POTOMAC ELECTRIC POWER COMPANY

1900 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C.

TO

THE RIGGS NATIONAL BANK
OF WASHINGTON, D.C.

800-17TH STREET, N.W., WASHINGTON, D.C.
AS TRUSTEE

Supplemental Indenture

DATED AS OF SEPTEMBER 29, 1993

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST

DATED JULY 1, 1936

FIRST MORTGAGE BONDS, 5 5/8% SERIES DUE 2003

POTOMAC ELECTRIC POWER COMPANY

SUPPLEMENTAL INDENTURE DATED AS OF SEPTEMBER 29, 1993

TABLE OF CONTENTS*

                                                                          PAGE
Parties..................................................................   1
Recitals.................................................................   1

                                   PART I

                            Description of Bonds
Section 1. General description of Bonds of 2003 Series..................    5
Section 2. Form of face of Bond of 2003 Series..........................    7
           Form of Trustee's certificate................................    9
           Text appearing on reverse side of Bond of 2003 Series........    9
Section 3. Denominations of Bonds of 2003 Series........................   11
Section 4. Execution and form of temporary Bonds........................   12

                                   PART II

                               Issue of Bonds
Section 1. Limitation as to principal amount............................   12
Section 2. Issue of Bonds...............................................   12

                                  PART III

                                 Redemption
Bonds of 2003 Series not redeemable prior to maturity ...................  13

                                   PART IV

               Additional Particular Covenants of the Company
Section 1. Company not to withdraw moneys pursuant to Section 2 of
            Article VIII in excess of an amount equal to principal
            amount of issued refundable bonds...........................   13
Section 2. No property additions made on or prior to December 31, 1946
            to be used for any purpose under the Indenture..............   13

                                   PART V
                                                                          PAGE
Amendment of Indenture to Permit Qualification Under Trust Indenture Act
 of 1939.................................................................  13

                                   PART VI
Amendment of Original Indenture..........................................  14

                                   PART VII

                                 The Trustee
Acceptance of trusts by the Trustee......................................  14

Trustee not responsible for validity of the Supplemental Indenture.......  14

                                  PART VIII

                           Miscellaneous Provisions
Execution of Supplemental Indenture in counterparts......................  15
Appointment of attorneys-in-fact by parties..............................  15
Testimonium..............................................................  15
Execution................................................................  16
Company's Acknowledgments................................................  17
Trustee's Acknowledgments................................................  19

SUPPLEMENTAL INDENTURE, dated as of the twenty-ninth day of September, nine- teen hundred and ninety-three (1993), made by and between Potomac Electric Power Company, a corporation organized and existing under the laws of the Dis- trict of Columbia and a domestic corporation of the Commonwealth of Virginia (hereinafter sometimes called the "Company"), party of the first part, and The Riggs National Bank of Washington, D.C., a national banking association orga- nized and existing under the laws of the United States of America (hereinafter sometimes called the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1936, hereinafter mentioned, party of the second part;

Whereas, The Company has heretofore executed and delivered its Mortgage and Deed of Trust, dated July 1, 1936 (hereinafter sometimes referred to as the "Original Indenture"), to the Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series; and

Whereas, pursuant to the terms and provisions of the Original Indenture, in- dentures supplemental thereto dated as of July 1, 1936, December 1, 1939, Au- gust 1, 1940, August 1, 1942, January 1, 1948, May 1, 1949, May 1, 1950, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, December 1, 1958, November 16, 1959, December 1, 1960, February 15, 1963, May 15, 1964, April 1, 1966, May 1, 1967, February 15, 1968, March 15, 1969, February 15, 1970, August 15, 1970, September 15, 1972, April 1, 1973, January 2, 1974, August 15, 1974, Au- gust 15, 1974, June 15, 1977, July 1, 1979, June 16, 1981, June 17, 1981, De- cember 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993 and Au- gust 20, 1993, have been heretofore entered into between the Company and the Trustee to provide, respectively, for the creation of the first through the fifty-third series of Bonds thereunder and, in the case of the supplemental indentures dated January 1, 1948, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, September 15, 1972, July 1, 1979, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992, July 1, 1993 and one of the supplemental indentures dated August 15, 1974, to convey addi- tional property; and

Whereas, $20,000,000 principal amount of Bonds of the 3 1/4% Series due 1966 (the first series), $5,000,000 principal amount of Bonds of the 3 1/4 Series due 1974 (the second series), $10,000,000 principal amount of Bonds of the 3 1/4% Series due 1975 (the third series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1977 (the fourth series), $15,000,000 principal amount of Bonds of the 3% Series due 1983 (the fifth series), $10,000,000 principal amount of Bonds of the 2 7/8% Series due 1984 (the sixth series), $30,000,000 principal amount of Bonds of the 2 3/4% Series due 1985 (the sev- enth series), $15,000,000 principal amount of Bonds of the 3 1/4% Series due 1987 (the eighth series), $10,000,000 principal amount of Bonds of the 3 7/8% Series due 1988 (the ninth series), $10,000,000 principal amount of Bonds of the 3 3/8% Series due 1990 (the tenth series), $10,000,000 principal amount of Bonds of the 3 5/8% Series due 1991 (the eleventh series), $35,000,000 princi- pal amount of Bonds of the 8.85% Series due 2005 (the twenty-first series), $70,000,000 principal amount of Bonds of the 9 1/2% Series due August 15, 2005 (the twenty-second series), $100,000,000 principal amount of Bonds of the 8 3/8% Series due 2009 (the twenty-fifth series), $50,000,000 principal amount of Bonds of the 10 1/4% Series due 1981 (the twenty-sixth series), $50,000,000 principal amount of Bonds of the 10 3/4% Series due 2004 (the twenty-seventh series), $30,000,000 principal amount of Bonds of the Floating Rate Series due 2010 (the thirty-second series), $50,000,000 principal amount of Bonds of the 14 1/2% Series due 1991 (the thirty-third series), $60,000,000 principal amount of Bonds of the 14 1/4% Series due 1992 (the thirty-fifth series), $50,000,000 principal amount of Bonds of the 11 7/8% Series due 1989 (the thirty-sixth series), $37,000,000 principal amount of Bonds of the 8 3/4% Se- ries due 2010 (the thirty-seventh series), $75,000,000 principal amount of Bonds of the 11 1/4% Series due 2015 (the thirty-eighth series), $75,000,000 principal amount of Bonds of the 9 1/4% Series due 2016 (the thirty-ninth se- ries), $75,000,000 principal amount of Bonds of the 8 3/4% Series due 2016 (the fortieth series) and $75,000,000 principal amount of Bonds of the 9% Se- ries due 1990 (the forty-second series) have been heretofore redeemed and re- tired and there are now issued and outstanding under the Original Indenture and under the supplemental indentures referred to above: $25,000,000 principal amount of Bonds of the 4 5/8% Series due 1993 (the twelfth series); $15,000,000 principal amount of Bonds of the 5 1/4% Series due 1994 (the thir- teenth series); $40,000,000

principal amount of Bonds of the 5% Series due 1995 (the fourteenth series); $50,000,000 principal amount of Bonds of the 4 3/8% Series due 1998 (the fif- teenth series); $45,000,000 principal amount of Bonds of the 4 1/2% Series due 1999 (the sixteenth series); $15,000,000 principal amount of Bonds of the 5 1/8% Series due 2001 (the seventeenth series); $35,000,000 principal amount of Bonds of the 5 7/8% Series due 2002 (the eighteenth series); $40,000,000 prin- cipal amount of Bonds of the 6 5/8% Series due 2003 (the nineteenth series); $45,000,000 principal amount of Bonds of the 7 3/4% Series due 2004 (the twen- tieth series); $50,000,000 principal amount of Bonds of the 7 3/4% Series due 2007 (the twenty-third series); $19,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twenty-fourth series); $38,300,000 principal amount of Bonds of the 6 1/8% Series due 2007 (the twenty-eighth series); $15,000,000 principal amount of Bonds of the 6 1/2% Series due 2004 (the twenty-ninth se- ries); $20,000,000 principal amount of Bonds of the 6 1/2% Series due 2007 (the thirtieth series); $7,500,000 principal amount of Bonds of the 6 5/8% Se- ries due 2009 (the thirty-first series); $50,000,000 principal amount of Bonds of the Adjustable Rate Series due 2001 (the thirty-fourth series); $75,000,000 principal amount of Bonds of the 8 1/4% Series due 2017 (the forty-first se- ries); $75,000,000 principal amount of Bonds of the 9 3/4% Series due 2019 (the forty-third series); $75,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series); $100,000,000 principal amount of Bonds of the 9% Series due 2000 (the forty-fifth series); $100,000,000 princi- pal amount of Bonds of the 9% Series due 2021 (the forty-sixth series); $75,000,000 principal amount of Bonds of the 8 1/2% Series due 2027 (the for- ty-seventh series); $30,000,000 principal amount of Bonds of the 6% Series due 2022 (the forty-eighth series); $37,000,000 principal amount of Bonds of the 6 3/8% Series due 2023 (the forty-ninth series); $78,000,000 principal amount of Bonds of the 6 1/2% Series due 2008 (the fiftieth series); $40,000,000 princi- pal amount of Bonds of the 7 1/2% Series due 2028 (the fifty-first series); $100,000,000 principal amount of Bonds of the 7 1/4% Series due 2023 (the fif- ty-second series); and $100,000,000 principal amount of Bonds of the 6 7/8% Series due 2023 (the fifty-third series); and

Whereas, for the purpose of conforming the Original Indenture to the stan- dards prescribed by the Trust Indenture Act of 1939 or otherwise modifying certain of the provisions of the Original Indenture, indentures

supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, Novem- ber 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993 and August 20, 1993 have been here- tofore entered into between the Company and the Trustee, and for the purpose of conveying additional property, indentures supplemental thereto dated July 15, 1942, October 15, 1947, December 31, 1948, December 31, 1949, February 15, 1951, February 16, 1953, March 15, 1954, March 15, 1955, March 15, 1956, April 1, 1957, May 1, 1958, May 1, 1959, May 2, 1960, April 3, 1961, May 1, 1962, May 1, 1963, April 23, 1964, May 3, 1965, June 1, 1966, April 28, 1967, July 3, 1967, May 1, 1968, June 16, 1969, May 15, 1970, September 1, 1971, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992 and July 1, 1993 have been heretofore entered into between the Company and the Trustee, and for the purpose of better securing and protecting the Bonds then or thereafter issued and confirming the lien of the Original Inden- ture, an indenture dated October 15, 1942 supplemental thereto has been here- tofore entered into between the Company and the Trustee; the Original Inden- ture as heretofore amended and supplemented being hereinafter referred to as the "Original Indenture as amended"; and

Whereas, the Company is entitled to have authenticated and delivered addi- tional Bonds on the basis of the net bondable value of property additions, upon compliance with the provisions of Section 4 of Article III of the Origi- nal Indenture as amended; and

Whereas, the Company has determined to issue a fifty-fourth series of Bonds under the Original Indenture as amended in the principal amount of $50,000,000, to be known as First Mortgage Bonds, 5 5/8% Series due 2003 (hereinafter called "Bonds of 2003 Series"); and

Whereas, the Original Indenture as amended provides that certain terms and provisions, as determined by the Board of Directors of the Company, of the Bonds of any particular series may be expressed in and provided by the execu- tion of an appropriate supplemental indenture; and

Whereas, the Original Indenture as amended provides that the Company and the Trustee may enter into indentures supplemental thereto to add to the covenants and agreements of the Company contained therein other covenants and agreements thereafter to be observed; and to surrender any right or power reserved to or conferred upon the Company in the Original Indenture as amended; and

Whereas, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture as amended and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and

Whereas, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized;

Now, Therefore, This Indenture Witnesseth:

That Potomac Electric Power Company, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and de- livery of these presents, and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants, declares and agrees with the Trustee and its successors in the trust under the Original Indenture as amend- ed, for the benefit of those who hold the Bonds and coupons, or any of them, issued or to be issued hereunder or under the Original Indenture as amended, as follows:

PART I.

Description of Bonds.

Section 1. The Bonds of 2003 Series shall, subject to the provisions of Sec- tion 1 of Article II of the Original Indenture as amended, be designated as "First Mortgage Bonds, 5 5/8% Series due 2003" of the Company. The Bonds of 2003 Series shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be

subject to, all of the terms, conditions and covenants of the Original Inden- ture as amended, except in so far as the terms and provisions of the Original Indenture as amended are amended or modified by this Supplemental Indenture.

The Bonds of 2003 Series shall mature October 15, 2003, and shall bear inter- est at the rate of five and five-eighths per cent (5 5/8%) per annum, payable semiannually, commencing April 15, 1994, on the fifteenth day of April and the fifteenth day of October in each year (each such April 15 and October 15 being hereinafter called an "interest payment date"). The Bonds of 2003 Series shall be payable as to principal and interest in lawful money of the United States of America, and shall be payable (as well the interest as the principal there- of) at the Agency of the Company in the City of Washington, D.C., or at the Agency of the Company in the Borough of Manhattan, The City of New York.

The interest so payable on any interest payment date shall be paid to the persons in whose names the Bonds of 2003 Series are registered at the close of business on the last business day (hereinafter called the "record date") which is more than ten days prior to such interest payment date, a "business day" being any day that is not a day on which banks in the City of Washington, D.C., are authorized by law to close; except that if the Company shall default in the payment of any interest due on such interest payment date, such de- faulted interest shall be paid to the persons in whose names the Bonds of 2003 Series are registered on the date of payment of such defaulted interest, or in accordance with the regulations of any securities exchange on which the Bonds of 2003 Series are listed.

Except as provided hereinafter, every Bond of 2003 Series shall be dated as of the date of its authentication and delivery, or if that is an interest pay- ment date, the next day, and shall bear interest from the interest payment date next preceding its date or October 13, 1993, whichever is later. Notwith- standing Section 6 of Article II of the Original Indenture, any Bond of 2003 Series authenticated and delivered by the Trustee after the close of business on the record date with respect to any interest payment date and prior to such interest payment date shall be dated as of the date next following such inter- est payment date and

shall bear interest from such interest payment date; except that if the Com- pany shall default in the payment of any interest due on such interest payment date, such Bond shall bear interest from the next preceding interest payment date or October 13, 1993, whichever is later.

Section 2. The Bonds of 2003 Series, and the Trustee's certificate to be en- dorsed on the Bonds of 2003 Series, shall be substantially in the following forms, respectively:

[FORM OF FACE OF BOND OF 2003 SERIES]

POTOMAC ELECTRIC POWER COMPANY
(A District of Columbia and Virginia corporation)

First Mortgage Bond, 5 5/8% Series Due 2003

No. $

Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic corporation of the Com- monwealth of Virginia (hereinafter called the "Company", which term shall in- clude any successor corporation as defined in the Amended Indenture hereinaf- ter referred to), for value received, hereby promises to pay to ................... or registered assigns, the sum of .................. dol- lars, on the fifteenth day of October 2003, in lawful money of the United States of America, and to pay interest thereon in like money from the later of October 13, 1993 or the interest payment date April 15 or October 15 next pre- ceding the date of this Bond, or if the Company shall default in the payment of interest due on such interest payment date, then from the next preceding interest payment date or October 13, 1993, whichever is later, at the rate of five and five-eighths percent (5 5/8%) per annum, payable semiannually, com- mencing April 15, 1994, on the fifteenth day of April and October in each year until maturity, or, if the Company shall default in the payment of the princi- pal hereof, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Amended Indenture. The inter- est so payable on any April 15 or October 15 will, subject to certain excep- tions provided in the indenture dated as

of September 29, 1993 supplemental to the Amended Indenture, be paid to the person in whose name this Bond is registered at the close of business on the last business day which is more than ten days prior to such April 15 or Octo- ber 15. Both principal of, and interest on, this Bond are payable at the agency of the Company in the City of Washington, D.C., or, at the option of the holder, at the agency of the Company in the Borough of Manhattan, The City of New York.

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

This Bond shall not be entitled to any benefit under the Amended Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until The Riggs National Bank of Washington, D.C., the Trustee under the Amended Indenture, or a successor trustee thereto under the Amended Indenture, shall have signed the form of certificate endorsed hereon.

In Witness Whereof, Potomac Electric Power Company has caused this Bond to be signed in its name by the signature (or a facsimile thereof) of its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by the facsimile signature of its Secretary or an Assistant Secretary.

Dated,

Potomac Electric Power Company

By......................................
Vice President

Attest:

...................................
Secretary

[FORM OF TRUSTEE'S CERTIFICATE]

This Bond is one of the Bonds, of the series designated therein, described in the within-mentioned Amended Indenture and the Supplemental Indenture dated as of September 29, 1993.

The Riggs National Bank of Washington, D.C.

Trustee.

By...................................
Authorized Officer

[TEXT APPEARING ON REVERSE SIDE OF BOND OF 2003 SERIES]

This Bond is one of a duly authorized issue of Bonds of the Company (herein- after called the "Bonds") in unlimited aggregate principal amount, of the se- ries hereinafter specified, all issued and to be issued under and equally se- cured (except in so far as any purchase or sinking fund or analogous provi- sions for any particular series of Bonds, established by any indenture supple- mental to the Amended Indenture hereinafter mentioned, may afford additional security for such Bonds) by a mortgage and deed of trust, dated July 1, 1936, executed by the Company to The Riggs National Bank of Washington, D.C. (herein called the "Trustee"), as trustee, as amended by indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993 and August 20, 1993 (said mortgage and deed of trust, as so amended, being herein called the "Amended Indenture") and all in- dentures supplemental thereto, to which Amended Indenture and supplemental in- dentures reference is hereby made for a description of the properties mort- gaged and pledged, the nature and extent of the security, the rights of the owners of the Bonds and of the Trustee in respect thereto, and the terms and

conditions upon which the Bonds are, and are to be, secured. To the extent permitted by, and as provided in, the Amended Indenture, modifications or al- terations of the Amended Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds may be made with the consent of the Company by an affirmative vote of not less than 80% in amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Amended Indenture, and by an affirmative vote of not less than 80% in amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Amended Indenture are so affected; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or interest on, this Bond, which are un- conditional, or which reduces the percentage of Bonds the affirmative vote of which is required for the making of such modifications or alterations. The Company is proposing an amendment to the Amended Indenture which would replace "80%" with "60%" in the preceding sentence, which amendment will become effec- tive upon the consent or agreement thereto of the holders of all the outstand- ing Bonds. The holder of this Bond will be deemed to have approved such amend- ment. The Bonds may be issued in series, for various principal sums, may ma- ture at different times, may bear interest at different rates and may other- wise vary as in the Amended Indenture provided.

This Bond is one of a series designated as the "First Mortgage Bonds, 5 5/8% Series due 2003" (herein called the "Bonds of 2003 Series") of the Company, issued under and secured by the Amended Indenture and all indentures supple- mental thereto and described in the indenture (herein called the "New Supple- mental Indenture"), dated as of September 29, 1993, between the Company and the Trustee, supplemental to the Amended Indenture.

The Bonds of 2003 Series are not subject to redemption prior to maturity.

In case an event of default, as defined in the Amended Indenture, shall oc- cur, the principal of all the Bonds at any such time outstanding under

the Amended Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Amended In- denture. The Amended Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds entitled to vote then outstanding.

This Bond is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that pur- pose at the agency of the Company in the City of Washington, D.C., or at the agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this Bond and on presentation of a duly executed written instrument of transfer, and thereupon a new Bond or Bonds of the same series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange therefor; and this Bond, with or without others of the same series, may in like manner be ex- changed for one or more new Bonds of the same series of other authorized de- nominations but of the same aggregate principal amount; all subject to the terms and conditions set forth in the Amended Indenture.

No recourse shall be had for the payment of the principal of, or the interest on, this Bond, or for any claim based hereon or otherwise in respect hereof or of the Amended Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company or of any predecessor or successor corporation, ei- ther directly or through the Company or any such predecessor or successor cor- poration, whether for amounts unpaid on stock subscriptions or by virtue of any constitution, statute or rule of law, or by the enforcement of any assess- ment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stock- holders, directors or officers being released by every owner hereof by the ac- ceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Amended Indenture.

Section 3. The Bonds of 2003 Series shall be registered Bonds without coupons in denominations of any multiple of $1,000, numbered consecutively upwards from R1.

Section 4. Until Bonds of 2003 Series in definitive form are ready for deliv- ery, the Company may execute, and upon its request in writing the Trustee shall authenticate and deliver, in lieu thereof, Bonds for such series in tem- porary form, as provided in Section 9 of Article II of the Original Indenture as amended.

PART II.

Issue of Bonds.

Section 1. Except for Bonds of 2003 Series issued pursuant to Section 13 of Article II of the Original Indenture as amended, the principal amount of Bonds of 2003 Series which may be authenticated and delivered hereunder is limited to $50,000,000 aggregate principal amount.

Section 2. Bonds of 2003 Series in the aggregate principal amount permitted in Section 1 of this Part II, may at any time subsequent to the execution hereof be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the record- ing hereof) to or upon the order of the Company evidenced by a writing or writings, signed by its President or one of its Vice Presidents and its Trea- surer or one of its Assistant Treasurers, at such time or times as may be re- quested by the Company subsequent to the receipt by the Trustee of

(1) the certified resolution and the officers' certificate required by Sec- tion 3(a) and Section 3(b) of Article III of the Original Indenture as amended;

(2) the opinion of counsel required by Section 3(c) of Article III of the Original Indenture as amended;

(3) cash, if any, in the amount required to be deposited by Section 3(d) of Article III of the Original Indenture as amended, which shall be held and applied by the Trustee as provided in said Section 3(d);

(4) the certificates, instruments, opinions of counsel, prior lien bonds and cash, if any, required by Section 4 of Article III of the Original In- denture as amended, except that, as required by Part IV of this Supplemental Indenture, property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall

not be made the basis for the authentication and delivery of Bonds of 2003 Series; and

(5) the certificates and opinions required by Article XVIII of the Original Indenture as amended.

PART III.

Redemption.

The Bonds of 2003 Series shall not be redeemable prior to maturity.

PART IV.

Additional Particular Covenants of the Company.

The Company hereby covenants, warrants and agrees that so long as any Bonds of 2003 Series are outstanding:

Section 1. The Company will not withdraw, pursuant to the provisions of Sec- tion 2 of Article VIII of the Original Indenture as amended, any moneys held by the Trustee as part of the trust estate in excess of an amount equal to the aggregate principal amount of such of the refundable Bonds as were theretofore issued by the Company; and that upon any such withdrawal by the Company re- fundable Bonds equal in aggregate principal amount to the amount so withdrawn shall be deemed to have been made the basis of such withdrawal.

Section 2. Property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds, or the withdrawal of cash, or the reduction of the amount of cash required to be paid to the Trustee under any provision of the Indenture.

PART V.

Amendment of Indenture to Permit Qualification Under Trust Indenture Act of 1939.

The Company and the Trustee, from time to time and at any time, without any vote or consent of the holders of the Bonds of 2003 Series,

may enter into such indentures supplemental to the Original Indenture as may or shall by them be deemed necessary or desirable to add to or modify or amend any of the provisions of the Original Indenture so as to permit the qualifica- tion of the Original Indenture under the Trust Indenture Act of 1939.

Except to the extent specifically provided herein, no provision of this Sup- plemental Indenture is intended to modify, and the parties hereto do hereby adopt and confirm, the provisions of Section 318(c) of the Trust Indenture Act of 1939 which amend and supersede provisions of the Original Indenture, as supplemented, in effect prior to November 15, 1990.

PART VI.

Amendment of Original Indenture.

Notwithstanding any other provisions of the Original Indenture as amended, the holders of the Bonds of 2003 Series, by their holding of such Bonds, are deemed to have approved the following amendment to the Original Indenture as amended and to have authorized the Trustee to take any action necessary to ev- idence or effectuate such approval:

Sections 5 and 6 of Article XV of the Original Indenture as amended are hereby amended by changing the words and figures "eighty percent. (80%)" to the words and figures "sixty percent. (60%)" wherever in such Sections such words and figures occur.

PART VII.

The Trustee.

The Trustee hereby accepts the trusts hereby declared and provided and agrees to perform the same upon the terms and conditions in the Original Indenture as amended set forth and upon the following terms and conditions:

The Trustee shall not be responsible in any manner whatsoever for or in re- spect of the validity or sufficiency of this Supplemental Indenture

or the due execution hereof by the Company or for or in respect of the recit- als contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Original Indenture as amended shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture.

PART VIII.

Miscellaneous Provisions.

This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an origi- nal; but such counterparts shall together constitute but one and the same in- strument.

Potomac Electric Power Company hereby constitutes and appoints William R. Gee, Jr., one of its Vice Presidents, to be its true and lawful attorney-in- fact, for it and in its name to appear before any officer authorized by law to take and certify acknowledgments of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and deliver these presents as the act and deed of said Potomac Electric Power Company.

The Riggs National Bank of Washington, D.C., hereby constitutes and appoints Alexander C. Baker, one of its Senior Vice Presidents, to be its true and law- ful attorney-in-fact, for it and in its name to appear before any officer au- thorized by law to take and certify acknowledgments of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and de- liver these presents as the act and deed of said The Riggs National Bank of Washington, D.C.

In Witness Whereof, said Potomac Electric Power Company has caused this Sup- plemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; and said The Riggs National Bank of Washington, D.C., in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Senior Vice Presidents, and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by one of its Corpo- rate Trust Officers, all as of the 29th day of September, One thousand nine hundred and ninety-three.

Potomac Electric Power Company

(Corporate Seal)
By...................................

WILLIAM R. GEE, JR.,
Vice President

Attested:

...................................
MARY T. HOWARD,
Assistant Secretary

Signed, sealed and delivered by
Potomac Electric Power Company
in the presence of:

...................................

...................................

As Witnesses

The Riggs National Bank of
Washington, D.C.

(Corporate Seal)
By...................................

ALEXANDER C. BAKER,
Senior Vice President

Attested:

...................................
BEVERLY MOFFETT,
Senior Corporate Trust Officer

Signed, sealed and delivered by
The Riggs National Bank of Wash-
ington, D.C. in the presence of:

...................................

...................................

As Witnesses

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, whose commission as such will expire , do hereby certify that William R. Gee, Jr. and Mary T. Howard, whose names as Vice President and Assistant Secretary, respectively, of Potomac Electric Power Company, a corpo- ration, are signed to the foregoing and hereto attached deed, bearing date as of the 29th day of September, 1993, personally appeared this day before me in my District aforesaid and acknowledged themselves to be, respectively, a Vice President and an Assistant Secretary of Potomac Electric Power Company, and that they as such, being authorized so to do, executed the said deed by sign- ing the name of Potomac Electric Power Company by William R. Gee, Jr., as Vice President, and attested by Mary T. Howard, as Assistant Secretary, and ac- knowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of Potomac Electric Power Company.

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that William R. Gee, Jr., a Vice Presi- dent of Potomac Electric Power Company, a corporation, one of the parties to the foregoing instrument bearing date as of the 29th day of September, 1993, and hereto annexed, this day personally appeared before me in the City of Washington, the said William R. Gee, Jr. being personally well known to me as the person who executed the said instrument as a Vice President of and on be- half of said Potomac Electric Power Company and known to me to be the attor- ney-in-fact duly appointed therein to acknowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said Potomac Electric Power Company, and delivered the same as such. I further certify that the said William R. Gee, Jr., being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corpora- tion; and that he signed his name thereto by like order. My commission expires

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker and Beverly Moffett, whose names as Senior Vice President and Senior Corporate Trust Officer, re- spectively, of The Riggs National Bank of Washington, D.C., a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 29th day of September, 1993, personally appeared before me this day in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice Pres- ident and a Senior Corporate Trust Officer of The Riggs National Bank of Wash- ington, D.C., and that they as such, being authorized so to do, executed the said deed by signing the name of The Riggs National Bank of Washington, D.C., by Alexander C. Baker as Senior Vice President, and attested by Beverly Moffett, as Senior Corporate Trust Officer, and acknowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of The Riggs National Bank of Washington, D.C., as therein set forth.

Given under my hand and notarial seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

Alexander C. Baker, of full age, being sworn according to law, on his oath deposes and says that he is a Senior Vice President of The Riggs National Bank of Washington, D.C., the Trustee named in the foregoing Supplemental Inden- ture, dated as of the 29th day of September, 1993, that he is the agent of said Trustee for the purpose of perfecting such Supplemental Indenture and that the consideration in the Original Indenture referred to therein and in all indentures supplemental to said Original Indenture, including the forego- ing Supplemental Indenture, is true and bona fide as therein set forth.

............................................

Alexander C. Baker

Subscribed and sworn to before me
this day of October, 1993.

...................................
Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker a Senior Vice President of The Riggs National Bank of Washington, D.C., a corporation, one of the parties to the foregoing instrument bearing date as of the 29th day of September, 1993, and hereto annexed, this day personally appeared before me in the City of Washington, the said Alexander C. Baker, being personally well known to me as the person who executed the said instrument as a Senior Vice President of and on behalf of said The Riggs National Bank of Washington, D.C., and known to me to be the attorney-in-fact duly appointed therein to ac- knowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said The Riggs National Bank of Washington, D.C., and delivered the same as such. I further certify that the said Alexander C. Baker, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

My Commission Expires

CERTIFICATE OF RESIDENCE

The Riggs National Bank of Washington, D.C., Mortgagee and Trustee within named, hereby certifies that its precise residence is 800-17th Street, N.W., Washington, D.C. 20006.

The Riggs National Bank of Washington, D.C.

By..........................................
Alexander C. Baker,

POTOMAC ELECTRIC POWER COMPANY

1900 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C.

TO

THE RIGGS NATIONAL BANK
OF WASHINGTON, D.C.

800-17TH STREET, N.W., WASHINGTON, D.C.
AS TRUSTEE

Supplemental Indenture

DATED AS OF SEPTEMBER 30, 1993

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST

DATED JULY 1, 1936

FIRST MORTGAGE BONDS, 5 7/8% SERIES DUE 2008

POTOMAC ELECTRIC POWER COMPANY

SUPPLEMENTAL INDENTURE DATED AS OF SEPTEMBER 30, 1993

TABLE OF CONTENTS*

                                                                          PAGE
Parties..................................................................   1
Recitals.................................................................   1

                                   PART I

                            Description of Bonds

Section 1. General description of Bonds of 2008 Series..................    5
Section 2. Form of face of Bond of 2008 Series..........................    7
           Form of Trustee's certificate................................    9
           Text appearing on reverse side of Bond of 2008 Series........    9
Section 3. Denominations of Bonds of 2008 Series........................   11
Section 4. Execution and form of temporary Bonds........................   12

                                   PART II

                               Issue of Bonds
Section 1. Limitation as to principal amount............................   12
Section 2. Issue of Bonds...............................................   12

                                  PART III

                                 Redemption
Bonds of 2008 Series are not redeemable prior to maturity................  13

                                   PART IV

               Additional Particular Covenants of the Company
Section 1. Company not to withdraw moneys pursuant to Section 2 of
            Article VIII in excess of an amount equal to principal
            amount of issued refundable bonds...........................   13
Section 2. No property additions made on or prior to December 31, 1946
            to be used for any purpose under the Indenture..............   13

                                    PART V
                                                                          PAGE
Amendment of Indenture to Permit Qualification Under Trust Indenture
 Act of 1939.............................................................  13

                                   PART VI
Amendment of Original Indenture..........................................  14

                                   PART VII

                                 The Trustee
Acceptance of trusts by the Trustee......................................  14
Trustee not responsible for validity of the Supplemental Indenture.......  14

                                  PART VIII

                           Miscellaneous Provisions
Execution of Supplemental Indenture in counterparts......................  15
Appointment of attorneys-in-fact by parties..............................  15
Testimonium..............................................................  15
Execution................................................................  16
Company's Acknowledgments................................................  17
Trustee's Acknowledgments................................................  19

SUPPLEMENTAL INDENTURE, dated as of the thirtieth day of September, nineteen hundred and ninety-three (1993), made by and between Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic corporation of the Commonwealth of Virginia (here- inafter sometimes called the "Company"), party of the first part, and The Riggs National Bank of Washington, D.C., a national banking association orga- nized and existing under the laws of the United States of America (hereinafter sometimes called the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1936, hereinafter mentioned, party of the second part;

Whereas, The Company has heretofore executed and delivered its Mortgage and Deed of Trust, dated July 1, 1936 (hereinafter sometimes referred to as the "Original Indenture"), to the Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series; and

Whereas, pursuant to the terms and provisions of the Original Indenture, in- dentures supplemental thereto dated as of July 1, 1936, December 1, 1939, Au- gust 1, 1940, August 1, 1942, January 1, 1948, May 1, 1949, May 1, 1950, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, December 1, 1958, November 16, 1959, December 1, 1960, February 15, 1963, May 15, 1964, April 1, 1966, May 1, 1967, February 15, 1968, March 15, 1969, February 15, 1970, August 15, 1970, September 15, 1972, April 1, 1973, January 2, 1974, August 15, 1974, Au- gust 15, 1974, June 15, 1977, July 1, 1979, June 16, 1981, June 17, 1981, De- cember 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993 and September 29, 1993 have been heretofore entered into between the Company and the Trustee to provide, respectively, for the creation of the first through the fifty-fourth series of Bonds thereunder and, in the case of the supplemental indentures dated January 1, 1948, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, September 15, 1972, July 1, 1979, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992, July 1, 1993 and one of the supplemental indentures dated August 15, 1974, to convey additional property; and

Whereas, $20,000,000 principal amount of Bonds of the 3 1/4% Series due 1966 (the first series), $5,000,000 principal amount of Bonds of the 3 1/4 Series due 1974 (the second series), $10,000,000 principal amount of Bonds of the 3 1/4% Series due 1975 (the third series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1977 (the fourth series), $15,000,000 principal amount of Bonds of the 3% Series due 1983 (the fifth series), $10,000,000 principal amount of Bonds of the 2 7/8% Series due 1984 (the sixth series), $30,000,000 principal amount of Bonds of the 2 3/4% Series due 1985 (the sev- enth series), $15,000,000 principal amount of Bonds of the 3 1/4% Series due 1987 (the eighth series), $10,000,000 principal amount of Bonds of the 3 7/8% Series due 1988 (the ninth series), $10,000,000 principal amount of Bonds of the 3 3/8% Series due 1990 (the tenth series), $10,000,000 principal amount of Bonds of the 3 5/8% Series due 1991 (the eleventh series), $35,000,000 princi- pal amount of Bonds of the 8.85% Series due 2005 (the twenty-first series), $70,000,000 principal amount of Bonds of the 9 1/2% Series due August 15, 2005 (the twenty-second series), $100,000,000 principal amount of Bonds of the 8 3/8% Series due 2009 (the twenty-fifth series), $50,000,000 principal amount of Bonds of the 10 1/4% Series due 1981 (the twenty-sixth series), $50,000,000 principal amount of Bonds of the 10 3/4% Series due 2004 (the twenty-seventh series), $30,000,000 principal amount of Bonds of the Floating Rate Series due 2010 (the thirty-second series), $50,000,000 principal amount of Bonds of the 14 1/2% Series due 1991 (the thirty-third series), $60,000,000 principal amount of Bonds of the 14 1/4% Series due 1992 (the thirty-fifth series), $50,000,000 principal amount of Bonds of the 11 7/8% Series due 1989 (the thirty-sixth series), $37,000,000 principal amount of Bonds of the 8 3/4% Se- ries due 2010 (the thirty-seventh series), $75,000,000 principal amount of Bonds of the 11 1/4% Series due 2015 (the thirty-eighth series), $75,000,000 principal amount of Bonds of the 9 1/4% Series due 2016 (the thirty-ninth se- ries), $75,000,000 principal amount of Bonds of the 8 3/4% Series due 2016 (the fortieth series) and $75,000,000 principal amount of Bonds of the 9% Se- ries due 1990 (the forty-second series) have been heretofore redeemed and re- tired and there are now issued and outstanding under the Original Indenture and under the supplemental indentures referred to above: $25,000,000 principal amount of Bonds of the 4 5/8% Series due 1993 (the twelfth series); $15,000,000 principal amount of Bonds of the 5 1/4% Series due 1994 (the thir- teenth series); $40,000,000

principal amount of Bonds of the 5% Series due 1995 (the fourteenth series); $50,000,000 principal amount of Bonds of the 4 3/8% Series due 1998 (the fif- teenth series); $45,000,000 principal amount of Bonds of the 4 1/2% Series due 1999 (the sixteenth series); $15,000,000 principal amount of Bonds of the 5 1/8% Series due 2001 (the seventeenth series); $35,000,000 principal amount of Bonds of the 5 7/8% Series due 2002 (the eighteenth series); $40,000,000 prin- cipal amount of Bonds of the 6 5/8% Series due 2003 (the nineteenth series); $45,000,000 principal amount of Bonds of the 7 3/4% Series due 2004 (the twen- tieth series); $50,000,000 principal amount of Bonds of the 7 3/4% Series due 2007 (the twenty-third series); $19,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twenty-fourth series); $38,300,000 principal amount of Bonds of the 6 1/8% Series due 2007 (the twenty-eighth series); $15,000,000 principal amount of Bonds of the 6 1/2% Series due 2004 (the twenty-ninth se- ries); $20,000,000 principal amount of Bonds of the 6 1/2% Series due 2007 (the thirtieth series); $7,500,000 principal amount of Bonds of the 6 5/8% Se- ries due 2009 (the thirty-first series); $50,000,000 principal amount of Bonds of the Adjustable Rate Series due 2001 (the thirty-fourth series); $75,000,000 principal amount of Bonds of the 8 1/4% Series due 2017 (the forty-first se- ries); $75,000,000 principal amount of Bonds of the 9 3/4% Series due 2019 (the forty-third series); $75,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series); $100,000,000 principal amount of Bonds of the 9% Series due 2000 (the forty-fifth series); $100,000,000 princi- pal amount of Bonds of the 9% Series due 2021 (the forty-sixth series); $75,000,000 principal amount of Bonds of the 8 1/2% Series due 2027 (the for- ty-seventh series); $30,000,000 principal amount of Bonds of the 6% Series due 2022 (the forty-eighth series); $37,000,000 principal amount of Bonds of the 6 3/8% Series due 2023 (the forty-ninth series); $78,000,000 principal amount of Bonds of the 6 1/2% Series due 2008 (the fiftieth series); $40,000,000 princi- pal amount of Bonds of the 7 1/2% Series due 2028 (the fifty-first series); $100,000,000 principal amount of Bonds of the 7 1/4% Series due 2023 (the fif- ty-second series); $100,000,000 principal amount of Bonds of the 6 7/8% Series due 2023 (the fifty-third series); and $50,000,000 principal amount of Bonds of the 5 5/8% Series due 2003 (the fifty-fourth series); and

Whereas, for the purpose of conforming the Original Indenture to the stan- dards prescribed by the Trust Indenture Act of 1939 or otherwise

modifying certain of the provisions of the Original Indenture, indentures sup- plemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993 and September 29, 1993 have been heretofore entered into between the Company and the Trustee, and for the purpose of conveying additional property, indentures supplemental thereto dated July 15, 1942, October 15, 1947, December 31, 1948, December 31, 1949, February 15, 1951, February 16, 1953, March 15, 1954, March 15, 1955, March 15, 1956, April 1, 1957, May 1, 1958, May 1, 1959, May 2, 1960, April 3, 1961, May 1, 1962, May 1, 1963, April 23, 1964, May 3, 1965, June 1, 1966, April 28, 1967, July 3, 1967, May 1, 1968, June 16, 1969, May 15, 1970, September 1, 1971, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992 and July 1, 1993 have been heretofore entered into be- tween the Company and the Trustee, and for the purpose of better securing and protecting the Bonds then or thereafter issued and confirming the lien of the Original Indenture, an indenture dated October 15, 1942 supplemental thereto has been heretofore entered into between the Company and the Trustee; the Original Indenture as heretofore amended and supplemented being hereinafter referred to as the "Original Indenture as amended"; and

Whereas, the Company is entitled to have authenticated and delivered addi- tional Bonds on the basis of the net bondable value of property additions, upon compliance with the provisions of Section 4 of Article III of the Origi- nal Indenture as amended; and

Whereas, the Company has determined to issue a fifty-fifth series of Bonds under the Original Indenture as amended in the principal amount of $50,000,000, to be known as First Mortgage Bonds, 5 7/8% Series due 2008 (hereinafter called "Bonds of 2008 Series"); and

Whereas, the Original Indenture as amended provides that certain terms and provisions, as determined by the Board of Directors of the Company, of the Bonds of any particular series may be expressed in and provided by the execu- tion of an appropriate supplemental indenture; and

Whereas, the Original Indenture as amended provides that the Company and the Trustee may enter into indentures supplemental thereto to add to the covenants and agreements of the Company contained therein other covenants and agreements thereafter to be observed; and to surrender any right or power reserved to or conferred upon the Company in the Original Indenture as amended; and

Whereas, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture as amended and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and

Whereas, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized;

Now, Therefore, This Indenture Witnesseth:

That Potomac Electric Power Company, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and de- livery of these presents, and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants, declares and agrees with the Trustee and its successors in the trust under the Original Indenture as amend- ed, for the benefit of those who hold the Bonds and coupons, or any of them, issued or to be issued hereunder or under the Original Indenture as amended, as follows:

PART I.

Description of Bonds.

Section 1. The Bonds of 2008 Series shall, subject to the provisions of Sec- tion 1 of Article II of the Original Indenture as amended, be designated as "First Mortgage Bonds, 5 7/8% Series due 2008" of the Company. The Bonds of 2008 Series shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be

subject to, all of the terms, conditions and covenants of the Original Inden- ture as amended, except in so far as the terms and provisions of the Original Indenture as amended are amended or modified by this Supplemental Indenture.

The Bonds of 2008 Series shall mature October 15, 2008, and shall bear inter- est at the rate of five and seven-eighths per cent (5 7/8%) per annum, payable semiannually, commencing April 15, 1994, on the fifteenth day of April and the fifteenth day of October in each year (each such April 15 and October 15 being hereinafter called an "interest payment date"). The Bonds of 2008 Series shall be payable as to principal and interest in lawful money of the United States of America, and shall be payable (as well the interest as the principal there- of) at the Agency of the Company in the City of Washington, D.C., or at the Agency of the Company in the Borough of Manhattan, The City of New York.

The interest so payable on any interest payment date shall be paid to the persons in whose names the Bonds of 2008 Series are registered at the close of business on the last business day (hereinafter called the "record date") which is more than ten days prior to such interest payment date, a "business day" being any day that is not a day on which banks in the City of Washington, D.C., are authorized by law to close; except that if the Company shall default in the payment of any interest due on such interest payment date, such de- faulted interest shall be paid to the persons in whose names the Bonds of 2008 Series are registered on the date of payment of such defaulted interest, or in accordance with the regulations of any securities exchange on which the Bonds of 2008 Series are listed.

Except as provided hereinafter, every Bond of 2008 Series shall be dated as of the date of its authentication and delivery, or if that is an interest pay- ment date, the next day, and shall bear interest from the interest payment date next preceding its date or the date of delivery of the initial Bonds of 2008 Series, whichever is later. Notwithstanding Section 6 of Article II of the Original Indenture, any Bond of 2008 Series authenticated and delivered by the Trustee after the close of business on the record date with respect to any interest payment date and prior to such interest payment date shall be dated as of the date next follow-

ing such interest payment date and shall bear interest from such interest pay- ment date; except that if the Company shall default in the payment of any in- terest due on such interest payment date, such Bond shall bear interest from the next preceding interest payment date or the date of delivery of the ini- tial Bonds of 2008 Series, whichever is later.

Section 2. The Bonds of 2008 Series, and the Trustee's certificate to be en- dorsed on the Bonds of 2008 Series, shall be substantially in the following forms, respectively:

[FORM OF FACE OF BOND OF 2008 SERIES]

POTOMAC ELECTRIC POWER COMPANY
(A District of Columbia and Virginia corporation)

First Mortgage Bond, 5 7/8% Series Due 2008

No. $

Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic cor- poration of the Com- monwealth of Virginia (hereinafter called the "Company", which term shall in- clude any successor corporation as defined in the Amended Indenture hereinaf- ter referred to), for value received, hereby promises to pay to ................... or registered assigns, the sum of .................. dol- lars, on the fifteenth day of October 2008, in lawful money of the United States of America, and to pay interest thereon in like money from the later of the date of delivery of the initial Bonds of 2008 Series or the interest pay- ment date April 15 or October 15 next preceding the date of this Bond, or if the Company shall default in the payment of interest due on such interest pay- ment date, then from the next preceding interest payment date or the date of delivery of the initial Bonds of 2008 Series, whichever is later, at the rate of five and seven-eighths percent (5 7/8%) per annum, payable semiannually, commencing April 15, 1994, on the fifteenth day of April and October in each year until maturity, or, if the Company shall default in the payment of the principal hereof, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the

Amended Indenture. The interest so payable on any April 15 or October 15 will, subject to certain exceptions provided in the indenture dated as of September 30, 1993 supplemental to the Amended Indenture, be paid to the person in whose name this Bond is registered at the close of business on the last business day which is more than ten days prior to such April 15 or October 15. Both princi- pal of, and interest on, this Bond are payable at the agency of the Company in the City of Washington, D.C., or, at the option of the holder, at the agency of the Company in the Borough of Manhattan, The City of New York.

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

This Bond shall not be entitled to any benefit under the Amended Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until The Riggs National Bank of Washington, D.C., the Trustee under the Amended Indenture, or a successor trustee thereto under the Amended Indenture, shall have signed the form of certificate endorsed hereon.

In Witness Whereof, Potomac Electric Power Company has caused this Bond to be signed in its name by the signature (or a facsimile thereof) of its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by the facsimile signature of its Secretary or an Assistant Secretary.

Dated,

Potomac Electric Power Company

By......................................
Vice President

Attest:

...................................
Secretary

[FORM OF TRUSTEE'S CERTIFICATE]

This Bond is one of the Bonds, of the series designated therein, described in the within-mentioned Amended Indenture and the Supplemental Indenture dated as of September 30, 1993.

The Riggs National Bank of Washington, D.C.

Trustee.

By..........................................
Authorized Officer

[TEXT APPEARING ON REVERSE SIDE OF BOND OF 2008 SERIES]

This Bond is one of a duly authorized issue of Bonds of the Company (herein- after called the "Bonds") in unlimited aggregate principal amount, of the se- ries hereinafter specified, all issued and to be issued under and equally se- cured (except in so far as any purchase or sinking fund or analogous provi- sions for any particular series of Bonds, established by any indenture supple- mental to the Amended Indenture hereinafter mentioned, may afford additional security for such Bonds) by a mortgage and deed of trust, dated July 1, 1936, executed by the Company to The Riggs National Bank of Washington, D.C. (herein called the "Trustee"), as trustee, as amended by indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993 and September 29, 1993 (said mortgage and deed of trust, as so amended, being herein called the "Amended Indenture") and all indentures supplemental thereto, to which Amended Inden- ture and supplemental indentures reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the owners of the Bonds and of the Trustee in respect thereto, and the terms and conditions upon which the Bonds are, and are

to be, secured. To the extent permitted by, and as provided in, the Amended Indenture, modifications or alterations of the Amended Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Com- pany and of the holders of the Bonds may be made with the consent of the Com- pany by an affirmative vote of not less than 80% in amount of the Bonds enti- tled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Amended Indenture, and by an affirmative vote of not less than 80% in amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Amended Indenture are so affected; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or interest on, this Bond, which are unconditional, or which reduces the percentage of Bonds the affirmative vote of which is required for the making of such modifi- cations or alterations. The Company is proposing an amendment to the Amended Indenture which would replace "80%" with "60%" in the preceding sentence, which amendment will become effective upon the consent or agreement thereto of the holders of all the outstanding Bonds. The holder of this Bond will be deemed to have approved such amendment. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Amended Indenture provided.

This Bond is one of a series designated as the "First Mortgage Bonds, 5 7/8% Series due 2008" (herein called the "Bonds of 2008 Series") of the Company, issued under and secured by the Amended Indenture and all indentures supple- mental thereto and described in the indenture (herein called the "New Supple- mental Indenture"), dated as of September 30, 1993, between the Company and the Trustee, supplemental to the Amended Indenture.

The Bonds of 2008 Series are not subject to redemption prior to maturity.

In case an event of default, as defined in the Amended Indenture, shall oc- cur, the principal of all the Bonds at any such time outstanding under

the Amended Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Amended In- denture. The Amended Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds entitled to vote then outstanding.

This Bond is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that pur- pose at the agency of the Company in the City of Washington, D.C., or at the agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this Bond and on presentation of a duly executed written instrument of transfer, and thereupon a new Bond or Bonds of the same series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange therefor; and this Bond, with or without others of the same series, may in like manner be ex- changed for one or more new Bonds of the same series of other authorized de- nominations but of the same aggregate principal amount; all subject to the terms and conditions set forth in the Amended Indenture.

No recourse shall be had for the payment of the principal of, or the interest on, this Bond, or for any claim based hereon or otherwise in respect hereof or of the Amended Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company or of any predecessor or successor corporation, ei- ther directly or through the Company or any such predecessor or successor cor- poration, whether for amounts unpaid on stock subscriptions or by virtue of any constitution, statute or rule of law, or by the enforcement of any assess- ment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stock- holders, directors or officers being released by every owner hereof by the ac- ceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Amended Indenture.

Section 3. The Bonds of 2008 Series shall be registered Bonds without coupons in denominations of any multiple of $1,000, numbered consecutively upwards from R1.

Section 4. Until Bonds of 2008 Series in definitive form are ready for deliv- ery, the Company may execute, and upon its request in writing the Trustee shall authenticate and deliver, in lieu thereof, Bonds for such series in tem- porary form, as provided in Section 9 of Article II of the Original Indenture as amended.

PART II.

Issue of Bonds.

Section 1. Except for Bonds of 2008 Series issued pursuant to Section 13 of Article II of the Original Indenture as amended, the principal amount of Bonds of 2008 Series which may be authenticated and delivered hereunder is limited to $50,000,000 aggregate principal amount.

Section 2. Bonds of 2008 Series in the aggregate principal amount permitted in Section 1 of this Part II, may at any time subsequent to the execution hereof be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the record- ing hereof) to or upon the order of the Company evidenced by a writing or writings, signed by its President or one of its Vice Presidents and its Trea- surer or one of its Assistant Treasurers, at such time or times as may be re- quested by the Company subsequent to the receipt by the Trustee of

(1) the certified resolution and the officers' certificate required by Sec- tion 3(a) and Section 3(b) of Article III of the Original Indenture as amended;

(2) the opinion of counsel required by Section 3(c) of Article III of the Original Indenture as amended;

(3) cash, if any, in the amount required to be deposited by Section 3(d) of Article III of the Original Indenture as amended, which shall be held and applied by the Trustee as provided in said Section 3(d);

(4) the certificates, instruments, opinions of counsel, prior lien bonds and cash, if any, required by Section 4 of Article III of the Original In- denture as amended, except that, as required by Part IV of this Supplemental Indenture, property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall

not be made the basis for the authentication and delivery of Bonds of 2008 Series; and

(5) the certificates and opinions required by Article XVIII of the Original Indenture as amended.

PART III.

Redemption.

The Bonds of 2008 Series shall not be redeemable prior to maturity.

PART IV.

Additional Particular Covenants of the Company.

The Company hereby covenants, warrants and agrees that so long as any Bonds of 2008 Series are outstanding:

Section 1. The Company will not withdraw, pursuant to the provisions of Sec- tion 2 of Article VIII of the Original Indenture as amended, any moneys held by the Trustee as part of the trust estate in excess of an amount equal to the aggregate principal amount of such of the refundable Bonds as were theretofore issued by the Company; and that upon any such withdrawal by the Company re- fundable Bonds equal in aggregate principal amount to the amount so withdrawn shall be deemed to have been made the basis of such withdrawal.

Section 2. Property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds, or the withdrawal of cash, or the reduction of the amount of cash required to be paid to the Trustee under any provision of the Indenture.

PART V.

Amendment of Indenture to Permit Qualification Under Trust Indenture Act of 1939.

The Company and the Trustee, from time to time and at any time, without any vote or consent of the holders of the Bonds of 2008 Series,

may enter into such indentures supplemental to the Original Indenture as may or shall by them be deemed necessary or desirable to add to or modify or amend any of the provisions of the Original Indenture so as to permit the qualifica- tion of the Original Indenture under the Trust Indenture Act of 1939.

Except to the extent specifically provided herein, no provision of this Sup- plemental Indenture is intended to modify, and the parties hereto do hereby adopt and confirm, the provisions of Section 318(c) of the Trust Indenture Act of 1939 which amend and supersede provisions of the Original Indenture, as supplemented, in effect prior to November 15, 1990.

PART VI.

Amendment of Original Indenture.

Notwithstanding any other provisions of the Original Indenture as amended, the holders of the Bonds of 2008 Series, by their holding of such Bonds, are deemed to have approved the following amendment to the Original Indenture as amended and to have authorized the Trustee to take any action necessary to ev- idence or effectuate such approval:

Sections 5 and 6 of Article XV of the Original Indenture as amended are hereby amended by changing the words and figures "eighty percent. (80%)" to the words and figures "sixty percent. (60%)" wherever in such Sections such words and figures occur.

PART VII.

The Trustee.

The Trustee hereby accepts the trusts hereby declared and provided and agrees to perform the same upon the terms and conditions in the Original Indenture as amended set forth and upon the following terms and conditions:

The Trustee shall not be responsible in any manner whatsoever for or in re- spect of the validity or sufficiency of this Supplemental Indenture

or the due execution hereof by the Company or for or in respect of the recit- als contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Original Indenture as amended shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture.

PART VIII.

Miscellaneous Provisions.

This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an origi- nal; but such counterparts shall together constitute but one and the same in- strument.

Potomac Electric Power Company hereby constitutes and appoints William R. Gee, Jr., one of its Vice Presidents, to be its true and lawful attorney-in- fact, for it and in its name to appear before any officer authorized by law to take and certify acknowledgments of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and deliver these presents as the act and deed of said Potomac Electric Power Company.

The Riggs National Bank of Washington, D.C., hereby constitutes and appoints Alexander C. Baker, one of its Senior Vice Presidents, to be its true and law- ful attorney-in-fact, for it and in its name to appear before any officer au- thorized by law to take and certify acknowledgments of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and de- liver these presents as the act and deed of said The Riggs National Bank of Washington, D.C.

In Witness Whereof, said Potomac Electric Power Company has caused this Sup- plemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; and said The Riggs National Bank of Washington, D.C., in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Senior Vice Presidents, and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by one of its Corpo- rate Trust Officers, all as of the 30th day of September, One thousand nine hundred and ninety-three.

Potomac Electric Power Company

(Corporate Seal)
By.........................................

WILLIAM R. GEE, JR.,
Vice President

Attested:

...................................
MARY T. HOWARD,
Assistant Secretary

Signed, sealed and delivered by
Potomac Electric Power Company
in the presence of:

...................................

...................................

As Witnesses

The Riggs National Bank of
Washington, D.C.

(Corporate Seal)
By..........................................

ALEXANDER C. BAKER,
Senior Vice President

Attested:

...................................
BEVERLY MOFFETT,
Senior Corporate Trust Officer

Signed, sealed and delivered by
The Riggs National Bank of Wash-
ington, D.C. in the presence of:

...................................

...................................

As Witnesses

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, whose commission as such will expire , do hereby certify that William R. Gee, Jr. and Mary T. Howard, whose names as Vice President and Assistant Secretary, respectively, of Potomac Electric Power Company, a corpo- ration, are signed to the foregoing and hereto attached deed, bearing date as of the 30th day of September, 1993, personally appeared this day before me in my District aforesaid and acknowledged themselves to be, respectively, a Vice President and an Assistant Secretary of Potomac Electric Power Company, and that they as such, being authorized so to do, executed the said deed by sign- ing the name of Potomac Electric Power Company by William R. Gee, Jr., as Vice President, and attested by Mary T. Howard, as Assistant Secretary, and ac- knowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of Potomac Electric Power Company.

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that William R. Gee, Jr., a Vice Presi- dent of Potomac Electric Power Company, a corporation, one of the parties to the foregoing instrument bearing date as of the 30th day of September, 1993, and hereto annexed, this day personally appeared before me in the City of Washington, the said William R. Gee, Jr., being personally well known to me as the person who executed the said instrument as a Vice President of and on be- half of said Potomac Electric Power Company and known to me to be the attor- ney-in-fact duly appointed therein to acknowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said Potomac Electric Power Company, and delivered the same as such. I further certify that the said William R. Gee, Jr., being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corpora- tion; and that he signed his name thereto by like order. My commission expires

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker and Beverly Moffett, whose names as Senior Vice President and Senior Corporate Trust Officer, re- spectively, of The Riggs National Bank of Washington, D.C., a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 30th day of September, 1993, personally appeared before me this day in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice Pres- ident and a Senior Corporate Trust Officer of The Riggs National Bank of Wash- ington, D.C., and that they as such, being authorized so to do, executed the said deed by signing the name of The Riggs National Bank of Washington, D.C., by Alexander C. Baker as Senior Vice President, and attested by Beverly Moffett, as Senior Corporate Trust Officer, and acknowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of The Riggs National Bank of Washington, D.C., as therein set forth.

Given under my hand and notarial seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

Alexander C. Baker, of full age, being sworn according to law, on his oath deposes and says that he is a Senior Vice President of The Riggs National Bank of Washington, D.C., the Trustee named in the foregoing Supplemental Inden- ture, dated as of the 30th day of September, 1993, that he is the agent of said Trustee for the purpose of perfecting such Supplemental Indenture and that the consideration in the Original Indenture referred to therein and in all indentures supplemental to said Original Indenture, including the forego- ing Supplemental Indenture, is true and bona fide as therein set forth.

............................................

Alexander C. Baker

Subscribed and sworn to before me
this day of October, 1993.

...................................
Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker a Senior Vice President of The Riggs National Bank of Washington, D.C., a corporation, one of the parties to the foregoing instrument bearing date as of the 30th day of September, 1993, and hereto annexed, this day personally appeared before me in the City of Washington, the said Alexander C. Baker, being personally well known to me as the person who executed the said instrument as a Senior Vice President of and on behalf of said The Riggs National Bank of Washington, D.C., and known to me to be the attorney-in-fact duly appointed therein to ac- knowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said The Riggs National Bank of Washington, D.C., and delivered the same as such. I further certify that the said Alexander C. Baker, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

My Commission Expires

CERTIFICATE OF RESIDENCE

The Riggs National Bank of Washington, D.C., Mortgagee and Trustee within named, hereby certifies that its precise residence is 800-17th Street, N.W., Washington, D.C. 20006.

The Riggs National Bank of Washington, D.C.

By..........................................
Alexander C. Baker,

POTOMAC ELECTRIC POWER COMPANY

1900 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C.

TO

THE RIGGS NATIONAL BANK
OF WASHINGTON, D.C.

800-17TH STREET, N.W., WASHINGTON, D.C.
AS TRUSTEE

Supplemental Indenture

DATED AS OF OCTOBER 1, 1993

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST

DATED JULY 1, 1936

FIRST MORTGAGE BONDS, 6 7/8% SERIES DUE 2024

POTOMAC ELECTRIC POWER COMPANY

SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 1, 1993

TABLE OF CONTENTS*

                                                                          PAGE
Parties..................................................................   1
Recitals.................................................................   1

                                   PART I

                            Description of Bonds
Section 1. General description of Bonds of 2024 Series..................    5
Section 2. Form of face of Bond of 2024 Series..........................    7
           Form of Trustee's certificate................................    9
           Text appearing on reverse side of Bond of 2024 Series........    9
Section 3. Denominations of Bonds of 2024 Series........................   12
Section 4. Execution and form of temporary Bonds........................   12

                                   PART II

                               Issue of Bonds
Section 1. Limitation as to principal amount............................   12
Section 2. Issue of Bonds...............................................   13

                                  PART III

                                 Redemption
Section 1. Bonds of 2024 Series redeemable .............................   13
Section 2. Notice of Redemption, etc. ..................................   14

                                   PART IV

               Additional Particular Covenants of the Company
Section 1. Company not to withdraw moneys pursuant to Section 2 of
            Article VIII in excess of an amount equal to principal
            amount of issued refundable bonds...........................   14
Section 2. No property additions made on or prior to December 31, 1946
            to be used for any purpose under the Indenture..............   14

                                    PART V

                                                                          PAGE
Amendment of Indenture to Permit Qualification Under Trust Indenture
 Act of 1939.............................................................  15

                                   PART VI
Amendment of Original Indenture..........................................  15

                                   PART VII

                                 The Trustee
Acceptance of trusts by the Trustee......................................  15
Trustee not responsible for validity of the Supplemental Indenture.......  16

                                  PART VIII

                           Miscellaneous Provisions
Execution of Supplemental Indenture in counterparts......................  16
Appointment of attorneys-in-fact by parties..............................  16
Testimonium..............................................................  16
Execution................................................................  17
Company's Acknowledgments................................................  18
Trustee's Acknowledgments................................................  20

SUPPLEMENTAL INDENTURE, dated as of the first day of October, nineteen hun- dred and ninety-three (1993), made by and between Potomac Electric Power Com- pany, a corporation organized and existing under the laws of the District of Columbia and a domestic corporation of the Commonwealth of Virginia (hereinaf- ter sometimes called the "Company"), party of the first part, and The Riggs National Bank of Washington, D.C., a national banking association organized and existing under the laws of the United States of America (hereinafter some- times called the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1936, hereinafter mentioned, party of the second part;

Whereas, The Company has heretofore executed and delivered its Mortgage and Deed of Trust, dated July 1, 1936 (hereinafter sometimes referred to as the "Original Indenture"), to the Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series; and

Whereas, pursuant to the terms and provisions of the Original Indenture, in- dentures supplemental thereto dated as of July 1, 1936, December 1, 1939, Au- gust 1, 1940, August 1, 1942, January 1, 1948, May 1, 1949, May 1, 1950, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, December 1, 1958, November 16, 1959, December 1, 1960, February 15, 1963, May 15, 1964, April 1, 1966, May 1, 1967, February 15, 1968, March 15, 1969, February 15, 1970, August 15, 1970, September 15, 1972, April 1, 1973, January 2, 1974, August 15, 1974, Au- gust 15, 1974, June 15, 1977, July 1, 1979, June 16, 1981, June 17, 1981, De- cember 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993 and September 30, 1993 have been heretofore en- tered into between the Company and the Trustee to provide, respectively, for the creation of the first through the fifty-fifth series of Bonds thereunder and, in the case of the supplemental indentures dated January 1, 1948, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, September 15, 1972, July 1, 1979, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992, July 1, 1993 and one of the supplemental indentures dated August 15, 1974, to convey additional property; and

Whereas, $20,000,000 principal amount of Bonds of the 3 1/4% Series due 1966 (the first series), $5,000,000 principal amount of Bonds of the 3 1/4 Series due 1974 (the second series), $10,000,000 principal amount of Bonds of the 3 1/4% Series due 1975 (the third series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1977 (the fourth series), $15,000,000 principal amount of Bonds of the 3% Series due 1983 (the fifth series), $10,000,000 principal amount of Bonds of the 2 7/8% Series due 1984 (the sixth series), $30,000,000 principal amount of Bonds of the 2 3/4% Series due 1985 (the sev- enth series), $15,000,000 principal amount of Bonds of the 3 1/4% Series due 1987 (the eighth series), $10,000,000 principal amount of Bonds of the 3 7/8% Series due 1988 (the ninth series), $10,000,000 principal amount of Bonds of the 3 3/8% Series due 1990 (the tenth series), $10,000,000 principal amount of Bonds of the 3 5/8% Series due 1991 (the eleventh series), $35,000,000 princi- pal amount of Bonds of the 8.85% Series due 2005 (the twenty-first series), $70,000,000 principal amount of Bonds of the 9 1/2% Series due August 15, 2005 (the twenty-second series), $100,000,000 principal amount of Bonds of the 8 3/8% Series due 2009 (the twenty-fifth series), $50,000,000 principal amount of Bonds of the 10 1/4% Series due 1981 (the twenty-sixth series), $50,000,000 principal amount of Bonds of the 10 3/4% Series due 2004 (the twenty-seventh series), $30,000,000 principal amount of Bonds of the Floating Rate Series due 2010 (the thirty-second series), $50,000,000 principal amount of Bonds of the 14 1/2% Series due 1991 (the thirty-third series), $60,000,000 principal amount of Bonds of the 14 1/4% Series due 1992 (the thirty-fifth series), $50,000,000 principal amount of Bonds of the 11 7/8% Series due 1989 (the thirty-sixth series), $37,000,000 principal amount of Bonds of the 8 3/4% Se- ries due 2010 (the thirty-seventh series), $75,000,000 principal amount of Bonds of the 11 1/4% Series due 2015 (the thirty-eighth series), $75,000,000 principal amount of Bonds of the 9 1/4% Series due 2016 (the thirty-ninth se- ries), $75,000,000 principal amount of Bonds of the 8 3/4% Series due 2016 (the fortieth series) and $75,000,000 principal amount of Bonds of the 9% Se- ries due 1990 (the forty-second series) have been heretofore redeemed and re- tired and there are now issued and outstanding under the Original Indenture and under the supplemental indentures referred to above: $25,000,000 principal amount of Bonds of the 4 5/8% Series due 1993 (the twelfth series); $15,000,000 principal amount of Bonds of the 5 1/4% Series due 1994 (the thir- teenth series); $40,000,000

principal amount of Bonds of the 5% Series due 1995 (the fourteenth series); $50,000,000 principal amount of Bonds of the 4 3/8% Series due 1998 (the fif- teenth series); $45,000,000 principal amount of Bonds of the 4 1/2% Series due 1999 (the sixteenth series); $15,000,000 principal amount of Bonds of the 5 1/8% Series due 2001 (the seventeenth series); $35,000,000 principal amount of Bonds of the 5 7/8% Series due 2002 (the eighteenth series); $40,000,000 prin- cipal amount of Bonds of the 6 5/8% Series due 2003 (the nineteenth series); $45,000,000 principal amount of Bonds of the 7 3/4% Series due 2004 (the twen- tieth series); $50,000,000 principal amount of Bonds of the 7 3/4% Series due 2007 (the twenty-third series); $19,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twenty-fourth series); $38,300,000 principal amount of Bonds of the 6 1/8% Series due 2007 (the twenty-eighth series); $15,000,000 principal amount of Bonds of the 6 1/2% Series due 2004 (the twenty-ninth se- ries); $20,000,000 principal amount of Bonds of the 6 1/2% Series due 2007 (the thirtieth series); $7,500,000 principal amount of Bonds of the 6 5/8% Se- ries due 2009 (the thirty-first series); $50,000,000 principal amount of Bonds of the Adjustable Rate Series due 2001 (the thirty-fourth series); $75,000,000 principal amount of Bonds of the 8 1/4% Series due 2017 (the forty-first se- ries); $75,000,000 principal amount of Bonds of the 9 3/4% Series due 2019 (the forty-third series); $75,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series); $100,000,000 principal amount of Bonds of the 9% Series due 2000 (the forty-fifth series); $100,000,000 princi- pal amount of Bonds of the 9% Series due 2021 (the forty-sixth series); $75,000,000 principal amount of Bonds of the 8 1/2% Series due 2027 (the for- ty-seventh series); $30,000,000 principal amount of Bonds of the 6% Series due 2022 (the forty-eighth series); $37,000,000 principal amount of Bonds of the 6 3/8% Series due 2023 (the forty-ninth series); $78,000,000 principal amount of Bonds of the 6 1/2% Series due 2008 (the fiftieth series); $40,000,000 princi- pal amount of Bonds of the 7 1/2% Series due 2028 (the fifty-first series); $100,000,000 principal amount of Bonds of the 7 1/4% Series due 2023 (the fif- ty-second series); $100,000,000 principal amount of Bonds of the 6 7/8% Series due 2023 (the fifty-third series); $50,000,000 principal amount of Bonds of the 5 5/8% Series due 2003 (the fifty-fourth series); and $50,000,000 princi- pal amount of Bonds of the 5 7/8% Series due 2008 (the fifty-fifth series); and

Whereas, for the purpose of conforming the Original Indenture to the stan- dards prescribed by the Trust Indenture Act of 1939 or otherwise modifying certain of the provisions of the Original Indenture, indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993 and September 30, 1993 have been heretofore entered into between the Company and the Trustee, and for the purpose of conveying additional property, indentures sup- plemental thereto dated July 15, 1942, October 15, 1947, December 31, 1948, December 31, 1949, February 15, 1951, February 16, 1953, March 15, 1954, March 15, 1955, March 15, 1956, April 1, 1957, May 1, 1958, May 1, 1959, May 2, 1960, April 3, 1961, May 1, 1962, May 1, 1963, April 23, 1964, May 3, 1965, June 1, 1966, April 28, 1967, July 3, 1967, May 1, 1968, June 16, 1969, May 15, 1970, September 1, 1971, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992 and July 1, 1993 have been here- tofore entered into between the Company and the Trustee, and for the purpose of better securing and protecting the Bonds then or thereafter issued and con- firming the lien of the Original Indenture, an indenture dated October 15, 1942 supplemental thereto has been heretofore entered into between the Company and the Trustee; the Original Indenture as heretofore amended and supplemented being hereinafter referred to as the "Original Indenture as amended"; and

Whereas, the Company is entitled to have authenticated and delivered addi- tional Bonds on the basis of the net bondable value of property additions, upon compliance with the provisions of Section 4 of Article III of the Origi- nal Indenture as amended; and

Whereas, the Company has determined to issue a fifty-sixth series of Bonds under the Original Indenture as amended in the principal amount of $75,000,000, to be known as First Mortgage Bonds, 6 7/8% Series due 2024 (hereinafter called "Bonds of 2024 Series"); and

Whereas, the Original Indenture as amended provides that certain terms and provisions, as determined by the Board of Directors of the

Company, of the Bonds of any particular series may be expressed in and pro- vided by the execution of an appropriate supplemental indenture; and

Whereas, the Original Indenture as amended provides that the Company and the Trustee may enter into indentures supplemental thereto to add to the covenants and agreements of the Company contained therein other covenants and agreements thereafter to be observed; and to surrender any right or power reserved to or conferred upon the Company in the Original Indenture as amended; and

Whereas, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture as amended and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and

Whereas, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized;

Now, Therefore, This Indenture Witnesseth:

That Potomac Electric Power Company, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and de- livery of these presents, and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants, declares and agrees with the Trustee and its successors in the trust under the Original Indenture as amend- ed, for the benefit of those who hold the Bonds and coupons, or any of them, issued or to be issued hereunder or under the Original Indenture as amended, as follows:

PART I.

Description of Bonds.

Section 1. The Bonds of 2024 Series shall, subject to the provisions of Sec- tion 1 of Article II of the Original Indenture as amended, be des-

ignated as "First Mortgage Bonds, 6 7/8% Series due 2024" of the Company. The Bonds of 2024 Series shall be executed, authenticated and delivered in accor- dance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Original Indenture as amended, ex- cept in so far as the terms and provisions of the Original Indenture as amended are amended or modified by this Supplemental Indenture.

The Bonds of 2024 Series shall mature October 15, 2024, and shall bear inter- est at the rate of six and seven-eighths per cent (6 7/8%) per annum, payable semiannually, commencing April 15, 1994, on the fifteenth day of April and the fifteenth day of October in each year (each such April 15 and October 15 being hereinafter called an "interest payment date"). The Bonds of 2024 Series shall be payable as to principal and interest in lawful money of the United States of America, and shall be payable (as well the interest as the principal there- of) at the Agency of the Company in the City of Washington, D.C., or at the Agency of the Company in the Borough of Manhattan, The City of New York.

The interest so payable on any interest payment date shall be paid to the persons in whose names the Bonds of 2024 Series are registered at the close of business on the last business day (hereinafter called the "record date") which is more than ten days prior to such interest payment date, a "business day" being any day that is not a day on which banks in the City of Washington, D.C., are authorized by law to close; except that if the Company shall default in the payment of any interest due on such interest payment date, such de- faulted interest shall be paid to the persons in whose names the Bonds of 2024 Series are registered on the date of payment of such defaulted interest, or in accordance with the regulations of any securities exchange on which the Bonds of 2024 Series are listed.

Except as provided hereinafter, every Bond of 2024 Series shall be dated as of the date of its authentication and delivery, or if that is an interest pay- ment date, the next day, and shall bear interest from the interest payment date next preceding its date or the date of delivery of the initial Bonds of 2024 Series, whichever is later. Notwithstanding Section 6 of Article II of the Original Indenture, any Bond of 2024 Series

authenticated and delivered by the Trustee after the close of business on the record date with respect to any interest payment date and prior to such inter- est payment date shall be dated as of the date next following such interest payment date and shall bear interest from such interest payment date; except that if the Company shall default in the payment of any interest due on such interest payment date, such Bond shall bear interest from the next preceding interest payment date or the date of delivery of the initial Bonds of 2024 Se- ries, whichever is later.

Section 2. The Bonds of 2024 Series, and the Trustee's certificate to be en- dorsed on the Bonds of 2024 Series, shall be substantially in the following forms, respectively:

[FORM OF FACE OF BOND OF 2024 SERIES]

POTOMAC ELECTRIC POWER COMPANY
(A District of Columbia and Virginia corporation)

First Mortgage Bond, 6 7/8% Series Due 2024

No. $

Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic cor- poration of the Com- monwealth of Virginia (hereinafter called the "Company", which term shall in- clude any successor corporation as defined in the Amended Indenture hereinaf- ter referred to), for value received, hereby promises to pay to ................... or registered assigns, the sum of .................. dol- lars, on the fifteenth day of October 2024, in lawful money of the United States of America, and to pay interest thereon in like money from the later of the date of delivery of the initial Bonds of 2024 Series or the interest pay- ment date April 15 or October 15 next preceding the date of this Bond, or if the Company shall default in the payment of interest due on such interest pay- ment date, then from the next preceding interest payment date or the date of delivery of the initial Bonds of 2024 Series, whichever is later, at the rate of six and seven-eighths percent (6 7/8%) per annum, payable semiannually, commencing April 15, 1994, on the fifteenth day of April and October in

each year until maturity, or, if the Company shall default in the payment of the principal hereof, until the Company's obligation with respect to the pay- ment of such principal shall be discharged as provided in the Amended Inden- ture. The interest so payable on any April 15 or October 15 will, subject to certain exceptions provided in the indenture dated as of October 1, 1993 sup- plemental to the Amended Indenture, be paid to the person in whose name this Bond is registered at the close of business on the last business day which is more than ten days prior to such April 15 or October 15. Both principal of, and interest on, this Bond are payable at the agency of the Company in the City of Washington, D.C., or, at the option of the holder, at the agency of the Company in the Borough of Manhattan, The City of New York.

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

This Bond shall not be entitled to any benefit under the Amended Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until The Riggs National Bank of Washington, D.C., the Trustee under the Amended Indenture, or a successor trustee thereto under the Amended Indenture, shall have signed the form of certificate endorsed hereon.

In Witness Whereof, Potomac Electric Power Company has caused this Bond to be signed in its name by the signature (or a facsimile thereof) of its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by the facsimile signature of its Secretary or an Assistant Secretary.

Dated,

Potomac Electric Power Company

By......................................
Vice President

Attest:

...................................
Secretary

[FORM OF TRUSTEE'S CERTIFICATE]

This Bond is one of the Bonds, of the series designated therein, described in the within-mentioned Amended Indenture and the Supplemental Indenture dated as of October 1, 1993.

The Riggs National Bank of Washington, D.C.

Trustee.

By..........................................
Authorized Officer

[TEXT APPEARING ON REVERSE SIDE OF BOND OF 2024 SERIES]

This Bond is one of a duly authorized issue of Bonds of the Company (herein- after called the "Bonds") in unlimited aggregate principal amount, of the se- ries hereinafter specified, all issued and to be issued under and equally se- cured (except in so far as any purchase or sinking fund or analogous provi- sions for any particular series of Bonds, established by any indenture supple- mental to the Amended Indenture hereinafter mentioned, may afford additional security for such Bonds) by a mortgage and deed of trust, dated July 1, 1936, executed by the Company to The Riggs National Bank of Washington, D.C. (herein called the "Trustee"), as trustee, as amended by indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993 and September 30, 1993 (said mortgage and deed of trust, as so amended, being herein called the "Amended Indenture") and all indentures supplemental thereto, to which Amended Indenture and supplemental indentures reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the owners of the Bonds and of the Trustee in re- spect thereto, and the terms and conditions upon which the

Bonds are, and are to be, secured. To the extent permitted by, and as provided in, the Amended Indenture, modifications or alterations of the Amended Inden- ture, or of any indenture supplemental thereto, and of the rights and obliga- tions of the Company and of the holders of the Bonds may be made with the con- sent of the Company by an affirmative vote of not less than 80% in amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Amended Indenture, and by an affirmative vote of not less than 80% in amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Amended Indenture are so affected; provided, however, that no such modifi- cation or alteration shall be made which will affect the terms of payment of the principal of, or interest on, this Bond, which are unconditional, or which reduces the percentage of Bonds the affirmative vote of which is required for the making of such modifications or alterations. The Company is proposing an amendment to the Amended Indenture which would replace "80%" with "60%" in the preceding sentence, which amendment will become effective upon the consent or agreement thereto of the holders of all the outstanding Bonds. The holder of this Bond will be deemed to have approved such amendment. The Bonds may be is- sued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Amended In- denture provided.

This Bond is one of a series designated as the "First Mortgage Bonds, 6 7/8% Series due 2024" (herein called the "Bonds of 2024 Series") of the Company, issued under and secured by the Amended Indenture and all indentures supple- mental thereto and described in the indenture (herein called the "New Supple- mental Indenture"), dated as of October 1, 1993, between the Company and the Trustee, supplemental to the Amended Indenture.

The Bonds of 2024 Series are subject to redemption, at any time or from time to time after October 14, 2003 and prior to maturity, at the option of the Company, either as a whole or in part by lot, upon payment of the redemption prices applicable to the respective period set forth below, together, in each case, with accrued interest to the redemption

date, all subject to the conditions and as more fully set forth in the Amended Indenture and the New Supplemental Indenture:

                   REDEMPTION PRICE
   IF REDEEMED       EXPRESSED AS
   DURING THE       PERCENTAGE OF
 12 MONTH PERIOD    THE PRINCIPAL
ENDING OCTOBER 14  AMOUNT OF BONDS
- -----------------  ----------------
2004.............       103.10%
2005.............       102.79
2006.............       102.48
2007.............       102.17
2008.............       101.86
2009.............       101.55

                         REDEMPTION PRICE
      IF REDEEMED          EXPRESSED AS
       DURING THE         PERCENTAGE OF
    12 MONTH PERIOD       THE PRINCIPAL
   ENDING OCTOBER 14     AMOUNT OF BONDS
   -----------------     ----------------
2010....................      101.24%
2011....................      100.93
2012....................      100.62
2013....................      100.31
2014 and thereafter.....      100.00

Notice of any redemption shall be sent by the Company through the mails, postage prepaid, at least thirty days and not more than sixty days prior to the redemption date, to the registered owners of any of the Bonds to be re- deemed, at their addresses as the same shall appear on the transfer register of the Company, all subject to the conditions and as more fully set forth in the Amended Indenture and New Supplemental Indenture. Any notice so mailed shall be conclusively presumed to have been duly given, whether or not the owner receives it.

In case an event of default, as defined in the Amended Indenture, shall oc- cur, the principal of all the Bonds at any such time outstanding under the Amended Indenture may be declared or may become due and payable, upon the con- ditions and in the manner and with the effect provided in the Amended Inden- ture. The Amended Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds entitled to vote then outstanding.

This Bond is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that pur- pose at the agency of the Company in the City of Washington, D.C., or at the agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this Bond and on presentation of a duly executed written instrument of transfer, and thereupon a new Bond or Bonds of the same series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange therefor; and this Bond, with or without others of the same series, may in like manner be ex- changed

for one or more new Bonds of the same series of other authorized denominations but of the same aggregate principal amount; all subject to the terms and con- ditions set forth in the Amended Indenture.

No recourse shall be had for the payment of the principal of, or the interest on, this Bond, or for any claim based hereon or otherwise in respect hereof or of the Amended Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company or of any predecessor or successor corporation, ei- ther directly or through the Company or any such predecessor or successor cor- poration, whether for amounts unpaid on stock subscriptions or by virtue of any constitution, statute or rule of law, or by the enforcement of any assess- ment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stock- holders, directors or officers being released by every owner hereof by the ac- ceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Amended Indenture.

Section 3. The Bonds of 2024 Series shall be registered Bonds without coupons in denominations of any multiple of $1,000, numbered consecutively upwards from R1.

Section 4. Until Bonds of 2024 Series in definitive form are ready for deliv- ery, the Company may execute, and upon its request in writing the Trustee shall authenticate and deliver, in lieu thereof, Bonds for such series in tem- porary form, as provided in Section 9 of Article II of the Original Indenture as amended.

PART II.

Issue of Bonds.

Section 1. Except for Bonds of 2024 Series issued pursuant to Section 13 of Article II of the Original Indenture as amended, the principal amount of Bonds of 2024 Series which may be authenticated and delivered hereunder is limited to $75,000,000 aggregate principal amount.

Section 2. Bonds of 2024 Series in the aggregate principal amount permitted in Section 1 of this Part II, may at any time subsequent to the execution hereof be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the record- ing hereof) to or upon the order of the Company evidenced by a writing or writings, signed by its President or one of its Vice Presidents and its Trea- surer or one of its Assistant Treasurers, at such time or times as may be re- quested by the Company subsequent to the receipt by the Trustee of

(1) the certified resolution and the officers' certificate required by Sec- tion 3(a) and Section 3(b) of Article III of the Original Indenture as amended;

(2) the opinion of counsel required by Section 3(c) of Article III of the Original Indenture as amended;

(3) cash, if any, in the amount required to be deposited by Section 3(d) of Article III of the Original Indenture as amended, which shall be held and applied by the Trustee as provided in said Section 3(d);

(4) the certificates, instruments, opinions of counsel, prior lien bonds and cash, if any, required by Section 4 of Article III of the Original In- denture as amended, except that, as required by Part IV of this Supplemental Indenture, property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall not be made the basis for the authenti- cation and delivery of Bonds of 2024 Series; and

(5) the certificates and opinions required by Article XVIII of the Original Indenture as amended.

PART III.

Redemption.

Section 1. The Bonds of 2024 Series are not redeemable up to and including October 14, 2003. The Bonds of 2024 Series shall, in accordance with the pro- visions of Article V of the Original Indenture as amended, be redeemable, at any time or from time to time after October 14, 2003 and prior to maturity, at the option of the Board of Directors of the

Company, either as a whole or in part by lot, upon payment of the redemption prices applicable to the respective periods set forth in the form of Bond of 2024 Series contained in Section 2 of Part I hereof, together, in each case, with accrued interest to the redemption date.

Section 2. In accordance with the provisions of Article V of the Original In- denture as amended, notice of any redemption shall be sent by the Company through the mails, postage prepaid, at least thirty days and not more than sixty days prior to the date of redemption, to the registered owners of any of the Bonds to be redeemed at their addresses as the same shall appear on the transfer register of the Company. Any notice so mailed shall be conclusively presumed to have been duly given, whether or not the owner receives it.

All Bonds delivered to or redeemed by the Trustee pursuant to the provisions of this Part III shall forthwith be cancelled.

PART IV.

Additional Particular Covenants of the Company.

The Company hereby covenants, warrants and agrees that so long as any Bonds of 2024 Series are outstanding:

Section 1. The Company will not withdraw, pursuant to the provisions of Sec- tion 2 of Article VIII of the Original Indenture as amended, any moneys held by the Trustee as part of the trust estate in excess of an amount equal to the aggregate principal amount of such of the refundable Bonds as were theretofore issued by the Company; and that upon any such withdrawal by the Company re- fundable Bonds equal in aggregate principal amount to the amount so withdrawn shall be deemed to have been made the basis of such withdrawal.

Section 2. Property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds, or the withdrawal of cash, or the reduction of the amount of cash required to be paid to the Trustee under any provision of the Indenture.

PART V.

Amendment of Indenture to Permit Qualification Under Trust Indenture Act of 1939.

The Company and the Trustee, from time to time and at any time, without any vote or consent of the holders of the Bonds of 2024 Series, may enter into such indentures supplemental to the Original Indenture as may or shall by them be deemed necessary or desirable to add to or modify or amend any of the pro- visions of the Original Indenture so as to permit the qualification of the Original Indenture under the Trust Indenture Act of 1939.

Except to the extent specifically provided herein, no provision of this Sup- plemental Indenture is intended to modify, and the parties hereto do hereby adopt and confirm, the provisions of Section 318(c) of the Trust Indenture Act of 1939 which amend and supersede provisions of the Original Indenture, as supplemented, in effect prior to November 15, 1990.

PART VI.

Amendment of Original Indenture.

Notwithstanding any other provisions of the Original Indenture as amended, the holders of the Bonds of 2024 Series, by their holding of such Bonds, are deemed to have approved the following amendment to the Original Indenture as amended and to have authorized the Trustee to take any action necessary to ev- idence or effectuate such approval:

Sections 5 and 6 of Article XV of the Original Indenture as amended are hereby amended by changing the words and figures "eighty percent. (80%)" to the words and figures "sixty percent. (60%)" wherever in such Sections such words and figures occur.

PART VII.

The Trustee.

The Trustee hereby accepts the trusts hereby declared and provided and agrees to perform the same upon the terms and conditions in the

Original Indenture as amended set forth and upon the following terms and con- ditions:

The Trustee shall not be responsible in any manner whatsoever for or in re- spect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Original Inden- ture as amended shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture.

PART VIII.

Miscellaneous Provisions.

This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an origi- nal; but such counterparts shall together constitute but one and the same in- strument.

Potomac Electric Power Company hereby constitutes and appoints William R. Gee, Jr., one of its Vice Presidents, to be its true and lawful attorney-in- fact, for it and in its name to appear before any officer authorized by law to take and certify acknowledgments of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and deliver these presents as the act and deed of said Potomac Electric Power Company.

The Riggs National Bank of Washington, D.C., hereby constitutes and appoints Alexander C. Baker, one of its Senior Vice Presidents, to be its true and law- ful attorney-in-fact, for it and in its name to appear before any officer au- thorized by law to take and certify acknowledgments of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and de- liver these presents as the act and deed of said The Riggs National Bank of Washington, D.C.

In Witness Whereof, said Potomac Electric Power Company has caused this Sup- plemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; and said The Riggs National Bank of Washington, D.C., in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Senior Vice Presidents, and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by one of its Corpo- rate Trust Officers, all as of the 1st day of October, One thousand nine hun- dred and ninety-three.

Potomac Electric Power Company

(Corporate Seal)
By.........................................

WILLIAM R. GEE, JR.,
Vice President

Attested:

...................................
MARY T. HOWARD,
Assistant Secretary

Signed, sealed and delivered by
Potomac Electric Power Company
in the presence of:

...................................

...................................

As Witnesses

The Riggs National Bank of
Washington, D.C.

(Corporate Seal)
By..........................................

ALEXANDER C. BAKER,
Senior Vice President

Attested:

...................................
BEVERLY MOFFETT,
Senior Corporate Trust Officer

Signed, sealed and delivered by
The Riggs National Bank of Wash-
ington, D.C. in the presence of:

...................................

...................................

As Witnesses

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, whose commission as such will expire , do hereby certify that William R. Gee, Jr. and Mary T. Howard, whose names as Vice President and Assistant Secretary, respectively, of Potomac Electric Power Company, a corpo- ration, are signed to the foregoing and hereto attached deed, bearing date as of the 1st day of October, 1993, personally appeared this day before me in my District aforesaid and acknowledged themselves to be, respectively, a Vice President and an Assistant Secretary of Potomac Electric Power Company, and that they as such, being authorized so to do, executed the said deed by sign- ing the name of Potomac Electric Power Company by William R. Gee, Jr., as Vice President, and attested by Mary T. Howard, as Assistant Secretary, and ac- knowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of Potomac Electric Power Company.

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that William R. Gee, Jr., a Vice Presi- dent of Potomac Electric Power Company, a corporation, one of the parties to the foregoing instrument bearing date as of the 1st day of October, 1993, and hereto annexed, this day personally appeared before me in the City of Washing- ton, the said William R. Gee, Jr. being personally well known to me as the person who executed the said instrument as a Vice President of and on behalf of said Potomac Electric Power Company and known to me to be the attorney-in- fact duly appointed therein to acknowledge and deliver said instrument on be- half of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said Potomac Electric Power Company, and delivered the same as such. I further certify that the said William R. Gee, Jr., being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order. My commission expires

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker and Beverly Moffett, whose names as Senior Vice President and Senior Corporate Trust Officer, re- spectively, of The Riggs National Bank of Washington, D.C., a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 1st day of October, 1993, personally appeared before me this day in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice Pres- ident and a Senior Corporate Trust Officer of The Riggs National Bank of Wash- ington, D.C., and that they as such, being authorized so to do, executed the said deed by signing the name of The Riggs National Bank of Washington, D.C., by Alexander C. Baker as Senior Vice President, and attested by Beverly Moffett, as Senior Corporate Trust Officer, and acknowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of The Riggs National Bank of Washington, D.C., as therein set forth.

Given under my hand and notarial seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

Alexander C. Baker, of full age, being sworn according to law, on his oath deposes and says that he is a Senior Vice President of The Riggs National Bank of Washington, D.C., the Trustee named in the foregoing Supplemental Inden- ture, dated as of the 1st day of October, 1993, that he is the agent of said Trustee for the purpose of perfecting such Supplemental Indenture and that the consideration in the Original Indenture referred to therein and in all inden- tures supplemental to said Original Indenture, including the foregoing Supple- mental Indenture, is true and bona fide as therein set forth.

............................................

Alexander C. Baker

Subscribed and sworn to before me
this day of October, 1993.

...................................
Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker a Senior Vice President of The Riggs National Bank of Washington, D.C., a corporation, one of the parties to the foregoing instrument bearing date as of the 1st day of October, 1993, and hereto annexed, this day personally appeared before me in the City of Washington, the said Alexander C. Baker, being personally well known to me as the person who executed the said instrument as a Senior Vice President of and on behalf of said The Riggs National Bank of Washington, D.C., and known to me to be the attorney-in-fact duly appointed therein to ac- knowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said The Riggs National Bank of Washington, D.C., and delivered the same as such. I further certify that the said Alexander C. Baker, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.

Given under my hand and official seal this day of October, 1993.

(Notarial Seal)

............................................

Notary Public
District of Columbia

My Commission Expires

CERTIFICATE OF RESIDENCE

The Riggs National Bank of Washington, D.C., Mortgagee and Trustee within named, hereby certifies that its precise residence is 800-17th Street, N.W., Washington, D.C. 20006.

The Riggs National Bank of Washington, D.C.

By..........................................

Alexander C. Baker,

POTOMAC ELECTRIC POWER COMPANY

1900 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C.

TO

THE RIGGS NATIONAL BANK
OF WASHINGTON, D.C.

800-17TH STREET, N.W., WASHINGTON, D.C.
AS TRUSTEE

Supplemental Indenture

DATED AS OF FEBRUARY 10, 1994

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST

DATED JULY 1, 1936

FIRST MORTGAGE BONDS, 5 3/8% SERIES DUE 2024

POTOMAC ELECTRIC POWER COMPANY
SUPPLEMENTAL INDENTURE DATED AS OF FEBRUARY 10, 1994

TABLE OF CONTENTS*

                                                                          PAGE
                                                                          ----
Parties..................................................................   1
Recitals.................................................................   1

                                   PART I

                                 Definitions
Facilities...............................................................   6
Loan Agreement...........................................................   6
Pollution Control Bond Indenture.........................................   6
Pollution Control Bonds..................................................   7
Pollution Control Bond Trustee...........................................   7

                                   PART II

                     Description of Bonds of 2024 Series
Section 1. General description of Bonds of 2024 Series..................    7
Section 2. Denominations of Bonds.......................................    8
Section 3. Form of Bond.................................................    8
           Form of Trustee's Certificate................................   16

                                  PART III

                        Issue of Bonds of 2024 Series
Section 1. Limitation as to principal amount............................   17
Section 2. Issue of $42,500,000 principal amount of Bonds of
            2024 Series.................................................   17

                                   PART IV

                                 Redemption
Section 1. Bonds of 2024 Series redeemable..............................   18
Section 2. Bonds of 2024 Series redeemable in certain events............   18
Section 3. Bonds of 2024 Series subject to mandatory redemption in cer-
            tain events.................................................   18
Section 4. Notice of redemption.........................................   19

                                                                          PAGE
                                                                          ----

                                    PART V

Amendment of Indenture to Permit Qualification under Trust Indenture Act
  of 1939................................................................  19

                                    PART VI
Amendment of Original Indenture..........................................  20

                                   PART VII

                Additional Particular Covenants of the Company
Section 1.  Company not to withdraw money pursuant to Section 2 of Arti-
              cle VIII in excess of an amount equal to principal amount
              of issued refundable Bonds.................................  20
Section 2.  No property additions made prior to December 31, 1946 to be
              used for any purpose under the Indenture...................  20

                                   PART VIII

                                  The Trustee
Acceptance of trusts by the Trustee......................................  21
Trustee not responsible for validity of the Supplemental Indenture.......  21

                                    PART IX

                           Miscellaneous Provisions
Payments due on non-business days........................................  21
Credits on First Mortgage Bonds..........................................  21
Execution of Supplemental Indenture in counterparts......................  22
Appointment of attorneys-in-fact by parties..............................  22
Testimonium..............................................................  22
Execution................................................................  23
Company's Acknowledgments................................................  24
Trustee's Acknowledgments................................................  26

SUPPLEMENTAL INDENTURE, dated as of the tenth day of February, nineteen hun- dred and ninety-four (1994), made by and between Potomac Electric Power Compa- ny, a corporation organized and existing under the laws of the District of Co- lumbia and a domestic corporation of the Commonwealth of Virginia (hereinafter sometimes called the "Company"), party of the first part, and The Riggs Na- tional Bank of Washington, D.C., a national banking association organized and existing under the laws of the United States of America (hereinafter sometimes called the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1936, hereinafter mentioned, party of the second part;

Whereas, The Company has heretofore executed and delivered its Mortgage and Deed of Trust, dated July 1, 1936 (hereinafter sometimes referred to as the "Original Indenture"), to the Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series; and

Whereas, pursuant to the terms and provisions of the Original Indenture, in- dentures supplemental thereto dated as of July 1, 1936, December 1, 1939, Au- gust 1, 1940, August 1, 1942, January 1, 1948, May 1, 1949, May 1, 1950, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, December 1, 1958, November 16, 1959, December 1, 1960, February 15, 1963, May 15, 1964, April 1, 1966, May 1, 1967, February 15, 1968, March 15, 1969, February 15, 1970, August 15, 1970, September 15, 1972, April 1, 1973, January 2, 1974, August 15, 1974, Au- gust 15, 1974, June 15, 1977, July 1, 1979, June 16, 1981, June 17, 1981, De- cember 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993, September 30, 1993 and October 1, 1993 have been heretofore entered into between the Company and the Trustee to provide, re- spectively, for the creation of the first through the fifty-sixth series of Bonds thereunder and, in the case of the supplemental indentures dated January 1, 1948, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, September 15, 1972, July 1, 1979, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992, July 1, 1993 and one of the supplemen- tal indentures dated August 15, 1974, to convey additional property; and

Whereas, $20,000,000 principal amount of Bonds of the 3 1/4% Series due 1966 (the first series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1974 (the second series), $10,000,000 principal amount of Bonds of the 3 1/4% Series due 1975 (the third series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1977 (the fourth series), $15,000,000 principal amount of Bonds of the 3% Series due 1983 (the fifth series), $10,000,000 principal amount of Bonds of the 2 7/8% Series due 1984 (the sixth series), $30,000,000 principal amount of Bonds of the 2 3/4% Series due 1985 (the sev- enth series), $15,000,000 principal amount of Bonds of the 3 1/4% Series due 1987 (the eighth series), $10,000,000 principal amount of Bonds of the 3 7/8% Series due 1988 (the ninth series), $10,000,000 principal amount of Bonds of the 3 3/8% Series due 1990 (the tenth series), $10,000,000 principal amount of Bonds of the 3 5/8% Series due 1991 (the eleventh series), $25,000,000 princi- pal amount of Bonds of the 4 5/8% Series due 1993 (the twelfth series), $45,000,000 principal amount of Bonds of the 7 3/4% Series due 2004 (the twen- tieth series), $35,000,000 principal amount of Bonds of the 8.85% Series due 2005 (the twenty-first series), $70,000,000 principal amount of Bonds of the 9 1/2% Series due August 15, 2005 (the twenty-second series), $50,000,000 prin- cipal amount of Bonds of the 7 3/4% Series due 2007 (the twenty-third series), $7,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twen- ty-fourth series), $100,000,000 principal amount of Bonds of the 8 3/8% Series due 2009 (the twenty-fifth series), $50,000,000 principal amount of Bonds of the 10 1/4% Series due 1981 (the twenty-sixth series), $50,000,000 principal amount of Bonds of the 10 3/4% Series due 2004 (the twenty-seventh series), $30,000,000 principal amount of Bonds of the Floating Rate Series due 2010 (the thirty-second series), $50,000,000 principal amount of Bonds of the 14 1/2% Series due 1991 (the thirty-third series), $60,000,000 principal amount of Bonds of the 14 1/4% Series due 1992 (the thirty-fifth series), $50,000,000 principal amount of Bonds of the 11 7/8% Series due 1989 (the thirty-sixth se- ries), $37,000,000 principal amount of Bonds of the 8 3/4% Series due 2010 (the thirty-seventh series), $75,000,000 principal amount of Bonds of the 11 1/4% Series due 2015 (the thirty-eighth series), $75,000,000 principal amount of Bonds of the 9 1/4% Series due 2016 (the thirty-ninth series), $75,000,000 principal amount of Bonds of the 8 3/4% Series due 2016 (the fortieth series), $75,000,000 principal amount of Bonds of the 8 1/4% Series due 2017 (the for- ty-first

series), $75,000,000 principal amount of Bonds of the 9% Series due 1990 (the forty-second series), $32,000,000 principal amount of Bonds of the 9 3/4% Se- ries due 2019 (the forty-third series) and $12,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series) have been here- tofore redeemed and retired and there are now issued and outstanding under the Original Indenture and under the supplemental indentures referred to above:
$15,000,000 principal amount of Bonds of the 5 1/4% Series due 1994 (the thir- teenth series); $40,000,000 principal amount of Bonds of the 5% Series due 1995 (the fourteenth series); $50,000,000 principal amount of Bonds of the 4 3/8% Series due 1998 (the fifteenth series); $45,000,000 principal amount of Bonds of the 4 1/2% Series due 1999 (the sixteenth series); $15,000,000 prin- cipal amount of Bonds of the 5 1/8% Series due 2001 (the seventeenth series); $35,000,000 principal amount of Bonds of the 5 7/8% Series due 2002 (the eigh- teenth series); $40,000,000 principal amount of Bonds of the 6 5/8% Series due 2003 (the nineteenth series); $18,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twenty-fourth series); $38,300,000 principal amount of Bonds of the 6 1/8% Series due 2007 (the twenty-eighth series); $15,000,000 principal amount of Bonds of the 6 1/2% Series due 2004 (the twenty-ninth se- ries); $20,000,000 principal amount of Bonds of the 6 1/2% Series due 2007 (the thirtieth series); $7,500,000 principal amount of Bonds of the 6 5/8% Se- ries due 2009 (the thirty-first series); $50,000,000 principal amount of Bonds of the Adjustable Rate Series due 2001 (the thirty-fourth series); $43,000,000 principal amount of Bonds of the 9 3/4% Series due 2019 (the forty-third se- ries); $63,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series); $100,000,000 principal amount of Bonds of the 9% Series due 2000 (the forty-fifth series); $100,000,000 principal amount of Bonds of the 9% Series due 2021 (the forty-sixth series); $75,000,000 princi- pal amount of Bonds of the 8 1/2% Series due 2027 (the forty-seventh series); $30,000,000 principal amount of Bonds of the 6% Series due 2022 (the forty- eighth series); $37,000,000 principal amount of Bonds of the 6 3/8% Series due 2023 (the forty-ninth series); $78,000,000 principal amount of Bonds of the 6 1/2% Series due 2008 (the fiftieth series); $40,000,000 principal amount of Bonds of the 7 1/2% Series due 2028 (the fifty-first series); $100,000,000 principal amount of Bonds of the 7 1/4% Series due 2023 (the fifty-second se- ries); $100,000,000 principal amount of Bonds of the 6 7/8% Series due

2023 (the fifty-third series); $50,000,000 principal amount of Bonds of the 5 5/8% Series due 2003 (the fifty-fourth series); $50,000,000 principal amount of Bonds of the 5 7/8% Series due 2008 (the fifty-fifth series); and $75,000,000 principal amount of Bonds of the 6 7/8% Series due 2024 (the fif- ty-sixth series); and

Whereas, for the purpose of conforming the Original Indenture to the stan- dards prescribed by the Trust Indenture Act of 1939 or otherwise modifying certain of the provisions of the Original Indenture, indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993, September 30, 1993 and October 1, 1993 have been heretofore entered into between the Company and the Trustee, and for the purpose of conveying additional property, indentures supplemental thereto dated July 15, 1942, October 15, 1947, Decem- ber 31, 1948, December 31, 1949, February 15, 1951, February 16, 1953, March 15, 1954, March 15, 1955, March 15, 1956, April 1, 1957, May 1, 1958, May 1, 1959, May 2, 1960, April 3, 1961, May 1, 1962, May 1, 1963, April 23, 1964, May 3, 1965, June 1, 1966, April 28, 1967, July 3, 1967, May 1, 1968, June 16, 1969, May 15, 1970, September 1, 1971, June 17, 1981, November 1, 1985, Sep- tember 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992 and July 1, 1993 have been heretofore entered into between the Company and the Trustee, and for the purpose of better securing and protecting the Bonds then or thereafter issued and confirming the lien of the Original Indenture, an indenture dated October 15, 1942 supplemental thereto has been heretofore entered into between the Company and the Trustee; the Original Indenture as heretofore amended and sup- plemented being hereinafter referred to as the "Original Indenture as amend- ed"; and

Whereas, the Company proposes to enter into a Loan Agreement (hereinafter de- fined) with Montgomery County, Maryland, a political subdivision of the State of Maryland (hereinafter called the "County"), to refinance a portion of the cost of the acquisition of the Facilities

(hereinafter defined) at the Company's Dickerson Generating Station in Mary- land (hereinafter called the "Plant"); and

Whereas, the County proposes to issue its Pollution Control Bonds (hereinaf- ter defined) in the principal amount of $42,500,000; and

Whereas, the Company is entitled to have authenticated and delivered addi- tional Bonds on the basis of the net bondable value of property additions, upon compliance with the provisions of Section 4 of Article III of the Origi- nal Indenture as amended; and

Whereas, the Company has determined to issue to the Pollution Control Bond Trustee (hereinafter defined), as assignee of the County, pursuant to and as security for the Loan Agreement, a fifty-seventh series of Bonds under the Original Indenture as amended in the principal amount of $42,500,000, to be known as First Mortgage Bonds, 5 3/8% Series due 2024 (hereinafter called "Bonds of 2024 Series"); and

Whereas, the Original Indenture as amended provides that certain terms and provisions, as determined by the Board of Directors of the Company, of the Bonds of any particular series may be expressed in and provided by the execu- tion of an appropriate supplemental indenture; and

Whereas, the Original Indenture as amended provides that the Company and the Trustee may enter into indentures supplemental thereto to add to the covenants and agreements of the Company contained therein other covenants and agreements thereafter to be observed; and to surrender any right or power reserved to or conferred upon the Company in the Original Indenture as amended; and

Whereas, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture as amended and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and

Whereas, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized;

Now, Therefore, This Indenture Witnesseth:

That Potomac Electric Power Company, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and de- livery of these presents, and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants, declares and agrees with the Trustee and its successors in the trust under the Original Indenture as amend- ed, for the benefit of those who hold the Bonds, or any of them, issued or to be issued hereunder or under the Original Indenture as amended, as follows:

PART I.

Definitions.

The terms defined in this Part I shall, for all purposes of this Supplemental Indenture, have the meanings herein specified, unless the context otherwise requires:

Facilities:

The term "Facilities" shall mean the pollution control project at the Plant, described in Exhibit A to the Loan Agreement, and related improvements and any substitutions therefor, acquired by the Company for operation by it as pollu- tion control facilities.

The terms "acquisition" and "acquired," when used with regard to the Facili- ties, shall include, without limitation, the construction, installation and equipping of the Facilities.

Loan Agreement:

The term "Loan Agreement" shall mean the Loan Agreement dated as of February 15, 1994, entered into between the County and the Company, and any and all modifications, alterations, amendments and supplements thereto.

Pollution Control Bond Indenture:

The term "Pollution Control Bond Indenture" shall mean the Indenture of Trust, dated as of February 15, 1994, between the County and

the Pollution Control Bond Trustee, pursuant to which the Pollution Control Bonds are issued, and any indenture supplemental thereto.

Pollution Control Bonds:

The term "Pollution Control Bonds" shall mean the Pollution Control Revenue Refunding Bonds (Potomac Electric Project), 1994 Series of the County authen- ticated and delivered pursuant to the Pollution Control Bond Indenture. The term "Pollution Control Bonds, 1994 Series" shall mean the series of Pollution Control Revenue Refunding Bonds in the aggregate principal amount of $42,500,000 delivered initially.

Pollution Control Bond Trustee:

The term "Pollution Control Bond Trustee" shall mean Security Trust Company, N.A., a banking corporation organized under the laws of the State of Maryland, or its successors, as Trustee under the Pollution Control Bond Indenture.

PART II.

Description of Bonds of 2024 Series.

Section 1. The fifty-seventh series of Bonds to be executed, authenticated and delivered under and secured by the Original Indenture as amended shall be Bonds of 2024 Series. The Bonds of 2024 Series shall, subject to the provi- sions of Section 1 of Article II of the Original Indenture as amended, be des- ignated as "First Mortgage Bonds, 5 3/8% Series due 2024" of the Company. The Bonds of 2024 Series shall be executed, authenticated and delivered in accor- dance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Original Indenture as amended, ex- cept in so far as the terms and provisions of the Original Indenture as amended are amended or modified by this Supplemental Indenture.

The Bonds of 2024 Series shall mature February 15, 2024 and shall bear inter- est at the rate of five and three-eighths percent (5 3/8%) per annum, payable semiannually on the fifteenth day of February and the fifteenth day of August in each year (each such February 15 and

August 15 being hereinafter called an "interest payment date"). The Bonds of 2024 Series shall be payable as to principal and interest in lawful money of the United States of America in immediately available funds, and shall be pay- able (the interest as well as the principal thereof) at the address of the registered owner of such Bonds of 2024 Series appearing on the transfer regis- ter of the Company.

Every Bond of 2024 Series shall be dated as of the date of its authentication and delivery, or if that is an interest payment date, the next day, and shall bear interest from the interest payment date next preceding its date or the date of delivery of the initial Bonds of 2024 Series, whichever is later.

Section 2. The Bonds of 2024 Series shall be registered Bonds without coupons of denominations of any integral multiple of $5,000, numbered consecutively upwards from R1.

Section 3. The Bonds of 2024 Series, and the Trustee's certificate to be en- dorsed on the Bonds of 2024 Series, shall be substantially in the following forms, respectively:

[FORM OF BOND]

This Bond is not transferable except as provided in the Pollution Control Bond Indenture, as defined herein.

POTOMAC ELECTRIC POWER COMPANY
(A District of Columbia and Virginia corporation)

First Mortgage Bond, 5 3/8% Series Due 2024

No. R- $

Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic corporation of the Common- wealth of Virginia (hereinafter called the "Company", which term shall include any successor corporation as defined in the Amended Indenture hereinafter re- ferred to), for value received,

hereby promises to pay to or registered assigns, the sum of dollars, on the fifteenth day of February, 2024, or on such other date as may be required herein, in lawful money of the United States of America in immedi- ately available funds, and to pay interest thereon in like money from the later of February 15, 1994 or the interest payment date (February 15 or August 15) next preceding the date of this Bond, or if the Company shall default in the payment of interest due on such interest payment date, then from the next preceding interest payment date to which interest has been paid or February 15, 1994, whichever is later, at the rate of five and three-eighths percent (5 3/8%) per annum, payable semiannually, on the fifteenth day of February and the fifteenth day of August in each year until maturity, or, if this Bond shall be duly called for redemption, until the redemption date, or, if the Company shall default in the payment of the principal hereof, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Amended Indenture. The principal of, premium, if any, and interest on, this Bond are payable at the address of the registered owner hereof appearing on the transfer register of the Company. To the extent permitted by law, the Company shall pay interest on any overdue installment of interest hereunder at the rate of five and three-eighths percent (5 3/8%) per annum, or at such lesser maximum rate of interest as is permitted by law at any such time.

This Bond is one of a duly authorized issue of Bonds of the Company (herein- after called the "Bonds") in unlimited aggregate principal amount of the se- ries hereinafter specified, all issued and to be issued under and equally se- cured (except in so far as any purchase or sinking fund or analogous provi- sions for any particular series of Bonds, established by any indenture supple- mental to the Amended Indenture hereinafter mentioned, may afford additional security for such Bonds) by a Mortgage and Deed of Trust, dated July 1, 1936, executed by the Company to The Riggs National Bank of Washington, D.C. (herein called the "Trustee"), as trustee, as amended by indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, No-

vember 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993, September 30, 1993 and October 1, 1993 (said Mortgage and Deed of Trust, as so amended, being herein called the "Amended Indenture") and all indentures supplemental thereto, to which Amended Indenture and supplemen- tal indentures reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the owners of the Bonds and of the Trustee in respect thereto, and the terms and conditions upon which the Bonds are, and are to be, secured. To the extent permitted by, and as provided in, the Amended Indenture, modifications or al- terations of the Amended Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds may be made with the consent of the Company by an affirmative vote of not less than 80% in amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Amended Indenture, and by an affirmative vote of not less than 80% in amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Amended Indenture are so affected; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or premium, if any, or interest on, this Bond, which are unconditional, or which reduces the percentage of Bonds the affirmative vote of which is required for the making of such modifications or alterations. The Company is proposing an amendment to the Amended Indenture which would replace "80%" with "60%" in the preceding sentence, which amend- ment will become effective upon the consent or agreement thereto of the hold- ers of all the outstanding Bonds. The holder of this Bond will be deemed to have approved such amendment. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Amended Indenture provided.

This Bond is one of a series designated as the "First Mortgage Bonds, 5 3/8% Series due 2024" (herein called the "Bonds of 5 3/8% Series due 2024") of the Company, limited in aggregate principal amount to $42,500,000, issued under and secured by the Amended Indenture and all indentures supplemental thereto and described in the indenture (herein

called the "Supplemental Indenture of February 10, 1994") dated as of February 10, 1994, between the Company and the Trustee, supplemental to the Amended In- denture. Unless otherwise defined herein, the terms used herein shall have the same meanings as in the Supplemental Indenture of February 10, 1994.

The Bonds of 5 3/8% Series due 2024 may not be called for redemption by the Company except as provided herein and in the Supplemental Indenture of Febru- ary 10, 1994. The Bonds of 5 3/8% Series due 2024 are subject to redemption in whole, but not in part, at any time, at the option of the Company upon payment of a redemption price equal to 100% of the principal amount thereof plus ac- crued interest to the redemption date, without premium, upon the occurrence of any of the following events:

(a) damage or destruction to the Company's Dickerson Generating Station in Maryland (the "Plant") or the pollution control project at the Plant (the "Facilities") to such extent that in the opinion of both the Company's board of directors (expressed in a resolution) and an architect or engineer ac- ceptable to Security Trust Company, N.A. (the "Pollution Control Bond Trust- ee"), as trustee under the Indenture of Trust, dated as of February 15, 1994 (the "Pollution Control Bond Indenture") between Montgomery County, Maryland (the "County") and the Pollution Control Bond Trustee, both opinions filed with the County and the Pollution Control Bond Trustee, (1) the Plant or the Facilities, as the case may be, cannot be reasonably repaired, rebuilt or restored within a period of six months to its condition immediately preced- ing such damage or destruction, or (2) the Company is thereby prevented from carrying on its normal operations at the Plant for a period of six months; or

(b) loss of title to or use of a substantial part of the Plant or the Fa- cilities as a result of the exercise of the power of eminent domain if, in the opinion of both the Company's board of directors (expressed in a resolu- tion) and an architect or engineer acceptable to the Pollution Control Bond Trustee, both opinions filed with the County and the Pollution Control Bond Trustee, the Company is thereby prevented or is likely to be prevented from carrying on its normal operations therein for a period of six months; or

(c) a change in the Constitution of the State of Maryland or of the United States of America or legislative or administrative action (whether local, state or Federal) or a final decree, judgment or order of any court or ad- ministrative body (whether local, state or Federal)

which causes the Loan Agreement, dated as of February 15, 1994, between the Company and the County (the "Loan Agreement"), to become void or unenforce- able or impossible of performance in accordance with the intent and purpose of the parties as expressed therein or unreasonable burdens or excessive li- abilities to be imposed upon the County or the Company with respect to the Plant or the Facilities or the operation thereof, including but not limited to the imposition of Federal, state or other ad valorem property, income or other taxes other than ad valorem taxes presently levied upon privately owned property used for the same general purpose as the Facilities; or

(d) changes in the economic availability of raw materials, operating sup- plies, energy sources or supplies, or facilities necessary for the operation of the Facilities for the purposes of pollution control "facilities" as de- fined in the Maryland Economic Development Revenue Bond Act or necessary for the operation of the Plant occur or such technological or other changes which the Company cannot reasonably overcome or control and which in the reasonable judgment of the Company's board of directors (expressed in a res- olution) render the Facilities or the Plant uneconomic or obsolete for such purposes; or

(e) any court or administrative body shall enter a judgment, order or de- cree, or shall take administrative action, requiring the Company to cease all or any substantial part of its operation serviced by the Facilities to the extent the Company is or will be prevented from carrying on its normal operations at the Plant for a period of six months.

To exercise its option to redeem the Bonds under the foregoing circumstances, the Company shall, as required under the Pollution Control Bond Indenture, file the required resolutions and opinions or a certificate, as the case may be, within nine months after the event permitting its exercise, giving notice to the County and the Pollution Control Bond Trustee, and shall specify a date not less than 45 nor more than 90 days thereafter for redemption.

The Bonds of 5 3/8% Series due 2024 are subject to mandatory redemption at any time as a whole or, as hereinafter provided, in part at 100% of the prin- cipal amount thereof plus accrued interest to the redemption date, without premium, in the event that the Pollution Control Bond Trustee shall (a) de- liver a notification to the Trustee and the Company that it has been finally determined by the Internal Revenue Service or a court of competent jurisdic- tion that, as a result of any fact, condition or event constituting a failure by the Company to observe any covenant or

agreement in the Loan Agreement or contravenes any representation in the Loan Agreement, the interest payable on the Pollution Control Bonds issued pursuant to the Pollution Control Bond Indenture is includable for Federal income tax purposes in the gross income of any holder of a Pollution Control Bond, other than a holder who is or was a "substantial user" of the Facilities or a "re- lated person," as provided in Section 147(a) of the Internal Revenue Code of 1986 or any applicable predecessor statutory provisions and (b) in conjunction therewith, make a demand for such redemption. No such determination will be considered final for the purpose of any mandatory redemption pursuant to this paragraph unless the Company shall have been given written notice as provided in the Pollution Control Bond Indenture and, if it shall have so desired, been afforded the opportunity to contest the same at its expense, either directly or in the name of any holder of a Pollution Control Bond, and until conclusion of any appellate review with respect thereto, if sought. Any such redemption shall be on any date within 120 days from the time of such final determina- tion. Upon the finality of such determination, the Bonds of 5 3/8% Series due 2024 shall be redeemed in whole unless, as a result of an opinion rendered by Bond Counsel (as defined in the Pollution Control Bond Indenture) pursuant to
Section 2.05(c) of the Pollution Control Bond Indenture, the Pollution Control Bonds shall be redeemed only in part, in which event an equal principal amount of Bonds of 5 3/8% Series due 2024 shall also be redeemed. If such redemption shall occur in accordance with the terms hereof, then such failure by the Com- pany to observe such covenant, agreement or representation in the Loan Agree- ment shall not in and of itself constitute an Event of Default under the Pol- lution Control Bond Indenture, the Bonds of 5 3/8% Series due 2024, the Amended Indenture or the Supplemental Indenture of February 10, 1994.

The Bonds of 5 3/8% Series due 2024 are also subject to mandatory redemption at any time, as a whole, at 100% of the principal amount thereof plus accrued interest to the redemption date, without premium, in the event the Trustee shall receive a written demand (hereinafter called "Default Redemption De- mand") from the Pollution Control Bond Trustee for redemption stating that the principal of all Pollution Control Bonds then outstanding under the Pollution Control Bond Indenture has been declared to be immediately due and payable pursuant to the provi-

sions of Section 9.01 thereof. The Trustee shall within 10 days of receiving the Default Redemption Demand mail a copy to the Company stamped or otherwise marked to show the date of receipt by the Trustee. The Company shall fix a re- demption date and shall mail the Trustee notice of such selection at least 15 days prior to the date so selected. Such redemption date may be any day not more than 60 days after the receipt of the Default Redemption Demand by the Trustee. If the Trustee does not receive notice of such selection by the Com- pany within 45 days after the Default Redemption Demand was received by the Trustee, then the redemption date shall be the 60th day after such receipt. The Trustee shall mail notice of the redemption date (hereinafter called the "Default Redemption Notice") to the Pollution Control Bond Trustee not more than 10 nor less than 5 days prior to the date fixed for redemption. The Trustee shall not mail any Default Redemption Notice (and no such redemption shall be made) if the Trustee receives a written cancellation of the Default Redemption Demand from the Pollution Control Bond Trustee prior to the mailing of the Default Redemption Notice. Notwithstanding any other provision con- tained in this Bond, the Supplemental Indenture dated as of February 10, 1994, or the Amended Indenture, the holder of this Bond by the acceptance of such Bond hereby waives any longer notice of redemption.

The Bonds of 5 3/8% Series due 2024 are subject to redemption by the Company prior to maturity in whole, or in part, at any time, on or after February 15, 2004, upon payment of the following redemption prices (expressed as a percent- age of principal amount of Bonds to be redeemed) plus accrued interest to the redemption date:

                         REDEMPTION DATE                           REDEMPTION
                        (DATES INCLUSIVE)                            PRICE
                        -----------------                          ----------
February 15, 2004 through February 14, 2005.......................    102%
February 15, 2005 through February 14, 2006.......................    101%
February 15, 2006 and thereafter..................................    100%

Any such redemption shall be subject to the conditions and as more fully set forth in the Amended Indenture and Supplemental Indenture of February 10, 1994. Notice of any such redemption (other than a redemption in the event of a Default Redemption Demand) shall be delivered at least forty-five days and not more than sixty days prior to the redemption date, to the registered owner of the Bonds, at its address as

the same shall appear on the transfer register of the Company, all subject to the conditions and as more fully set forth in the Amended Indenture and the Supplemental Indenture of February 10, 1994; provided, however, that such prior notice shall be deemed to have been duly given with respect to all or any part of the Bonds whenever the Company shall have complied with all of its obligations, as set forth in Article VII of the Pollution Control Bond Inden- ture, with respect to redemption of all or such part of the Pollution Control Bonds.

In case an event of default, as defined in the Amended Indenture, shall oc- cur, the principal of all the Bonds at any such time outstanding under the Amended Indenture may be declared or may become due and payable, upon the con- ditions and in the manner and with the effect provided in the Amended Inden- ture. The Amended Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds entitled to vote then outstanding.

Subject to the restriction on transfer appearing hereon, this Bond is trans- ferable by the registered owner hereof, in person or by duly authorized attor- ney, on the books of the Company to be kept for that purpose at the agency of the Company in the City of Washington, D.C., upon surrender and cancellation of this Bond and on presentation of a duly executed written instrument of transfer, and thereupon a new Bond or Bonds of the same series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee in exchange therefor; and this Bond, with or without others of the same series, may in like manner be exchanged for one or more new Bonds of the same series of other authorized denominations but of the same aggregate principal amount; all subject to the terms and conditions set forth in the Amended Indenture.

No recourse shall be had for the payment of the principal of, premium, if any, or the interest on, this Bond, or for any claim based hereon or otherwise in respect hereof or of the Amended Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or of- ficer, past, present or future, of the Company or of any predecessor or suc- cessor corporation, either directly or through the Company or any such prede- cessor or successor corporation, whether for amounts unpaid on stock subscriptions or by virtue of any

constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, di- rectors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Amended Indenture.

This Bond shall not be entitled to any benefit under the Amended Indenture or any indenture supplemental thereto, or become valid or obligatory for any pur- pose, until The Riggs National Bank of Washington, D.C., the Trustee under the Amended Indenture, or a successor trustee thereto under the Amended Indenture, shall have signed the form of certificate endorsed hereon.

In Witness Whereof, Potomac Electric Power Company has caused this Bond to be signed in its name by the signature (or a facsimile thereof) of its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by the facsimile signature of its Secretary or an Assistant Secretary.

Dated,

Potomac Electric Power Company

By ............................................
Vice President

Attest:

...................................
Secretary

[FORM OF TRUSTEE'S CERTIFICATE]

This Bond is one of the Bonds, of the series designated therein, described in the within-mentioned Amended Indenture and the Supplemental Indenture of Feb- ruary 10, 1994.

The Riggs National Bank of Washington, D.C.

Trustee

By ............................................
Authorized Officer

PART III.

Issue of Bonds.

Section 1. Except for Bonds of 2024 Series issued pursuant to Section 13 of Article II of the Original Indenture as amended, the principal amount of Bonds of 2024 Series which may be authenticated and delivered hereunder is limited to the aggregate principal amount of Forty-Two Million Five Hundred Thousand Dollars ($42,500,000).

Section 2. Bonds of 2024 Series in the aggregate principal amount of Forty- Two Million Five Hundred Thousand Dollars ($42,500,000) may at any time subse- quent to the execution hereof be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the recording hereof) to or upon the order of the Company evidenced by a writing or writings, signed by its President or one of its Vice Presi- dents and its Treasurer or one of its Assistant Treasurers, at such time or times as may be requested by the Company subsequent to the receipt by the Trustee of

(1) the certified resolution and the officers' certificate required by Sec- tion 3(a) and Section 3(b) of Article III of the Original Indenture as amended;

(2) the opinion of counsel required by Section 3(c) of Article III of the Original Indenture as amended;

(3) cash, if any, in the amount required to be deposited by Section 3(d) of Article III of the Original Indenture as amended, which shall be held and applied by the Trustee as provided in said Section 3(d);

(4) the certificates, instruments, opinions of counsel, prior lien bonds and cash, if any, required by Section 4 of Article III of the Original In- denture as amended, except that, as required by Part VII of this Supplemen- tal Indenture, property additions purchased, constructed or otherwise ac- quired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds of 2024 Series; and

(5) the certificates and opinions required by Article XVIII of the Original Indenture as amended.

PART IV.

Redemption

Section 1. The Bonds of 2024 Series may not be called for redemption by the Company except as provided herein. The Bonds of 2024 Series shall, in accor- dance with the provisions of Article V of the Original Indenture as amended, be redeemable, prior to maturity on or after February 15, 2004, at the option of the Board of Directors of the Company, either as a whole, or in part, at any time upon payment of the redemption prices applicable to the respective periods set forth in the form of Bond contained in Section 3 of Part II hereof together, in each case, with accrued interest to the redemption date.

Section 2. Notwithstanding the provisions of Section 1 of this Part IV, in the event of (a) damage or destruction of the Company's Plant or the Facili- ties, (b) condemnation of the Company's Plant or the Facilities, (c) constitu- tional, legislative, judicial or administrative action voiding the Loan Agree- ment or imposing unreasonable burdens or excessive liabilities on the Company, including the imposition of certain taxes, (d) changes in the economic or technological status of the Plant or the Facilities rendering the Plant obso- lete or uneconomic or (e) court or administrative action requiring the Company to cease all or any substantial part of its operations serviced by the Facili- ties for a period of six months, all as provided in the form of Bond contained in Section 3 of Part II hereof, the Bonds of 2024 Series shall, in accordance with the provisions of Article V of the Original Indenture as amended, be re- deemable, as a whole at any time prior to maturity, in the manner and upon the conditions provided in said form of Bond, upon payment of a redemption price equal to 100% of the principal amount thereof together with accrued interest to the redemption date, without premium.

Section 3. Notwithstanding the provisions of Section 1 of this Part IV, in the event the Trustee shall receive from the Pollution Control Bond Trustee either

(a) a notification that the Bonds are subject to mandatory redemption pur- suant to Section 2.05(c) of the Pollution Control Bond Indenture; or

(b) a Default Redemption Demand (as defined in the form of Bond contained in Section 3 of Part II hereof);

the Bonds of 2024 Series shall be subject to mandatory redemption, as a whole at any time prior to maturity, or, upon the occurrence of any of the events referred to in clause (a) above, in part at any time, in each case in the man- ner and upon the conditions provided in said form of Bond, at 100% of the principal amount thereof together with accrued interest to the redemption date, without premium.

Section 4. In accordance with the provisions of Article V of the Original In- denture as amended, notice of redemption (other than in a redemption in the event of a Default Redemption Demand) shall be delivered at least forty-five days and not more than sixty days prior to the date of redemption, to the reg- istered owner of the Bonds of 2024 Series at its address as the same shall ap- pear on the transfer register of the Company; provided, however, that such prior notice shall be deemed to have been duly given with respect to all or any part of the Bonds whenever the Company shall have complied with all of its obligations, as set forth in Article VII of the Pollution Control Bond Inden- ture, with respect to redemption of all or such part of the Pollution Control Bonds.

PART V.

Amendment of Indenture to Permit Qualification Under Trust Indenture Act of 1939.

The Company and the Trustee, from time to time and at any time, without any vote or consent of the holders of the Bonds of 2024 Series, may enter into such indentures supplemental to the Original Indenture as amended as may or shall by them be deemed necessary or desirable to add to or modify or amend any of the provisions of the Original Indenture so as to permit the qualifica- tion of the Original Indenture as amended under the Trust Indenture Act of 1939.

Except to the extent specifically provided herein, no provision of this Sup- plemental Indenture is intended to modify, and the parties hereto do

hereby adopt and confirm, the provisions of Section 318(c) of the Trust Inden- ture Act of 1939 which amend and supersede provisions of the Original Inden- ture, as supplemented, in effect prior to November 15, 1990.

PART VI.

Amendment of Original Indenture.

Notwithstanding any other provisions of the Original Indenture as amended, the holders of the Bonds of 2024 Series, by their holding of such Bonds, are deemed to have approved the following amendment to the Original Indenture as amended and to have authorized the Trustee to take any action necessary to ev- idence or effectuate such approval:

Sections 5 and 6 of Article XV of the Original Indenture as amended are hereby amended by changing the words and figures "eighty percent. (80%)" to the words and figures "sixty percent. (60%)" wherever in such Sections such words and figures occur.

PART VII.

Additional Particular Covenants of the Company.

The Company hereby covenants, warrants and agrees that so long as any Bonds of 2024 Series are outstanding:

Section 1. The Company will not withdraw, pursuant to the provisions of Sec- tion 2 of Article VIII of the Original Indenture as amended, any moneys held by the Trustee as part of the trust estate in excess of an amount equal to the aggregate principal amount of such of the refundable Bonds as were theretofore issued by the Company; and that upon any such withdrawal by the Company re- fundable Bonds equal in aggregate principal amount to the amount so withdrawn shall be deemed to have been made the basis for such withdrawal.

Section 2. Property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds, or the withdrawal of cash, or

the reduction of the amount of cash required to be paid to the Trustee under any provision of the Indenture.

PART VIII.

The Trustee.

The Trustee hereby accepts the trusts hereby declared and provided and agrees to perform the same upon the terms and conditions in the Original Indenture as amended set forth and upon the following terms and conditions:

The Trustee shall not be responsible in any manner whatsoever for or in re- spect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Original Inden- ture as amended shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture.

PART IX.
Miscellaneous Provisions.

If any payment of principal of, premium, if any, or installment of interest on, the Bonds of 2024 Series shall be due and payable on any day which is not a business day, such payment shall become due and payable on the next suc- ceeding business day, a "business day" being any Monday, Tuesday, Wednesday, Thursday, or Friday other than any such day that is a legal holiday or a day on which commercial banking institutions in the State of Maryland are autho- rized or obligated to close.

As provided in the Pollution Control Bond Indenture, any amounts of money held in the Bond Fund provided in the Pollution Control Bond Indenture and available for such purpose, which are at the request of the Company applied to the payment of the principal of and premium, if any, and interest on the Pol- lution Control Bonds on any payment or

redemption date, shall be applied as a credit on amounts otherwise due under the Bonds of 2024 Series and shall pro tanto discharge the Company's obliga- tions to pay such amounts otherwise due; provided that the amount of such credit shall be established by an officer's certificate (as defined in the Original Indenture as amended), concurred in by the Pollution Control Bond Trustee, which shall be delivered prior to the application of any such credit.

This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an origi- nal; but such counterparts shall together constitute but one and the same in- strument.

Potomac Electric Power Company hereby constitutes and appoints Dennis R. Wraase, its Senior Vice President, to be its true and lawful attorney-in-fact, for it and in its name to appear before any officer authorized by law to take and certify acknowledgments of deeds to be recorded in the District of Colum- bia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and deliver these presents as the act and deed of said Potomac Electric Power Company.

The Riggs National Bank of Washington, D.C., hereby constitutes and appoints Alexander C. Baker, one of its Senior Vice Presidents, to be its true and law- ful attorney-in-fact, for it and in its name to appear before any officer au- thorized by law to take and certify acknowledgements of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and de- liver these presents as the act and deed of said The Riggs National Bank of Washington, D.C.

In Witness Whereof, said Potomac Electric Power Company has caused this Sup- plemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; and said The Riggs National Bank of Washington, D.C., in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Senior Vice Presidents,

and its corporate seal to be hereto affixed and said seal and this Supplemen- tal Indenture to be attested by one of its Corporate Trust Officers, all as of the 10th day of February, One thousand nine hundred and ninety-four.

Potomac Electric Power Company

(Corporate Seal)

By .........................................

DENNIS R. WRAASE,
Senior Vice President

Attested:
...................................
MARY T. HOWARD,
Assistant Secretary

Signed, sealed and delivered by
Potomac Electric Power Company
in the presence of:
...................................
...................................

As Witnesses

The Riggs National Bank
of Washington, D.C.

(Corporate Seal)

By .........................................

ALEXANDER C. BAKER,
Senior Vice President

Attested:
...................................
BEVERLY MOFFETT
Senior Corporate Trust Officer

Signed, sealed and delivered by The
Riggs National Bank of Washington,
D.C. in the presence of:
...................................
...................................

As Witnesses

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, a Notary Public in and for the District of Columbia, United States of America, whose commission as such will expire , do hereby certify that Dennis R. Wraase and Mary T. Howard, whose names as Senior Vice President and Assistant Secretary, respectively, of Potomac Electric Power Company, a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 10th day of February, 1994, personally appeared this day before me in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice President and an Assistant Secretary of Potomac Electric Power Company, and that they as such, being authorized so to do, executed the said deed by signing the name of Potomac Electric Power Company by Dennis R. Wraase, as Senior Vice President, and attested by Mary T. Howard, as Assistant Secretary, and acknowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of Potomac Elec- tric Power Company.

Given under my hand and official seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Dennis R. Wraase, Senior Vice Presi- dent of Potomac Electric Power Company, a corporation, one of the parties to the foregoing instrument bearing date as of the 10th day of February, 1994, and hereto annexed, this day personally appeared before me in the City of Washington, the said Dennis R. Wraase being personally well known to me as the person who executed the said instrument as Senior Vice President of and on be- half of said Potomac Electric Power Company and known to me to be the attor- ney-in-fact duly appointed therein to acknowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said Potomac Electric Power Company, and delivered the same as such. I further certify that the said Dennis R. Wraase, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corpora- tion; and that he signed his name thereto by like order. My commission expires .

Given under my hand and official seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                                      26
                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker and Beverly Moffett, whose names as Senior Vice President and Senior Corporate Trust Offi- cer, respectively, of The Riggs National Bank of Washington, D.C., a corpora- tion, are signed to the foregoing and hereto attached deed, bearing date as of the 10th day of February, 1994, personally appeared before me this day in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice President and a Senior Corporate Trust Officer of The Riggs National Bank of Washington, D.C., and that they as such, being authorized so to do, exe- cuted the said deed by signing the name of The Riggs National Bank of Washing- ton, D.C. by Alexander C. Baker as Senior Vice President, and attested by Bev- erly Moffett, as Senior Corporate Trust Officer, and acknowledged the same be- fore me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of The Riggs National Bank of Washington, D.C., as therein set forth.

Given under my hand and notarial seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

Alexander C. Baker, of full age, being sworn according to law, on his oath deposes and says that he is a Senior Vice President of The Riggs National Bank of Washington, D.C., the Trustee named in the foregoing Supplemental Inden- ture, dated as of the 10th day of February, 1994, that he is the agent of said Trustee for the purpose of perfecting such Supplemental Indenture and that the consideration in the Original Indenture referred to therein and in all inden- tures supplemental to said Original Indenture, including the foregoing Supple- mental Indenture, is true and bona fide as therein set forth.

............................................

Alexander C. Baker

Subscribed and sworn to before me
this day of February, 1994.

...................................
Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker a Senior Vice President of The Riggs National Bank of Washington, D.C., a corporation, one of the parties to the foregoing instrument bearing date as of the 10th day of February, 1994, and hereto annexed, this day personally appeared before me in the City of Washington, the said Alexander C. Baker, being personally well known to me as the person who executed the said instrument as a Senior Vice President of and on behalf of said The Riggs National Bank of Washington, D.C., and known to me to be the attorney-in-fact duly appointed therein to ac- knowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said The Riggs National Bank of Washington, D.C., and delivered the same as such. I further certify that the said Alexander C. Baker, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.

Given under my hand and official seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

My Commission Expires

CERTIFICATE OF RESIDENCE

The Riggs National Bank of Washington, D.C., Mortgagee and Trustee within named, hereby certifies that its precise residence is 800-17th Street, N.W., Washington, D.C. 20006.

The Riggs National Bank of Washington, D.C.

By..........................................

Alexander C. Baker,
Senior Vice President

POTOMAC ELECTRIC POWER COMPANY

1900 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C.

TO

THE RIGGS NATIONAL BANK
OF WASHINGTON, D.C.

800-17TH STREET, N.W., WASHINGTON, D.C.
AS TRUSTEE

Supplemental Indenture

DATED AS OF FEBRUARY 11, 1994

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST

DATED JULY 1, 1936

FIRST MORTGAGE BONDS, 5 3/8% SERIES DUE 2024

POTOMAC ELECTRIC POWER COMPANY
SUPPLEMENTAL INDENTURE DATED AS OF FEBRUARY 11, 1994

TABLE OF CONTENTS*

                                                                          PAGE
                                                                          ----
Parties..................................................................   1
Recitals.................................................................   1

                                   PART I

                                 Definitions
Facilities...............................................................   6
Loan Agreement...........................................................   6
Pollution Control Bond Indenture.........................................   6
Pollution Control Bonds..................................................   7
Pollution Control Bond Trustee...........................................   7

                                   PART II

                     Description of Bonds of 2024 Series
Section 1. General description of Bonds of 2024 Series..................    7
Section 2. Denominations of Bonds.......................................    8
Section 3. Form of Bond.................................................    8
           Form of Trustee's Certificate................................   16

                                  PART III

                        Issue of Bonds of 2024 Series
Section 1. Limitation as to principal amount............................   17
Section 2. Issue of $38,300,000 principal amount of Bonds of
            2024 Series.................................................   17

                                   PART IV

                                 Redemption
Section 1. Bonds of 2024 Series redeemable..............................   18
Section 2. Bonds of 2024 Series redeemable in certain events............   18
Section 3. Bonds of 2024 Series subject to mandatory redemption in cer-
            tain events.................................................   18
Section 4. Notice of redemption.........................................   19

                                                                          PAGE
                                                                          ----

                                    PART V

Amendment of Indenture to Permit Qualification under Trust Indenture Act
  of 1939................................................................  19

                                    PART VI
Amendment of Original Indenture..........................................  20

                                   PART VII

                Additional Particular Covenants of the Company
Section 1.  Company not to withdraw money pursuant to Section 2 of Arti-
              cle VIII in excess of an amount equal to principal amount
              of issued refundable Bonds.................................  20
Section 2.  No property additions made prior to December 31, 1946 to be
              used for any purpose under the Indenture...................  20

                                   PART VIII

                                  The Trustee
Acceptance of trusts by the Trustee......................................  21
Trustee not responsible for validity of the Supplemental Indenture.......  21

                                    PART IX

                           Miscellaneous Provisions
Payments due on non-business days........................................  21
Credits on First Mortgage Bonds..........................................  21
Execution of Supplemental Indenture in counterparts......................  22
Appointment of attorneys-in-fact by parties..............................  22
Testimonium..............................................................  22
Execution................................................................  23
Company's Acknowledgments................................................  24
Trustee's Acknowledgments................................................  26

SUPPLEMENTAL INDENTURE, dated as of the eleventh day of February, nineteen hundred and ninety-four (1994), made by and between Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic corporation of the Commonwealth of Virginia (here- inafter sometimes called the "Company"), party of the first part, and The Riggs National Bank of Washington, D.C., a national banking association orga- nized and existing under the laws of the United States of America (hereinafter sometimes called the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1936, hereinafter mentioned, party of the second part;

Whereas, The Company has heretofore executed and delivered its Mortgage and Deed of Trust, dated July 1, 1936 (hereinafter sometimes referred to as the "Original Indenture"), to the Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series; and

Whereas, pursuant to the terms and provisions of the Original Indenture, in- dentures supplemental thereto dated as of July 1, 1936, December 1, 1939, Au- gust 1, 1940, August 1, 1942, January 1, 1948, May 1, 1949, May 1, 1950, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, December 1, 1958, November 16, 1959, December 1, 1960, February 15, 1963, May 15, 1964, April 1, 1966, May 1, 1967, February 15, 1968, March 15, 1969, February 15, 1970, August 15, 1970, September 15, 1972, April 1, 1973, January 2, 1974, August 15, 1974, Au- gust 15, 1974, June 15, 1977, July 1, 1979, June 16, 1981, June 17, 1981, De- cember 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993, September 30, 1993, October 1, 1993 and February 10, 1994 have been heretofore entered into between the Company and the Trustee to provide, respectively, for the creation of the first through the fifty-sev- enth series of Bonds thereunder and, in the case of the supplemental inden- tures dated January 1, 1948, March 1, 1952, May 15, 1953, May 16, 1955, June 1, 1956, September 15, 1972, July 1, 1979, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992, July 1, 1993 and one of the supplemental indentures dated August 15, 1974, to convey additional property; and

Whereas, $20,000,000 principal amount of Bonds of the 3 1/4% Series due 1966 (the first series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1974 (the second series), $10,000,000 principal amount of Bonds of the 3 1/4% Series due 1975 (the third series), $5,000,000 principal amount of Bonds of the 3 1/4% Series due 1977 (the fourth series), $15,000,000 principal amount of Bonds of the 3% Series due 1983 (the fifth series), $10,000,000 principal amount of Bonds of the 2 7/8% Series due 1984 (the sixth series), $30,000,000 principal amount of Bonds of the 2 3/4% Series due 1985 (the sev- enth series), $15,000,000 principal amount of Bonds of the 3 1/4% Series due 1987 (the eighth series), $10,000,000 principal amount of Bonds of the 3 7/8% Series due 1988 (the ninth series), $10,000,000 principal amount of Bonds of the 3 3/8% Series due 1990 (the tenth series), $10,000,000 principal amount of Bonds of the 3 5/8% Series due 1991 (the eleventh series), $25,000,000 princi- pal amount of Bonds of the 4 5/8% Series due 1993 (the twelfth series), $45,000,000 principal amount of Bonds of the 7 3/4% Series due 2004 (the twen- tieth series), $35,000,000 principal amount of Bonds of the 8.85% Series due 2005 (the twenty-first series), $70,000,000 principal amount of Bonds of the 9 1/2% Series due August 15, 2005 (the twenty-second series), $50,000,000 prin- cipal amount of Bonds of the 7 3/4% Series due 2007 (the twenty-third series), $7,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twen- ty-fourth series), $100,000,000 principal amount of Bonds of the 8 3/8% Series due 2009 (the twenty-fifth series), $50,000,000 principal amount of Bonds of the 10 1/4% Series due 1981 (the twenty-sixth series), $50,000,000 principal amount of Bonds of the 10 3/4% Series due 2004 (the twenty-seventh series), $30,000,000 principal amount of Bonds of the Floating Rate Series due 2010 (the thirty-second series), $50,000,000 principal amount of Bonds of the 14 1/2% Series due 1991 (the thirty-third series), $60,000,000 principal amount of Bonds of the 14 1/4% Series due 1992 (the thirty-fifth series), $50,000,000 principal amount of Bonds of the 11 7/8% Series due 1989 (the thirty-sixth se- ries), $37,000,000 principal amount of Bonds of the 8 3/4% Series due 2010 (the thirty-seventh series), $75,000,000 principal amount of Bonds of the 11 1/4% Series due 2015 (the thirty-eighth series), $75,000,000 principal amount of Bonds of the 9 1/4% Series due 2016 (the thirty-ninth series), $75,000,000 principal amount of Bonds of the 8 3/4% Series due 2016 (the fortieth series), $75,000,000 principal amount of Bonds of the 8 1/4% Series due 2017 (the for- ty-first series),

$75,000,000 principal amount of Bonds of the 9% Series due 1990 (the forty- second series), $32,000,000 principal amount of Bonds of the 9 3/4% Series due 2019 (the forty-third series) and $12,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series) have been heretofore redeemed and retired and there are now issued and outstanding under the Original Inden- ture and under the supplemental indentures referred to above: $15,000,000 principal amount of Bonds of the 5 1/4% Series due 1994 (the thirteenth se- ries); $40,000,000 principal amount of Bonds of the 5% Series due 1995 (the fourteenth series); $50,000,000 principal amount of Bonds of the 4 3/8% Series due 1998 (the fifteenth series); $45,000,000 principal amount of Bonds of the 4 1/2% Series due 1999 (the sixteenth series); $15,000,000 principal amount of Bonds of the 5 1/8% Series due 2001 (the seventeenth series); $35,000,000 principal amount of Bonds of the 5 7/8% Series due 2002 (the eighteenth se- ries); $40,000,000 principal amount of Bonds of the 6 5/8% Series due 2003 (the nineteenth series); $18,000,000 principal amount of Bonds of the 5 5/8% Series due 1997 (the twenty-fourth series); $38,300,000 principal amount of Bonds of the 6 1/8% Series due 2007 (the twenty-eighth series); $15,000,000 principal amount of Bonds of the 6 1/2% Series due 2004 (the twenty-ninth se- ries); $20,000,000 principal amount of Bonds of the 6 1/2% Series due 2007 (the thirtieth series); $7,500,000 principal amount of Bonds of the 6 5/8% Se- ries due 2009 (the thirty-first series); $50,000,000 principal amount of Bonds of the Adjustable Rate Series due 2001 (the thirty-fourth series); $43,000,000 principal amount of Bonds of the 9 3/4% Series due 2019 (the forty-third se- ries); $63,000,000 principal amount of Bonds of the 8 5/8% Series due 2019 (the forty-fourth series); $100,000,000 principal amount of Bonds of the 9% Series due 2000 (the forty-fifth series); $100,000,000 principal amount of Bonds of the 9% Series due 2021 (the forty-sixth series); $75,000,000 princi- pal amount of Bonds of the 8 1/2% Series due 2027 (the forty-seventh series); $30,000,000 principal amount of Bonds of the 6% Series due 2022 (the forty- eighth series); $37,000,000 principal amount of Bonds of the 6 3/8% Series due 2023 (the forty-ninth series); $78,000,000 principal amount of Bonds of the 6 1/2% Series due 2008 (the fiftieth series); $40,000,000 principal amount of Bonds of the 7 1/2% Series due 2028 (the fifty-first series); $100,000,000 principal amount of Bonds of the 7 1/4% Series due 2023 (the fifty-second se- ries); $100,000,000 principal amount of Bonds of the 6 7/8% Series due

2023 (the fifty-third series); $50,000,000 principal amount of Bonds of the 5 5/8% Series due 2003 (the fifty-fourth series); $50,000,000 principal amount of Bonds of the 5 7/8% Series due 2008 (the fifty-fifth series); $75,000,000 principal amount of Bonds of the 6 7/8% Series due 2024 (the fifty-sixth se- ries); and $42,500,000 principal amount of Bonds of the 5 3/8% Series due 2024 (the fifty-seventh series); and

Whereas, for the purpose of conforming the Original Indenture to the stan- dards prescribed by the Trust Indenture Act of 1939 or otherwise modifying certain of the provisions of the Original Indenture, indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993, September 30, 1993, October 1, 1993 and February 10, 1994 have been heretofore entered into between the Company and the Trustee, and for the purpose of conveying ad- ditional property, indentures supplemental thereto dated July 15, 1942, Octo- ber 15, 1947, December 31, 1948, December 31, 1949, February 15, 1951, Febru- ary 16, 1953, March 15, 1954, March 15, 1955, March 15, 1956, April 1, 1957, May 1, 1958, May 1, 1959, May 2, 1960, April 3, 1961, May 1, 1962, May 1, 1963, April 23, 1964, May 3, 1965, June 1, 1966, April 28, 1967, July 3, 1967, May 1, 1968, June 16, 1969, May 15, 1970, September 1, 1971, June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21, 1991, May 7, 1992 and July 1, 1993 have been heretofore entered into between the Company and the Trustee, and for the purpose of better securing and protecting the Bonds then or thereafter issued and confirming the lien of the Original Indenture, an in- denture dated October 15, 1942 supplemental thereto has been heretofore en- tered into between the Company and the Trustee; the Original Indenture as heretofore amended and supplemented being hereinafter referred to as the "Original Indenture as amended"; and

Whereas, the Company proposes to enter into a Loan Agreement (hereinafter de- fined) with the Industrial Development Authority of the City of Alexandria, Virginia, a political subdivision of the Common-

wealth of Virginia (hereinafter called the "Authority"), to refinance a por- tion of the cost of the acquisition of the Facilities (hereinafter defined) at the Company's Potomac River Generating Station, Alexandria, Virginia (herein- after called the "Plant"); and

Whereas, the Authority proposes to issue its Pollution Control Bonds (herein- after defined) in the principal amount of $38,300,000; and

Whereas, the Company is entitled to have authenticated and delivered addi- tional Bonds on the basis of the net bondable value of property additions, upon compliance with the provisions of Section 4 of Article III of the Origi- nal Indenture as amended; and

Whereas, the Company has determined to issue to the Pollution Control Bond Trustee (hereinafter defined), as assignee of the Authority, pursuant to and as security for the Loan Agreement, a fifty-eighth series of Bonds under the Original Indenture as amended in the principal amount of $38,300,000, to be known as First Mortgage Bonds, 5 3/8% Series due 2024 (hereinafter called "Bonds of 2024 Series"); and

Whereas, the Original Indenture as amended provides that certain terms and provisions, as determined by the Board of Directors of the Company, of the Bonds of any particular series may be expressed in and provided by the execu- tion of an appropriate supplemental indenture; and

Whereas, the Original Indenture as amended provides that the Company and the Trustee may enter into indentures supplemental thereto to add to the covenants and agreements of the Company contained therein other covenants and agreements thereafter to be observed; and to surrender any right or power reserved to or conferred upon the Company in the Original Indenture as amended; and

Whereas, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture as amended and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and

Whereas, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized;

Now, Therefore, This Indenture Witnesseth:

That Potomac Electric Power Company, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and de- livery of these presents, and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants, declares and agrees with the Trustee and its successors in the trust under the Original Indenture as amend- ed, for the benefit of those who hold the Bonds, or any of them, issued or to be issued hereunder or under the Original Indenture as amended, as follows:

PART I.

Definitions.

The terms defined in this Part I shall, for all purposes of this Supplemental Indenture, have the meanings herein specified, unless the context otherwise requires:

Facilities:

The term "Facilities" shall mean the pollution control project at the Plant, described in Exhibit A to the Loan Agreement, and related improvements and any substitutions therefor, acquired by the Company for operation by it as pollu- tion control facilities.

The terms "acquisition" and "acquired," when used with regard to the Facili- ties, shall include, without limitation, the construction, installation and equipping of the Facilities.

Loan Agreement:

The term "Loan Agreement" shall mean the Loan Agreement dated as of February 15, 1994, entered into between the Authority and the Company, and any and all modifications, alterations, amendments and supplements thereto.

Pollution Control Bond Indenture:

The term "Pollution Control Bond Indenture" shall mean the Indenture of Trust, dated as of February 15, 1994, between the Authority and

the Pollution Control Bond Trustee, pursuant to which the Pollution Control Bonds are issued, and any indenture supplemental thereto.

Pollution Control Bonds:

The term "Pollution Control Bonds" shall mean the Pollution Control Revenue Refunding Bonds (Potomac Electric Project), 1994 Series of the Authority au- thenticated and delivered pursuant to the Pollution Control Bond Indenture. The term "Pollution Control Bonds, 1994 Series" shall mean the series of Pol- lution Control Revenue Refunding Bonds in the aggregate principal amount of $38,300,000 delivered initially.

Pollution Control Bond Trustee:

The term "Pollution Control Bond Trustee" shall mean NationsBank of Virginia, N.A., a national banking association organized under the laws of the United States of America, or its successors, as Trustee under the Pollution Control Bond Indenture.

PART II.

Description of Bonds of 2024 Series.

Section 1. The fifty-eighth series of Bonds to be executed, authenticated and delivered under and secured by the Original Indenture as amended shall be Bonds of 2024 Series. The Bonds of 2024 Series shall, subject to the provi- sions of Section 1 of Article II of the Original Indenture as amended, be des- ignated as "First Mortgage Bonds, 5 3/8% Series due 2024" of the Company. The Bonds of 2024 Series shall be executed, authenticated and delivered in accor- dance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Original Indenture as amended, ex- cept in so far as the terms and provisions of the Original Indenture as amended are amended or modified by this Supplemental Indenture.

The Bonds of 2024 Series shall mature February 15, 2024 and shall bear inter- est at the rate of five and three-eighths percent (5 3/8%) per annum, payable semiannually on the fifteenth day of February and the fifteenth day of August in each year (each such February 15 and Au-

gust 15 being hereinafter called an "interest payment date"). The Bonds of 2024 Series shall be payable as to principal and interest in lawful money of the United States of America in immediately available funds, and shall be pay- able (the interest as well as the principal thereof) at the address of the registered owner of such Bonds of 2024 Series appearing on the transfer regis- ter of the Company.

Every Bond of 2024 Series shall be dated as of the date of its authentication and delivery, or if that is an interest payment date, the next day, and shall bear interest from the interest payment date next preceding its date or the date of delivery of the initial Bonds of 2024 Series, whichever is later.

Section 2. The Bonds of 2024 Series shall be registered Bonds without coupons of denominations of any integral multiple of $5,000, numbered consecutively upwards from R1.

Section 3. The Bonds of 2024 Series, and the Trustee's certificate to be en- dorsed on the Bonds of 2024 Series, shall be substantially in the following forms, respectively:

[FORM OF BOND]

This Bond is not transferable except as provided in the Pollution Control Bond Indenture, as defined herein.

POTOMAC ELECTRIC POWER COMPANY
(A District of Columbia and Virginia corporation)

First Mortgage Bond, 5 3/8% Series Due 2024

No. R- $

Potomac Electric Power Company, a corporation organized and existing under the laws of the District of Columbia and a domestic corporation of the Common- wealth of Virginia (hereinafter called the "Company", which term shall include any successor corporation as defined in the Amended Indenture hereinafter re- ferred to), for value received,

hereby promises to pay to or registered assigns, the sum of dollars, on the fifteenth day of February, 2024, or on such other date as may be required herein, in lawful money of the United States of America in immedi- ately available funds, and to pay interest thereon in like money from the later of February 15, 1994 or the interest payment date (February 15 or August 15) next preceding the date of this Bond, or if the Company shall default in the payment of interest due on such interest payment date, then from the next preceding interest payment date to which interest has been paid or February 15, 1994, whichever is later, at the rate of five and three-eighths percent (5 3/8%) per annum, payable semiannually, on the fifteenth day of February and the fifteenth day of August in each year until maturity, or, if this Bond shall be duly called for redemption, until the redemption date, or, if the Company shall default in the payment of the principal hereof, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Amended Indenture. The principal of, premium, if any, and interest on, this Bond are payable at the address of the registered owner hereof appearing on the transfer register of the Company. To the extent permitted by law, the Company shall pay interest on any overdue installment of interest hereunder at the rate of five and three-eighths percent (5 3/8%) per annum, or at such lesser maximum rate of interest as is permitted by law at any such time.

This Bond is one of a duly authorized issue of Bonds of the Company (herein- after called the "Bonds") in unlimited aggregate principal amount of the se- ries hereinafter specified, all issued and to be issued under and equally se- cured (except in so far as any purchase or sinking fund or analogous provi- sions for any particular series of Bonds, established by any indenture supple- mental to the Amended Indenture hereinafter mentioned, may afford additional security for such Bonds) by a Mortgage and Deed of Trust, dated July 1, 1936, executed by the Company to The Riggs National Bank of Washington, D.C. (herein called the "Trustee"), as trustee, as amended by indentures supplemental thereto dated December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September 1, 1992, No-

vember 1, 1992, March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993, September 29, 1993, September 30, 1993, October 1, 1993 and February 10, 1994 (said Mortgage and Deed of Trust, as so amended, being herein called the "Amended Indenture") and all indentures supplemental thereto, to which Amended Indenture and supplemental indentures reference is hereby made for a descrip- tion of the properties mortgaged and pledged, the nature and extent of the se- curity, the rights of the owners of the Bonds and of the Trustee in respect thereto, and the terms and conditions upon which the Bonds are, and are to be, secured. To the extent permitted by, and as provided in, the Amended Inden- ture, modifications or alterations of the Amended Indenture, or of any inden- ture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds may be made with the consent of the Company by an affirmative vote of not less than 80% in amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Amended Indenture, and by an affirmative vote of not less than 80% in amount of the Bonds of any series entitled to vote then outstanding and af- fected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Amended Indenture are so affected; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or premium, if any or interest on, this Bond, which are unconditional, or which reduces the percentage of Bonds the affirmative vote of which is required for the mak- ing of such modifications or alterations. The Company is proposing an amend- ment to the Amended Indenture which would replace "80%" with "60%" in the pre- ceding sentence, which amendment will become effective upon the consent or agreement thereto of the holders of all the outstanding Bonds. The holder of this Bond will be deemed to have approved such amendment. The Bonds may be is- sued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Amended In- denture provided.

This Bond is one of a series designated as the "First Mortgage Bonds, 5 3/8% Series due 2024" (herein called the "Bonds of 5 3/8% Series due 2024") of the Company, limited in aggregate principal amount to $38,300,000, issued under and secured by the Amended Indenture and all indentures supplemental thereto and described in the indenture (herein

called the "Supplemental Indenture of February 11, 1994") dated as of February 11, 1994, between the Company and the Trustee, supplemental to the Amended In- denture. Unless otherwise defined herein, the terms used herein shall have the same meanings as in the Supplemental Indenture of February 11, 1994.

The Bonds of 5 3/8% Series due 2024 may not be called for redemption by the Company except as provided herein and in the Supplemental Indenture of Febru- ary 11, 1994. The Bonds of 5 3/8% Series due 2024 are subject to redemption in whole, but not in part, at any time, at the option of the Company upon payment of a redemption price equal to 100% of the principal amount thereof plus ac- crued interest to the redemption date, without premium, upon the occurrence of any of the following events:

(a) damage or destruction to the Company's Potomac River Generating Station in Alexandria, Virginia (the "Plant") or the pollution control project at the Plant (the "Facilities") to such extent that in the opinion of both the Company's board of directors (expressed in a resolution) and an architect or engineer acceptable to NationsBank of Virginia, N.A. (the "Pollution Control Bond Trustee"), as trustee under the Indenture of Trust, dated as of Febru- ary 15, 1994 (the "Pollution Control Bond Indenture") between the Industrial Development Authority of the City of Alexandria, Virginia (the "Authority") and the Pollution Control Bond Trustee, both opinions filed with the Author- ity and the Pollution Control Bond Trustee, (1) the Plant or the Facilities, as the case may be, cannot be reasonably repaired, rebuilt or restored within a period of six months to its condition immediately preceding such damage or destruction, or (2) the Company is thereby prevented from carrying on its normal operations at the Plant for a period of six months; or

(b) loss of title to or use of a substantial part of the Plant or the Fa- cilities as a result of the exercise of the power of eminent domain if, in the opinion of both the Company's board of directors (expressed in a resolu- tion) and an architect or engineer acceptable to the Pollution Control Bond Trustee, both opinions filed with the Authority and the Pollution Control Bond Trustee, the Company is thereby prevented or is likely to be prevented from carrying on its normal operations therein for a period of six months; or

(c) a change in the Constitution of the Commonwealth of Virginia or of the United States of America or legislative or administrative action (whether local, state or Federal) or a final decree, judgment or

order of any court or administrative body (whether local, state or Federal) which causes the Loan Agreement, dated as of February 15, 1994, between the Company and the Authority (the "Loan Agreement"), to become void or unen- forceable or impossible of performance in accordance with the intent and purpose of the parties as expressed therein or unreasonable burdens or ex- cessive liabilities to be imposed upon the Authority or the Company with re- spect to the Plant or the Facilities or the operation thereof, including but not limited to the imposition of Federal, state or other ad valorem proper- ty, income or other taxes other than ad valorem taxes presently levied upon privately owned property used for the same general purpose as the Facili- ties; or

(d) changes in the economic availability of raw materials, operating sup- plies, energy sources or supplies, or facilities necessary for the operation of the Facilities for the purposes of pollution control "facilities" as de- fined in the Virginia Industrial Development and Revenue Bond Act or neces- sary for the operation of the Plant occur or such technological or other changes which the Company cannot reasonably overcome or control and which in the reasonable judgment of the Company's board of directors (expressed in a resolution) render the Facilities or the Plant uneconomic or obsolete for such purposes; or

(e) any court or administrative body shall enter a judgment, order or de- cree, or shall take administrative action, requiring the Company to cease all or any substantial part of its operation serviced by the Facilities to the extent the Company is or will be prevented from carrying on its normal operations at the Plant for a period of six months.

To exercise its option to redeem the Bonds under the foregoing circumstances, the Company shall, as required under the Pollution Control Bond Indenture, file the required resolutions and opinions or a certificate, as the case may be, within nine months after the event permitting its exercise, giving notice to the Authority and the Pollution Control Bond Trustee, and shall specify a date not less than 45 nor more than 90 days thereafter for redemption.

The Bonds of 5 3/8% Series due 2024 are subject to mandatory redemption at any time as a whole or, as hereinafter provided, in part at 100% of the prin- cipal amount thereof plus accrued interest to the redemption date, without premium, in the event that the Pollution Control Bond Trustee shall (a) de- liver a notification to the Trustee and the Company that it has been finally determined by the Internal Revenue Service or a

court of competent jurisdiction that, as a result of any fact, condition or event constituting a failure by the Company to observe any covenant or agree- ment in the Loan Agreement or contravenes any representation in the Loan Agreement, the interest payable on the Pollution Control Bonds issued pursuant to the Pollution Control Bond Indenture is includable for Federal income tax purposes in the gross income of any holder of a Pollution Control Bond, other than a holder who is or was a "substantial user" of the Facilities or a "re- lated person," as provided in Section 147(a) of the Internal Revenue Code of 1986 or any applicable predecessor statutory provisions and (b) in conjunction therewith, make a demand for such redemption. No such determination will be considered final for the purpose of any mandatory redemption pursuant to this paragraph unless the Company shall have been given written notice as provided in the Pollution Control Bond Indenture and, if it shall have so desired, been afforded the opportunity to contest the same at its expense, either directly or in the name of any holder of a Pollution Control Bond, 1994 Series, and un- til conclusion of any appellate review with respect thereto, if sought. Any such redemption shall be on any date within 120 days from the time of such fi- nal determination. Upon the finality of such determination, the Bonds of 5 3/8% Series due 2024 shall be redeemed in whole unless, as a result of an opinion rendered by Bond Counsel (as defined in the Pollution Control Bond In- denture) pursuant to Section 2.5(c) of the Pollution Control Bond Indenture, the Pollution Control Bonds shall be redeemed only in part, in which event an equal principal amount of Bonds of 5 3/8% Series due 2024 shall also be re- deemed. If such redemption shall occur in accordance with the terms hereof, then such failure by the Company to observe such covenant, agreement or repre- sentation in the Loan Agreement shall not in and of itself constitute an Event of Default under the Pollution Control Bond Indenture, the Bonds of 5 3/8% Se- ries due 2024, the Amended Indenture or the Supplemental Indenture of February 11, 1994.

The Bonds of 5 3/8% Series due 2024 are also subject to mandatory redemption at any time, as a whole, at 100% of the principal amount thereof plus accrued interest to the redemption date, without premium, in the event the Trustee shall receive a written demand (hereinafter called "Default Redemption De- mand") from the Pollution Control Bond Trustee for redemption stating that the principal of all Pollution Control

Bonds then outstanding under the Pollution Control Bond Indenture has been de- clared to be immediately due and payable pursuant to the provisions of Section 9.1 thereof. The Trustee shall within 10 days of receiving the Default Redemp- tion Demand mail a copy to the Company stamped or otherwise marked to show the date of receipt by the Trustee. The Company shall fix a redemption date and shall mail the Trustee notice of such selection at least 15 days prior to the date so selected. Such redemption date may be any day not more than 60 days after the receipt of the Default Redemption Demand by the Trustee. If the Trustee does not receive notice of such selection by the Company within 45 days after the Default Redemption Demand was received by the Trustee, then the redemption date shall be the 60th day after such receipt. The Trustee shall mail notice of the redemption date (hereinafter called the "Default Redemption Notice") to the Pollution Control Bond Trustee not more than 10 nor less than 5 days prior to the date fixed for redemption. The Trustee shall not mail any Default Redemption Notice (and no such redemption shall be made) if the Trustee receives a written cancellation of the Default Redemption Demand from the Pollution Control Bond Trustee prior to the mailing of the Default Redemp- tion Notice. Notwithstanding any other provision contained in this Bond, the Supplemental Indenture dated as of February 11, 1994, or the Amended Inden- ture, the holder of this Bond by the acceptance of such Bond hereby waives any longer notice of redemption.

The Bonds of 5 3/8% Series due 2024 are subject to redemption by the Company prior to maturity in whole, or in part, at any time, on or after February 15, 2004, upon payment of the following redemption prices (expressed as a percent- age of principal amount of Bonds to be redeemed) plus accrued interest to the redemption date:

                         REDEMPTION DATE                           REDEMPTION
                        (DATES INCLUSIVE)                            PRICE
                        -----------------                          ----------
February 15, 2004 through February 14, 2005.......................    102%
February 15, 2005 through February 14, 2006.......................    101%
February 15, 2006 and thereafter..................................    100%

Any such redemption shall be subject to the conditions and as more fully set forth in the Amended Indenture and Supplemental Indenture of February 11, 1994. Notice of any such redemption (other than a redemption in the event of a Default Redemption Demand) shall be deliv-

ered at least forty-five days and not more than sixty days prior to the re- demption date, to the registered owner of the Bonds, at its address as the same shall appear on the transfer register of the Company, all subject to the conditions and as more fully set forth in the Amended Indenture and the Sup- plemental Indenture of February 11, 1994; provided, however, that such prior notice shall be deemed to have been duly given with respect to all or any part of the Bonds whenever the Company shall have complied with all of its obliga- tions, as set forth in Article VII of the Pollution Control Bond Indenture, with respect to redemption of all or such part of the Pollution Control Bonds.

In case an event of default, as defined in the Amended Indenture, shall oc- cur, the principal of all the Bonds at any such time outstanding under the Amended Indenture may be declared or may become due and payable, upon the con- ditions and in the manner and with the effect provided in the Amended Inden- ture. The Amended Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds entitled to vote then outstanding.

Subject to the restriction on transfer appearing hereon, this Bond is trans- ferable by the registered owner hereof, in person or by duly authorized attor- ney, on the books of the Company to be kept for that purpose at the agency of the Company in the City of Washington, D.C., upon surrender and cancellation of this Bond and on presentation of a duly executed written instrument of transfer, and thereupon a new Bond or Bonds of the same series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee in exchange therefor; and this Bond, with or without others of the same series, may in like manner be exchanged for one or more new Bonds of the same series of other authorized denominations but of the same aggregate principal amount; all subject to the terms and conditions set forth in the Amended Indenture.

No recourse shall be had for the payment of the principal of, premium, if any, or the interest on, this Bond, or for any claim based hereon or otherwise in respect hereof or of the Amended Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or of- ficer, past, present or future, of the Company or of any predecessor or suc- cessor corporation, either directly or

through the Company or any such predecessor or successor corporation, whether for amounts unpaid on stock subscriptions or by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any con- stitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise re- leased by the terms of the Amended Indenture.

This Bond shall not be entitled to any benefit under the Amended Indenture or any indenture supplemental thereto, or become valid or obligatory for any pur- pose, until The Riggs National Bank of Washington, D.C., the Trustee under the Amended Indenture, or a successor trustee thereto under the Amended Indenture, shall have signed the form of certificate endorsed hereon.

In Witness Whereof, Potomac Electric Power Company has caused this Bond to be signed in its name by the signature (or a facsimile thereof) of its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by the facsimile signature of its Secretary or an Assistant Secretary.

Dated,

Potomac Electric Power Company

By ............................................
Vice President

Attest:

...................................
Secretary

[form of trustee's certificate]

This Bond is one of the Bonds, of the series designated therein, described in the within-mentioned Amended Indenture and the Supplemental Indenture of Feb- ruary 11, 1994.

The Riggs National Bank of Washington, D.C.

Trustee

By ............................................
Authorized Officer

PART III.

Issue of Bonds.

Section 1. Except for Bonds of 2024 Series issued pursuant to Section 13 of Article II of the Original Indenture as amended, the principal amount of Bonds of 2024 Series which may be authenticated and delivered hereunder is limited to the aggregate principal amount of Thirty-Eight Million Three Hundred Thou- sand Dollars ($38,300,000).

Section 2. Bonds of 2024 Series in the aggregate principal amount of Thirty- Eight Million Three Hundred Thousand Dollars ($38,300,000) may at any time subsequent to the execution hereof be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the recording hereof) to or upon the order of the Company evi- denced by a writing or writings, signed by its President or one of its Vice Presidents and its Treasurer or one of its Assistant Treasurers, at such time or times as may be requested by the Company subsequent to the receipt by the Trustee of

(1) the certified resolution and the officers' certificate required by Sec- tion 3(a) and Section 3(b) of Article III of the Original Indenture as amended;

(2) the opinion of counsel required by Section 3(c) of Article III of the Original Indenture as amended;

(3) cash, if any, in the amount required to be deposited by Section 3(d) of Article III of the Original Indenture as amended, which shall be held and applied by the Trustee as provided in said Section 3(d);

(4) the certificates, instruments, opinions of counsel, prior lien bonds and cash, if any, required by Section 4 of Article III of the Original In- denture as amended, except that, as required by Part VII of this Supplemen- tal Indenture, property additions purchased, constructed or otherwise ac- quired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds of 2024 Series; and

(5) the certificates and opinions required by Article XVIII of the Original Indenture as amended.

PART IV.

Redemption

Section 1. The Bonds of 2024 Series may not be called for redemption by the Company except as provided herein. The Bonds of 2024 Series shall, in accor- dance with the provisions of Article V of the Original Indenture as amended, be redeemable, prior to maturity on or after February 15, 2004, at the option of the Board of Directors of the Company, either as a whole, or in part, at any time upon payment of the redemption prices applicable to the respective periods set forth in the form of Bond contained in Section 3 of Part II hereof together, in each case, with accrued interest to the redemption date.

Section 2. Notwithstanding the provisions of Section 1 of this Part IV, in the event of (a) damage or destruction of the Company's Plant or the Facili- ties, (b) condemnation of the Company's Plant or the Facilities, (c) constitu- tional, legislative, judicial or administrative action voiding the Loan Agree- ment or imposing unreasonable burdens or excessive liabilities on the Company, including the imposition of certain taxes, (d) changes in the economic or technological status of the Plant or the Facilities rendering the Plant obso- lete or uneconomic or (e) court or administrative action requiring the Company to cease all or any substantial part of its operations serviced by the Facili- ties for a period of six months, all as provided in the form of Bond contained in Section 3 of Part II hereof, the Bonds of 2024 Series shall, in accordance with the provisions of Article V of the Original Indenture as amended, be re- deemable, as a whole at any time prior to maturity, in the manner and upon the conditions provided in said form of Bond, upon payment of a redemption price equal to 100% of the principal amount thereof together with accrued interest to the redemption date, without premium.

Section 3. Notwithstanding the provisions of Section 1 of this Part IV, in the event the Trustee shall receive from the Pollution Control Bond Trustee either

(a) a notification that the Bonds are subject to mandatory redemption pur- suant to Section 2.5(c) of the Pollution Control Bond Indenture; or

(b) a Default Redemption Demand (as defined in the form of Bond contained in Section 3 of Part II hereof);

the Bonds of 2024 Series shall be subject to mandatory redemption, as a whole at any time prior to maturity, or, upon the occurrence of any of the events referred to in clause (a) above, in part at any time, in each case in the man- ner and upon the conditions provided in said form of Bond, at 100% of the principal amount thereof together with accrued interest to the redemption date, without premium.

Section 4. In accordance with the provisions of Article V of the Original In- denture as amended, notice of redemption (other than in a redemption in the event of a Default Redemption Demand) shall be delivered at least forty-five days and not more than sixty days prior to the date of redemption, to the reg- istered owner of the Bonds of 2024 Series at its address as the same shall ap- pear on the transfer register of the Company; provided, however, that such prior notice shall be deemed to have been duly given with respect to all or any part of the Bonds whenever the Company shall have complied with all of its obligations, as set forth in Article VII of the Pollution Control Bond Inden- ture, with respect to redemption of all or such part of the Pollution Control Bonds.

PART V.

Amendment of Indenture to Permit Qualification Under Trust Indenture Act of 1939.

The Company and the Trustee, from time to time and at any time, without any vote or consent of the holders of the Bonds of 2024 Series, may enter into such indentures supplemental to the Original Indenture as amended as may or shall by them be deemed necessary or desirable to add to or modify or amend any of the provisions of the Original Indenture so as to permit the qualifica- tion of the Original Indenture as amended under the Trust Indenture Act of 1939.

Except to the extent specifically provided herein, no provision of this Sup- plemental Indenture is intended to modify, and the parties hereto do

hereby adopt and confirm, the provisions of Section 318(c) of the Trust Inden- ture Act of 1939 which amend and supersede provisions of the Original Inden- ture, as supplemented, in effect prior to November 15, 1990.

PART VI.

Amendment of Original Indenture.

Notwithstanding any other provisions of the Original Indenture as amended, the holders of the Bonds of 2024 Series, by their holding of such Bonds, are deemed to have approved the following amendment to the Original Indenture as amended and to have authorized the Trustee to take any action necessary to ev- idence or effectuate such approval:

Sections 5 and 6 of Article XV of the Original Indenture as amended are hereby amended by changing the words and figures "eighty percent. (80%)" to the words and figures "sixty percent. (60%)" wherever in such Sections such words and figures occur.

PART VII.

Additional Particular Covenants of the Company.

The Company hereby covenants, warrants and agrees that so long as any Bonds of 2024 Series are outstanding:

Section 1. The Company will not withdraw, pursuant to the provisions of Sec- tion 2 of Article VIII of the Original Indenture as amended, any moneys held by the Trustee as part of the trust estate in excess of an amount equal to the aggregate principal amount of such of the refundable Bonds as were theretofore issued by the Company; and that upon any such withdrawal by the Company re- fundable Bonds equal in aggregate principal amount to the amount so withdrawn shall be deemed to have been made the basis for such withdrawal.

Section 2. Property additions purchased, constructed or otherwise acquired on or before December 31, 1946 shall not be made the basis for the authentication and delivery of Bonds, or the withdrawal of cash, or

the reduction of the amount of cash required to be paid to the Trustee under any provision of the Indenture.

PART VIII.

The Trustee.

The Trustee hereby accepts the trusts hereby declared and provided and agrees to perform the same upon the terms and conditions in the Original Indenture as amended set forth and upon the following terms and conditions:

The Trustee shall not be responsible in any manner whatsoever for or in re- spect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Original Inden- ture as amended shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture.

PART IX.
Miscellaneous Provisions.

If any payment of principal of, premium, if any, or installment of interest on, the Bonds of 2024 Series shall be due and payable on any day which is not a business day, such payment shall become due and payable on the next suc- ceeding business day, a "business day" being any Monday, Tuesday, Wednesday, Thursday, or Friday other than any such day that is a legal holiday or a day on which commercial banking institutions in the Commonwealth of Virginia are authorized or obligated to close.

As provided in the Pollution Control Bond Indenture, any amounts of money held in the Bond Fund provided in the Pollution Control Bond Indenture and available for such purpose, which are at the request of the Company applied to the payment of the principal of and premium, if any, and interest on the Pol- lution Control Bonds on any payment or

redemption date, shall be applied as a credit on amounts otherwise due under the Bonds of 2024 Series and shall pro tanto discharge the Company's obliga- tions to pay such amounts otherwise due; provided that the amount of such credit shall be established by an officer's certificate (as defined in the Original Indenture as amended), concurred in by the Pollution Control Bond Trustee, which shall be delivered prior to the application of any such credit.

This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an origi- nal; but such counterparts shall together constitute but one and the same in- strument.

Potomac Electric Power Company hereby constitutes and appoints Dennis R. Wraase, its Senior Vice President, to be its true and lawful attorney-in-fact, for it and in its name to appear before any officer authorized by law to take and certify acknowledgments of deeds to be recorded in the District of Colum- bia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and deliver these presents as the act and deed of said Potomac Electric Power Company.

The Riggs National Bank of Washington, D.C., hereby constitutes and appoints Alexander C. Baker, one of its Senior Vice Presidents, to be its true and law- ful attorney-in-fact, for it and in its name to appear before any officer au- thorized by law to take and certify acknowledgements of deeds to be recorded in the District of Columbia, in the State of Maryland, in the Commonwealth of Virginia, and in the Commonwealth of Pennsylvania and to acknowledge and de- liver these presents as the act and deed of said The Riggs National Bank of Washington, D.C.

In Witness Whereof, said Potomac Electric Power Company has caused this Sup- plemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; and said The Riggs National Bank of Washington, D.C., in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Senior Vice Presidents,

and its corporate seal to be hereto affixed and said seal and this Supplemen- tal Indenture to be attested by one of its Corporate Trust Officers, all as of the 11th day of February, One thousand nine hundred and ninety-four.

Potomac Electric Power Company

(Corporate Seal)

By .........................................

DENNIS R. WRAASE,
Senior Vice President

Attested:
...................................
MARY T. HOWARD,
Assistant Secretary

Signed, sealed and delivered by
Potomac Electric Power Company
in the .presence of:
...................................
...................................

As Witnesses

The Riggs National Bank
of Washington, D.C.

(Corporate Seal)

By .........................................

ALEXANDER C. BAKER,
Senior Vice President

Attested:
...................................
BEVERLY MOFFETT
Senior Corporate Trust Officer

Signed, sealed and delivered by The
Riggs National Bank of Washington,
D.C. in the presence of:
...................................
...................................

As Witnesses

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, a Notary Public in and for the District of Columbia, United States of America, whose commission as such will expire , do hereby certify that Dennis R. Wraase and Mary T. Howard, whose names as Senior Vice President and Assistant Secretary, respectively, of Potomac Electric Power Company, a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 11th day of February, 1994, personally appeared this day before me in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice President and an Assistant Secretary of Potomac Electric Power Company, and that they as such, being authorized so to do, executed the said deed by signing the name of Potomac Electric Power Company by Dennis R. Wraase, as Senior Vice President, and attested by Mary T. Howard, as Assistant Secretary, and acknowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of Potomac Elec- tric Power Company.

Given under my hand and official seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Dennis R. Wraase, Senior Vice Presi- dent of Potomac Electric Power Company, a corporation, one of the parties to the foregoing instrument bearing date as of the 11th day of February, 1994, and hereto annexed, this day personally appeared before me in the City of Washington, the said Dennis R. Wraase being personally well known to me as the person who executed the said instrument as Senior Vice President of and on be- half of said Potomac Electric Power Company and known to me to be the attor- ney-in-fact duly appointed therein to acknowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said Potomac Electric Power Company, and delivered the same as such. I further certify that the said Dennis R. Wraase, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corpora- tion; and that he signed his name thereto by like order. My commission expires .

Given under my hand and official seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker and Beverly Moffett, whose names as Senior Vice President and Senior Corporate Trust Offi- cer, respectively, of The Riggs National Bank of Washington, D.C., a corpora- tion, are signed to the foregoing and hereto attached deed, bearing date as of the 11th day of February, 1994, personally appeared before me this day in my District aforesaid and acknowledged themselves to be, respectively, a Senior Vice President and a Senior Corporate Trust Officer of The Riggs National Bank of Washington, D.C., and that they as such, being authorized so to do, exe- cuted the said deed by signing the name of The Riggs National Bank of Washing- ton, D.C. by Alexander C. Baker as Senior Vice President, and attested by Bev- erly Moffett, as Senior Corporate Trust Officer, and acknowledged the same be- fore me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of The Riggs National Bank of Washington, D.C., as therein set forth.

Given under my hand and notarial seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

Alexander C. Baker, of full age, being sworn according to law, on his oath deposes and says that he is a Senior Vice President of The Riggs National Bank of Washington, D.C., the Trustee named in the foregoing Supplemental Inden- ture, dated as of the 11th day of February, 1994, that he is the agent of said Trustee for the purpose of perfecting such Supplemental Indenture and that the consideration in the Original Indenture referred to therein and in all inden- tures supplemental to said Original Indenture, including the foregoing Supple- mental Indenture, is true and bona fide as therein set forth.

............................................

Alexander C. Baker

Subscribed and sworn to before me
this day of February, 1994.

...................................
Notary Public
District of Columbia

                           ++
City of Washington,         +
District of Columbia,       ++  ss.:
                            +
                           ++

I, , a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Alexander C. Baker a Senior Vice President of The Riggs National Bank of Washington, D.C., a corporation, one of the parties to the foregoing instrument bearing date as of the 11th day of February, 1994, and hereto annexed, this day personally appeared before me in the City of Washington, the said Alexander C. Baker, being personally well known to me as the person who executed the said instrument as a Senior Vice President of and on behalf of said The Riggs National Bank of Washington, D.C., and known to me to be the attorney-in-fact duly appointed therein to ac- knowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said The Riggs National Bank of Washington, D.C., and delivered the same as such. I further certify that the said Alexander C. Baker, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.

Given under my hand and official seal this day of February, 1994.

(Notarial Seal)

............................................

Notary Public
District of Columbia

My Commission Expires

CERTIFICATE OF RESIDENCE

The Riggs National Bank of Washington, D.C., Mortgagee and Trustee within named, hereby certifies that its precise residence is 800-17th Street, N.W., Washington, D.C. 20006.

The Riggs National Bank of Washington, D.C.

By..........................................

Alexander C. Baker,