........................................................44
    Section 606.  Money Held in Trust...........................................................44
    Section 607.  Compensation and Reimbursement................................................44
    Section 608.  Disqualification; Conflicting Interests.......................................45
    Section 609.  Corporate Trustee Required; Eligibility.......................................45
    Section 610.  Resignation and Removal; Appointment of Successor.............................46
    Section 611.  Acceptance of Appointment by Successor........................................47
    Section 612.  Merger, Conversion, Consolidation or Succession to Business...................48
    Section 613.  Preferential Collection of Claims Against Company.............................49
    Section 614.  Appointment of Authenticating Agent...........................................49
</Table>

                                      -iv-
<Page>

<Table>
<S>               <C>                                                                           <C>
ARTICLE SEVEN     HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.............................51

    Section 701.  Company to Furnish Trustee Names and Addresses of Holders.....................51
    Section 702.  Preservation of Information; Communications to Holders........................51
    Section 703.  Reports by Trustee............................................................51
    Section 704.  Reports by PEC................................................................52

ARTICLE EIGHT     CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..........................52

    Section 801.  PEC May Consolidate, Etc., Only on Certain Terms..............................52
    Section 802.  Successor Corporation Substituted.............................................53

ARTICLE NINE      SUPPLEMENTAL INDENTURES.......................................................53

    Section 901.  Supplemental Indentures without Consent of Holders............................53
    Section 902.  Supplemental Indentures with Consent of Holders...............................54
    Section 903.  Execution of Supplemental Indentures..........................................56
    Section 904.  Effect of Supplemental Indentures.............................................56
    Section 905.  Conformity with Trust Indenture Act...........................................56
    Section 906.  Reference in Securities to Supplemental Indentures............................56

ARTICLE TEN       COVENANTS.....................................................................57

    Section 1001. Payment of Principal, Premium and Interest....................................57
    Section 1002. Maintenance of Office or Agency...............................................57
    Section 1003. Money for Securities Payments to Be Held in Trust.............................58
    Section 1004. Additional Amounts............................................................59
    Section 1005. Corporate Existence...........................................................60
    Section 1006. Maintenance of Properties.....................................................60
    Section 1007. Payment of Taxes and Other Claims.............................................60
    Section 1008. Intentionally Omitted.........................................................60
    Section 1009. Statement as to Default.......................................................60
    Section 1010. Waiver of Certain Covenants...................................................61

ARTICLE ELEVEN    REDEMPTION OF SECURITIES......................................................61

    Section 1101. Applicability of Article......................................................61
    Section 1102. Election to Redeem; Notice to Trustee.........................................61
    Section 1103. Selection by Trustee of Securities to Be Redeemed.............................61
    Section 1104. Notice of Redemption..........................................................62
    Section 1105. Deposit of Redemption Price...................................................63
    Section 1106. Securities Payable on Redemption Date.........................................63
    Section 1107. Securities Redeemed in Part...................................................63

ARTICLE TWELVE    SINKING FUNDS.................................................................64

    Section 1201. Applicability of Article......................................................64
</Table>

                                       -v-
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<Table>
<S>               <C>                                                                           <C>
    Section 1202. Satisfaction of Sinking Fund Payments with Securities.........................64
    Section 1203. Redemption of Securities for Sinking Fund.....................................65

ARTICLE THIRTEEN  MEETINGS OF HOLDERS OF SECURITIES.............................................65

    Section 1301. Purposes for Which Meetings May be Called.....................................65
    Section 1302. Call Notice and Place of Meeting..............................................65
    Section 1303. Persons Entitled to Vote at Meetings..........................................65
    Section 1304. Quorum; Action................................................................66
    Section 1305. Determination of Voting Rights; Conduct and Adjournment of Meetings...........66
    Section 1306. Counting Votes and Recording Action of Meetings...............................67
    Section 1307. Action Without Meeting........................................................68

ARTICLE FOURTEEN  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES....68

    Section 1401. Liability Solely Corporate....................................................68

ARTICLE FIFTEEN   SUBORDINATION.................................................................68

    Section 1501. Securities Subordinate to Senior Indebtedness ................................68
    Section 1502. Payment over of Proceeds of Securities........................................69
    Section 1503. Disputes with Holders of Certain Senior Indebtedness..........................70
    Section 1504. Subrogation...................................................................71
    Section 1505. Obligation Unconditional......................................................71
    Section 1506. Priority of Senior Indebtedness upon Maturity.................................72
    Section 1507. Trustee as Holder of Senior Indebtedness .....................................72
    Section 1508. Notice to Trustee to Effectuate Subordination.................................72
    Section 1509. Modification, Extension, etc. of Senior Indebtedness .........................73
    Section 1510. Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness ..............73
    Section 1511. Paying Agents Other Than the Trustee..........................................73
    Section 1512. Rights of Holders of Senior Indebtedness Not Impaired.........................73
    Section 1513. Effect of Subordination Provisions; Termination...............................74
</Table>

                                      -vi-
<Page>

     INDENTURE, dated as of __________, 2002, between Peoples Energy
Corporation, a corporation duly organized and existing under the laws of the
State of Illinois (herein called "PEC"), having its principal office at 130 East
Randolph Drive, Chicago, Illinois 60601 and [Bank One Trust Company National
Association,] a corporation duly organized and existing under the laws of the
State of [New York,] having its principal corporate trust office at [1 Bank One
Plaza, Mail Code IL1-0823, Chicago, Illinois 60670,] as trustee (herein called
the "TRUSTEE").

                                 RECITALS OF PEC

     PEC has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of PEC's unsecured, subordinated
debentures, notes or other evidences of indebtedness (herein collectively called
the "SECURITIES," and individually called a "SECURITY"), to be issued in one or
more series as provided in this Indenture.

     All things necessary to make this Indenture a valid agreement of PEC, in
accordance with its terms, have been done.

     This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.

     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 series thereof, as
follows:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

   SECTION 101. 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 in the Trust Indenture Act;

                                       -1-
<Page>

          (3) all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with generally accepted accounting
     principles in the United States of America, and, except as otherwise herein
     expressly provided, the term "generally accepted accounting principles"
     with respect to any computation required or permitted hereunder shall mean
     such accounting principles as are generally accepted in the United States
     of America at the date of such computation;

          (4) the words "herein," "hereof," "hereto" 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; and

          (5) the word "or" is always used inclusively (for example, the phrase
     "A or B" means "A or B or both," not "either A or B but not both").

     Certain terms used principally in certain Articles are defined in those
Articles.

     "ACT," when used with respect to any Holder of a Security, has the meaning
specified in Section 104.

     "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. 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.

     "AUTHENTICATING AGENT" means any Person or Persons authorized by the
Trustee to act on behalf of the Trustee to authenticate one or more series of
Securities.

     "AUTHORIZED NEWSPAPER" means a newspaper, in an official language of the
country of publication or in the English language, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

     "BANKRUPTCY LAW" means Title 11 of the United States Code or any similar
United States federal or state law for the relief of debtors.

     "BEARER SECURITY" means any Security in the form for Bearer Securities set
forth in Section 203 or established pursuant to Section 201 which is payable to
bearer and shall bear the legend specified in Section 205.

                                       -2-
<Page>

     "BOARD OF DIRECTORS" means the board of directors of PEC, or any duly
authorized committee thereof.

     "BOARD RESOLUTION" means a copy of a resolution certified by the Corporate
Secretary or an Assistant Corporate Secretary of PEC, to have been duly adopted
by the Board of Directors 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 a Saturday or Sunday or a day on
which banking institutions in the City of New York, New York or Chicago,
Illinois are authorized or required by law or executive order to remain closed
or a day on which the 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, as amended,
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 at such time.

     "CORPORATE TRUST OFFICE" means the corporate trust office of the Trustee of
a series of Securities at which at any particular time its corporate trust
business shall be administered, which office on the date of execution of this
Indenture is located at [1 Bank One Plaza, Mail Code IL1-0823, Chicago, Illinois
60670, Attention: Global Corporate Trust Services.]

     "CORPORATION" includes any corporation, association, company, limited
liability company or business trust.

     "DEFAULTED INTEREST" has the meaning specified in Section 307.

     "DEPOSITARY" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, specified for that purpose as contemplated by Section 301 or any
successor clearing agency registered under such Act as contemplated by Section
305, and if at any time there is more than one such Person, the term
"Depositary" as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of such series.

     "DOLLAR" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.

     "ELIGIBLE OBLIGATIONS" means:

     (a) with respect to Securities denominated in Dollars, Government
Obligations; or

                                       -3-
<Page>

     (b) with respect to Securities denominated in a currency other than Dollars
or in a composite currency, such other obligations or instruments as shall be
specified with respect to such Securities, as contemplated by Section 301.

     "EVENT OF DEFAULT" has the meaning specified in Section 501.

     "GLOBAL SECURITY" means a Security bearing the legend specified in Section
204 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
nominee.

     "GOVERNMENTAL OBLIGATIONS" means securities which are (a) (i) direct
obligations of the United States where the payment or payments thereunder are
supported by the full faith and credit of the United States or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States where the timely payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by the United States or (b) depository receipts issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of a depositary 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 or other amount with respect
to the Government Obligation evidenced by such depository receipt.

     "HOLDER," when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.

     "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," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

     "INTEREST PAYMENT DATE," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

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

                                       -4-
<Page>

     "OFFICER" means, with respect to any Person, the Chairman of the Board, the
President, the Chief Financial Officer, a Vice President, the Treasurer, an
Assistant Treasurer, the Controller or Assistant Controller and the Corporate
Secretary or an Assistant Corporate Secretary.

     "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the President, the Chief Financial Officer or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller,
the Corporate Secretary or an Assistant Corporate Secretary, of PEC, that
complies with the requirements of Section 314(c) of the Trust Indenture Act and
is delivered to the Trustee.

     "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel
for PEC, and who shall be acceptable to the Trustee, that complies with the
requirements of Section 314(c) of the Trust Indenture Act and Section 102 of
this Indenture.

     "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

     "OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

          (i) Securities theretofore canceled by the Trustee or delivered to the
     Trustee for cancellation;

          (ii) Securities for whose payment or redemption money in the necessary
     amount has been theretofore deposited with the Trustee or any Paying Agent
     (other than PEC) in trust or set aside and segregated in trust by PEC (if
     PEC shall act as its own Paying Agent) for the Holders of such Securities
     and any coupons thereto appertaining; PROVIDED, that if such Securities are
     to be redeemed, notice of such redemption has been duly given pursuant to
     this Indenture or provision therefor satisfactory to the Trustee has been
     made; and

          (iii) Securities which have been paid pursuant to Section 306 or in
     exchange for or in lieu of which other Securities have been authenticated
     and delivered pursuant to this Indenture, other than any such Securities in
     respect of which there shall have been presented to the Trustee proof
     satisfactory to it that such Securities are held by a bona fide purchaser
     in whose hands such Securities are valid obligations of PEC;

and PROVIDED FURTHER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have been given any request,
demand, authorization, direction, notice, consent or waiver hereunder or are
present at a meeting of Holders of Securities for quorum purposes, Securities
owned by PEC, or any other obligor upon the Securities or any Affiliate of PEC,
or of 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

                                       -5-
<Page>

request, demand, authorization, direction, notice, consent or waiver or upon any
such determination as to the presence of a quorum, 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 PEC, or any other
obligor upon the Securities or any Affiliate of PEC, or of such other obligor.

     "PAYING AGENT" means any Person authorized by PEC to pay the principal of
(and premium, if any) or interest on any Securities on behalf of PEC.

     "PERSON" means any individual, Corporation, limited liability company,
partnership, joint venture, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.

     "PLACE OF PAYMENT," when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.

     "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 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "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.

     "REGISTERED SECURITY" means any Security established pursuant to Section
201 which is registered in the Security Register.

     "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.

     "REQUEST" or "ORDER" means a written request or order signed in the name of
PEC, by its Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its
Corporate Secretary or an Assistant Corporate Secretary, and delivered to the
Trustee.

     "RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
Vice President, any assistant secretary, any assistant treasurer, any cashier,
any assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, any assistant controller or any other officer of

                                       -6-
<Page>

the Trustee customarily performing corporate trust functions on behalf of the
Trustee and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

     "SECURITIES" AND "SECURITY" have the meanings stated in the first recital
of this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; PROVIDED, that if at any time there is more than
one Person acting as Trustee under this Indenture, the term "SECURITIES," with
respect to any such Person, shall mean Securities authenticated and delivered
under this Indenture, exclusive, however, of Securities of any series as to
which such Person is not Trustee.

     "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305.

     "SENIOR INDEBTEDNESS," when used with respect to PEC, means all obligations
(other than non-recourse obligations and the indebtedness issued under this
Indenture) of, or guaranteed or assumed by, PEC for borrowed money, including,
both senior and subordinated indebtedness for borrowed money (other than the
Securities), or for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of PEC and its subsidiaries in
accordance with generally accepted accounting principles as in effect from time
to time, or evidenced by bonds, debentures, notes or other similar instruments,
and in each case, amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligations, whether existing as of the date of this
Indenture or subsequently incurred by PEC unless, in the case of any particular
indebtedness, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding is not superior
in right of payment to or is PARI PASSU with the Securities; PROVIDED that
Senior Indebtedness shall not include (i) any obligation of PEC to any of its
subsidiaries or (ii) trade accounts payable or accrued liabilities arising in
the ordinary course of business or (iii) any obligations to an employee.

     "SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.

     "STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or 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 PEC or by one or more other
Subsidiaries, or by PEC and one or more other Subsidiaries. For the purposes of
this definition, the term "VOTING STOCK" means stock or other equity interest
which ordinarily has voting power for the election of directors or managers,
whether at all times or only so long as no senior class of stock or other equity
interest has such voting power by reason of any contingency.

                                       -7-
<Page>

     "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Trust Indenture Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rules or regulations adopted by the Commission under or in furtherance of the
purposes of such Trust Indenture Act or provision, as the case may be.

     "TRUSTEE" means the Person named as the "TRUSTEE" in the first paragraph of
this instrument until a successor Trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
Indenture, and thereafter the term "TRUSTEE" shall mean or include each Person
who is then a Trustee hereunder and, if at any time there is more than one such
Person, the term "TRUSTEE," as used with respect to the Securities of any
series, shall mean the Trustee with respect to Securities of that series.

     "UNITED STATES" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.

     "UNITED STATES ALIEN" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

     "VICE PRESIDENT," when used with respect to PEC or the Trustee, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "VICE PRESIDENT" and shall also include the Chief
Financial Officer of PEC.

   SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or
request by PEC to the Trustee to take any action under any provision of this
Indenture, PEC shall furnish to the Trustee an Officers' Certificate stating
that all conditions 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, 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 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;

                                       -8-
<Page>

          (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 103. FORM 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 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
the 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, stating that the information with respect to such factual
matters is in the possession of PEC, 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 104. ACTS OF HOLDERS; RECORD DATEs. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given 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. If
Securities of a series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given or taken by Holders may,
alternatively, be embodied in and evidenced by the record of Holders of
Securities voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities duly called and
held in accordance with the provisions of Article Thirteen, or a combination of
such instrument or instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to PEC. Such instrument or instruments and any such
record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such

                                       -9-
<Page>

agent, or of the holding by any Person of a Security, shall be sufficient for
any purpose of this Indenture and (subject to Section 601) conclusive in favor
of the Trustee and PEC if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1306.

     Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent PEC, the Trustee, or any agent of PEC or the Trustee, from
giving effect to any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be given or taken by a
Depositary or impair, as between a Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Security.

     Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depositary that
is a Holder of a Global Security, may make, give or take, by a proxy or proxies
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in or pursuant to this
Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a Global Security may give its proxy or proxies to the Depositary's
participants or the beneficial owners of interests in any such Global Security,
as the case may be, through such Depositary's standing instructions and
customary practices.

     Subject to the next succeeding paragraph, PEC may, in the circumstances
permitted by the Trust Indenture Act, fix any day as the record date for the
purpose of determining the Holders of Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be given
or taken by Holders of Securities of such series. If not set by PEC prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day prior to
such first solicitation or vote, or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701, as the case may be.
With regard to any record date for action to be taken by the Holders of one or
more series of Securities, only the Holders of Securities of such series on such
date (or their duly designated proxies) shall be entitled to give or take, or
vote on, the relevant action.

     The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interests in any permanent Global Security
held by a Depositary and who are entitled under the procedures of such
Depositary to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in or pursuant to this Indenture to be made, given or
taken by Holders. If such a record date is fixed, the Holders on such record
date or their duly appointed proxy or proxies, and only such Persons, shall be
entitled to make, give or take such request, demand, authorization, direction,
notice, consent, waiver or other action, whether or not such Holders remain
Holders after such record date. No such request, demand, authorization,
direction, notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.

                                      -10-
<Page>

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient.

     (c) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.

     (d) The principal amount and serial numbers of Bearer Securities held by
any Person executing any such instrument or writing as a Holder of Securities,
and the date of his holding the same, may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person executing such instrument
or writing as a Holder of Securities, if such certificate or affidavit is deemed
by the Trustee to be satisfactory. The Trustee and PEC may assume that such
ownership of any Bearer Security continues until (1) another certificate or
affidavit bearing a later date issued in respect of the same Bearer Security is
produced, or (2) such Bearer Security is produced to the Trustee by some other
Person, or (3) such Bearer Security is surrendered in exchange for a Registered
Security, or (4) such Bearer Security is no longer Outstanding.

     (e) The fact and date of execution of any such instrument or writing, the
authority of the Person executing the same, the principal amount and serial
numbers of Bearer Securities held by the Person so executing such instrument or
writing and the date of holding the same may also be proved in any other
reasonable manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.

     (f) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
PEC in reliance thereon, whether or not notation of such action is made upon
such Security.

   SECTION 105. NOTICES, ETC., TO TRUSTEE AND PEC. Any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of
Holders of a series of Securities or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

          (1) the Trustee of such series by any Holder of a Security of such
     series or by PEC shall be sufficient for every purpose hereunder if made,
     given, furnished or filed in writing to or with the Trustee of such series
     at its Corporate Trust Office, or

          (2) PEC, by the Trustee of such series or by any Holder of a Security
     of such series shall be sufficient for every purpose hereunder (unless
     otherwise herein expressly provided) if in writing and mailed, first-class
     postage prepaid, to PEC, addressed to the

                                      -11-
<Page>

     attention of its Treasurer, at 130 East Randolph Drive, Chicago, Illinois
     60601, or at any other address previously furnished in writing to the
     Trustee of such series by PEC.

   SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER. Except as otherwise
expressly provided herein, where this Indenture provides for notice to Holders
of Securities (of any series) of any event,

          (1) such notice shall be sufficiently given to Holders of Registered
     Securities of such series if in writing and mailed, first-class postage
     prepaid, to each Holder of a Registered Security of such series affected by
     such event, at his address as it appears in the Security Register, not
     later than the latest date, and not earlier than the earliest date,
     prescribed for the giving of such Notice; and

          (2) such notice shall be sufficiently given to Holders of Bearer
     Securities of such series if published in an Authorized Newspaper in the
     Borough of Manhattan, The City of New York and, if the Securities of such
     series are then listed on The Stock Exchange of the United Kingdom and the
     Republic of Ireland and such stock exchange shall so require, in London
     and, if the Securities of such series are then listed on the Luxembourg
     Stock Exchange and such stock exchange shall so require, in Luxembourg and,
     if the Securities of such series are then listed on any other stock
     exchange outside the United States and such stock exchange shall so
     require, in any other required city outside the United States or, if not
     practicable, in Europe, on a Business Day at least twice, the first such
     publication to be not earlier than the earliest date and not later than the
     latest date prescribed for the giving of such notice.

     In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder. In any case where notice
to Holders of Registered Securities is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder of a Registered Security shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities or the sufficiency of any
notice by publication to Holders of Bearer Securities given as provided above.

     In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities of any
series as provided above, then such notification to Holders of such Bearer
Securities as shall be given with the approval of the Trustee for such series
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither failure to give notice by publication to Holders of Bearer Securities as
provided above, nor any defect in any notice so published, shall affect the
sufficiency of any notice mailed to Holders of Registered Securities as provided
above.

     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

                                      -12-
<Page>

waiver shall be the equivalent of such notice. Waivers of notice by Holders of
Securities 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 107. LANGUAGE OF NOTICES, ETC. Any request, demand, authorization,
direction, notice, consent, election or waiver required or permitted under this
Indenture shall be in the English language, except that any published notice may
be in an official language of the country of publication.

   SECTION 108. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with any duties under any required provision of
the Trust Indenture Act deemed included herein by Section 318(c) thereof, such
required provision shall control.

   SECTION 109. 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 110. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture by PEC shall bind their respective successors and assigns, whether so
expressed or not.

   SECTION 111. SEPARABILITY CLAUSE. In case any provision in this Indenture or
the Securities or coupons 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 112. BENEFITS OF INDENTURE. Nothing in this Indenture or the
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, their successors hereunder and the Holders of Securities and
coupons, any benefit or any legal or equitable right, remedy or claim under this
Indenture.

   SECTION 113. GOVERNING LAW. This Indenture and the Securities and coupons
shall be governed by and construed in accordance with the internal law of the
State of Illinois, without giving effect to any contrary conflict of laws or
choice of law provisions of the law of the State of Illinois or any other
jurisdiction.

   SECTION 114. LEGAL HOLIDAYS. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities or coupons) payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity; PROVIDED, that no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

                                      -13-
<Page>

   SECTION 115. APPOINTMENT OF AGENT FOR SERVICE. By the execution and delivery
of this Indenture, PEC hereby appoints the Trustee as its agent upon which
process may be served in any legal action or proceeding which may be instituted
in any Federal or State court in the Borough of Manhattan, The City of New York,
arising out of or relating to the Securities, the coupons or this Indenture.
Service of process upon such agent at the office of such agent at [1 Bank One
Plaza, Mail Code IL1-0823, Chicago, Illinois 60670, Attention: Global Corporate
Trust Services] (or such other address in the Borough of Manhattan, The City of
New York, as may be the Corporate Trust Office of the Trustee), and written
notice of said service to PEC, by the Person serving the same addressed as
provided in Section 105, shall be deemed in every respect effective service of
process upon PEC, in any such legal action or proceeding, and PEC hereby submits
to the jurisdiction of any such court in which any such legal action or
proceeding is so instituted. Such appointment shall be irrevocable so long as
the Holders of Securities or coupons shall have any rights pursuant to the terms
thereof or of this Indenture until the appointment of a successor by PEC, with
the consent of the Trustee and such successor's acceptance of such appointment.
PEC further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment of such agent or successor.

     By the execution and delivery of this Indenture, the Trustee hereby agrees
to act as such agent and undertakes promptly to notify PEC of receipt by it of
service of process in accordance with this Section.

   SECTION 116. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture
may not be used to interpret another indenture, loan or debt agreement of PEC or
any Affiliate. No such indenture, loan or debt agreement may be used to
interpret this Indenture.

   SECTION 117. EXECUTION IN COUNTERPARTS. 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.

                                   ARTICLE TWO

                                 SECURITY FORMS

   SECTION 201. FORMS GENERALLY. The Registered Securities, if any, of each
series and the Bearer Securities, if any, of each series and related coupons and
the Global Securities, if any, issued pursuant to this Indenture shall be in
such form as shall be established by or pursuant to a Board Resolution or in one
or more indentures supplemental hereto, in each case 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 the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or coupons, as evidenced by their execution of the Securities or coupons (but
which do not affect the rights or duties of the Trustee). If the forms of
Securities or coupons of any series are established by action taken pursuant to
a Board Resolution, a copy of an

                                      -14-
<Page>

appropriate record of such action shall be certified by the Corporate Secretary
or an Assistant Corporate Secretary of PEC and delivered to the Trustee at or
prior to the delivery of the Order contemplated by Section 303 for the
authentication and delivery of such Securities or coupons.

     The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article or Article Six.

     Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
global and registered form without coupons. If so provided as contemplated by
Section 301, the Securities of a series also shall be issuable in bearer form,
with or without interest coupons attached.

     The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner permitted by the rules of any applicable securities exchange, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities or coupons.

   SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. Subject to
Section 614, the Trustee's certificate of authentication shall be in
substantially the following form:

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

                                                [Bank One Trust Company National
                                                   Association, as Trustee]

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

   SECTION 203. SECURITIES IN GLOBAL FORM. If Securities of a series are
issuable in global form, any such Security may provide that it or any number of
such Securities shall represent the aggregate amount of all Outstanding
Securities of such series (or such lesser amount as is permitted by the terms
thereof) from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be increased or reduced to reflect exchanges. Any endorsement of any
Security in global form to reflect the amount, or any increase or decrease in
the amount, or changes in the rights of Holders, of Outstanding Securities
represented thereby shall be made in such manner and by such Person or Persons
as shall be specified therein or in the Order to be delivered pursuant to
Sections 303 or 304 with respect thereto. Subject to the provisions of Section
303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Order. If the Order
pursuant to Sections 303 or 304 has been, or simultaneously is, delivered, any
instructions by PEC with respect to a Security in global form shall be in
writing but need not be accompanied by or contained in an Officers' Certificate
and need not be accompanied by an Opinion of Counsel.

                                      -15-
<Page>

   SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES. Any Global Security
authenticated and delivered hereunder shall bear a legend in substantially the
following form, or in such other form that is acceptable to the Depositary and
the Trustee:

          "Unless and until it is exchanged in whole or in part for Securities
     in definitive registered form, this Security 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 or
     by the Depositary or any such nominee to a successor Depositary or a
     nominee of such successor Depositary."

   SECTION 205. FORM OF LEGEND FOR BEARER SECURITIES. Any Bearer Security
authenticated and delivered hereunder shall bear a legend in substantially the
following form:

          "Any United States person who holds this Security will be subject to
     limitations under the United States income tax laws, including the
     limitation provided in Sections 165(j) and 1287(a) of the Internal Revenue
     Code of 1986, as amended."

                                  ARTICLE THREE

                                 THE SECURITIES

   SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.

     The Securities may be issued in one or more series. Prior to the issuance
of Securities of any series, there shall be set forth in an Officers'
Certificate pursuant to a Board Resolution, or established in one or more
indentures supplemental hereto approved in or pursuant to a Board Resolution,

          (1) the title of the Securities of the series (which shall distinguish
     the Securities of the series from Securities of all other series issued by
     PEC);

          (2) any limit upon the aggregate principal amount of the Securities of
     the series which may be authenticated and delivered under this Indenture
     (except for Securities authenticated and delivered upon registration of
     transfer of, or in exchange for, or in lieu of, other Securities of the
     series pursuant to Section 304, 305, 306, 906 or 1107);

          (3) the date or dates on which the principal of the Securities of the
     series is payable or how to determine such dates;

          (4) the right, if any, to extend the Stated Maturity on which PEC will
     pay any installment of principal of or interest on the Securities of the
     series;

                                      -16-
<Page>

          (5) the rate or rates at which the Securities of the series shall bear
     interest, if any, or any method by which such rate or rates shall be
     determined, the basis upon which interest will be computed if other than
     that specified in Section 310, the date or dates from which such interest
     shall accrue, the Interest Payment Dates on which such interest shall be
     payable, the Regular Record Date for the interest payable on Registered
     Securities on any Interest Payment Date, and any right to extend or defer
     Interest Payment Dates and the duration of the extension.

          (6) the place or places where the principal of (and premium, if any)
     and interest, if any, on Securities of the series shall be payable;

          (7) whether Securities of such series may be redeemed, and if so, the
     period or periods within which, the price or prices at which and the terms
     and conditions upon which Securities of the series may be redeemed, in
     whole or in part, at the option of PEC;

          (8) the obligation or option, if any, of PEC to redeem, purchase, or
     repay Securities of the series pursuant to any sinking fund or analogous
     provisions or at the option of a Holder thereof and the period or periods
     within which, the price or prices at which and the terms and conditions
     upon which Securities of the series shall be redeemed or purchased, in
     whole or in part, pursuant to such obligation or option;

          (9) the right, if any, of PEC or a third party to redeem or purchase
     Securities of the series and the period or periods within which, the price
     or prices at which and the terms and conditions upon which Securities of
     the series shall be redeemed or purchased, in whole or in part, pursuant to
     such right;

          (10) whether Bearer Securities of the series are to be issuable;

          (11) if Bearer Securities of the series are to be issuable, whether
     interest in respect of any portion of a temporary Bearer Security in global
     form (representing all of the Outstanding Bearer Securities of the series)
     payable in respect of an Interest Payment Date prior to the exchange of
     such temporary Bearer Security for definitive Securities of the series
     shall be paid to any clearing organization with respect to the portion of
     such temporary Bearer Security held for its account and, in such event, the
     terms and conditions (including any certification requirements) upon which
     any such interest payment received by a clearing organization will be
     credited to the Persons entitled to interest payable on such Interest
     Payment Date;

          (12) the date as of which any Bearer Securities of the series, any
     temporary Bearer Security in global form and any Global Securities shall be
     dated if other than the date of original issuance of the first Security of
     the series to be issued;

          (13) the denominations in which Registered Securities of the series,
     if any, shall be issuable if other than denominations of $1,000 and any
     integral multiple thereof,

                                      -17-
<Page>

     and the denominations in which Bearer Securities of the series, if any,
     shall be issuable if other than the denomination of $5,000;

          (14) the currency or currencies, including composite currencies, in
     which payment of the principal of (and premium, if any) and interest, if
     any, on the Securities of the series shall be payable (if other than the
     currency of the United States of America);

          (15) if the amount of payments of principal of (and premium, if any)
     or interest on the Securities of the series may be determined with
     reference to an index, the manner in which such amounts shall be
     determined;

          (16) if other than the principal amount thereof, the portion of the
     principal amount of Securities of the series which shall be payable upon
     declaration of acceleration of the Maturity thereof pursuant to Section
     502;

          (17) any additional Events of Default or additional covenants of PEC
     pertaining to the Securities of the series;

          (18) whether and under what circumstances PEC will pay additional
     amounts on the Securities of the series held by a Person who is a United
     States Alien in respect of taxes or similar charges withheld or deducted
     and, if so, whether PEC will have the option to redeem such Securities
     rather than pay such additional amounts;

          (19) whether any Securities of the series are to be issuable in whole
     or in part in the form of one or more Global Securities and, if so, (a) the
     Depositary with respect to such Global Security or Securities and (b) the
     circumstances under which beneficial owners of interests in any such Global
     Security may exchange such interest for Securities of the same series and
     of like tenor and of any authorized form and denomination, and the
     circumstances under which any such exchange may occur, if other than as set
     forth in Section 305;

          (20) if any of such Securities are to be issued in global form and are
     to be issuable in definitive form (whether upon original issue or upon
     exchange of a temporary Security) only upon receipt of certain certificates
     or other documents or satisfaction of other conditions, then the form and
     terms of such certificates, documents, or conditions;

          (21) whether such Securities are convertible into other securities and
     the terms thereof;

          (22) whether Section 401 shall apply to such Securities; and

          (23) any other terms of the series (which terms shall not be
     inconsistent with the terms of this Indenture).

                                      -18-
<Page>

     All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental hereto.

     If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Corporate Secretary or an Assistant Corporate Secretary of PEC
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series. Such Board Resolution may
provide general terms or parameters for Securities of such series and may
provide that the specific terms of particular Securities of such series, and the
Persons authorized to determine such terms or parameters, may be determined in
accordance with or pursuant to the Order referred to in the third paragraph of
Section 303.

   SECTION 302. DENOMINATIONS. Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, the Registered Securities
of each series shall be issuable in denominations of $1,000 or any integral
multiple thereof and the Bearer Securities of each series, if any, shall be
issuable in the denomination of $5,000.

   SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities
shall be executed on behalf of PEC by its Chairman of the Board, its President
or one of its Vice Presidents or its Treasurer, attested by its Corporate
Secretary or one of its Assistant Corporate Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile. Coupons shall bear
the facsimile signature of the Treasurer or any Assistant Treasurer of PEC.

     Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time relevant to the authorization thereof the
proper officers of PEC shall bind PEC, 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, PEC may deliver Securities of any series executed on behalf of PEC to
the Trustee for authentication by the Trustee together with an Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Order shall authenticate and deliver such Securities; PROVIDED, that
in connection with its original issuance, a Bearer Security may be delivered
only outside the United States and only if the Trustee shall have received from
the Person entitled to receive such Bearer Security a certificate in the form
required by Section 311; and PROVIDED FURTHER, that, with respect to Securities
of a series constituting a medium term note program, the Trustee shall
authenticate and deliver Securities of such series for original issue from time
to time in the aggregate principal amount established for such series pursuant
to such procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by an Order. The maturity dates, original issue
dates, interest rates and any other terms of the Securities of a subseries of
any medium term note program shall be determined by or pursuant to such Order
and procedures.

                                      -19-
<Page>

     In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Sections 315(a) through
315(d) of the Trust Indenture Act) shall be fully protected in relying upon:

          (a) the Board Resolution or indenture supplemental hereto establishing
     the form of the Securities of that series pursuant to Section 201 and the
     terms of the Securities of that series pursuant to Section 301 (or, in the
     case of a Board Resolution, pursuant to which such form and terms are
     established);

          (b) an Officer's Certificate pursuant to Sections 201 and 301 and
     complying with Section 102; and

          (c) an Opinion of Counsel complying with Section 102 stating,

               (i) that the forms of such Securities and coupons, if any, have
          been established by or pursuant to a Board Resolution or by an
          indenture supplemental hereto, as permitted by Section 201 and in
          conformity with the provisions of this Indenture;

               (ii) that the terms of such Securities have been established by
          or pursuant to a Board Resolution or by an indenture supplemental
          hereto, as permitted by Sections 201 and 301 and in conformity with
          the provisions of this Indenture;

               (iii) that such Securities, together with the coupons, if any,
          appertaining thereto, when authenticated and delivered by the Trustee
          and issued by PEC in the manner and subject to any customary
          conditions specified in such Opinion of Counsel, will constitute valid
          and legally binding obligations of PEC entitled to the benefits
          provided by the Indenture, enforceable in accordance with their
          respective terms, except to the extent that the enforcement of such
          obligations may be subject to bankruptcy laws or insolvency laws or
          other similar laws, general principles of equity and such other
          qualifications as such counsel shall conclude are customary or do not
          materially affect the rights of the Holders of such Securities;

               (iv) that all laws and requirements in respect of the execution
          and delivery of the Securities have been complied with; and

               (v) such other matters as the Trustee may reasonably request.

     With respect to Securities of a subseries of a medium term note program,
the Trustee may conclusively rely on the documents and opinion delivered
pursuant to Sections 201 and 301 and this Section 303, as applicable (unless
revoked by superseding comparable documents or opinions), with respect to the
establishment of the medium term note program as to the

                                      -20-
<Page>

authorization of the Board of Directors of any Securities delivered hereunder,
the form thereof and the legality, validity, binding effect and enforceability
thereof.

     Notwithstanding the provisions of Section 301 and of the preceding two
paragraphs, if not all the Securities of any series are to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the documents otherwise required pursuant to
the preceding clauses (a), (b) or (c) prior to or at the time of issuance of
each Security, but such documents shall be delivered prior to or at the time of
issuance of the first Security of such series and shall pertain to all of the
Securities of such series. After any such first delivery, any separate Request
that the Trustee authenticate Securities of such series for original issue will
be deemed to be a certification by PEC that all conditions precedent provided
for in this Indenture relating to authentication and delivery of such Securities
continue to have been complied with.

     If such forms or terms have been so established by or pursuant to a Board
Resolution or by an indenture supplemental hereto as permitted by Sections 201
and 301, the Trustee shall have the right to decline to authenticate and deliver
any Securities of such series:

          (i) if the Trustee, being advised by counsel, determines that such
     action may not lawfully be taken;

          (ii) if the Trustee, being advised by its board of directors,
     executive committee or a committee of directors or Responsible Officers of
     the Trustee, in good faith determines that such action would expose the
     Trustee to personal liability to Holders of any Outstanding series of
     Securities; or

          (iii) if the issue of such Securities pursuant to this Indenture will
     affect the Trustee's own rights, duties and immunities under the Securities
     and this Indenture or otherwise in a manner which is not reasonably
     acceptable to the Trustee.

     If PEC shall establish pursuant to Section 301 that the Securities of a
series are to be issued in whole or in part in the form of one or more Global
Securities, then it shall execute and the Trustee shall, in accordance with this
Section and the Order with respect to such series, authenticate and deliver one
or more Global Securities in permanent form that (i) shall represent and shall
be denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by such Global Security
or Securities, (ii) shall be registered, if in registered form, in the name of
the Depositary for such Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction and (iv) shall bear a legend as
required by Section 204.

     Each Registered Security shall be dated the date of its authentication.
Each Global Security, each Bearer Security and any temporary Bearer Security in
global form shall be dated as of the date specified as contemplated by Section
301.

                                      -21-
<Page>

     No Security or related coupon 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 manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Except as permitted by Section 306 or 307, the
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured and paid or payment duly provided
for have been detached and canceled.

   SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, PEC may execute, and upon an Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more coupons or without coupons, 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
(but which do not affect the rights or duties of the Trustee). In the case of
Bearer Securities of any series, such temporary Securities may be in global
form, representing all of the Outstanding Bearer Securities of such series.

     Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities of
any series are issued, PEC will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of PEC in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any unmatured coupons appertaining thereto), PEC shall execute and the
Trustee shall authenticate and deliver in exchange therefor (at an office or
agency of PEC in the case of Bearer Securities) a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor; PROVIDED, that no definitive Bearer Security shall be delivered in
exchange for a temporary Registered Security; and PROVIDED FURTHER, that no
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security unless the Trustee shall have received from the Person entitled to
receive the definitive Bearer Security a certificate in the form required by
Section 311. Until so exchanged, the temporary Securities of any series,
including temporary Securities in global form, shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities of such
series.

   SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. PEC shall
cause to be kept at one of its offices or agencies designated pursuant to
Section 1002 a register (referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, PEC shall provide
for the registration of Registered Securities of each series and of transfers
and exchanges of Registered Securities of such series. Said office or agency is
hereby appointed the security registrar (referred to as the "Security
Registrar") for the purpose of registering

                                      -22-
<Page>

Registered Securities of each series and transfers and exchanges of Registered
Securities of such series as herein provided.

     Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency in a Place of Payment maintained for such
purpose for such series, PEC shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Registered Securities of the same series, Stated Maturity and original
issue date, of any authorized denominations and of like tenor and aggregate
principal amount.

     At the option of the Holder, Registered Securities of any series (except a
Global Security representing all or a portion of such series) may be exchanged
for Registered Securities of the same series, Stated Maturity and original issue
date, of any authorized denominations and of like tenor and aggregate principal
amount, upon surrender of the Securities to be exchanged at any such office or
agency.

     At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series, Stated Maturity and
original issue date, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, such exchange may be effected if the Bearer
Securities are accompanied by payment in funds acceptable to PEC and the Trustee
in an amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by PEC and the Trustee
if there be furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; PROVIDED, that except as
otherwise provided in Section 1002, interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside the United States. Notwithstanding the foregoing, in case
a Bearer Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be.

     Whenever any Securities are so surrendered for exchange, PEC shall execute,
and the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.

                                      -23-
<Page>

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

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

     No service charge shall be made for any registration of transfer or
exchange of Securities, but PEC may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.

     PEC shall not be required (i) to issue, to register the transfer of or to
exchange Securities of any series during a period of 15 Business Days
immediately preceding the date notice is given identifying the serial numbers of
the Securities of that series called for redemption, or (ii) to issue, to
register the transfer of or to exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part, or (iii) to exchange any Bearer Security so selected for
redemption except that such a Bearer Security may be exchanged for a Registered
Security of that series, PROVIDED, that such Registered Security shall be
immediately surrendered for redemption with written instruction for payment
consistent with the provisions of this Indenture.

     Notwithstanding the foregoing, except as otherwise specified as provided by
Section 301, any Global Security shall be exchangeable pursuant to this Section
305 or Sections 304, 306, 906 or 1107 for Securities registered in the name of,
and a transfer of a Global Security of any series may be registered to, any
Person other than the Depositary for such Global Security or its nominee only
if:

          (i) such Depositary notifies PEC 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, and a successor Depositary is not
     appointed by PEC within 90 days;

          (ii) PEC executes and delivers to the Trustee an Order that such
     Global Security shall be so exchangeable and the transfer thereof so
     registrable; or

          (iii) there shall have occurred and be continuing an Event of Default
     or an event which, with the giving of notice or lapse of time, would
     constitute an Event of Default with respect to the Securities of such
     series.

Upon the occurrence in respect of any Global Security of any series of any one
or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence or such other conditions as may be specified as contemplated
by Section 301 for such series, then without unnecessary

                                      -24-
<Page>

delay, but in any event not later than the earliest date on which such interests
may be so exchanged, PEC shall deliver to the Trustee definitive Securities of
that series in aggregate principal amount equal to the principal amount of such
Global Security executed by PEC.

     On or after the earliest date on which such interests may be so exchanged,
such Global Securities shall be surrendered from time to time by the Depositary
and in accordance with instructions given to the Trustee and the Depositary
(which instructions shall be in writing but need not be contained in or
accompanied by an Officers' Certificate or be accompanied by an Opinion of
Counsel), as shall be specified in the Order with respect thereto to the
Trustee, as PEC's agent for such purpose, to be exchanged, in whole or in part,
for definitive Securities of the same series without service charge. The Trustee
shall authenticate and make available for delivery, in exchange for each portion
of such surrendered Global Security, a like aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such Global Security to be exchanged which (unless the
Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, in which case the definitive Securities exchanged for the
Global Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 301) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof; PROVIDED, that no such exchanges
may occur during a period beginning at the opening of business 15 Business Days
before any selection of Securities of that series to be redeemed and ending on
the relevant Redemption Date; and PROVIDED FURTHER, that (unless otherwise
specified as contemplated by Section 301) no Bearer Security delivered in
exchange for a portion of a Global Security shall be mailed or otherwise
delivered to any location in the United States.

     Promptly following any such exchange in part, such Global Security shall be
returned by the Trustee to the Depositary in accordance with the instructions
referred to above. If a Registered Security is issued in exchange for any
portion of a Global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date for such Security and
before the opening of business at such office or agency on the next Interest
Payment Date, or (ii) any Special Record Date for such Security and before the
opening of business at such office or agency on the related proposed date for
payment of interest or Defaulted Interest, as the case may be, interest shall
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Registered Security, but shall be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such Global
Security is payable in accordance with the provisions of this Indenture.

   SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee, PEC shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series, Stated
Maturity and original issue date, and of like tenor and principal amount and
bearing a number not contemporaneously outstanding, with coupons corresponding
to the coupons, if any, appertaining to the surrendered Security.

                                      -25-
<Page>

     If there shall be delivered to PEC and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security or coupon and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to PEC
or the Trustee that such Security or coupon has been acquired by a bona fide
purchaser, PEC shall execute and upon its Request the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security or in
exchange for the Security to which a destroyed, lost or stolen coupon appertains
(with all appurtenant coupons not destroyed, lost or stolen), a new Security of
the same series, Stated Maturity and original issue date, and of like tenor and
principal amount and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost or
stolen coupon appertains.

     In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, PEC in its discretion may,
instead of issuing a new Security, pay such Security or coupon; PROVIDED, that
payment of principal of (and premium, if any) and any interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States; and PROVIDED FURTHER,
that with respect to any such coupons, interest represented thereby (but not any
additional amounts payable as provided in Section 1004), shall be payable only
upon presentation and surrender of the coupons appertaining thereto.

     Upon the issuance of any new Security under this Section, PEC 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 of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any mutilated, destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
PEC, whether or not the mutilated, destroyed, lost or stolen Security and its
coupons, if any, or the mutilated, destroyed, lost or stolen coupon shall be at
any time enforceable by anyone, and any such new Security and coupons, if any,
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, 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 or coupons.

   SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Registered 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. Interest, if any, is paid on Bearer Securities to Holders of
coupons. In case a Bearer

                                      -26-
<Page>

Security of any series is surrendered in exchange for a Registered Security of
such series after the close of business (at an office or agency in a Place of
Payment for such series) on any Regular Record Date and before the opening of
business (at such office or agency) on the next succeeding Interest Payment
Date, such Bearer Security shall be surrendered without the coupon relating to
such Interest Payment Date and interest will not be payable on such Interest
Payment Date in respect of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such coupon when due
in accordance with the provisions of this Indenture.

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

          (1) PEC may elect to make payment of any Defaulted Interest to the
     Persons in whose names the Registered Securities of such series (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. PEC shall notify the Trustee in
     writing of the amount of Defaulted Interest proposed to be paid on each
     Registered Security of such series and the date of the proposed payment,
     and at the same time PEC 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 provided in this clause. 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 PEC of such Special Record Date and, in the name and at the
     expense of PEC, 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 of Registered Securities of
     such series at the address of such Holder as it appears in the Security
     Register, not less than 10 days prior to such Special Record Date. The
     Trustee may, in its discretion, in the name and at the expense of PEC,
     cause a similar notice to be published at least once in an Authorized
     Newspaper in each Place of Payment, but such publication shall not be a
     condition precedent to the establishment of such Special Record Date.
     Notice of the proposed payment of such Defaulted Interest and the Special
     Record Date therefor having been so mailed, such Defaulted Interest shall
     be paid to the Persons in whose names the Registered Securities of such
     series (or their respective Predecessor Securities) are registered at the
     close of business on such Special Record Date and shall no longer be
     payable pursuant to the following clause (2). In case a Bearer Security of
     any series is surrendered at the office or agency in a Place of Payment for
     such series in exchange for a Registered Security of such series after the
     close of business at such office or agency on any Special Record

                                      -27-
<Page>

     Date and before the opening of business at such office or agency on the
     related proposed date for payment of Defaulted Interest, such Bearer
     Security shall be surrendered without the coupon relating to such proposed
     date of payment and Defaulted Interest will not be payable on such proposed
     date of payment in respect of the Registered Security issued in exchange
     for such Bearer Security, but will be payable only to the Holder of such
     coupon when due in accordance with the provisions of this Indenture.

          (2) PEC may make payment of any Defaulted Interest on the Securities
     of any series in any other lawful manner not inconsistent with the
     requirements of any securities exchange on which such Securities may be
     listed, and upon such notice as may be required by such exchange, if, after
     notice given by PEC to the Trustee of the proposed payment pursuant to this
     clause, such manner of payment shall be deemed practicable by the Trustee.

     Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of 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 308. PERSONS DEEMED OWNERS. Prior to due presentment of a Registered
Security for registration of transfer, PEC, the Trustee and any agent of PEC or
the Trustee may deem and treat the Person in whose name such Registered Security
is registered as the absolute owner of such Registered Security for the purpose
of receiving payment of principal of (and premium, if any) and (subject to
Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither PEC, the Trustee nor any
agent of PEC or the Trustee shall be affected by any notice to the contrary.

     PEC, the Trustee and any agent of PEC or the Trustee may treat the bearer
of any Bearer Security and the bearer of any coupon as the absolute owner of
such Security or coupon for the purpose of receiving payment thereof or on
account thereof and for all other purposes whatsoever, whether or not such
Security or coupon be overdue, and neither PEC, the Trustee nor any agent of PEC
or the Trustee shall be affected by notice to the contrary.

     No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary (or its nominee) shall have any rights under this
Indenture with respect to such Global Security or any Security represented
thereby, and such Depositary may be treated by PEC, the Trustee, and any agent
of PEC or the Trustee as the owner of such Global Security or any Security
represented thereby for all purposes whatsoever. None of PEC, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

                                      -28-
<Page>

   SECTION 309. CANCELLATION. All Securities and coupons surrendered for
payment, redemption, registration of transfer or exchange or for credit against
any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by the
Trustee. PEC may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which PEC 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 and
coupons held by the Trustee shall be destroyed and certification of their
destruction delivered to PEC, unless an Order shall direct that canceled
Securities be returned to PEC.

     The repayment of any principal amount of Securities pursuant to such option
of the Holder to require repayment of Securities before their Stated Maturity,
for purposes of this Section 309, shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
PEC, at its option, shall deliver or surrender the same to the Trustee with an
Order that such Securities be canceled.

   SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 301(4) for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.

   SECTION 311. FORM OF CERTIFICATION BY A PERSON ENTITLED TO RECEIVE A BEARER
SECURITY. Whenever any provision of this Indenture or the form of Security
contemplates that certification be given by a Person entitled to receive a
Bearer Security, such certification shall be provided substantially in the form
of the following certificate, with only such changes as shall be approved by PEC
and of which PEC shall have given written notice to the Trustee:

                                      -29-
<Page>

                       [FORM OF CERTIFICATE TO BE GIVEN BY
                   PERSON ENTITLED TO RECEIVE BEARER SECURITY]

                                   Certificate

                               [Name of Security]

     This is to certify that the above-captioned Security is not being acquired
by or on behalf of a United States person, or for offer to resell or for resale
to a United States person, or, if a beneficial interest in the Security is being
acquired by a United States person, that such person is a financial institution
or is acquiring through a financial institution and that the Security is held by
a financial institution that has agreed in writing to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder and that such person or
financial institution is not purchasing for offer to resell or for resale within
the United States. If this certificate is being provided by a clearing
organization, it is based on statements provided to it by its member
organizations. As used herein, "UNITED STATES" means the United States of
America (including the States and the District of Columbia), its territories and
possessions and other areas subject to its jurisdiction, and "UNITED STATES
PERSON" means any citizen or resident of the United States, any corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source. If the undersigned is a dealer, the undersigned agrees to obtain
a similar certificate from each person entitled to delivery of any of the
above-captioned Securities in bearer form purchased from it; PROVIDED, that if
the undersigned has actual knowledge that the information contained in such a
certificate is false, the undersigned will not deliver a Security in temporary
or definitive bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the undersigned.

     We undertake to advise you by telecopy if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.

     We understand that this certificate is required in connection with certain
tax legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.

Dated:  __________, 20__                        ________________________________

                                      -30-
<Page>

   SECTION 312. CUSIP, ISIN AND COMMON CODE NUMBERS. PEC, in issuing the
Securities, may use "CUSIP", "ISIN" or "Common Code" numbers (if then generally
in use) and, if so, the Trustee shall use "CUSIP", "ISIN" or "Common Code"
numbers in notices of redemption as a convenience to Holders; PROVIDED, however,
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 FOUR

                           SATISFACTION AND DISCHARGE

   Section 401. SATISFACTION AND DISCHARGE OF SECURITIES.

     Unless otherwise specified in an Officers' Certificate or indenture
supplemental hereto provided pursuant to Section 301, any Security or
Securities, or any portion of the principal amount thereof, shall be deemed to
have been paid for all purposes of this Indenture, and the entire indebtedness
of PEC in respect thereof shall be satisfied and discharged, if there shall have
been irrevocably deposited with the Trustee or any Paying Agent (other than
PEC), in trust:

     (a) money in an amount which shall be sufficient, or

     (b) in the case of a deposit made prior to the Maturity of such Securities
or portions thereof, Eligible Obligations, which shall not contain provisions
permitting the redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which when due, without any
regard to reinvestment thereof, will provide moneys which, together with the
money, if any, deposited with or held by the Trustee or such Paying Agent, shall
be sufficient, or

     (c) a combination of (a) or (b) which shall be sufficient,

to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof; PROVIDED, however,
that in the case of the provision for payment or redemption of less than all the
Securities of any series, such Securities or portions thereof shall have been
selected by the Trustee as provided herein and, in the case of a redemption, the
notice requisite to the validity of such redemption shall have been given or
irrevocable authority shall have been given by PEC to the Trustee to give such
notice, under arrangements satisfactory to the Trustee; and PROVIDED, further,
that PEC shall have delivered to the Trustee and such Paying Agent:

          (x) if such deposit shall have been made prior to the Maturity of such
     Securities, an Order stating that the money and Eligible Obligations
     deposited in accordance with this Section shall be held in trust, as
     provided in Section 1003;

                                      -31-
<Page>

          (y) if Eligible Obligations shall have been deposited, an Opinion of
     Counsel to the effect that such obligations constitute Eligible Obligations
     and do not contain provisions permitting the redemption or other prepayment
     thereof at the option of the issuer thereof, and an opinion of an
     independent public accountant of nationally recognized standing, selected
     by PEC, to the effect that the other requirements set forth in clause (b)
     and (c) above have been satisfied; and

          (z) if such deposit shall have been made prior to the Maturity of such
     Securities, an Officers' Certificate stating PEC's intention that, upon
     delivery of such Officers' Certificate, its indebtedness in respect of such
     Securities or portions thereof will have been satisfied and discharged as
     contemplated in this Section.

     Upon the deposit of money or Eligible Obligations, or both, in accordance
with this Section, together with the documents required by clauses (x), (y) and
(z) above, the Trustee shall, upon a Request, acknowledge in writing that such
Securities or portions thereof are deemed to have been paid for all purposes of
this Indenture and that the entire indebtedness of PEC in respect thereof has
been satisfied and discharged as contemplated in this Section and that such
Securities are no longer deemed to be Outstanding under this Indenture. In the
event that all of the conditions set forth in the preceding paragraph shall have
been satisfied in respect of any Securities or portions thereof except that, for
any reason, the Officers' Certificate specified in clause (z) (if otherwise
required) shall not have been delivered, such Securities or portions thereof
shall nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof shall
nevertheless be no longer entitled to the benefits provided by this Indenture or
of any of the covenants of PEC under Article Ten (except the covenants contained
in Sections 1002 and 1003) or any other covenants made in respect of such
Securities or portions thereof as contemplated by Section 301 or Section 901(2),
but the indebtedness of PEC in respect of such Securities or portions thereof
shall not be deemed to have been satisfied and discharged prior to Maturity for
any other purpose; and, upon a Request, the Trustee shall acknowledge in writing
that such Securities or portions thereof are deemed to have been paid for all
purposes of this Indenture.

     If payment at Stated Maturity of less than all of the Securities of any
series is to be provided for in the manner and with the effect provided in this
Section, the Trustee shall select such Securities, or portions of principal
amount thereof, in the manner specified by Section 1103 for selection for
redemption of less than all the Securities of a series.

     In the event that the Securities which shall be deemed to have been paid
for purposes of this Indenture, and, if such is the case, in respect of which
PEC's indebtedness shall have been satisfied and discharged and which are no
longer deemed to be Outstanding under this Indenture, all as provided in this
Section, do not mature and are not to be redeemed within the sixty (60) day
period commencing with the date of the deposit of moneys or Eligible
Obligations, as aforesaid, PEC shall, as promptly as practicable, give a notice,
in the same manner as a notice of redemption with respect to such Securities, to
the Holders of such Securities to the effect that such deposit has been made and
the effect thereof.

                                      -32-
<Page>

     Notwithstanding that any Securities shall be deemed to have been paid and
no longer Outstanding for purposes of this Indenture, as aforesaid, the
obligations of PEC and the Trustee in respect of such Securities under Sections
304, 305, 306, 607, 614, 1002, 1003 and 1104 and this Article shall survive.

     PEC shall pay, and shall indemnify the Trustee or any Paying Agent with
which Eligible Obligations shall have been deposited as provided in this Section
against, any tax, fee or other charge imposed on or assessed against such
Eligible Obligations or the principal or interest received in respect of such
Eligible Obligations, including, but not limited to, any such tax payable by any
entity deemed, for tax purposes, to have been created as a result of such
deposit.

     Anything herein to the contrary notwithstanding, (a) if, at any time after
a Security would be deemed to have been paid for purposes of this Indenture,
and, if such is the case, PEC's indebtedness in respect thereof would be deemed
to have been satisfied and discharged and which are no longer deemed to be
Outstanding under this Indenture, pursuant to this Section (without regard to
the provisions of this paragraph), the Trustee or any Paying Agent, as the case
may be, (i) shall be required to return the money or Eligible Obligations, or
combination thereof, deposited with it as aforesaid to PEC or its representative
under any applicable Federal or State bankruptcy, insolvency or other similar
law, or (ii) are unable to apply any money in accordance with this Article with
respect to any Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, such Security shall thereupon be deemed retroactively not to have
been paid and any satisfaction and discharge of PEC's indebtedness in respect
thereof shall retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any satisfaction and
discharge of PEC's indebtedness in respect of any Security shall be subject to
the provisions of the last paragraph of Section 1003.

   SECTION 402. SATISFACTION AND DISCHARGE OF INDENTURE.

This Indenture shall upon a Request cease to be of further effect (except as
hereinafter expressly provided), and the Trustee, at the expense of PEC, shall
execute such instruments as PEC shall reasonably request to evidence and
acknowledge the satisfaction and discharge of this Indenture, when:

     (a) no Securities remain Outstanding hereunder; and

     (b) PEC has paid or caused to be paid all other sums payable hereunder by
PEC;

PROVIDED, however, that if, in accordance with the last paragraph of Section
401, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and PEC shall
execute and deliver such instruments as the Trustee shall reasonably request to
evidence and acknowledge the same.

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     Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of PEC and the Trustee under Sections 304, 305, 306,
607, 614, 1002, 1003 and 1104 and this Article shall survive.

     Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall turn over to PEC any and all money, securities and
other property then held by the Trustee for the benefit of the Holders of the
Securities (other than money and Eligible Obligations held by the Trustee
pursuant to Section 403) and shall execute and deliver to PEC such instruments
as, in the judgment of PEC, shall be necessary, desirable or appropriate to
effect or evidence the satisfaction and discharge of this Indenture.

   SECTION 403. APPLICATION OF TRUST MONEY.

     Neither the Eligible Obligations nor the money deposited pursuant to
Section 401, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of and premium, if any, and
interest, if any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 1003; PROVIDED, however, that any cash received from such principal
or interest payments on such Eligible Obligations, if not then needed for such
purpose, shall, to the extent practicable and upon a Request and delivery to the
Trustee of the documents referred to in clause (y) in the first paragraph of
Section 401, be invested in Eligible Obligations of the type described in clause
(b) in the first paragraph of Section 401 maturing at such times and in such
amounts as shall be sufficient, together with any other moneys and the proceeds
of any other Eligible Obligations then held by the Trustee, to pay when due the
principal of and premium, if any, and interest, if any, due and to become due on
such Securities or portions thereof on and prior to the Maturity thereof, and
interest earned from such reinvestment shall be paid over to PEC as received,
free and clear of any trust, lien or pledge under this Indenture (except the
lien provided by Section 607); and PROVIDED FURTHER, that any moneys held in
accordance with this Section on the Maturity of all such Securities in excess of
the amount required to pay the principal of and premium, if any, and interest,
if any, then due on such Securities shall be paid over to PEC free and clear of
any trust, lien or pledge under this Indenture (except the lien provided by
Section 607); and PROVIDED FURTHER, that if an Event of Default shall have
occurred and be continuing, moneys to be paid over to PEC pursuant to this
Section shall be held until such Event of Default shall have been waived or
cured.

   SECTION 404. REINSTATEMENT.

     If the Trustee is unable to apply any money or Eligible Obligations in
accordance with Section 401 or 402, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
PEC's obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to section 401 or 402, as
the case may be, until such time as the Trustee is permitted to apply all such
money or Eligible Obligations in accordance with Section 401 or 402, as the case
may be; PROVIDED that, if PEC has

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made payment of principal of, or interest on any Securities because of the
reinstatement of its obligations, PEC shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money or Eligible
Obligations held by the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

   SECTION 501. EVENTS OF DEFAULT. "Event of Default," wherever used herein with
respect to Securities of any series, 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) PEC defaults in the payment of any interest (including any
     additional amounts due under Section 1004 as specified therein) upon any
     Security of that series when it becomes due and payable and continuance of
     such default for a period of 60 days; or

          (2) PEC defaults in the payment of the principal (including any
     additional amounts due under Section 1004 as specified therein) of (or
     premium, if any, on) any Security of that series at its Maturity or in the
     deposit of any sinking fund payment when and as due by the terms of the
     Security of that series and in any such case, continuance of such default
     for a period of three Business Days thereafter; or

          (3) PEC defaults in the performance of or breaches any covenant or
     warranty of PEC in this Indenture (other than a covenant or warranty a
     default in whose performance or whose breach is elsewhere in this Section
     specifically dealt with or which has expressly been included in or pursuant
     to this Indenture solely for the benefit of one or more series of
     Securities other than that series), and continuance of such default or
     breach for a period of 90 days after there has been given, by registered or
     certified mail, to PEC by the Trustee, or to PEC and the Trustee by the
     Holders of at least 25% in principal amount of the Outstanding Securities
     of that series, a written notice specifying such default or breach and
     requiring it to be remedied and stating that such notice is a "Notice of
     Default" hereunder; or

          (4) the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of PEC in an involuntary case or
     proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or (B) a decree or order adjudging PEC
     as bankrupt or insolvent, or approving as properly filed a petition by one
     or more Persons other than PEC, or any of its Affiliates, seeking
     reorganization, arrangement, adjustment or composition of or in respect of
     PEC under any applicable Federal or State law, or appointing a custodian,
     receiver, liquidator, assignee, trustee, sequestrator or other similar
     official for PEC, or for any substantial part of the property of PEC, or
     ordering the liquidation or winding up of the affairs of PEC,

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     and the continuance of any such decree or order for relief or any such
     other decree or order unstayed and in effect for a period of 90 consecutive
     days; or

          (5) the commencement by PEC of a case or proceeding under any
     applicable Federal or State bankruptcy, insolvency, reorganization or other
     similar law or of any other case or proceeding to be adjudicated a bankrupt
     or insolvent, or the consent by it to the entry of a decree or order for
     relief in respect of it in a case or proceeding under any applicable
     Federal or State bankruptcy, insolvency, reorganization or other similar
     law or to the commencement of any bankruptcy or insolvency case or
     proceeding against it, or the filing by it of a petition or answer or
     consent seeking reorganization or relief under any applicable Federal or
     State law, or the consent by it to the filing of such petition or to the
     appointment of or taking possession by a custodian, receiver, liquidator,
     assignee, trustee, sequestrator or similar official in respect of it or any
     substantial part of its property, or the making by it of an assignment for
     the benefit of creditors, or its admission in writing of its inability to
     pay its debts generally as they become due, or its taking of corporate
     action in furtherance of any such action; or

          (6) any other Event of Default PROVIDED with respect to Securities of
     that series.

   SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event
of Default with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 33% in principal amount of the Outstanding Securities of that
series may declare the principal amount (or, if the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all of the Securities of that
series to be due and payable immediately, by a notice in writing to PEC (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.

     At any time after such a declaration of acceleration with respect to
Securities of any series 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, such declaration and its consequences shall be rescinded and
annulled if:

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

               (A) all overdue interest on all Securities of that series;

               (B) the principal of (and premium, if any, on) any Securities of
          that series which have become due otherwise than by such declaration
          of acceleration and interest thereon at the rate or rates prescribed
          therefor in such Securities;

               (C) to the extent that payment of such interest is lawful,
          interest upon overdue interest at the rate or rates prescribed
          therefor in such Securities; and

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               (D) 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 any other amounts due to the
          Trustee under Section 607;

     and

          (2) all Events of Default with respect to Securities of that series,
     other than the non-payment of the principal of Securities of that series
     which have become due solely by such declaration of acceleration, have been
     cured or waived as provided in Section 513.

     No such rescission and annulment shall affect any subsequent default or
impair any right consequent thereon.

   SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
PEC covenants that if:

          (1) default is made in the payment of any interest on any Security
     when such interest becomes due and payable and such default continues for a
     period of 60 days, or

          (2) default is made in the payment of the principal of (or premium, if
     any, on) any Security at the Maturity thereof and such default continues
     for a period of three Business Days,

PEC will, upon demand of the Trustee, pay to it, for the benefit of the Holders
of such Securities and coupons, the whole amount then due and payable on such
Securities and coupons for principal (and premium, if any) and interest, with
interest on any overdue principal (and premium, if any) and on any overdue
interest, to the extent that payment of such interest shall be legally
enforceable, at the rate or rates prescribed therefor in such Securities, 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, and
any other amounts due to the Trustee under Section 607.

     If PEC 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, may prosecute such
proceeding to judgment or final decree, and may enforce the same against PEC or
any other obligor upon such Securities and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of PEC
or any other obligor upon such Securities, wherever situated.

     If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights,

                                      -37-
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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 504. 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 PEC or any
other obligor upon the Securities or the property of PEC or of such other
obligor or their creditors, 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 PEC or any other obligor for the payment of overdue principal or
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 owing and unpaid in respect of the Securities
     and to file such other papers or documents as may be necessary or advisable
     in order to have the claims of the Trustee (including any claim for the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel, and any other amounts due to the Trustee
     under Section 607) and of the Holders of Securities and coupons allowed in
     such judicial proceeding; and

          (ii) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.

   SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS. All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons 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, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.

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   SECTION 506. APPLICATION OF MONEY COLLECTED. Any money collected 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 on account of principal (or premium, if any) or interest, upon
presentation of the Securities or coupons, or both, as the case may be, 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 under Section
     607; and

          SECOND: To the payment of the amounts then due and unpaid for
     principal of (and premium, if any) and interest on the Securities and
     coupons 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 and coupons for principal
     (and premium, if any) and interest, respectively; and

          THIRD: To PEC.

   SECTION 507. LIMITATION ON SUITS. No Holder of any Security of any series or
any related coupons shall have any right to institute any proceeding, judicial
or otherwise with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:

          (1) such Holder has previously given written notice to the Trustee of
     a continuing Event of Default with respect to the Securities of that
     series;

          (2) the Holders of not less than a majority in principal amount of the
     Outstanding Securities of that series 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 of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.

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   SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST. Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security or payment of such coupon on
the Stated Maturity or Maturities expressed in such Security or coupon (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

   SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder
of a Security or coupon 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, subject to any determination in such
proceeding, PEC, the Trustee and the Holders of Securities and coupons shall 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 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities or coupons 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 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Security or coupon 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 of Securities or coupons may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders of Securities
or coupons, as the case may be.

   SECTION 512. CONTROL BY HOLDERS OF SECURITIES. The Holders of a majority in
principal amount of the Outstanding Securities of any series 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, with respect to the Securities of such series; PROVIDED, that:

          (1) such direction shall not be in conflict with any rule of law or
     with this Indenture, expose the Trustee to personal liability or be unduly
     prejudicial to Holders not joined therein; and

                                      -40-
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          (2) the Trustee may take any other action deemed proper by the Trustee
     which is not inconsistent with such direction.

   SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of not less than a majority
in principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series and any related coupons waive
any past default hereunder with respect to such series and its consequences,
except a default:

          (1) in the payment of the principal of (or premium, if any) or
     interest on any Security of such series; 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 of such series 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 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and
each Holder of any Security or coupon 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, suffered 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 of any series, or to any suit instituted by any Holder of
any Security or coupon for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Security or the payment of any coupon on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).

                                   ARTICLE SIX

                                   THE TRUSTEE

   SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.

     (a) Except during the continuance of an Event of Default with respect to
Securities of any series:

          (1) the Trustee undertakes to perform, with respect to Securities of
     such series, such duties and only such duties as are specifically set forth
     in this Indenture, and

                                      -41-
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     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, with
     respect to Securities of such series, 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 provision 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 with respect to Securities of any series
has occurred and is continuing, the Trustee shall exercise, with respect to
Securities of such series, 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 man 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 of any series 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 with respect to the Securities of such series; 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 it shall have 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.

                                      -42-
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   SECTION 602. NOTICE OF DEFAULTS. Within 90 days after the occurrence of any
default hereunder with respect to the Securities of any series, the Trustee
shall transmit, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, notice of all such defaults hereunder known to the
Trustee, unless such default shall have been cured or waived; PROVIDED, that
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
PROVIDED FURTHER, that in the case of any default of the character specified in
Section 501(3) with respect to Securities of such series, no such notice to
Holders shall be given until at least 75 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 with
respect to Securities of such series.

   SECTION 603. CERTAIN RIGHTS OF TRUSTEE. Subject to Sections 315(a) through
315(d) of the Trust Indenture Act:

          (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, note, coupon, other evidence of indebtedness 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 PEC mentioned herein shall be
     sufficiently evidenced by a Request or Order and any resolution of the
     Board of Directors shall 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 of Securities of any series 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;

                                      -43-
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          (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, note, coupon, other evidence of indebtedness or other
     paper or document, but the Trustee, in its discretion, may make such
     further inquiry or investigation into such facts or matters as it may see
     fit, and, if the Trustee shall determine to make such further inquiry or
     investigation, it shall be entitled to examine the books, records and
     premises of PEC personally or by agent or attorney;

          (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; and

          (h) except as otherwise provided in Section 501(5), the Trustee shall
     not be charged with knowledge of any Event of Default with respect to the
     Securities of any series for which it is acting as Trustee unless either
     (1) a Responsible Officer of the Trustee assigned to Global Corporate Trust
     Services (or any successor division or department of the Trustee) shall
     have actual knowledge of the Event of Default or (2) written notice of such
     Event of Default shall have been given to the Trustee by PEC, any other
     obligor on such Securities or by any Holder of such Securities.

   SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) and in any coupons shall be taken as the
statements of PEC, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities or coupons,
except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to PEC are true and accurate, subject to the
qualifications set forth therein. The Trustee or any Authenticating Agent shall
not be accountable for the use or application by PEC of Securities or the
proceeds thereof.

   SECTION 605. MAY HOLD SECURITIES. The Trustee, any Authenticating Agent, any
Paying Agent, any Security Registrar or any other agent of PEC, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with PEC or an Affiliate of either with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

   SECTION 606. 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 PEC.

                                      -44-
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   SECTION 607. COMPENSATION AND REIMBURSEMENT. PEC agrees:

          (1) to pay to the Trustee and each Authenticating Agent from time to
     time reasonable compensation for all services rendered by it hereunder
     (which compensation shall not be limited by any provision of law in regard
     to the compensation of a trustee of an express trust);

          (2) except as otherwise expressly provided herein, 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 and any Authenticating Agent),
     except any such expense, disbursement or advance as may be attributable to
     its negligence, willful misconduct or bad faith; and

          (3) to indemnify the Trustee for, and to hold it harmless against, any
     loss, liability or expense incurred without negligence, willful misconduct
     or bad faith on its part, arising out of or in connection with the
     acceptance or administration of the trust or trusts hereunder, including
     the reasonable 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.

     As security for the performance of the obligations of PEC under this
Section, the Trustee shall have a lien prior to the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the payment of principal of, premium, if any, or interest, if any, on
particular Securities.

   SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS. If at any time the
Trustee shall fail to comply with the obligations imposed upon it by the
provisions of Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by PEC or by any Holder
of a Security of such series who has been a bona fide Holder of a Security of
such series for at least six months then, (i) PEC, by or pursuant to a Board
Resolution, may remove the Trustee with respect to all Securities or the
Securities of such series, or (ii) subject to Section 315(e) of the Trust
Indenture Act, any Holder who has been a bona fide Holder of a Security of such
series 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 with respect to all Securities of such series and the appointment
of a successor Trustee or Trustees. The Trustee shall comply with the terms of
Section 310(b) of the Trust Indenture Act.

   SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee hereunder that is a Person organized and doing business under
the laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers, or any
other Person permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the Trust
Indenture Act) of at least $50,000,000, is subject to supervision or examination
by Federal, State or District of Columbia authority and is not otherwise
ineligible under Section 310(a)(5) of the Trust Indenture Act. If such Person
publishes reports of condition at least annually, pursuant to law or to the

                                      -45-
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requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time 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.

   SECTION 610. 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 in accordance with the
applicable requirements of Section 611.

     (b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to PEC. If the instrument of
acceptance by a successor Trustee required by Section 611 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 with respect to the
Securities of such series.

     (c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and PEC.

     (d) Except during the continuance of an Event of Default, the Trustee may
be removed at any time by PEC by Board Resolution with no less than thirty days
notice to the Trustee.

     (e) If at any time:

          (1) the Trustee shall fail to comply with Section 608 after written
     request therefor by PEC or by any Holder of a Security 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 609 and shall
     fail to resign after written request therefor by PEC 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) PEC by Board Resolution of each may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder of a Security who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all other
similarly situated Holders, petition any court of competent jurisdiction for

                                      -46-
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the removal of the Trustee with respect to all Securities and the appointment of
a successor Trustee or Trustees.

     (f) 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, with respect
to the Securities of one or more series, PEC, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to PEC and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by PEC. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by PEC or the Holders of
Securities and accepted appointment in the manner required by Section 611, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

     (g) PEC shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issuable as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

   SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to PEC and to the retiring Trustee an instrument accepting such appointment.
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 PEC or on the request of 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; PROVIDED, that such property and money shall
continue to be subject to any lien in favor of the retiring Trustee provided for
in Section 607.

                                      -47-
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     (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, PEC, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each 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 with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
PEC or on the request of any successor Trustee, such retiring Trustee 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 607, with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

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

     (d) 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 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, if such Person 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

                                      -48-
<Page>

deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

   SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and when
the Trustee shall be or become a creditor of PEC (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions of Section 311 and
any other provision of the Trust Indenture Act regarding the collection of
claims against PEC.

   SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT. At any time when any of the
Securities remain Outstanding, the Trustee may appoint an Authenticating Agent
or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to PEC and shall at all times be a Corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the Trust Indenture Act) of not less than $50,000,000 and
subject to supervision or examination by Federal, State or District of Columbia
authority. If such Corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes 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
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.

     Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, if such Corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to PEC. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to PEC. Upon receiving such a notice of resignation or
upon such termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,

                                      -49-
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the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to PEC and shall (i) mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Registered Securities, if
any, of the series with respect to which such Authenticating Agent will serve,
as their names and addresses appear in the Security Register, and (ii) if
Securities of the series are issuable as Bearer Securities, publish notice of
such appointment at least once in an Authorized Newspaper in the place where
such successor Authenticating Agent has its principal office if such office is
located outside the United States. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

     The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.

     If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:

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

                                             [Bank One Trust Company National
                                                Association,] as Trustee

                                             By
                                                -------------------------------
                                             As Authenticating Agent

                                             By
                                                -------------------------------
                                             Authorized Signatory

                                      -50-
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                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

   SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. In
accordance with Section 312(a) of the Trust Indenture Act, PEC will furnish or
cause to be furnished to the Trustee:

          (a) semi-annually, not later than June 1 and December 1, in each year,
     a list, in such form as the Trustee may reasonably require, containing all
     the information in the possession or control of PEC, or any of its Paying
     Agents other than the Trustee, as to the names and addresses of the Holders
     of Securities as of the preceding May 15 or November 15, as the case may
     be, and

          (b) at such other times as the Trustee may request in writing, within
     30 days after the receipt by PEC 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;

PROVIDED, that no such list need be furnished if the Trustee shall be the
Security Registrar.

   SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. (a) The
Trustee shall comply with the obligations imposed upon it pursuant to Section
312 of the Trust Indenture Act.

     (b) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with PEC and the Trustee that neither PEC nor the Trustee nor any
agent of any of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders of Securities
in accordance with Section 312 of 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 of the Trust Indenture Act.

   SECTION 703. REPORTS BY TRUSTEE. (a) Within 60 days after May 15 of each year
commencing with the first May 15 following the first issuance of Securities
pursuant to Section 301, if required by Section 313(a) of the Trust Indenture
Act, the Trustee shall transmit, pursuant to Section 313(c) of the Trust
Indenture Act, a brief report dated as of such May 15 with respect to any of the
events specified in said Section 313(a) which may have occurred since the later
of the immediately preceding May 15 and the date of this Indenture.

     (b) The Trustee shall transmit the reports required by Section 313(b) of
the Trust Indenture Act at the times specified therein.

     (c) Reports pursuant to this Section shall be transmitted in the manner and
to the Persons required by -> Sections 313(c) and 313(d) of the Trust Indenture
Act.

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   SECTION 704. REPORTS BY PEC. PEC, pursuant to Section 314(a) of the Trust
Indenture Act, shall:

          (1) file with the Trustee, within 15 days after PEC is required to
     file the same with the Commission, copies of the annual reports and of the
     information, documents and other reports (or copies of such portions of any
     of the foregoing as the Commission may from time to time by rules and
     regulations prescribe) which PEC may be required to file with the
     Commission pursuant to Section 13 or Section 15(d) of the Securities
     Exchange Act of 1934, as amended; or, if PEC is not required to file
     information, documents or reports pursuant to either of said sections, then
     it shall file with the Trustee and the Commission, in accordance with rules
     and regulations prescribed from time to time by the Commission, such of the
     supplementary and periodic information, documents and reports which may be
     required pursuant to Section 13 of the Securities Exchange Act of 1934, as
     amended, in respect of a security listed and registered on a national
     securities exchange as may be prescribed from time to time in such rules
     and regulations;

          (2) file with the Trustee and the Commission, in accordance with rules
     and regulations prescribed from time to time by the Commission, such
     additional information, documents and reports with respect to compliance by
     PEC with the conditions and covenants of this Indenture as may be required
     from time to time by such rules and regulations; and

          (3) transmit, within 30 days after the filing thereof with the
     Trustee, to the Holders of Securities, in the manner and to the extent
     provided in Section 313(c) of the Trust Indenture Act, such summaries of
     any information, documents and reports required to be filed by PEC pursuant
     to paragraphs (1) and (2) of this Section as may be required by rules and
     regulations prescribed from time to time by the Commission.

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

   SECTION 801. PEC MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. PEC 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) (A) PEC is the surviving or resulting entity, or (B) the Person
     formed by any such consolidation or into which it is merged or the Person
     which acquires by conveyance or transfer, or which leases, its properties
     and assets substantially as an entirety shall be organized and existing
     under the laws of the United States of America, any State thereof or the
     District of Columbia and shall expressly assume the due and punctual
     payment of the principal of (and premium, if any) and interest on all the
     Securities and the performance of every covenant of this Indenture to be
     performed or observed on the part of PEC;

                                      -52-
<Page>

          (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; and

          (3) PEC has delivered to the Trustee an Officers' Certificate and an
     Opinion of Counsel, each stating that such consolidation, merger,
     conveyance, transfer or lease complies with this Section 801 and that all
     conditions precedent herein provided for relating to such transaction have
     been complied with.

   SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation by PEC
with or merger by PEC into any other Person or any conveyance, transfer or lease
of PEC's properties and assets substantially as an entirety in accordance with
Section 801, the successor formed by such consolidation or into which it 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, PEC under
this Indenture with the same effect as if such successor had been named as PEC
herein, and thereafter, except in the case of a lease, the predecessor shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

   SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders of Securities or coupons, PEC, 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 one or more of the following purposes only:

          (1) to evidence the succession of another Corporation to PEC and the
     assumption by any such successor of the covenants of PEC herein and in the
     Securities and coupons; or

          (2) to add to the covenants of PEC for the benefit of the Holders of
     all or any series of Securities (and if such covenants are to be for the
     benefit of less than all series of Securities, stating that such covenants
     are expressly being included solely for the benefit of such series) or to
     surrender any right or power herein conferred upon PEC; or

          (3) to add any additional Events of Default; or

          (4) to add to or change any of the provisions of this Indenture to
     provide that Bearer Securities may be registrable as to principal, to
     change or eliminate any restrictions on the payment of principal (or
     premium, if any) on Registered Securities or of principal (or premium, if
     any) or any interest on Bearer Securities, to permit Registered Securities
     to be exchanged for Bearer Securities or to permit the issuance of
     Securities in uncertificated form; PROVIDED, that any such action shall not
     adversely affect the interests

                                      -53-
<Page>

     of the Holders of Securities of any series or any related coupons in any
     material respect; or

          (5) to change or eliminate any of the provisions of this Indenture;
     PROVIDED, that any such change or elimination shall become effective only
     when there is no Security Outstanding of any series created prior to the
     execution of such supplemental indenture which is entitled to the benefit
     of such provision; or

          (6) to secure the Securities; or

          (7) to establish the form or terms of Securities of any series and any
     related coupons as permitted by Sections 201 and 301; or

          (8) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series, to contain such provisions as shall be deemed necessary or
     desirable to confirm that all the rights, powers, trusts and duties of the
     predecessor Trustee with respect to the Securities of any series as to
     which the predecessor Trustee is not retiring shall continue to be vested
     in the predecessor Trustee, and to add to or change any of the provisions
     of this Indenture as shall be necessary to provide for or facilitate the
     administration of the trusts hereunder by more than one Trustee, pursuant
     to the requirements of Section 611(b); or

          (9) to cure any ambiguity, to correct or supplement any provision
     herein which may be defective or 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 change shall
     not be inconsistent with the provisions of this Indenture and shall not
     adversely affect the interests of the Holders of Securities of any series
     or any related coupons in any material respect; or

          (10) to provide for issuance of Bearer Securities; or

          (11) to change any place or places where (a) PEC and Trust may pay
     principal, premium and interest, (b) Securities may be surrendered for
     transfer or exchange, and (c) notices and demands to or upon PEC may be
     served; or

          (12) to conform this Indenture to any amendments to the Trust
     Indenture Act.

   SECTION 902. 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 of each series affected by such supplemental indenture,
by Act of said Holders delivered to PEC and the Trustee, PEC, 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 modifying
in any manner the rights of the Holders of Securities of such series and any
related coupons under

                                      -54-
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this Indenture; PROVIDED, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security or coupon affected thereby:

          (1) change the Stated Maturity of the principal of, or of any
     installment of principal of or interest on, any Security, or reduce the
     principal amount thereof or the rate of interest thereon or any premium
     payable upon the redemption thereof, or change the method of calculating
     the rate of interest thereon, or change any obligation of PEC to pay
     additional amounts pursuant to Section 1004 (except as contemplated by
     Section 801(1) and permitted by Section 901(1)), or reduce the amount of
     the principal of an Original Issue Discount Security that would be due and
     payable upon a declaration of acceleration of the Maturity thereof pursuant
     to Section 502, or change any Place of Payment in the United States where,
     or the coin or currency in which, any Security or any premium or the
     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);

          (2) reduce the percentage in principal amount of the Outstanding
     Securities of any series, 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 reduce the requirements of Section 1304 for quorum or voting;

          (3) change any obligation of PEC to maintain an office or agency in
     each Place of Payment, or any obligation of PEC to maintain an office or
     agency outside the United States pursuant to Section 1002;

          (4) modify any of the provisions of this Section, Section 513 or
     Section 1010, 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 Outstanding Security affected
     thereby.

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

     It shall not be necessary for any Act of Holders of Securities 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.

     PEC shall have the right to set a record date for the solicitation of any
consents under this Article Nine, which record date shall be set in accordance
with Section 104.

                                      -55-
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   SECTION 903. 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 315 of the
Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties, immunities or liabilities under this Indenture or otherwise.

   SECTION 904. 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 and of any coupons appertaining
thereto shall be bound thereby.

   SECTION 905. 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 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities
of any series 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 PEC shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and PEC, to any such supplemental indenture may be prepared and executed
by PEC and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.

                                      -56-
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                                   ARTICLE TEN

                                    Covenants

   SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. PEC covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay the principal of (and premium, if any) and interest on the
Securities of that series in accordance with the terms of the Securities, any
coupons appertaining thereto and this Indenture. Any interest due on Bearer
Securities on or before Maturity, other than additional amounts, if any, payable
as provided in Section 1004 in respect of principal of (or premium, if any, on)
such a Security, shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby as they
severally mature.

   SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. PEC will maintain in each
Place of Payment for any series of Securities an office or agency where
Securities of that series (but, except as otherwise provided below, unless such
Place of Payment is located outside the United States, not Bearer Securities)
may be presented or surrendered for payment, where Securities of that series may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon PEC in respect of the Securities of that series and this
Indenture may be served. PEC initially hereby appoints the Trustee, its office
or agency for each of said purposes. If Securities of a series are issuable as
Bearer Securities, PEC will maintain, subject to any laws or regulations
applicable thereto, an office or agency in a Place of Payment for such series
which is located outside the United States where Securities of such series and
the related coupons may be presented and surrendered for payment (including
payment of any additional amounts payable on Securities of such series pursuant
to Section 1004); PROVIDED, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, PEC will maintain a Paying
Agent in London or Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of such series are
listed on such exchange. PEC will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time PEC shall fail to maintain any such required office or agency in
respect of any series of Securities or shall fail to furnish the Trustee with
the address thereof, such presentations and surrenders of Securities of that
series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Bearer Securities of
that series pursuant to Section 1004) at the place specified for the purpose
pursuant to Section 301 or, if no such place is specified, at the main office of
the Trustee in London, and PEC hereby appoints the Trustee as its agent to
receive such respective presentations, surrenders, notices and demands.

     No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of PEC in the United States or by check mailed to
any address in the United States or by transfer to an account maintained with a
bank located in the United States; PROVIDED,

                                      -57-
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that payment of principal of and any premium and interest in U.S. dollars
(including additional amounts payable in respect thereof) on any Bearer Security
may be made at the Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York if (but only if) payment of the full amount of
such principal, premium, interest or additional amounts at all offices outside
the United States maintained for the purpose by PEC in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.

     PEC may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, that no such designation or rescission shall in any
manner relieve PEC of its obligation to maintain an office or agency in each
Place of Payment in accordance with the requirements set forth above for
Securities of any series for such purposes. PEC will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

   SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If PEC shall
at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Securities of that series, 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 action or failure so
to act.

     Whenever PEC shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, 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, premium or interest, and (unless such Paying
Agent is the Trustee) PEC will promptly notify the Trustee of its action or
failure so to act.

     PEC will cause each Paying Agent for any series of Securities 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 of that series 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 PEC (or any other
     obligor upon the Securities of that series) in the making of any payment of
     principal of (and premium, if any) or interest on the Securities of that
     series; and

                                      -58-
<Page>

          (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.

     PEC may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Order direct
any Paying Agent to pay, to the Trustee all sums held in trust by PEC or such
Paying Agent, such sums to be held by the Trustee upon the same terms as those
upon which such sums were held by PEC 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 sums.

     Any sums deposited with the Trustee or any Paying Agent, or then held by
PEC, in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to PEC on Request, or (if then held by PEC) shall be
discharged from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to PEC for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of PEC as trustee
thereof, shall thereupon cease; PROVIDED, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of PEC
cause to be published once in an Authorized Newspaper in each Place of Payment
or mailed to each such Holder, or both, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to PEC.

   SECTION 1004. ADDITIONAL AMOUNTS. If the Securities of a series provide for
the payment of additional amounts, PEC will pay to the Holder of any Security of
any series or any coupon appertaining thereto additional amounts as provided
therein. Whenever in this Indenture there is mentioned, in any context, the
payment of principal of (or premium, if any) or interest on, or in respect of,
any Security of any series or any related coupon or the net proceeds received on
the sale or exchange of any Security of any series, such mention shall be deemed
to include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context, additional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.

     If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
PEC will furnish the Trustee and PEC's principal Paying Agent or Paying Agents,
if other than the Trustee, with an Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such

                                      -59-
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payment of principal of (and premium, if any) or interest on the Securities of
that series shall be made to Holders of Securities of that series or the related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or coupons and PEC will pay to
the Trustee or such Paying Agent the additional amounts required by this
Section. PEC covenants to indemnify the Trustee and any Paying Agent for, and to
hold them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section.

   SECTION 1005. CORPORATE EXISTENCE. Subject to Article Eight, PEC will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and its rights (charter and statutory).

   SECTION 1006. MAINTENANCE OF PROPERTIES. PEC will cause all properties used
or useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; PROVIDED, that nothing in this Section shall prevent PEC
from discontinuing the operation or maintenance of any of such properties or
disposing of them if such discontinuance or disposal is, in the judgment of PEC,
desirable in the conduct of its business or the business of the Subsidiaries and
not disadvantageous in any material respect to the Holders of Securities.

   SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS. PEC will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon PEC, or upon
the income, profits or property of PEC or any of the Subsidiaries, and (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of PEC or any of the Subsidiaries; PROVIDED,
that none of PEC or any of the Subsidiaries shall be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.

   SECTION 1008. INTENTIONALLY OMITTED.

   SECTION 1009. STATEMENT AS TO DEFAULT. (a) PEC will deliver to the Trustee,
within 120 days after the end of each fiscal year of PEC ending after the date
hereof, a certificate, signed by the principal executive officer, principal
financial officer or principal accounting officer of PEC, stating whether or not
to the best knowledge of the signers thereof PEC, is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if PEC shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

                                      -60-
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     (b) PEC will deliver to the Trustee, within five days after the occurrence
thereof, written notice of any event which after notice or lapse of time would
become an Event of Default pursuant to clause (4) of Section 501.

   SECTION 1010. WAIVER OF CERTAIN COVENANTS. PEC may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1006 and 1007 if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities considered as one
class, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of PEC and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

   SECTION 1101. APPLICABILITY OF ARTICLE. Securities of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.

   SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of PEC to
redeem any Securities shall be evidenced by a Board Resolution. In case of any
redemption at the election of PEC of all of the Securities of any series, PEC
shall, at least 60 days prior to the Redemption Date fixed by PEC (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date. In case of any redemption at the election of
PEC of less than all the Securities of any series, PEC shall, at least 60 days
prior to the Redemption Date fixed by PEC (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities (i) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, or (ii) pursuant to an election of PEC which is
subject to a condition specified in the terms of such Securities, PEC shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction or condition. The elected redemption is conditional upon the
receipt by the Trustee or Paying Agent, on or prior to the dated fixed for
redemption, of money sufficient to pay the Redemption Price plus accrued
interest. If the Trustee or Paying Agent has not received such money by the date
fixed for redemption, PEC will not be required to redeem such Securities.

   SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less than
all the Securities of any series 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 of such series (other than
Securities of such series held by PEC), not

                                      -61-
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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
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series. Unless otherwise provided in the Securities of a
series, partial redemptions must be in an amount not less than $1,000,000
principal amount of Securities.

     The Trustee shall promptly notify PEC in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, 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 Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

   SECTION 1104. NOTICE OF REDEMPTION. Notice of redemption shall be given in
the manner provided in Section 106 to the Holders of Securities to be redeemed
not less than 30 nor more than 60 days prior to the Redemption Date.

     All notices of redemption shall state:

          (1) the Redemption Date,

          (2) the Redemption Price,

          (3) if less than all the Outstanding Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption,
     the principal amounts) of the particular Securities to be redeemed,

          (4) that on the Redemption Date the Redemption Price will become due
     and payable upon each such Security to be redeemed and, if applicable, that
     interest thereon will cease to accrue on and after said date,

          (5) the place or places where such Securities, together in the case of
     Bearer Securities with all coupons appertaining thereto, if any, maturing
     after the Redemption Date, are to be surrendered for payment of the
     Redemption Price, which shall be the office or agency maintained by PEC in
     each Place of Payment pursuant to Section 1002, and

          (6) that the redemption is for a sinking fund, if such is the case.

A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.

                                      -62-
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     Notice of redemption of Securities to be redeemed at the election of PEC
shall be given by PEC or, at PEC's request, by the Trustee in the name and at
the expense of PEC.

   SECTION 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to any Redemption
Date, PEC shall deposit with the Trustee or with a Paying Agent (or, if PEC is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest, if any, on, all the Securities which are to be redeemed on that date.

   SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, and the conditions, if any, set forth in such
notice having been satisfied, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless PEC shall default in the payment
of the Redemption Price and accrued interest) such Securities shall cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with said
notice, together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security shall be paid by PEC at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; PROVIDED, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of coupons for such interest (at an office or agency located outside
the United States except as otherwise provided in Section 1002); and PROVIDED
FURTHER, that installments of interest on Registered Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.

     If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by PEC and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; PROVIDED, that interest represented
by coupons shall be payable only upon presentation and surrender of those
coupons at an office or agency located outside of the United States except as
otherwise provided in Section 1002.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.

   SECTION 1107. SECURITIES REDEEMED IN PART. Any Security which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor (with,
if PEC or the Trustee so requires

                                      -63-
<Page>

with respect to any Registered Security, due endorsement by, or a written
instrument of transfer in form satisfactory to PEC and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), and PEC
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the same
series, Stated Maturity and of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

     Except as otherwise specified as contemplated by Section 301, if a Global
Security is so surrendered, PEC shall execute, and the Trustee shall
authenticate and deliver to the Depositary in global form, without service
charge, a new Global Security or Securities of the same series, Stated Maturity
and of any authorized denomination as requested by the Depositary, in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

   SECTION 1201. APPLICABILITY OF ARTICLE. The provisions of this Article shall
be applicable to any sinking fund for the retirement of Securities of a series
except as otherwise specified as contemplated by Section 301 for Securities of
such series.

     The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.

   SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. PEC (1)
may deliver Outstanding Securities of a series (other than any previously called
for redemption), together in the case of any Bearer Securities of such series
with all unmatured coupons appertaining thereto, and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of PEC
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; PROVIDED, that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.

                                      -64-
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   SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60
days prior to each sinking fund payment date for any series of Securities, PEC
will deliver to the Trustee an Officers' Certificate specifying the amount of
the next ensuing sinking fund payment for that series pursuant to the terms of
that series, the portion thereof, if any, which is to be satisfied by payment of
cash and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 1202 and stating the
basis for such credit and that such Securities have not previously been so
credited and will also deliver to the Trustee any Securities to be so delivered.
Not less than 30 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of PEC in the manner
provided in Section 1104. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.

                                ARTICLE THIRTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

   SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. If Securities of a
series are issuable as Bearer Securities, a meeting of Holders of Securities of
such series may be called at any time and from time to time pursuant to this
Article to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be made,
given or taken by Holders of Securities of such series.

   SECTION 1302. CALL NOTICE AND PLACE OF MEETING. (a) The Trustee may at any
time call a meeting of Holders of Securities of any series for any purpose
specified in Section 1301, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, or in London as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.

     (b) In case at any time PEC, pursuant to a Board Resolution, or the Holders
of at least 10% in principal amount of the Outstanding Securities of any series
shall have requested the Trustee to call a meeting of the Holders of Securities
of such series for any purpose specified in Section 1301, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made the first publication of the notice
of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then PEC
or the Holders of Securities of such series in the amount above specified, as
the case may be, may determine the time and the place in the Borough of
Manhattan, The City of New York, or in London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in subsection (a)
of this Section.

   SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to vote at
any meeting of Holders of Securities of any series, a Person shall be (1) a
Holder of one or more Outstanding

                                      -65-
<Page>

Securities of such series, or (2) a Person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more Outstanding Securities of such
series by such Holder or Holders. The only Persons who shall be entitled to be
present or to speak at any meeting of Holders of Securities of any series shall
be the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of PEC
and each of their respective counsel.

   SECTION 1304. QUORUM; ACTION. The Persons entitled to vote a majority in
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series. In the absence of
a quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities of such
series, be dissolved. In any other case the meeting may be adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Except as provided by Section
1305(d), notice of the reconvening of any adjourned meeting shall be given as
provided in Section 1302(a), except that such notice need be given only once not
less than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.

     Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
PROVIDED, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.

     Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.

   SECTION 1305. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS. (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of such series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise

                                      -66-
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permitted or required by any such regulations, the holding of Securities shall
be proved in the manner specified in Section 104 and the appointment of any
proxy shall be proved in the manner specified in Section 104. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 104 or
other proof.

     (b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by PEC or by
Holders of Securities as provided in Section 1302(b), in which case PEC or the
Holders of Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting.

     (c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of Securities of such
series held or represented by him; PROVIDED, that no vote shall be cast or
counted at any meeting in respect of any Security challenged as not Outstanding
and ruled by the chairman of the meeting to be not Outstanding. The chairman of
the meeting shall have no right to vote, except as a Holder of a Security of
such series or proxy.

     (d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 1302 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.

   SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. The vote upon
any resolution submitted to any meeting of Holders of Securities of any series
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Securities of such series or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Securities of such
series held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in triplicate of all votes cast at
the meeting. A record, at least in triplicate, of the proceedings of each
meeting of Holders of Securities of any series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 1302 and, if applicable, Section 1304. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to PEC, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

                                      -67-
<Page>

   SECTION 1307. ACTION WITHOUT MEETING. In lieu of a vote of Holders at a
meeting as hereinbefore contemplated in this Article, any request, demand,
authorization, direction, notice, consent, waiver or other action may be made,
given or taken by Holders by written instruments as provided in Section 104.

                                ARTICLE FOURTEEN

        IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND
                                    EMPLOYEES

   SECTION 1401. LIABILITY SOLELY CORPORATE. No recourse shall be had for the
payment of the principal of or premium, if any, or interest, if any, on any
Securities, or any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement under this Indenture, against any
incorporator, stockholder, officer, director or employee, as such, past, present
or future of PEC or of any predecessor or successor Corporation (either directly
or through PEC or a predecessor or successor Corporation of either of them),
whether by virtue of any constitutional provision, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
agreed and understood that this Indenture and all the Securities are solely
corporate obligations, and that no personal liability whatsoever shall attach
to, or be incurred by, any incorporator, stockholder, officer, director or
employee, past, present or future, of PEC or of any predecessor or successor
Corporation of either of them, either directly or indirectly through PEC or any
predecessor or successor Corporation of either of them, because of the
indebtedness hereby authorized or under or by reason of any of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or to be implied herefrom or therefrom, and that any such personal liability is
hereby expressly waived and released as a condition of, and as part of the
consideration for, the execution of this Indenture and the issuance of the
Securities.

                                 ARTICLE FIFTEEN

                                  SUBORDINATION

   SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.

     PEC, for itself, its successors and assigns, covenants and agrees, and each
Holder of the Securities of each series, by its acceptance thereof, likewise
covenants and agrees, that the payment of the principal of and premium, if any,
and interest, if any, on each and all of the Securities is hereby expressly
subordinated and subject to the extent and in the manner set forth in this
Article, in right of payment to the prior payment in full of all Senior
Indebtedness of PEC.

     Each Holder of the Securities of each series, by its acceptance thereof,
authorizes and directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article, and appoints the Trustee its attorney-in-fact for any and all such
purposes.

                                      -68-
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   SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES.

     In the event (a) of any insolvency or bankruptcy proceedings or any
receivership, liquidation, reorganization or other similar proceedings in
respect of PEC or a substantial part of its property, or of any proceedings for
liquidation, dissolution or other winding up of PEC, whether or not involving
insolvency or bankruptcy, or (b) subject to the provisions of Section 1503, that
(i) a default shall have occurred with respect to the payment of principal of or
interest on or other monetary amounts due and payable on any Senior Indebtedness
of PEC, or (ii) there shall have occurred a default (other than a default in the
payment of principal or interest or other monetary amounts due and payable) in
respect of any Senior Indebtedness of PEC, as defined therein or in the
instrument under which the same is outstanding, permitting the holder or holders
thereof to accelerate the maturity thereof (with notice or lapse of time, or
both), and such default shall have continued beyond the period of grace, if any,
in respect thereof, and, in the cases of subclauses (i) and (ii) of this clause
(b), such default shall not have been cured or waived or shall not have ceased
to exist, or (c) that the principal of and accrued interest on the Securities of
any series shall have been declared due and payable pursuant to Section 501 and
such declaration shall not have been rescinded and annulled as provided in
Section 502, then:

          (1) the holders of all Senior Indebtedness of PEC shall first be
     entitled to receive payment of the full amount due thereon, or provision
     shall be made for such payment in money or money's worth, before the
     Holders of any of the Securities are entitled to receive a payment on
     account of the principal of or interest on the indebtedness evidenced by
     the Securities, including, without limitation, any payments made pursuant
     to Articles Eleven and Twelve;

          (2) any payment by, or distribution of assets of, PEC of any kind or
     character, whether in cash, property or securities, to which any Holder or
     the Trustee would be entitled except for the provisions of this Article,
     shall be paid or delivered by the Person making such payment or
     distribution, whether a trustee in bankruptcy, a receiver or liquidating
     trustee or otherwise, directly to the holders of such Senior Indebtedness
     of PEC or their representative or representatives or to the trustee or
     trustees under any indenture under which any instruments evidencing any of
     such Senior Indebtedness of PEC may have been issued, ratably according to
     the aggregate amounts remaining unpaid on account of such Senior
     Indebtedness of PEC held or represented by each, to the extent necessary to
     make payment in full of all Senior Indebtedness of PEC remaining unpaid
     after giving effect to any concurrent payment or distribution (or provision
     therefor) to the holders of such Senior Indebtedness of PEC, before any
     payment or distribution is made to the Holders of the indebtedness
     evidenced by the Securities or to the Trustee under this Indenture; and

          (3) in the event that, notwithstanding the foregoing, any payment by,
     or distribution of assets of, PEC of any kind or character, whether in
     cash, property or securities, in respect of principal of or interest on the
     Securities or in connection with any repurchase by PEC of the Securities,
     shall be received by the Trustee or any Holder before all Senior
     Indebtedness of PEC is paid in full, or provision is made for such

                                      -69-
<Page>

     payment in money or money's worth, such payment or distribution in respect
     of principal of or interest on the Securities or in connection with any
     repurchase by PEC of the Securities shall be paid over to the holders of
     such Senior Indebtedness of PEC or their representative or representatives
     or to the trustee or trustees under any Indenture under which any
     instruments evidencing any such Senior Indebtedness of PEC may have been
     issued, ratably as aforesaid, for application to the payment of all Senior
     Indebtedness of PEC remaining unpaid until all such Senior Indebtedness of
     PEC shall have been paid in full, after giving effect to any concurrent
     payment or distribution (or provision therefor) to the holders of such
     Senior Indebtedness of PEC.

     Notwithstanding the foregoing, at any time after the 123rd day following
the date of deposit of money or Eligible Obligations pursuant to Section 401 or
402 (provided all conditions set out in such Section shall have been satisfied),
the funds so deposited and any interest thereon will not be subject to any
rights of holders of Senior Indebtedness of PEC, including, without limitation,
those arising under this Article Fifteen; PROVIDED that no event described in
clauses (4) and (5) of Section 501 with respect to PEC has occurred during such
123-day period.

     For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of stock of PEC as reorganized or
readjusted, or securities of PEC or any other corporation provided for by a plan
or reorganization or readjustment which are subordinate in right of payment to
all Senior Indebtedness of PEC which may at the time be outstanding to the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. The consolidation of PEC with, or the merger of PEC
into, another corporation or the liquidation or dissolution of PEC following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article Eight hereof shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 1502 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eight hereof. Nothing in
Section 1501 or in this Section 1502 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.

   SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS.

     Any failure by PEC to make any payment on or perform any other obligation
in respect of Senior Indebtedness of PEC, other than any indebtedness incurred
by PEC or assumed or guaranteed, directly or indirectly, by PEC for money
borrowed (or any deferral, renewal, extension or refunding thereof) or any other
obligation as to which the provisions of this Section shall have been waived by
PEC in the instrument or instruments by which PEC incurred, assumed, guaranteed
or otherwise created such indebtedness or obligation, shall not be deemed a
default under clause (b) of Section 1502 if (i) PEC shall be disputing its
obligation to make such payment or perform such obligation and (ii) either (A)
no final judgment relating to such dispute shall have been issued against PEC
which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the
time within which a party may seek further appeal or review, or (B) in the event
that a judgment that is subject to further review or appeal has been issued, PEC
shall in good faith be prosecuting an

                                      -70-
<Page>

appeal or other proceeding for review and a stay of execution shall have been
obtained pending such appeal or review.

   SECTION 1504. SUBROGATION.

     Senior Indebtedness of PEC shall not be deemed to have been paid in full
unless the holders thereof shall have received cash (or securities or other
property satisfactory to such holders) in full payment of such Senior
Indebtedness of PEC then outstanding. Upon the payment in full of all Senior
Indebtedness of PEC, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness of PEC to receive
any further payments or distributions of cash, property or securities of PEC
applicable to the holders of the Senior Indebtedness of PEC until all amounts
owing on the Securities shall be paid in full; and such payments or
distributions of cash, property or securities received by the Holders of the
Securities, by reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness of PEC shall, as between
PEC, its creditors other than the holders of Senior Indebtedness of PEC, and the
Holders, be deemed to be a payment by PEC to or on account of Senior
Indebtedness of PEC, it being understood that the provisions of this Article are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of the Senior Indebtedness of PEC, on
the other hand.

   SECTION 1505. OBLIGATION UNCONDITIONAL.

     Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among PEC, its creditors other
than the holders of Senior Indebtedness of PEC and the Holders, the obligation
of PEC, which is absolute and unconditional, to pay to the Holders the principal
of and interest on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of PEC other than the holders of
Senior Indebtedness of PEC, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness of PEC in respect of
cash, property or securities of PEC received upon the exercise of any such
remedy.

     Upon any payment or distribution of assets or securities of PEC referred to
in this Article, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of PEC and other
indebtedness of PEC, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon, and all other facts pertinent thereto or to
this Article.

     The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness of
PEC (or a representative of such holder or a trustee under any indenture under
which any instruments evidencing any such Senior Indebtedness of PEC may have
been issued) to establish that such notice has been given by a

                                      -71-
<Page>

holder of such Senior Indebtedness of PEC or such representative or trustee on
behalf of such holder. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness of PEC to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness of PEC held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the right of such Person under this Article, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment or distribution.

   SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.

     Upon the maturity of the principal of any Senior Indebtedness of PEC by
lapse of time, acceleration or otherwise, all matured principal of Senior
Indebtedness of PEC and interest and premium, if any, thereon shall first be
paid in full before any payment of principal or premium, if any, or interest, if
any, is made upon the Securities or before any Securities can be acquired by PEC
or any sinking fund payment is made with respect to the Securities (except that
required sinking fund payments may be reduced by Securities acquired before such
maturity of such Senior Indebtedness of PEC).

   SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.

     The Trustee shall be entitled to all rights set forth in this Article with
respect to any Senior Indebtedness of PEC at any time held by it, to the same
extent as any other holder of Senior Indebtedness of PEC. Nothing in this
Article shall deprive the Trustee of any of its rights as such holder.

   SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.

     Notwithstanding the provisions of this Article or any other provision of
the Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of moneys to or by
the Trustee unless and until the Trustee shall have received written notice
thereof from PEC, from a Holder or from a holder of any Senior Indebtedness of
PEC or from any representative or representatives of such holder or any trustee
or trustees under any indenture under which any instruments evidencing any such
Senior Indebtedness of PEC may have been issued and, prior to the receipt of any
such written notice, the Trustee shall be entitled, subject to Section 601, in
all respects to assume that no such facts exist; PROVIDED, however, that, if
prior to the fifth Business Day preceding the date upon which by the terms
hereof any such moneys may become payable for any purpose, or in the event of
the execution of an instrument pursuant to Section 401 or 402 acknowledging that
Securities or portions thereof are deemed to have been paid for all purposes of
this Indenture, acknowledging that the entire indebtedness of PEC in respect
thereof has been satisfied and discharged or acknowledging satisfaction and
discharge of this Indenture, then if prior to the second Business Day preceding
the date of such execution, the Trustee shall not have received with respect to

                                      -72-
<Page>

such moneys the notice provided for in this Section, then, anything herein
contained to the contrary notwithstanding, the Trustee may, in its discretion,
receive such moneys and/or 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 on or after such date; PROVIDED, however, that no such
application shall affect the obligations under this Article of the persons
receiving such moneys from the Trustee.

   SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS.

     The holders of Senior Indebtedness of PEC may, without affecting in any
manner the subordination of the payment of the principal of and premium, if any,
and interest, if any, on the Securities, at any time or from time to time and in
their absolute discretion, agree with PEC to change the manner, place or terms
of payment, change or extend the time of payment of, or renew or alter, any
Senior Indebtedness of PEC, or amend or supplement any instrument pursuant to
which any Senior Indebtedness of PEC is issued, or exercise or refrain from
exercising any other of their rights under the Senior Indebtedness of PEC
including, without limitation, the waiver of default thereunder, all without
notice to or assent from the Holders or the Trustee.

   SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
INDEBTEDNESS.

     With respect to the holders of Senior Indebtedness of PEC, the Trustee
undertakes to perform or to observe only such of its covenants and objectives as
are specifically set forth in this Indenture, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness of PEC shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness of PEC, and shall
not be liable to any such holders if it shall mistakenly pay over or deliver to
the Holders or PEC or any other Person, money or assets to which any holders of
Senior Indebtedness of PEC shall be entitled by virtue of this Article or
otherwise.

   SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE.

     In case at any time any Paying Agent other than the Trustee shall have been
appointed by PEC and be then acting hereunder, the term "Trustee" as used in
this Article shall in such case (unless the context shall otherwise require) 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; PROVIDED, however, that
Sections 1507, 1508 and 1510 shall not apply to PEC if it acts as Paying Agent.

   SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.

     No right of any present or future holder of Senior Indebtedness of PEC to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of PEC or by any
noncompliance by PEC with the terms, provisions and

                                      -73-
<Page>

covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.

   SECTION 1513. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.

     Notwithstanding anything contained herein to the contrary, other than as
provided in the immediately succeeding sentence, all the provisions of this
Indenture shall be subject to the provisions of this Article, so far as the same
may be applicable thereto.

     Notwithstanding anything contained herein to the contrary, the provisions
of this Article Fifteen shall be of no further effect, and the Securities shall
no longer be subordinated in right of payment to the prior payment of Senior
Indebtedness of PEC, if PEC shall have delivered to the Trustee a notice to such
effect. Any such notice delivered by PEC shall not be deemed to be a
supplemental indenture for purposes of Article Nine.

                              --------------------

                                      -74-
<Page>

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and attested, all as of the day and year first above written.

                                                      PEOPLES ENERGY CORPORATION

                                                      By
                                                         -----------------------
                                                         Name:
                                                         Title:

Attest:

By:
    -------------------------

                                      -75-
<Page>

                                              [BANK ONE TRUST COMPANY NATIONAL
                                                ASSOCIATION, as Trustee

                                               By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                      -76-

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