S-3

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As filed with the Securities and Exchange Commission on August 5, 2003

Registration No. 333-          

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Baltimore Gas and Electric Company
(Exact Name of Registrant as Specified in its Charter)

Maryland
(State of Incorporation) 52-0280210
(I.R.S. Employer Identification No.)

BGE Capital Trust II
(Exact Name of Registrant as Specified in its trust agreement)

Delaware
(State of Organization) Applied for
(I.R.S. Employer Identification No.)

39 W. Lexington Street, Baltimore, Maryland 21201
(410) 234-5511
(Address, including Zip Code, and Telephone Number, including Area Code
of Principal Executive Offices and Agent for Service for each Registrant)

E. Follin Smith, Senior Vice President and Chief Financial Officer
750 E. Pratt Street, Baltimore, Maryland 21202    (410) 783-3013
(Address, including Zip Code, and Telephone Number, including Area Code
of Agent for Service for each Registrant)

        Approximate date of commencement of proposed sale to the public:    After the effective date of this Registration Statement as determined by market conditions.

        If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price per Unit (1)	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
BGE Capital Trust II Preferred Securities	10,000,000	$25	$250,000,000	$20,225
Baltimore Gas and Electric Company        % Junior Subordinated Debentures, Series A (2) (3)	10,000,000	100%	$250,000,000	N/A
Baltimore Gas and Electric Company Preferred Securities Guarantee (3)	N/A	N/A	N/A	N/A
Total	10,000,000	100%	$250,000,000	$20,225

(1)

Estimated solely for calculating the registration fee. Junior Subordinated Debentures of Baltimore Gas and Electric Company may be issued and sold to BGE Capital Trust II, in which event such Junior Subordinated Debentures may later be distributed to the holders of the Preferred Securities upon a dissolution of BGE Capital Trust II, and the distribution of the assets thereof.

(2)

The Junior Subordinated Debentures will be purchased by BGE Capital Trust II with the proceeds of the sale of the Preferred Securities.

(3)

Includes the rights of the holders of Preferred Securities under the Preferred Securities Guarantee and back-up undertakings, consisting of obligations by Baltimore Gas and Electric Company as set forth in the Amended and Restated Declaration of Trust of BGE Capital Trust II, the Indenture and supplemental indentures thereto, in each case as further described in the Registration Statement. No separate consideration will be received for the Junior Subordinated Debentures or Preferred Securities Guarantee and pursuant to Rule 457 (n) under the Securities Act of 1933 no separate fee is payable for such Debentures or Guarantee.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities Exchange Commission is effective. This prospectus is not an offer to sell those securities and it is not soliciting an offer to buy these securities in any state where the offer sale is not permitted.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED                        , 2003

PROSPECTUS
$250,000,000
BGE CAPITAL TRUST II
    % TRUST PREFERRED
SECURITIES

Fully and Unconditionally Guaranteed,
on a Subordinated Basis by Baltimore
Gas and Electric Company, as described
in this prospectus. Baltimore Gas and Electric Company
BGE Capital Trust II
39 W. Lexington Street
Baltimore, Maryland 21201
(410) 234-5000

        A brief description of the preferred securities can be found under "SUMMARY" in this prospectus.

BGE AND THE TRUST URGE YOU TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE 11, WHERE SPECIFIC RISKS ASSOCIATED WITH THESE PREFERRED SECURITIES ARE DESCRIBED, ALONG WITH THIS PROSPECTUS BEFORE YOU MAKE YOUR INVESTMENT DECISION

        BGE plans to list the preferred securities on the New York Stock Exchange under the trading symbol                        . BGE expects that the preferred securities will begin trading on the New York Stock Exchange within 30 days after they are first issued.

	Proceeds to the Trust		Initial Public Offering Price	Underwriting Commission
Per preferred security	$	(1)	(2)	$
Total	$		(2)	$

(1)

Accrued distributions, if any, from                        , 2003 will be added to the initial public offering price.

(2)

Underwriting commissions of $            (or $                        for all securities) will be paid by Baltimore Gas and Electric Company. However, such compensation will be $            for sales to certain institutions.

We expect that the preferred securities will be ready for delivery in book-entry form only through The Depository Trust Company on or about                        , 2003.

The date of this prospectus is                        , 2003.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

TABLE OF CONTENTS

	Page No.
SUMMARY	3
RISK FACTORS	11
FORWARD-LOOKING STATEMENTS	17
USE OF PROCEEDS	18
ACCOUNTING TREATMENT	19
DESCRIPTION OF THE PREFERRED SECURITIES	19
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES	28
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE	38
RELATIONSHIP AMOUNG THE PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES HELD BY THE TRUST	41
BOOK ENTRY ISSUANCE	42
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES	45
ERISA CONSIDERATIONS	48
UNDERWRITING	50
VALIDITY OF THE SECURITIES	51
EXPERTS	51
WHERE YOU CAN FIND MORE INFORMATION	51

No dealer, salesperson or other individual has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this prospectus in connection with the offer made by this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by BGE, the trust or the underwriters. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of BGE or the trust since the date hereof. BGE's business, financial condition, results of operations and prospects may have changed since that date. This prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.

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Summary

This summary highlights information contained elsewhere in, or incorporated by reference into, this prospectus. Because this is a summary, it may not contain all of the information that is important to you. Therefore, you should also read the more detailed information in this prospectus, BGE's financial statements and the other information that is incorporated by reference in this prospectus, before making a decision to invest in the preferred securities.

Overview of BGE

Baltimore Gas and Electric Company ("BGE"), a wholly-owned subsidiary of Constellation Energy Group, Inc. ("Constellation Energy"), is a regulated electric and gas public transmission and distribution company. BGE delivers electricity to approximately 1.2 million customers and natural gas to approximately 600,000 customers in a service territory that includes the City of Baltimore and all or part of 10 counties in Central Maryland. BGE's electric delivery territory has a population of 2.7 million and its natural gas delivery territory has a population of 2 million. BGE is regulated by the Maryland Public Service Commission, or Maryland PSC, and the Federal Energy Regulatory Commission, or FERC, with respect to rates and other aspects of its business.

Electric Business

Effective on July 1, 2001 electric customer choice and competition among electric suppliers was implemented in Maryland. As a result of deregulation, BGE's electric customers can purchase their electricity from other sources. If a customer chooses an alternate supplier, BGE collects a delivery service charge to recover its costs for the service it provides. BGE remains obligated to provide electricity to different classes of customers who do not choose an alternate supplier through a fixed price standard offer service over various time periods, the last of which ends on June 30, 2006. Effective July 1, 2000, BGE also reduced residential base rates by approximately 6.5%, which on average is about $54 million a year through June 2006.

Since July 1, 2002, large commercial and industrial customers are no longer eligible for standard offer service and, if they choose to continue to receive their electric supply from BGE, are charged market rates. As a result, currently customers representing approximately 96% (approximately 1,000 megawatts) of load from this class purchase their electricity from alternate suppliers.

Beginning on July 1, 2004, all other commercial and industrial customers will no longer be eligible for fixed price standard offer service. Currently, this class of customers represents approximately 2,200 megawatts of load. If they choose to continue to receive their electric supply from BGE after July 1, 2004, they will be charged market rates. Beginning July 1, 2006, BGE's obligation to provide standard offer service pursuant to the original deregulation order to residential customers will end.

On April 29, 2003, the Maryland PSC approved a settlement agreement that BGE entered into with parties representing customers, industry, utilities, suppliers, the Maryland Energy Administration, the Maryland PSC's Staff and the Office of People's Counsel which, among other things, extends BGE's (and other utilities') obligation to supply standard offer service. Under the settlement agreement, BGE is obligated to provide market-based standard offer service to residential customers until June 30, 2010, and for commercial and industrial customers for a one, two or four year period beyond June 30, 2004, depending on customer size. The rates charged during this time would recover BGE's wholesale power supply costs and would include an administrative fee. On July 2, 2003, a second settlement agreement was filed that addressed operational details remaining from the first settlement, including, but not limited to, a model request for proposals, a model power supply contract, and numerous ancillary agreements and exhibits.

BGE has entered into power supply contracts to meet its fixed price standard offer service requirements until June 30, 2006 from Constellation Power Source, Inc., a Constellation Energy subsidiary. BGE will seek bids for supply to meet its market-based standard offer service

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obligation under a process established through the settlements discussed above. The amount BGE pays for energy and capacity does not exceed the rates it receives from its customers during these time periods.

As a result of electric competition, BGE's generating assets were deregulated, and on July 1, 2000 BGE transferred all of its generating assets (6,240 megawatts) and related liabilities, at book value, to Constellation Energy subsidiaries. All of these assets were transferred subject to the lien of BGE's mortgage. BGE also transferred to Constellation Energy subsidiaries tax-exempt debt related to the transferred assets, of which $270 million currently remains outstanding. If the subsidiaries default on their obligations relating to this debt and the debt were declared due and payable, BGE would be required to pay the debt as it remains primarily liable.

For a more detailed discussion of the Maryland law authorizing customer choice and competition, and the Maryland PSC order that resolved major issues surrounding electric restructuring, please refer to BGE's Annual Report on Form 10-K for the year ended December 31, 2002 and most recent Quarterly Report on Form 10-Q. See "WHERE YOU CAN FIND MORE INFORMATION."

Gas Business

Currently, no regulation exists for the wholesale price of natural gas as a commodity, and the regulation of interstate transmission at the federal level has been reduced. All BGE gas customers have the option to purchase gas from other suppliers. However, the delivery of gas continues to be regulated in Maryland by the Maryland PSC.

Currently, approximately 54% of the gas delivered on BGE's distribution system is for customers purchasing gas from alternative suppliers. BGE charges these customers fees to recover the costs for the transportation service it provides. These fees are the same as the base rate BGE charges for gas sales. In addition to the delivery service, BGE also provides these customers with meter readings, billing, emergency response, regular maintenance, and balancing.

BGE buys all gas that it sells directly from various suppliers and arranges separately for the transportation and storage. BGE has a market based rates incentive mechanism for gas it sells. Under market based rates, BGE's cost of gas is compared to a market index (a measure of the market price of gas in a given period). The difference between BGE's actual cost and the market index is shared equally between shareholders and customers except for fixed-price contracts that must be secured for at least 10%, but not more than 20%, of forecasted system supply requirements for the November through March period. These fixed price contracts are not subject to sharing under the market-based rates incentive mechanism.

The Maryland PSC allows BGE to record a monthly adjustment to its gas revenues to eliminate the effect of abnormal weather patterns on BGE's gas system sales volumes. This means BGE's monthly gas revenues are based on weather that is considered "normal" for the month and, therefore, are not affected by actual weather conditions. BGE also participates in the interstate markets, by releasing pipeline capacity or bundling pipeline capacity with gas for off-system sales.

BGE's and the trust's principal executive offices are located at 39 W. Lexington Street, Baltimore, Maryland 21201, and BGE's telephone number is 410-234-5000.

Overview of BGE Capital Trust II

The trust is a statutory trust created under Delaware law. BGE created the trust only to issue and sell the common and preferred securities, to purchase the junior subordinated debentures from BGE, to use the proceeds from such sales to distribute the cash payments it receives from the junior subordinated debentures it earns to holders of the common and preferred securities, and to engage in only those other activities that are necessary or incidental to those purposes. The trust has a term of 40 years, but may be dissolved earlier as provided in the Declaration.

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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERENCE STOCK DIVIDENDS

The ratio of earnings to fixed charges and of earnings to combined fixed charges and preference stock dividends for each of the periods indicated is as follows:

		Year Ended December 31
	Three Months Ended March 31 2003
		2002	2001	2000	1999	1998
Ratio of earnings to fixed charges	5.48x	2.66x	1.99x	2.27x	3.45x	2.94x
Ratio of earnings to combined fixed charges and preference stock dividends	4.64x	2.31x	1.75x	2.03x	3.14x	2.60x

For current information on these ratios, please see BGE's most recent Form 10-K and 10-Q. See "WHERE YOU CAN FIND MORE INFORMATION."

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The Offering

The following is a brief summary of the offering of the preferred securities. You should refer to "DESCRIPTION OF THE PREFERRED SECURITITES," "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES" and "DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE" for a more detailed description of the preferred securities, the junior subordinated debentures and the preferred securities guarantee.

The issuer	BGE Capital Trust II
Securities the trust is offering	The trust is issuing      % trust preferred securities. Each preferred security represents a preferred undivided beneficial interest in the assets of the trust. The trust will sell the preferred securities to the public for cash. The trust will also issue common securities, which will represent common undivided beneficial interests in the assets of the trust. BGE will purchase all of the common securities from the trust for cash.
Offering price	$25 per preferred security, plus any accumulated and unpaid distributions from the original issue date.
Junior subordinated debentures	The trust will use the cash it receives from the sale of the preferred and common securities to purchase junior subordinated debentures from BGE, which are due on            , 2043. The assets of the trust will consist solely of the junior subordinated debentures and payments received on the junior subordinated debentures. The junior subordinated debentures will have payment terms identical to those of the preferred securities, and the trust will rely on the payments it receives on the junior subordinated debentures to make all payments on the preferred securities.
When the trust will pay distributions to you	Your purchase of the preferred securities entitles you to receive cumulative cash distributions at a    % annual rate. Distributions will accumulate from the date the trust issues the preferred securities and are to be paid quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning            , 2003. As long as the preferred securities are represented by a global security, the record date for distributions on the preferred securities will be the close of business on the Business Day, immediately preceding the relevant distribution date. BGE may defer the payment of cash distributions, as described below.
When the trust must redeem the preferred securities	The junior subordinated debentures will mature and BGE must redeem the preferred securities on            , 2043, unless in its sole discretion BGE accelerates the date of maturity. BGE may shorten the maturity date to a date not earlier than            , 2008.

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Redemption of the preferred securities before            , 2043 is possible	The trust must redeem the preferred securities when BGE repays the junior subordinated debentures because they mature, are accelerated or are redeemed. BGE may redeem all or part of the junior subordinated debentures before they are due, at a price equal to their principal amount plus interest accrued to the date of redemption at any time on or after            , 2008.
	In addition, BGE may redeem all of the junior subordinated debentures at any time within 90 days following any of the following events:
	•	a "Tax Event," which occurs if existing laws or regulations or their interpretation or application change, causing the interest BGE pays on the junior subordinated debentures no longer to be deductible by it for federal income tax purposes, or causing the trust to become subject to federal income tax or to certain other taxes or governmental charges; or
	•	an "Investment Company Event," which occurs if existing laws or regulations change, requiring the trust to register as an investment company.
	If your preferred securities are redeemed by the trust, you will receive the liquidation amount of $25 per preferred security, plus any accrued and unpaid distributions to the date of redemption.
BGE has the option to extend the interest payment period	The trust will rely solely on payments made by BGE under the junior subordinated debentures to pay distributions on the preferred securities. As long as BGE is not in default under the Indenture relating to the junior subordinated debentures, or such default has been cured, BGE will have the right, one or more times, to defer interest payments on the junior subordinated debentures for up to 20 consecutive quarters, but not beyond the Maturity Date of the junior subordinated debentures. Each period during which interest payments are deferred is called a "deferral period." Each time BGE defers interest payments on the junior subordinated debentures:
	•	the trust also will defer the payment of distributions on the preferred securities;
	•	you will still accumulate distributions at an annual rate of    % of the liquidation amount of $25 per preferred security; and

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	•	these accumulated distributions will (to the extent permitted by law) earn interest at the same rate, compounded quarterly, until paid. At the end of any deferral period, BGE will pay to the trust all accrued and unpaid interest under the junior subordinated debentures. The trust will then pay all accumulated and unpaid distributions to you.
You will still be taxed if distributions on the preferred securities are deferred	If a deferral of payment occurs, you will be required to accrue interest income and include it in your gross income for United States federal income tax purposes, even if you are a cash basis taxpayer.
BGE is guaranteeing payments on the preferred securities	BGE will fully and unconditionally guarantee payments on the preferred securities, but only to the extent that the trust has funds legally and immediately available to make those payments. If BGE does not make payments on the junior subordinated debentures, the trust will not have sufficient funds to make payments on the preferred securities. If this is the case, your remedy is to institute a legal proceeding directly against BGE for enforcement of payments under the junior subordinated debentures. BGE's obligations under the Preferred Securities Guarantee will rank junior in right of payment to BGE's senior indebtedness. At June 30, 2003, BGE's Senior Indebtedness totaled approximately $1.95 billion.
BGE can dissolve the trust and cause an exchange of preferred securities for junior subordinated debentures	BGE has the right at any time to dissolve the trust. In that event, the trustees will either:
	•	distribute the junior subordinated debentures to you; or
	•	if the Property Trustee decides that distributing the junior subordinated debentures is not practical, distribute assets of the trust to you in an amount equal to the liquidation amount of $25 per preferred security plus accumulated and unpaid distributions.
	In all cases, however, the trust will make distributions only to the extent that the trust has available assets after the trust has satisfied all of its liabilities to its creditors. If BGE distributes the junior subordinated debentures, BGE will use its best efforts to list the junior subordinated debentures on the New York Stock Exchange (or any other stock exchange or automated quotation system on which the preferred securities are then listed or quoted.)

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How the securities will rank in right of payment	BGE's obligations under the preferred securities, junior subordinated debentures and Preferred Securities Guarantee are unsecured and will rank as follows with regard to right of payment:
	•	the preferred securities will rank equally with the common securities of the trust. The trust will pay distributions on the preferred securities and the common securities ratably. However, if BGE defaults with respect to the junior subordinated debentures, then no distributions on or redemptions of the common securities of the trust or BGE's capital stock will be paid until all accumulated and unpaid distributions on the preferred securities have been paid; and
	•	BGE'S obligations under the junior subordinated debentures and the Preferred Securities Guarantee are unsecured and generally will rank junior in priority to BGE's existing and future Senior Indebtedness.
Voting rights of the preferred securities	Except in limited circumstances, holders of the preferred securities will have no voting rights.
You will not receive certificates representing your preferred securities	The preferred securities will generally be represented by a global security that will be deposited with and registered in the name of The Depository Trust Company, or its nominee. This means that, except in limited circumstances, you will not receive a certificate for the preferred securities, and your beneficial ownership interests will be recorded through the DTC book-entry system.
Proposed New York Stock Exchange Symbol	.
How the proceeds of this offering will be used	The trust will invest the proceeds from the sale of the preferred and common securities in the junior subordinated debentures. BGE intends to use the net proceeds for general corporate purposes, which may include the repayment of long-term debt, including its 7.16% Deferrable Interest Subordinated Debentures due June 30, 2038, underlying its outstanding 7.16% Trust Originated Preferred Securities. If BGE does not use the net proceeds immediately, BGE may temporarily invest them in short-term, interest-bearing obligations.
BGE is reimbursing the trust for expenses	BGE has agreed in the Declaration to reimburse the trust for any expenses and liabilities it may incur, other than amounts payable for the securities. Expenses that give rise to Additional Interest will be paid by the Property Trustee upon receipt of Additional Interest payments from BGE.

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Trustees and Administrators
The Bank of New York will act as Property Trustee and The Bank of New York (Delaware) will act as Delaware Trustee, and they will conduct the business and affairs of the trust. In addition, Thomas E. Ruszin, Jr. (or another of BGE's officers) will act as Administrative Trustee of the trust.

Before buying the preferred securities you should carefully consider the "Risk Factors" beginning on page 11.

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BGE Capital Trust II

BGE created a Delaware statutory trust pursuant to a BGE Capital Trust II Declaration of Trust executed by BGE as depositor for the trust and three appointed trustees. BGE will execute an amended and restated Declaration of Trust (Declaration), in the form filed as an exhibit to the Registration Statement, which will state the terms and conditions for the trust to issue and sell its preferred and common securities.

The trust exists solely to:

•

issue and sell its preferred and common securities representing undivided beneficial interests in the assets of BGE Capital Trust II;



•

use the proceeds from the sale of its preferred and common securities to purchase a series of BGE's junior subordinated debentures;



•

distribute the cash payments it receives from the junior subordinated debentures to holders of the common and preferred securities; and



•

engage in only those other activities that are necessary or incidental to these purposes.

BGE will purchase all of the common securities of the trust. The common securities will represent an aggregate liquidation amount equal to 3% of the trust's total capitalization. The preferred securities will represent the remaining 97% of the trust's total capitalization. The common securities will have terms substantially identical to, and will rank equal in priority of payment with, the preferred securities. However, if BGE defaults on the junior subordinated debentures, cash distributions and liquidation, redemption and other amounts on the common securities will be subordinate to the preferred securities in priority of payment.

BGE has appointed three trustees (collectively, trustees) to conduct the trust's business and affairs:

•

The Bank of New York (Property Trustee)

•

The Bank of New York, Delaware (Delaware Trustee)

•

A BGE officer (Administrative Trustee)

As holder of the common securities, BGE can replace or remove any of the trustees. However, if an event of default occurs and is continuing under the Declaration, the Property Trustee and the Delaware Trustee can only be replaced and removed by the holders of at least a Majority in Aggregate Liquidation Amount of the preferred securities then Outstanding (as defined in the Declaration). Only BGE, as owner of the common securities, can remove or replace the Administrative Trustee.

BGE will pay all fees and expenses related to the trust and the offering of the preferred securities and will pay all ongoing costs and expenses of the trust, except the trust's obligations under the preferred and common securities, and except for expenses that give rise to Additional Interest payments, which the Property Trustee will pay upon receipt of such Additional Interest.

The trust will have a term of approximately 40 years from the date it issues preferred and common securities, but may be dissolved earlier as provided in the Declaration. The principal executive office of the trust is c/o Baltimore Gas and Electric Company, 39 W. Lexington Street, Baltimore, Maryland 21201 and its telephone number is 410-234-5000.

RISK FACTORS

An investment in the preferred securities involves a number of risks. Some of these risks relate to the preferred securities and others relate to BGE and the gas and electric industry generally. BGE urges you to read all of the information contained in this prospectus. In addition, BGE urges you to consider carefully the following factors in evaluating an investment in the trust before you purchase the preferred securities offered by this prospectus.

Risks Relating to the Preferred Securities

Because the trust will rely on the payments it receives on the junior subordinated debentures to make all payments on the preferred securities, and because the trust may distribute the junior subordinated debentures in exchange for the preferred securities upon liquidation of the trust, you are making an investment decision with regard to the junior subordinated debentures as well as the preferred securities. You should carefully review the information in this prospectus about both of these securities.

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Junior subordinated debentures and the Preferred Securities Guarantee rank lower than any of BGE's other indebtedness.

The junior subordinated debentures are not secured by any of BGE's property or assets. BGE's obligations under the junior subordinated debentures will rank junior and be subordinate in right of payment to all of BGE's Senior Indebtedness. For a definition of Senior Indebtedness, see "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Subordination." The junior subordinated debentures, the Indenture and the Preferred Securities Guarantee do not limit BGE's ability to incur additional indebtedness, including indebtedness that ranks senior to the junior subordinated debentures and the Preferred Securities Guarantee. For more information on the subordination of the junior subordinated debentures, see "DESCRIPTION OF THE JUNIOR SUBORDINATION DEBENTURES—Subordination." For more information on the subordination of the Preferred Securities Guarantee, see "DESCRIPTION OF PREFERRED SECURITIES GUARANTEE—Status of the Preferred Securities Guarantee."

BGE's right to postpone interest payments on the junior subordinated debentures and the tax treatment of the preferred securities could adversely affect market prices for the preferred securities.

The market price of the preferred securities may be more volatile than the market prices of similar securities that are not subject to these rights, since BGE has the right to defer interest payments on the junior subordinated debentures. Any exercise of this right could cause the market price of the preferred securities to decline. Accordingly, the preferred securities that you purchase, whether in this offering or in the secondary market, or the junior subordinated debentures that you may receive on liquidation of the trust, may trade at a discount to the price that you paid for the preferred securities.

If you sell your preferred securities before the record date for the payment of distributions, you will not receive payment of a distribution for the period before the disposition. However, you will be required to include accrued but unpaid interest on the junior subordinated debentures through the date of disposition as ordinary income for United States federal income tax purposes. In addition, if BGE has, at any time, deferred interest payments on the junior subordinated debentures, you will be required to add the amount of the accrued but unpaid interest to your tax basis in the preferred securities. Your increased tax basis in the preferred securities will increase the amount of any capital loss or decrease the amount of any capital gain that you may have otherwise realized on the sale. You cannot offset ordinary income against capital losses for United States federal income tax purposes, except in a few limited cases. For more information on the tax consequences of selling your preferred securities before the record date for payment of distributions, see "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES—Sale or Redemption of Preferred Securities."

Payments on preferred securities are dependent on BGE's payments on junior subordinated debentures, and if BGE fails to make a payment it will adversely affect you.

The ability of the trust to timely pay distributions on the preferred securities and to pay the liquidation amount is dependent solely upon BGE's making the related payments on the junior subordinated debentures when due.

If BGE defaults on its obligation to pay principal of or interest on the junior subordinated debentures, the trust will not have sufficient funds to pay distributions or the liquidation amount. As a result, you will not be able to rely upon the Preferred Securities Guarantee for payment of these amounts. Instead, you or the Property Trustee may sue BGE directly to enforce the rights of the trust under the junior subordinated debentures, as described under "RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES HELD BY THE TRUST."

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You will have no protection under the terms of the preferred securities or the Indenture against any sudden and dramatic decline in BGE's credit quality resulting from any highly leveraged transaction, takeover, merger, recapitalization or similar restructuring or change in control.

Distribution payments on the preferred securities could be deferred for substantial periods, but you would continue to recognize income for United States federal income tax purposes.

As long as there is no event of default under the Indenture that has occurred but has not been cured, BGE will have the right, one or more times, to defer interest payments on the junior subordinated debentures for up to 20 consecutive quarters, but not beyond the Maturity Date. There is no limit on the number of deferral periods that BGE may impose. Deferral periods are periods during which BGE defers interest payments on the junior subordinated debentures.

If BGE defers interest payments on the junior subordinated debentures, the trust also will defer payment of distributions on the preferred securities. During a deferral period, you will still accumulate distributions at an annual rate of    % of the liquidation amount of the preferred securities, and you will accumulate additional distributions on the deferred distributions at the same rate compounded quarterly (to the extent permitted by law). If BGE exercises its right to defer interest payments on the junior subordinated debentures, the preferred securities may trade at a price that does not fully reflect the value of accumulated but unpaid distributions on the preferred securities. If you sell your preferred securities during a deferral period, you may not receive the same return on your investment as someone else who continues to hold the preferred securities. For more information on the deferral of distributions on the preferred securities during a deferral period, see "DESCRIPTION OF THE PREFERRED SECURITIES—Distributions" and "—Deferral of Distribution."

If BGE exercises its option to defer interest on the junior subordinated debentures, you will be required to accrue interest income for United States federal income tax purposes in respect of your pro rata share of the junior subordinated debentures held by the trust, even if you are a cash basis taxpayer. As a result, you will be required to include that accrued interest income in your gross income for United States federal income tax purposes, before you actually receive any cash distributions relating to that income. You also will not receive the cash related to any accrued and unpaid interest from the trust if you sell the preferred securities before the end of any deferral period. For more information on the tax consequences of interest deferral, see "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES—Interest Income and Original Issue Discount" and "—Sale or Redemption of Preferred Securities."

BGE may redeem the junior subordinated debentures at its option on or after                        , 2008 or if a "Tax Event," or an "Investment Company Event" occurs, you may not be able to reinvest your principal at the same or a higher rate of return.

BGE will have an option to redeem the junior subordinated debentures—and therefore cause the trust to redeem a Like Amount of the common and preferred securities—at any time on or after                        , 2008. You should assume that BGE will exercise its redemption option if BGE is able to refinance at a lower interest rate or it is otherwise in BGE's interest to redeem the junior subordinated debentures at that time. Consequently, your preferred securities could be redeemed as early as 5 years after the issue date.

In addition, if a Tax Event or an Investment Company Event, as further described below, occurs, BGE has the right to redeem the junior subordinated debentures in whole, but not in part, within 90 days. If BGE redeems the junior subordinated debentures, the trust will be required to redeem the preferred securities. Thus, it is possible that the preferred securities could be redeemed before                        , 2043.

A Tax Event, generally described, could result from amendments or changes in U.S. federal income tax laws or regulations, including those

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arising from judicial decisions or administrative pronouncements, that could have adverse tax consequences for BGE or the trust in connection with the junior subordinated debentures or the preferred securities.

An Investment Company Event could result from changes in laws or regulations that could cause the trust to be deemed an "investment company" under the Investment Company Act of 1940, which could have adverse consequences for BGE or the trust.

The trust may distribute the junior subordinated debentures in exchange for the preferred securities, which could affect the market price and could be a taxable event in certain circumstances.

The trust will dissolve upon the occurrence of certain events described under "DESCRIPTION OF THE PREFFERRED SECURITIES—Liquidation Distribution Upon Dissolution," including if BGE elects to terminate the trust. After BGE terminates the trust, subject to the terms of the Declaration and after satisfying all liabilities to the trust's creditors, the Property Trustee may distribute the junior subordinated debentures to the holders of the common and preferred securities in exchange for a Like Amount of those securities. BGE must use its best efforts to list the junior subordinated debentures on the New York Stock Exchange or any other stock exchange or automated quotation system on which the preferred securities are then listed or quoted if the junior subordinated debentures are distributed to holders. However, BGE can give no assurance that the junior subordinated debentures will be approved for listing or that a trading market will exist for the junior subordinated debentures. For further information on this exchange, see "DESCRIPTION OF THE PREFERRED SECURITIES—Liquidation Distribution Upon Dissolution."

BGE cannot predict the market prices for the junior subordinated debentures that may be distributed. Accordingly, the junior subordinated debentures that you receive upon an exchange distribution, or the preferred securities that you hold pending a distribution, may trade at a discount to the price that you paid for the preferred securities.

Under current United States federal income tax law and assuming, as BGE expects, that the trust will not be classified as an association taxable as a corporation, you would not be taxed if the Property Trustee distributed the junior subordinated debentures to you upon liquidation of the trust. However, if a tax event were to occur and the trust became subject to United States federal tax with respect to income received or accrued on the junior subordinated debentures, the distribution of junior subordinated debentures to United States holders by the trust would be taxable to the trust and to each United States holder. For more information on the tax consequences of an exchange, see "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES—Distribution of the Junior Subordinated Debentures to Holders of the Preferred Securities."

BGE has made only limited covenants in the Indenture and the Declaration, which may not protect your investment in the event BGE experiences significant adverse changes in its financial condition or results of operations.

The Indenture governing the junior subordinated debentures and the Declaration governing the trust do not require BGE to maintain any financial ratios or specified levels of net worth, revenues, income, cash flow or liquidity, and therefore do not protect holders of the junior subordinated debentures or the preferred securities in the event BGE experiences significant adverse changes in its financial condition or results of operations. Neither the Indenture nor the Declaration limits BGE's ability or the ability of any subsidiary to incur additional indebtedness that is senior in right of payment to the junior subordinated debentures. Therefore, you should not consider the provisions of these governing instruments as a significant factor in evaluating whether BGE will be able to comply with its obligations under the junior subordinated debentures or the Preferred Securities Guarantee.

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As a holder of preferred securities you have limited voting rights, and BGE can amend the Declaration to change the terms and conditions of the administration, operation and management of the trust without your consent.

Holders of preferred securities will have limited voting rights relating principally to the amendment of the Declaration and the Preferred Securities Guarantee. Holders of preferred securities will not be entitled to appoint, remove or replace the Property Trustee or the Delaware Trustee except upon the occurrence of the events described in "DESCRIPTION OF THE PREFERRED SECURITIES—Removal of Trustees."

In general, BGE can replace or remove any of the trustees of the trust. In addition, BGE generally may amend the Declaration and the Indenture without the consent of the holders of preferred securities. For further information on these provisions, see "DESCRIPTION OF THE PREFERRED SECURITIES—Voting Rights; Amendment of the Declaration" and "—Removal of Trustees."

There has been no prior market for the preferred securities, and the market price may decline after you invest.

Before this offering, there has been no market for the preferred securities. Although the trust will apply to list the preferred securities on the New York Stock Exchange, a listing does not guarantee that a trading market for the preferred securities will develop. If a trading market for the preferred securities does develop, a listing will not guarantee the depth of that market and your ability to easily sell your preferred securities.

RISKS RELATING TO BGE

BGE may not be able to recover increases in its operating, maintenance and capital costs with respect to its delivery service through a rate increase due to frozen electric base rates.

BGE is required to offer electricity at frozen rates to its residential customers through June 30, 2006 and to certain commercial and industrial customers through June 30, 2004. It is possible that BGE will experience an increase in its operating, maintenance and capital costs with respect to delivery services during this time, particularly in the event of an unforeseen circumstance, such as the occurrence of a catastrophic storm which causes damage to BGE's systems that exceeds the amounts covered by insurance maintained by BGE. Although BGE is allowed, under certain circumstances, to apply for recovery of certain costs resulting from catastrophic events through electric rate increases, there can be no assurance that relief from frozen base rates would be permitted by the Maryland PSC.

BGE is required to provide standard offer service at frozen rates to electric customers in Maryland and if its suppliers fail to provide service, BGE may not be able to obtain power at prices to meet its obligation at or below the amount it will receive from the frozen rates.

As a result of the 1999 Maryland electric restructuring statute, BGE's electric customers are able to choose their supplier. Electric suppliers compete for retail customers with BGE. BGE transmits and delivers the power to all electric customers. BGE's supply obligations vary by customer type for a transition period ending on June 30, 2006. To the extent customers do not choose a supplier, BGE is required to supply the power at frozen rates through the transition period. BGE refers to this obligation to provide power as "standard offer service." If BGE is required to pay more for power than the amount it can recover in the fixed rates, it could have a materially adverse impact on the results of operations of BGE.

BGE has entered into power supply contracts with an affiliate, Constellation Power Source, Inc. to meet its fixed-price standard offer service obligations through June 30, 2006. BGE shall seek bids for supply to meet its market-based standard offer service obligations. If BGE suppliers are unable to meet their obligations under their contracts, BGE could be required to obtain power at prices that may be higher than the amount it can charge customers.

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BGE is subject to extensive regulation. Changes in regulations could have a material adverse impact on BGE's results of operations.

BGE is subject to extensive regulation from both the State of Maryland and the federal government, particularly FERC. Regulation includes rate regulation by the Maryland PSC and FERC, and state and federal environmental regulation. BGE cannot predict the future development of regulations or the ultimate effect that a changing regulatory environment will have on its business.

For example, in July 2002, the FERC issued a proposed rulemaking regarding implementation of a standard market design for wholesale electric markets. In April 2003, FERC issued a report that significantly revised its position from July 2002. In the report, FERC indicated that it will leave, relatively unmodified, existing practices in place, will allow flexibility among regions of the country, phased-in implementation of the final rule, and provide an increased deference to states' concerns.

As another example, BGE cannot assure you that Maryland's 1999 electric restructuring law will not be changed in the future. In addition, BGE is currently involved in proceedings with the Maryland PSC that address BGE's obligations to provide "standard offer service" to commercial and industrial customers after June 30, 2004 and to residential customers after June 30, 2006. Since these proceedings are ongoing, there is no assurance as to the effect the final settlement will have on BGE's operations or revenues.

BGE may have liability associated with the generation assets it transferred to Constellation Energy subsidiaries.

As a result of Maryland's 1999 electric restructuring law, on July 1, 2000, BGE transferred all of its generating assets and related liabilities to other Constellation Energy subsidiaries. Those subsidiaries assumed all the liabilities related to those assets and also the obligations under tax-exempt debt relating to the transferred generation assets. Currently, approximately $270 million of tax-exempt debt remains outstanding. This debt has varying maturities through 2027. These subsidiaries have agreed to comply with the covenants relating to the debt and to pay the interest and principal on this debt when due. However, BGE has not been released from any of the payment or covenant obligations with respect to the assumed debt, and if any of these subsidiaries default on their payment or covenant obligations relating to the assumed debt, and that debt were declared due and payable, BGE would be liable to pay the amounts owed as a result of the default. This obligation would be senior to BGE's obligations with respect to the preferred securities, the junior subordinated debentures and the Preferred Securities Guarantee. In addition, BGE is still a named party in several claims relating to the transferred assets, including numerous asbestos claims. If BGE were determined to have liability in regard to those claims, BGE would look to those subsidiaries to pay those claims on BGE's behalf. Failure by such subsidiaries to pay such claims could expose BGE to liability that could be material.

BGE participates in a cash pool sponsored by Constellation Energy for the benefit of all of its subsidiaries. BGE is dependent on Constellation Energy or its other subsidiaries to repay any cash Constellation Energy's other subsidiaries may borrow that BGE may have invested into the cash pool.

Constellation Energy sponsors a cash pool for the benefit of all of its subsidiaries to manage their cash needs. Subsidiaries invest excess cash into the pool or borrow cash invested into the pool as needed. At times, BGE may invest excess cash into the pool. If that cash is borrowed by other subsidiaries of Constellation Energy, then BGE is dependent on Constellation Energy or the subsidiary that borrowed the cash to repay it. Failure by Constellation Energy or such subsidiary to timely repay any cash borrowed could have a material adverse effect on BGE.

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Unexpected weather conditions, such as warmer winters and cooler summers than forecasted, as well as the other factors listed in "FORWARD-LOOKING STATEMENTS" below, may adversely affect BGE's results of operations.

The demand for electricity by BGE customers is directly affected by weather conditions. Generally, demand for electricity is seasonal, peaking in winter and summer. Typically, when winters are warmer than expected and summers are cooler than expected, demand for electricity is lower, resulting in less electric consumption than forecasted. These and other unexpected weather conditions and other factors listed in "FORWARD-LOOKING STATEMENTS" below may adversely affect BGE's revenues and results of operations.

A downgrade in BGE's credit ratings could negatively affect the ability to access capital.

If any of BGE's credit ratings were to be downgraded, especially below investment grade, BGE's ability to access the capital markets, including the commercial paper markets, could be hindered, and its borrowing costs would increase. Some of the factors that affect credit ratings are cash flows, liquidity and the amount of debt as a component of total capitalization.

BGE may be liable for significant environmental costs.

BGE may be liable for costs of environmental remediation, including costs resulting from generation assets transferred to affiliated entities. The actual cost of compliance and remediation could be significantly higher than any recorded liabilities.

FORWARD-LOOKING STATEMENTS

This prospectus and the documents BGE has filed with the SEC, which BGE has referenced under "WHERE YOU CAN FIND MORE INFORMATION," contain statements that are considered forward-looking statements within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this prospectus that address activities, events or developments that BGE expects or anticipates will or may occur in the future, including such matters as BGE's projections, future expenditures, business strategy, competitive strengths, goals, expansion, market and industry developments and the growth of its businesses and operations, are forward-looking statements. Sometimes these statements will contain words such as "believes," "expects," "intends," "plans," and other similar words. These statements are based on assumptions and analyses made by BGE in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors BGE believes are appropriate under the circumstances. These statements are not guarantees of BGE's future performance and are subject to risks, uncertainties, and other important factors that could cause BGE's actual performance or achievements to be materially different from those BGE projects. These risks, uncertainties, and factors include, but are not limited to:

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the risk factors discussed in this prospectus;

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general and local economic, market or business conditions;

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fluctuations in demand for electricity, capacity and ancillary services in the markets in which BGE operates;

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uncertain obligations due to customers' right to choose suppliers;

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changes in laws or regulations that are applicable to BGE;

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environmental constraints on construction and operation;

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the timing and extent of changes in commodity prices and volatilities for energy including coal, natural gas, oil, electricity and emission allowances,

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the timing and extent of deregulation of, and competition in, the energy markets in North America, and the rules and regulations adopted on a transitional basis in those markets,

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the conditions of the capital markets, interest rates, availability of credit, liquidity, and general conditions, as well

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as BGE's ability to maintain its current credit ratings,

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the effectiveness of BGE's risk management policies and procedures and the ability of their counterparties to satisfy their financial and performance commitments,

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the liquidity and competitiveness of wholesale markets for energy commodities,

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operational factors affecting the start-up or ongoing commercial operations of Constellation's generating facilities (including nuclear facilities) and BGE's transmission and distribution facilities, including catastrophic weather related damages, unscheduled outages or repairs, unanticipated changes in fuel costs or availability, unavailability of gas transportation or electric transmission services, workforce issues, terrorism, liabilities associated with catastrophic events, and other events beyond BGE's control,

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the inability of BGE to recover all its costs associated with providing electric retail customers service during the electric rate freeze period,

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the effect of weather and general economic and business conditions on energy supply, demand, and prices,

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regulatory or legislative developments that affect deregulation, transmission or distribution rates and revenues, demand for energy, or increase costs, including costs related to nuclear power plants, safety, or environmental compliance,

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the actual outcome of uncertainties associated with assumptions and estimates using judgment when applying critical accounting policies and preparing financial statements.

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changes in accounting principles or practices,

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losses on the sale or write down of assets due to impairment events or changes in management intent with regard to either holding or selling certain assets, and

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cost and other effects of legal and administrative proceedings that may not be covered by insurance, including environmental liabilities.

Consequently, all of the forward-looking statements made in this prospectus are qualified by these cautionary statements and BGE cannot assure you that the results or developments anticipated by it will be realized or, even if realized, will have the expected consequences to or effects on BGE or its business prospects, financial condition or results of operations. Given these uncertainties, you should not place undue reliance on these forward-looking statements in making your investment decision. BGE expressly disclaims any obligation or undertaking to release publicly any updates or revisions to these forward-looking statements to reflect events or circumstances that occur or arise or are anticipated to occur or arise after the date of this prospectus. In making an investment decision regarding the securities described in this prospectus, BGE is not making, and you should not infer, any representation about the likely existence of any particular future set of facts or circumstances.

USE OF PROCEEDS

The net proceeds from the sale of the debt securities will be used for general corporate purposes relating to BGE's utility business which may include the repayment of long-term debt, including its 7.16% Deferrable Interest Subordinated Debentures due June 30, 2038, underlying its outstanding 7.16% Trust Originated Preferred Securities. If BGE does not use the net proceeds immediately, BGE may temporarily invest them in short-term, interest-bearing obligations. The trust will invest all proceeds received from any sale of its preferred and common securities in BGE's junior subordinated debentures in connection with any offering of preferred and common securities. BGE will use the net proceeds from the sale of the junior subordinated debentures to the trust for the purpose described above. BGE will not receive any proceeds from the sale of any shares of common securities by any selling stockholder.

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ACCOUNTING TREATMENT

For financial reporting purposes, the trust will be treated as a subsidiary of BGE, and the accounts of the trust will be included in BGE's financial statements. The preferred securities will be presented as a separate liability line item in BGE's balance sheet entitled "Company obligated mandatorily redeemable trust preferred securities of subsidiary trust holding solely    % debentures of BGE due                        , 2043," and disclosures concerning the preferred securities, the Preferred Securities Guarantee and the junior subordinated debentures will be included in the notes to the financial statements. For financial reporting purposes, BGE will record distributions paid on the preferred securities as interest expense.

DESCRIPTION OF SECURITIES

The following is a summary of the terms of the securities offered by this prospectus. The sections "DESCRIPTION OF THE PREFERRED SECURITIES," "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES", "DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE" and "RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES HELD BY THE TRUST" contain a description of the material terms of the preferred securities but is not complete. BGE refers you to the Indenture and the forms of Declaration, Second Supplemental Indenture and Preferred Securities Guarantee that are exhibits to the registration statement of which this prospectus forms a part. Capitalized terms used in this prospectus that are not defined will have the meanings given them in these documents.

Pursuant to the terms of the Declaration, the trustees on behalf of the trust will issue the preferred securities and the common securities. The preferred securities will represent preferred beneficial interests in the trust. As a holder of preferred securities you will be entitled to a preference in some circumstances with respect to distributions and amounts payable on redemption or liquidation over the common securities, as well as other benefits as described in the Declaration or made a part of the Declaration by the Trust Indenture Act or the Delaware Statutory Trust Act. The terms of the preferred securities will mirror the terms of the junior subordinated debentures held by the trust.

The preferred securities will rank on a parity, and payments will be made ratably with the common securities, except as described under "DESCRIPTION OF THE PREFERRED SECURITIES—Subordination of Common Securities." Legal title to the junior subordinated debentures will be held by the Property Trustee in trust for the benefit of the holders of the preferred securities and common securities. The Preferred Securities Guarantee will be a guarantee on a subordinated basis with respect to the common and preferred securities. The Preferred Securities Guarantee will not, however, guarantee payment of distributions or amounts payable on redemption or liquidation of the preferred securities when the trust does not have funds on hand available to make those payments. For more information on the payments guaranteed by the Preferred Securities Guarantee, see "DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE."

BGE and its affiliates conduct banking transactions with The Bank of New York which is a trustee under the Declaration, Indenture and Preferred Securities Guarantee.

DESCRIPTION OF THE PREFERRED SECURITIES

General

The Declaration authorizes the Administrative Trustee to issue preferred and common securities on behalf of the trust. The proceeds from the sale of the preferred and common securities will be used by the trust to purchase a series of junior subordinated debentures. The junior subordinated debentures issued by BGE will be held in trust by the Property Trustee for the benefit of the holders of the preferred and common securities. The assets of the trust available for distribution to the holders of its preferred securities will be limited to payments

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from BGE under the junior subordinated debentures. If BGE fails to make a payment on such junior subordinated debentures, the trust will not have sufficient funds to make related payments, including distributions, on the preferred securities.

The Preferred Securities Guarantee, when taken together with BGE's obligations under the junior subordinated debentures and the Indenture, and BGE's obligations under the Declaration, including obligations to pay all costs, expenses, debts and liabilities of the trust (other than with respect to the preferred and common securities and with respect to expenses that give rise to Additional Interest, which shall be paid by the Property Trustee upon receipt of Additional Interest from BGE), will provide a full and unconditional guarantee of amounts due on the preferred securities issued by the trust. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under the preferred securities. See "RELATIONSHIP AMONG PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES HELD BY THE TRUST."

The Declaration will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (Trust Indenture Act). The Property Trustee will act as indenture trustee for the preferred securities to be issued by the trust, in order to comply with the provisions of the Trust Indenture Act.

Distributions

The preferred securities represent undivided beneficial interests in the assets of the trust. Distributions on the preferred securities are cumulative and will accumulate from the date they are first issued at the annual rate of            % of the $25 per preferred security liquidation amount. Distributions will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning                        , 2003. Distributions not paid when due will accumulate additional distributions, compounded quarterly, at the annual rate of            % on the amount of unpaid distributions. The term "distributions" includes any of these additional distributions. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and for any period shorter than a full quarterly period, shall be computed based on the actual number of days elapsed per 90-day quarter.

If distributions are payable on a date that is not a Business Day (as defined at the end of this paragraph), payment will be made on the next Business Day (and without any interest or other payment in respect for any delay). However, if the next Business Day is in the next calendar year, payment of distributions will be made on the immediately preceding Business Day. A "Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions in The City of New York or the State of Maryland are authorized or obligated by law, regulation or executive order to close.

Deferral of Distributions

BGE may at any time and from time to time, so long as no event of default has occurred and is continuing under the junior subordinated debentures, defer interest payments for up to 20 consecutive quarters. However, no deferral period will extend beyond the maturity date of the junior subordinated debentures. The trust will similarly defer quarterly distributions on the preferred securities during any deferral period, but the amount of distributions due to you would continue to accumulate at the rate stated above, compounded quarterly to the extent permitted by law.

BGE has no current intention to exercise its right to defer interest payments on the junior subordinated debentures. If BGE defers interest payments on the junior subordinated debentures, it would be subject to certain restrictions relating to the payment of dividends on or purchases of its capital stock and payments on its debt securities ranking equal with or junior to the

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junior subordinated debentures. See "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Option to Defer Interest Payments on the Junior Subordinated Debentures".

Payment of Distributions

Distributions on the preferred securities will be payable to holders named on the securities register of the trust on the relevant record date. Payments on the preferred securities represented by a global security will be made in immediately available funds to DTC, the depository for the preferred securities.

As long as the preferred securities are in book-entry only form, the record date for the payment of distributions will be one Business Day prior to the distribution date. If the preferred securities are ever issued in certificated form, the record date for the payment of distributions will be the 15th day of the last month of each calendar quarter, whether or not a Business Day.

Redemption

When BGE pays the junior subordinated debentures at maturity on                        , 2043 or upon early redemption, the Property Trustee will use the proceeds to redeem a Like Amount of the preferred and common securities. The Property Trustee will give you at least 30 days, but not more than 60 days, notice before the redemption date. The preferred and (unless there is a default under the junior subordinated debentures) common securities will be redeemed at a price equal to the liquidation amount of $25 per security plus accrued and unpaid distributions to the date of redemption (the "Redemption Price").

If less than all the outstanding preferred and common securities are redeemed, then the aggregate liquidation amount of preferred and common securities to be redeemed will be allocated 3% to the common securities holders, subject to the exceptions as described in "DESCRIPTION OF THE PREFERRED SECURITIES—Subordination of Common Securities" and 97% to the preferred securities holders. The preferred and (unless there is a default under the junior subordinated debentures) common securities to be redeemed will be selected by the Property Trustee by a method determined to be fair and appropriate by it subject to the subordination provisions of the common securities provided that, so long as the preferred securities are in book-entry form, such selection shall be made in accordance with the customary procedures for the Clearing Agency for such book-entry preferred securities.

"Like Amount" means (a) with respect to a redemption of the preferred and common securities, the preferred and common securities having an aggregate liquidation amount equal to the principal amount of junior subordinated debentures to be paid in accordance with the Indenture, (b) with respect to a distribution of junior subordinated debentures to holders of preferred and common securities in connection with a dissolution and liquidation of the trust, junior subordinated debentures having a principal amount equal to the aggregate liquidation amount of the preferred and common securities in exchange for which such junior subordinated debentures are distributed and (c) with respect to any distribution of Additional Amounts to holders of preferred and common securities, junior subordinated debentures having a principal amount equal to the liquidation amount of the preferred and common securities in respect of which such distribution is made.

"Liquidation Amount" means the stated amount of $25 per security.

Special Event Redemption

If a Tax Event or an Investment Company Event, as BGE defines below (each a Special Event) has occurred and is continuing, BGE may redeem the junior subordinated debentures, in whole but not in part. This will cause a mandatory redemption of the preferred and common securities, in whole but not in part, at the Redemption Price within 90 days following the occurrence of the Special Event.

"Tax Event" means that BGE will have received an opinion of counsel (which may be regular counsel to BGE or an affiliate but not an employee and which must be reasonably

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acceptable to the Property Trustee) experienced in such matters to the effect that, as a result of any

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amendment to, or change (including any announced prospective change) in, the laws (or any regulations under those laws) of the United States or any political subdivision or taxing authority affecting taxation; or



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interpretation or application of such laws or regulations by any court, governmental agency or regulatory authority,

in each case, which amendment or change is enacted, promulgated, issued or announced or which interpretation or application is issued or announced on or after the date of this prospectus, there is more than an insubstantial risk that:

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the trust is, or will be within 90 days of the date of the opinion of counsel, subject to United States federal income tax with respect to interest received on the junior subordinated debentures;



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interest payable by BGE to the trust on the junior subordinated debentures is not, or will not be within 90 days of the date of the opinion of counsel, deductible, in whole or in part, for United States federal income tax purposes; or



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the trust is, or will be within 90 days of the date of the opinion of counsel, subject to more than a minimal amount of other taxes, duties, assessments or other governmental charges.

"Investment Company Event" means the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority to the effect that the trust is or will be considered an "investment company" required to be registered under the Investment Company Act of 1940 and which change becomes effective on or after the date of this prospectus.

Redemption Procedures

The Property Trustee will give you at least 30 days but not more than 60 days prior notice of any redemption of preferred and common securities. To the extent funds are available for payment the Property Trustee will irrevocably deposit with DTC funds sufficient to pay the Redemption Price. Also at that time, the Property Trustee will give DTC irrevocable instructions and authority to pay the Redemption Price to the holders of the preferred securities as further described under "BOOK-ENTRY ISSUANCE". If the preferred securities are no longer in book-entry form, the Property Trustee will, to the extent funds are available, irrevocably deposit with the paying agent sufficient funds to pay the Redemption Price for the preferred and common securities being redeemed. The Property Trustee will also give the paying agent irrevocable instructions and authority to pay the Redemption Price to the preferred and common securities holders upon surrender of their securities. Distributions to be paid on or prior to the redemption date for any securities called for redemption will be payable to the holders on the record dates for the related dates of distributions.

Once notice of redemption is given and funds are irrevocably deposited, all rights of the holders of the preferred and common securities called for redemption will cease. The preferred and common securities holders will receive the Redemption Price to the date of redemption and the securities will no longer be outstanding.

If any redemption date is not a Business Day, then the Redemption Price to the date of redemption will be payable on the next Business Day (and without any interest or other payment in respect of any such delay), except that if the Business Day is in the next calendar year, the Redemption Price will be payable on the preceding Business Day, in each case with the same force and effect as if made on the redemption date.

If payment of the Redemption Price for any preferred and common securities called for redemption is improperly withheld or refused and not paid either by the trust or by BGE pursuant to the Preferred Securities Guarantee,

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distributions on the preferred and common securities will continue to accumulate at the applicable rate from the original redemption date to the date of payment. In this case, the actual payment date will be the redemption date for purposes of calculating the Redemption Price.

BGE or its subsidiaries may at any time and from time to time purchase outstanding preferred securities by tender, in the open market, or by private agreement.

Subordination of Common Securities

Payment of distributions on, and the redemption amount of, the preferred and common securities will be made pro-rata based on the aggregate liquidation amounts of the preferred and common securities. However, if a Debenture Event of Default has occurred and is continuing, no payments may be made on the common securities unless all unpaid amounts on the preferred securities have been provided for or paid in full.

If a Debenture Event of Default has occurred and is continuing, the common securities holder will be deemed to have waived any right to act with respect to the Debenture Event of Default or any related Declaration Event of Default until such Event of Default has been cured, waived or eliminated. Until any Declaration Events of Default with respect to the preferred securities have been cured, waived or eliminated, the Property Trustee will act solely on the behalf of holders (other than BGE) of the preferred securities and only such holders will have the right to direct the Property Trustee to act on such holders' behalf.

Liquidation Distribution Upon Dissolution

The Declaration states that the trust shall be dissolved on the earliest to occur of:

•

the expiration of the term of the trust;



•

the occurrence of a Bankruptcy Event in respect of a bankruptcy, dissolution or liquidation of BGE or an acceleration of the maturity of the junior subordinated debentures;



•

the distribution of the junior subordinated debentures directly to the holders of the preferred and common securities, at the optional election of BGE. For this distribution, BGE must give at least 30 days written notice prior to distribution to the trustees;



•

the redemption of all of the common and preferred securities; and



•

a court order for the dissolution of the trust is entered.

If dissolution of the trust occurs as described in the second or fifth bullets above, the trustees shall liquidate the trust as quickly as possible. If a dissolution of the trust occurs as described in the third bullet above, the trustees shall liquidate the trust on the date of distribution of the junior subordinated debentures specified by BGE in its notice delivered pursuant to the Declaration. After paying all amounts owed to creditors, the trustees will distribute to the holders of the preferred and common securities either:

1)

a Like Amount of junior subordinated debentures; or

2)

if the distribution of the junior subordinated debentures is determined by the Property Trustee not to be practical, cash equal to the aggregate liquidation amount per preferred and common security, plus accumulated and unpaid distributions thereon to the date of payment.

If the trust cannot pay the full amount due on its preferred and common securities because insufficient assets are available for payment, then the amounts payable by the trust on its preferred and common securities shall be paid pro-rata, except that if a Debenture Event of Default has occurred and is continuing, the total amounts due on the preferred securities shall be paid before any distribution on the common securities.

Event of Default

Any one of the following is a "Declaration Event of Default" under the Declaration with respect to the preferred securities (whatever the reason for such Declaration Event of Default and

23

whether it shall be voluntary or involuntary) or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body:

        (a)   the occurrence of a Debenture Event of Default;

        (b)   default by the trust in the payment of any distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or

        (c)   default by the trust in the payment of the Redemption Price of any preferred or common security when it becomes due and payable; or

        (d)   default in the performance, or breach, in any material respect, of any covenant or warranty of the trustees in the Declaration (other than those specified in clause (b) or (c) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the trustees and to BGE by the holders of at least 25% in aggregate liquidation amount of the Outstanding Preferred Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under the Declaration; or

        (e)   the occurrence of certain events of bankruptcy or insolvency with respect to the Property Trustee and the failure of BGE to appoint a successor Property Trustee within 90 days thereof.

Within 90 days after the occurrence of a Declaration Event of Default known to the Property Trustee, the Property Trustee will notify the holders of the preferred and common securities, the Administrative Trustee and BGE, unless the Declaration Event of Default has been cured or waived.

BGE and the Administrative Trustee must file annually with the Property Trustee a certificate stating whether or not they are in compliance with all the applicable conditions and covenants under the Declaration.

If the Property Trustee fails to enforce its rights under the Declaration or the Indenture to the fullest extent permitted by law and subject to the terms of the Declaration and the Indenture, any holder of the preferred securities may sue BGE, or seek other remedies, to enforce the Property Trustee's rights under the Declaration or the Indenture with respect to junior subordinated debentures having a principal amount equal to the liquidation amount of the preferred securities of such holder without first instituting a legal proceeding against the Property Trustee or any other person.

If any action under the Indenture is entitled to be taken by the holders of at least a specified percentage of the principal amount of the junior subordinated debentures, holders of the same percentage of the liquidation amount of preferred securities may take such action if it is not taken by the Property Trustee. However, if BGE fails to pay principal, premium or interest on the junior subordinated debentures, then a holder of preferred securities may sue BGE, or seek other remedies, to collect its pro-rata share of payments owed.

Removal of Trustees

Unless a Debenture Event of Default has occurred and is continuing, any trustee may be removed and replaced at any time by the holder of the common securities. If a Debenture Event of Default has occurred and is continuing, the Property Trustee and the Delaware Trustee may be removed and replaced only by the holders of at least a Majority in liquidation amount of the preferred securities then Outstanding. Only the holder of the common securities has the right to remove or replace the Administrative Trustee. No resignation or removal of any of the trustees and no appointment of a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the Declaration.

Co-Trustees and Separate Property Trustee

Unless a Declaration Event of Default has occurred and is continuing, the holder of the common securities and the Administrative Trustee shall have the power:

•

to appoint one or more persons approved by the Property Trustee either to act as

24

co-trustee, jointly with the Property Trustee, of all or any part of the trust property, or to act as separate trustee of any trust property, in either case with the powers as may be provided in the instrument of appointment; and

•

to vest in such person(s) in such capacity any property, title, right or power deemed necessary or desirable, subject to the provisions of the Declaration.

If a Debenture Event of Default has occurred and is continuing, only the Property Trustee may appoint a co-trustee or separate property trustee.

Merger or Consolidation of Trustees

If any of the trustees merge, convert, or consolidate with or into another entity or sells its trust operations to another entity, the new entity shall automatically be the successor of such trustee under the Declaration, provided such corporation or other entity shall otherwise be qualified and eligible to be a trustee.

Mergers, Consolidations, Amalgamations or Replacements of the Trust

The trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease all or substantially all of its properties and assets to any other entity (Merger Event), except as described below. The trust may, at BGE's request, with the consent of the Administrative Trustee and without the consent of the holders of its preferred securities, merge with or into consolidate, amalgamate or be replaced by another trust provided that:

•

the successor entity either (1) expressly assumes all of the obligations of the trust relating to the preferred securities or (2) substitutes for the preferred securities other securities having substantially similar terms to such preferred securities (successor securities) so long as the successor securities rank the same as the preferred securities for distributions and payments upon redemption and liquidation;



•

BGE expressly appoints a trustee of such successor entity who has the same powers and duties as the Property Trustee with respect to the junior subordinated debentures;



•

the successor securities are listed or any successor securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the preferred securities are listed, if any;



•

the Merger Event does not cause the preferred securities or successor securities to be downgraded by any nationally recognized statistical rating agency;



•

the Merger Event does not adversely affect the material rights, preferences and privileges of the holders of the preferred securities or successor securities in any material way;



•

the successor entity has a purpose substantially identical to that of the trust;



•

prior to the Merger Event, BGE has received an opinion of counsel to the effect that (1) such Merger Event does not adversely affect the rights, preferences or privileges of the holders of the preferred securities or any successor securities in any material way, and (2) following the Merger Event, neither the trust nor the successor entity will be required to register as an investment company under the Investment Company Act of 1940, as amended; and



•

BGE owns all of the common securities of the successor entity and guarantees its obligations under the successor securities at least to the extent provided by the Preferred Securities Guarantee and the Declaration.

Notwithstanding the foregoing, the trust shall not, except with the consent of holders of 100% in liquidation amount of the preferred securities engage in a Merger Event that would cause the trust or the successor entity to be classified as an association taxable as a corporation or as other than a grantor trust for United States Federal income tax purposes.

There are no provisions that afford holders of any preferred securities protection in the event of a sudden and dramatic decline in credit quality of BGE resulting from any highly leveraged transaction, takeover, merger,

25

recapitalization or similar restructuring or change in control of BGE. Nor are there any provisions that require the repurchase of any preferred securities upon a change in control of BGE.

Voting Rights; Amendment of Declaration

The holders of the preferred securities have no voting rights except as discussed under "DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE—Amendments and Assignment", and as otherwise required by law and the Declaration.

BGE and the trustees may amend the Declaration without the consent of the holders of the preferred securities:

•

to cure any ambiguity, correct or supplement any provisions in the Declaration that may be inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under the Declaration, which shall not be inconsistent with the other provisions of the Declaration provided that any such amendment does not adversely affect the interests of any holder of preferred or common securities, or



•

to modify, eliminate or add to any provisions of the Declaration to such extent as shall be necessary to ensure that the trust will be classified for United States federal income tax purposes as a grantor trust and as other than an association taxable as a corporation or partnership at all times that any trust securities are outstanding, to ensure that the junior subordinated debentures will be treated as indebtedness of BGE or to ensure that the trust will not be required to register as an "investment company" under the Investment Company Act; provided however, that such amendments do not adversely affect in any material respect the rights of the holders of the preferred securities. Any amendments of the Declaration shall become effective when notice thereof is given to the holders of trust securities.

BGE and the trustees may, with (1) the consent of the holders of at least a Majority in the liquidation amount of all outstanding preferred securities, (2) an opinion of counsel stating that the action taken will not affect the trust's status as a grantor trust for federal income tax purposes, nor will the action affect the characterization of the junior subordinated debentures as debt for federal income tax purposes, and (3) an opinion of counsel stating that the action taken will not affect the trust's exemption from regulation as an investment company under the Investment Company Act of 1940, amend the Declaration for any other reason except to:

•

change the amount, timing or currency or otherwise adversely affect the method of payment of any distribution or liquidation amount on the preferred or common securities;



•

restrict the right of a preferred security holder to institute suit for enforcement of any distribution or liquidation amount on the preferred or common securities;

The changes described above require the approval of each holder of the preferred securities affected.

So long as any junior subordinated debentures are held by the Property Trustee on behalf of the trust, the trustees shall not:

•

direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee or execute any trust or power conferred on the Debenture Trustee with respect to the junior subordinated debentures held by the trust;



•

waive any past default under the Indenture;



•

cancel an acceleration of the principal of the junior subordinated debentures; or



•

agree to any change in the Indenture, where approval is required.

The trustees cannot change anything previously approved by the preferred securities holders without getting those holders to approve the change. The Property Trustee shall notify all preferred securities holders of any notice received from the Debenture Trustee as a result of the trust being the holder of the junior subordinated debentures.

26

In addition, prior to taking any of the foregoing actions, the trustees must obtain an opinion of counsel stating that the trust will continue to be classified as a grantor trust for federal income tax purposes.

As described in the Declaration, the Property Trustee may hold a meeting to have the preferred securities holders vote on a change or have them approve the change by written consent.

If a vote of preferred securities holders is taken or a consent is obtained, any preferred securities that are owned by BGE, the trustees or any affiliate of any of them will, for purposes of the vote or consent, be treated as if they were not outstanding.

Payment and Paying Agency

Payments in respect of preferred securities represented by global certificates shall be made to DTC as described under "BOOK-ENTRY ISSUANCE." If any preferred securities are not represented by global certificates, such payments shall be made by check mailed to the address of the holder entitled thereto as such address shall appear on the Register. The paying agent (the "Paying Agent") shall initially be the Property Trustee and any co-paying agent chosen by the Property Trustee and acceptable to the Administrative Trustee and BGE. Payment will be made at the corporate trust office of the Property Trustee, as Paying Agent, in New York. That office is currently located at 101 Barclay Street, New York, New York 10286. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Property Trustee and BGE. In the event that the Property Trustee shall no longer be the Paying Agent, the Administrative Trustee shall appoint a successor (which shall be a bank or trust company acceptable to the Administrative Trustee and BGE) to act as Paying Agent.

Registrar and Transfer Agent

The Property Trustee will act as the initial registrar and transfer agent for the preferred securities.

Registration of transfers or exchanges of preferred securities will be effected without charge by or on behalf of the trust, but upon payment of any tax or other governmental charges that may be imposed in connection with any transfer or exchange. The trust will not be required to register or cause to be registered the transfer of its preferred securities after such preferred securities have been called for redemption or after the liquidation date.

Information Concerning the Property Trustee

For matters relating to complying with the Trust Indenture Act, the Property Trustee will have all of the duties and responsibilities as an indenture trustee under the Trust Indenture Act. The Property Trustee, other than during the occurrence and continuance of a Declaration Event of Default, undertakes to perform only such duties as are specifically set forth in the Declaration and, upon the occurrence of a Declaration Event of Default, must use the same degree of care and skill in the exercise thereof as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to exercise any of the powers given it by the Declaration at the request of any holder of preferred securities unless it is offered reasonable security or indemnity against the costs, expenses and liabilities that it might incur thereby.

If no Declaration Event of Default has occurred and is continuing, and the Property Trustee is required to decide between alternative courses of action, construe ambiguous provisions in the Declaration or is unsure of the application of any provisions of the Declaration, and the matter is not one on which holders of preferred securities are entitled under the Declaration to vote, then the Property Trustee shall take such action as is directed by BGE and, if not so directed, may take such action as it deems advisable and in the best interests of the holders of the common and preferred securities of the trust and will have no liability except for its own negligent action, negligent failure to act or willful misconduct.

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Miscellaneous

The Administrative Trustee is authorized and directed to conduct the affairs of and to operate the trust in such a way that

•

the trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act or to be classified as an association taxable other than as a grantor trust for federal income tax purposes and;



•

the junior subordinated debentures held by the trust will be treated as indebtedness of BGE for federal income tax purposes.

In this connection, BGE and the Administrative Trustee are authorized to take any action, not inconsistent with applicable law, the certificate of trust or the Declaration, that BGE and the Administrative Trustee determine in their discretion to be necessary or desirable for such purposes.

Holders of the preferred securities have no preemptive or similar rights. The trust may not borrow money, issue debt, execute mortgages or pledge any of its assets.

Except as otherwise provided in the Declaration, any action requiring the consent or vote of the trustees shall be approved by the Administrative Trustee.

Governing Law

The Declaration will be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of law principles.

DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES

The junior subordinated debentures are to be issued under an Indenture, dated as of June 15, 1998, as supplemented from time to time (as so supplemented, the "Indenture"), between BGE and The Bank of New York, as trustee (the "Debenture Trustee"). The Indenture is qualified under the Trust Indenture Act. The junior subordinated debentures will be established as a series of securities under the Indenture pursuant to an indenture supplemental to the Indenture, an officers' certificate or a resolution of BGE's Board of Directors or a committee thereof. The Indenture and form of supplemental indenture are exhibits to the registration statement of which this prospectus forms a part.

General

The junior subordinated debentures will be unsecured and will be subordinate and junior in priority of payment to certain of BGE's other indebtedness which is described under "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Subordination." The Indenture does not limit the amount of junior subordinated debentures which BGE may issue, nor does it limit BGE from issuing any other secured or unsecured debt.

Concurrently with the issuance of the preferred securities, the trust will invest the proceeds of the preferred securities and the consideration BGE pays for the common securities, in the junior subordinated debentures that BGE issues. The junior subordinated debentures initially will be issued in an aggregate principal amount equal to $250,000,000, which is the sum of the maximum aggregate, stated liquidation amounts of the preferred securities and the common securities.

Interest on the Junior Subordinated Debentures

The junior subordinated debentures will bear interest at the annual rate of            % of their principal amount, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an interest payment date) commencing on                        , 2003, to the person in whose name each junior subordinated debenture is registered, subject to certain exceptions, at the close of business on the regular record date for such interest installment, which, in the respect of (i) junior subordinated debentures of which the Property Trustee is the holder and the preferred securities are in book-entry only form or (ii) a global debenture, shall be the close of business on the business day next preceding that interest payment date. Notwithstanding the foregoing sentence, if (i) the junior subordinated

28

debentures are held by the Property Trustee and the preferred securities are no longer in book-entry form or (ii) the junior subordinated debentures are not held by the Property Trustee and not represented by a global debenture, the regular record date for such interest installment which shall be the preceding an interest payment date. It is anticipated that, until any liquidation of the trust, the junior subordinated debentures will be held in the name of the Property Trustee in trust for the benefit of the holders of the common and preferred securities. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and the amount of interest payable for any period shorter than a full quarterly period will be computed on the basis of the actual number of days elapsed in such 90-day period. If any date on which interest is payable on the junior subordinated debentures is not a Business Day, then payment of the interest payable on that date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Accrued interest that is not paid on the interest payment date will bear compounded interest to the extent permitted by law at the annual rate of            % compounded quarterly from the interest payment date ("Compounded Interest"). The term "interest" as used in this prospectus includes quarterly interest payments, interest on quarterly interest payments not paid on the interest payment date and Additional Interest, which are described below under "—Additional Interest BGE May Have to Pay on the Junior Subordinated Debentures."

Subordination of the Junior Subordinated Debentures

The junior subordinated debentures will be unsecured and will rank junior and be subordinate in right of payment to all of BGE's Senior Indebtedness. At June 30, 2003, BGE's Senior Indebtedness totaled approximately $1.95 billion. The junior subordinated debentures will rank on a parity with any other series of junior subordinated debentures that BGE and the trust may issue under the Indenture and will be unsecured and subordinate and junior in right of payment to all of BGE's Senior Indebtedness. The Indenture does not limit BGE's incurrence or issuance of other secured or unsecured debt, including senior indebtedness, whether under the Indenture or any existing or other indenture that BGE may enter into in the future or otherwise. BGE expects from time to time to incur additional indebtedness constituting Senior Indebtedness.

Option to Defer Interest Payments on the Junior Subordinated Debentures

So long as no Debenture Event of Default has occurred and is continuing, BGE has the right under the Indenture at any time or from time to time during the term of the junior subordinated debentures to defer payment of interest on the junior subordinated debentures for a period not exceeding 20 consecutive quarters with respect to each deferral period. No deferral period, however, may extend beyond the maturity date of the junior subordinated debentures, which is                        , and no interest will be due and payable until the end of the deferral period, except upon a redemption of the junior subordinated debentures during a deferral period. At the end of a deferral period, BGE must pay all interest then accrued and unpaid on the junior subordinated debentures, together with Compounded Interest. BGE may pay at any time all or any portion of the interest accrued to that point during a deferral period. During a deferral period, interest will continue to accrue and holders of junior subordinated debentures or holders of preferred securities while that series is outstanding will be required to accrue interest income for United States federal income tax purposes. For more information about the tax consequences of an extension period, see "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES—Interest Income and Original Issue Discount."

During any deferral period, BGE may not:

1.

declare or pay any dividend on, make any distributions, or redeem, purchase, acquire,

29

or make a liquidation payment on any shares of BGE's capital stock or make any related guarantee payment other than:

•

as a result of a reclassification of its capital stock or the exchange or conversion of one class or series of its capital stock for another class or series of its capital stock;



•

any declaration of a dividend in connection with the implementation of a shareholder rights plan, the issuance of stock under any plan in the future, or the redemption or repurchase of any rights pursuant to any plan;



•

purchases of its common stock related to the issuance of stock under any of BGE's benefit plans for its directors, officers or employees;



•

obligations under any BGE dividend reinvestment or stock purchase plan; or



•

purchases of fractional interests in shares of BGE capital stock pursuant to the conversion or exchange provisions of the capital stock or security being converted or exchanged;

2.

make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by BGE which rank equal with or junior to the junior subordinated debentures; and

3.

make any guarantee payments on these securities (other than pursuant to the Preferred Securities Guarantee and any similar guarantee with respect to preferred securities of an entity holding securities issued by BGE under the Indenture).

The restrictions described above in clauses 1, 2 and 3 will also apply if there occurs and is continuing a default under the Indenture or if BGE defaults on its obligations under the Preferred Securities Guarantee.

Prior to the termination of any deferral period, BGE may further extend the interest payment period. However, the deferral period, together with all such previous and further extensions, may not exceed 20 consecutive quarters or extend beyond the maturity date of the junior subordinated debentures. After the termination of any deferral period and the payment of all amounts due, BGE may decide to begin a new deferral period, subject to the above requirements.

If the Property Trustee is the sole holder of the junior subordinated debentures, BGE will give the Administrative Trustee and the Property Trustee notice of its selection of any deferral period one Business Day prior to the earlier of:

•

the next date distributions on the preferred securities would be payable but for such deferral; or



•

the date the trust is required to give notice to the New York Stock Exchange (or other applicable self-regulatory organization) or to holders of the preferred securities of the record date or the date any distribution is payable.

If the Property Trustee is not the sole holder of the junior subordinated debentures, BGE will give the junior subordinated debenture holders notice of its selection of any deferral period at least one Business Day prior to the earlier of:

•

the next regular record date; or



•

the date upon which BGE is required to give notice to the New York Stock Exchange (or other applicable self-regulatory organization) or to holders of the junior subordinated debentures of the record or payment date of any related interest payment.

Additional Interest BGE May Have to Pay on the Junior Subordinated Debentures

If the trust or the Property Trustee is required to pay any additional taxes, duties assessments, or other governmental charges (other than United States federal income taxes attributable to trust property) as a result of a tax event, BGE will pay as Additional Interest on the junior subordinated debentures the amounts required so that the distributions payable by the trust will not be reduced as a result of any additional taxes, duties or other governmental charges.

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Pursuant to the Declaration, BGE, as the holder of the common securities, will agree to pay all debts and other obligations, other than with respect to the preferred securities, and all costs and expenses of the trust. The expenses include costs and expenses relating to the organization of the trust, the fees and expenses of the trustees and the costs and expenses relating to the operation of the trust, but do not include expenses that give rise to Additional Interest.

Distribution of the Junior Subordinated Debentures

If the Property Trustee distributes the junior subordinated debentures to the preferred and common securities holders upon dissolution and liquidation of the trust, the junior subordinated debentures will be issued in denominations of $25 and integral multiples thereof. BGE anticipates that the junior subordinated debentures would be distributed in the form of one or more global securities and DTC, or any successor depository, for the preferred securities, would act as depository for the junior subordinated debentures. It is anticipated that the depositary arrangements for the junior subordinated debentures would be substantially identical to those in effect for the preferred securities.

For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights, redemption and other notices and other matters, see "DESCRIPTION OF THE PREFERRED SECURITIES—Payment and Paying Agency and "BOOK-ENTRY ISSUANCE". If junior subordinated debentures are distributed to the holders of preferred and common securities in exchange for them upon liquidation of the trust, BGE will use its best efforts to list the junior subordinated debentures on the New York Stock Exchange. There can be no assurance as to the market price of any junior subordinated debentures that may be distributed to the holders of preferred and common securities.

The Indenture does not contain any provisions that would provide protection to holders of the junior subordinated debentures against a sudden and dramatic decline in credit quality of BGE resulting from any highly leveraged transaction, takeover, merger, recapitalization or similar restructuring or change in control.

The Indenture allows BGE to merge or consolidate with another company, or to sell all or substantially all of BGE's assets to another company provided that certain conditions are satisfied. If these events occur, the other company will be required to assume BGE's responsibilities relating to the junior subordinated debentures, and BGE will be released from all liabilities and obligations. See "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Consolidation, Merger or Sale" for a more detailed discussion.

The Indenture provides that BGE and the Debenture Trustee may change certain of their obligations or certain of your rights concerning the junior subordinated debentures. However, to change the amount or timing of principal, interest or other payments or redemption terms under the junior subordinated debentures, every holder must consent. See "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Modification of Subordinated Indenture; Waiver" for a more detailed discussion.

Consolidation, Merger or Sale

The Indenture provides that BGE may not consolidate or merge with or into any other corporation (whether or not BGE is the surviving corporation), or sell, assign, transfer or lease all or substantially all of its properties and assets as an entirety or substantially as an entirety to any entity or group of affiliated entities, in one transaction or a series of related transactions, unless:

•

BGE shall be the continuing entity, or the entity (if other than BGE) formed by such consolidation or with which or into which BGE is merged or the entities (or group of affiliated entities) to which all or substantially all of BGE's properties and assets are sold, assigned, transferred or leased is a corporation (or constitute corporations) organized under the laws of the United States or any State or the District of Columbia and expressly

31

assumes, by an indenture supplemental to the Indenture, all of BGE's obligations under the junior subordinated debentures and the Indenture executed and delivered to the Debenture Trustee in form satisfactory to the Debenture Trustee;

•

immediately before and after the transaction no Debenture Event of Default, and no default, under the Indenture shall have occurred and be continuing;



•

BGE shall have delivered to the Debenture Trustee an officer's certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplemental indenture complies with the Indenture and such other conditions as may be established in connection with the issuance of the applicable junior subordinated debentures.

The general provisions of the Indenture do not afford holders of the junior subordinated debentures protection in the event of a highly leveraged transaction, takeover, merger, recapitalization or similar restructuring or change in control or other transaction involving BGE that may adversely affect holders of the junior subordinated debentures.

Events of Default

The following are Debenture Events of Default under the Indenture with respect to any series of junior subordinated debentures issued:

•

failure to pay interest, including Compounded Interest, when due and such failure continues for 30 days and the time for payment has not been extended or deferred;



•

failure to pay the principal (or premium, if any) when due, excluding BGE's failure to deposit money for a redemption at BGE's option;



•

failure to observe or perform any other covenant, warranty or agreement contained in the junior subordinated debentures or in the Indenture (other than a covenant, agreement or warranty included in the Indenture solely for the benefit of another series of junior subordinated debentures), and such failure continues for a period of 60 days after BGE receives notice from the Debenture Trustee or holders of at least 25% in aggregate principal amount of the outstanding junior subordinated debentures of that series; and



•

certain events of bankruptcy, insolvency or reorganization.

The Indenture provides that the Debenture Trustee shall, within 30 days after the occurrence of any default or Debenture Event of Default, give the holders of junior subordinated debentures notice of all uncured defaults or Debenture Events of Default known to it (the term "default" includes any event which after notice or passage of time or both would be a Debenture Event of Default). However, except in the case of a Debenture Event of Default or a default in payment of the principal, premium or interest on any junior subordinated debentures, the Debenture Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or directors or Responsible Officers of the Debenture Trustee in good faith determine that the withholding of notice is in the interest of the holders of junior subordinated debentures.

If a Debenture Event of Default (other than due to events of bankruptcy, insolvency or reorganization) occurs and is continuing, the Debenture Trustee or the holders of at least 25% in aggregate principal amount of the outstanding junior subordinated debentures by notice in writing to BGE (and to the Debenture Trustee if notice is given by such holders), may declare the unpaid principal of and accrued interest, if any, to the date of acceleration on all the outstanding junior subordinated debentures to be due and payable immediately and, upon any such declaration, the junior subordinated debentures shall become immediately due and payable.

If a Debenture Event of Default occurs due to bankruptcy, insolvency or reorganization, all unpaid principal of and accrued interest on the outstanding junior subordinated debentures will become immediately due and payable without any declaration or other act on the part of the Debenture Trustee or any holder of any junior subordinated debenture.

32

The holders of not less than a majority in principal amount of the outstanding junior subordinated debentures (or if such junior subordinated debentures are held by the trust, the holders of at least a Majority in Liquidation Amount of the preferred securities) may waive any default or Debenture Event of Default and its consequences, except:

1)

defaults or Debenture Events of Default regarding payment of principal, premium or interest, including Compounded Interest; or

2)

provisions of the Indenture that cannot be modified without the consent of all the holders of the affected series.

Any such waiver shall cure such default or Debenture Event of Default.

If a Debenture Event of Default with respect to the junior subordinated debentures has occurred and is continuing and such event is attributable to the failure of BGE to pay interest or principal on such junior subordinated debentures on the date such interest or principal is due and payable, a holder of the preferred securities may institute a legal proceeding directly against BGE for enforcement of payment to such holder of the principal of or interest on the junior subordinated debentures, including any Compounded Interest, having a principal amount equal to the aggregate liquidation amount of the preferred securities of such holder (a "Direct Action"). BGE may not amend the Indenture to remove the foregoing right to bring a Direct Action without the prior written consent of the holders of all of the preferred securities outstanding. If the right to bring a Direct Action is removed, the trust may become subject to the reporting obligations under the Exchange Act. BGE shall have the right under the Indenture to set-off any payment made to such holder of the preferred securities by BGE in connection with a Direct Action.

The holders of the preferred securities will not be able to exercise directly any remedies other than those set forth in the preceding paragraph available to the holders of the junior subordinated debentures unless there shall have been a Declaration Event of Default. See "DESCRIPTION OF THE PREFERRED SECURITIES—Events of Default".

Subject to the terms of the Indenture, if an event of default shall occur and be continuing, the Debenture Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders, unless such holders have offered the Debenture Trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding junior subordinated debentures will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or exercising any trust or power conferred on the Debenture Trustee, with respect to the junior subordinated debentures, provided that:

•

it is not in conflict with any law or the Indenture;



•

the Debenture Trustee may take any other action deemed proper by it which is not inconsistent with such direction; and



•

subject to its duties under the Trust Indenture Act, the Debenture Trustee need not take any action that might involve the Debenture Trustee in personal liability or might be unduly prejudicial to the holders not involved in the proceeding.

No holder of the junior subordinated debentures will have any right to institute a proceeding under the Indenture or to appoint a receiver or trustee, or to seek other remedies unless:

•

the holder has given to the Debenture Trustee written notice of a continuing Debenture Event of Default;



•

the holders of at least 25% in aggregate principal amount of the outstanding junior subordinated debentures have made written request, and the holder(s) have offered reasonable indemnity to the Debenture Trustee to institute such proceedings as trustee; and



•

the Debenture Trustee has failed to institute such proceeding, and has not received from the holders of a majority in aggregate principal amount of the outstanding junior

33

subordinated debentures of any series other conflicting directions within 60 days after such notice, request and offer.

These limitations do not apply to a suit instituted by a holder of a junior subordinated debenture if BGE defaults in the payment of the principal, premium or interest on the junior subordinated debenture.

The Indenture requires that BGE periodically file statements with the Debenture Trustee regarding its compliance with certain of the covenants in the Indenture. BGE must report any Debenture Event of Default or default with respect to any junior subordinated debentures that it knows of.

Modification of Subordinated Indenture; Waiver

BGE and the Debenture Trustee may change the Indenture without the consent of any holders with respect to certain matters, including:

•

to fix any ambiguity, defect or inconsistency or to change any provision which may be inconsistent with any other provision of the Indenture; and



•

to change anything that does not materially adversely affect the interests of any holder of junior subordinated debentures or the preferred securities if they are outstanding.

In addition, under the Indenture, BGE's rights and obligations and the rights of holders of the junior subordinated debentures may be changed by BGE and the Debenture Trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding junior subordinated debentures. However, the following changes may not be made without the consent of each holder of any outstanding junior subordinated debentures affected:

•

change the Stated Maturity of the principal of, or any installment of principal of or interest on, any such junior subordinated debentures;



•

reduce the principal amount, or the rate of interest, or any premium payable upon the redemption of any such junior subordinated debentures;



•

change the place of payment, or currency, for payment of principal of (or premium, if any) or interest;



•

impair the right to institute suit for the enforcement of any payment;



•

change any of the provisions discussed above or provisions relating to the waiver of certain past defaults or certain covenants;



•

change the provisions of the Indenture relating to the subordination of the junior subordinated debentures in a manner adverse to the holders;



•

reduce the percentage in principal amount of outstanding junior subordinated debentures of any series necessary to change the Indenture, or to waive compliance with certain provisions or defaults or events of default under the Indenture and their consequences; or



•

change the redemption provisions of any junior subordinated debenture in a manner adverse to the holder.

The Indenture provides that if any of the junior subordinated debentures are held by the trust, BGE and the Debenture Trustee shall not enter into any supplemental indenture for the purposes of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture, that adversely affects the holders of the preferred securities of the trust without the prior consent of the holders of each preferred security.

Defeasance and Covenant Defeasance

The Indenture provides that BGE may elect either:

(A) to defease and be discharged from any and all obligations with respect to such junior subordinated debentures then outstanding ("defeasance"), except for the obligations to register the transfer or exchange of such junior subordinated debentures; to replace temporary or mutilated, destroyed, lost or stolen junior subordinated debentures; to maintain an office or agency in respect of the junior subordinated debentures; and to hold moneys for payment in trust; or

34

(B) to be released from its obligations with respect to such junior subordinated debentures then outstanding under any sections of the Indenture applicable to such junior subordinated debentures that are subject to covenant defeasance ("covenant defeasance") except for the obligations to register the transfer or exchange of such junior subordinated debentures; to replace temporary or mutilated, destroyed, lost or stolen junior subordinated debentures; to maintain an office or agency in respect of the junior subordinated debentures; to properly apply money collected; to restore the rights and remedies of the trustees and the holders under the Indenture after a proceeding to enforce such rights or remedy has been discontinued, abandoned or determined adversely; to appoint successor trustees, if a trustee should resign, be removed or become incapable of acting; to pay the principal of, and premium if any, and interest on the junior subordinated debentures; to file with the trustee certain reports filed with the SEC; to waive any stays, extension laws or usury laws; and to hold moneys for payment in trust. BGE may omit to comply with and will have no liability in respect of any term, condition or limitation in the Indenture, except as noted above, and such omission to comply will not constitute an Event of Default.

As a condition to defeasance or covenant defeasance, BGE must:

•

deposit with the Debenture Trustee, under the terms of an irrevocable trust agreement, money or U.S.-Government Obligations sufficient to pay all remaining indebtedness on the junior subordinated debentures;



•

in the case of defeasance under clause (A) above, deliver to the trustee either a ruling directed to the trustee received from the Internal Revenue Service, or an opinion of counsel (as defined in the Indenture) based on such ruling or on a change in the applicable federal income tax law since the date of the Indenture, in either case to the effect that, and based thereon such opinion shall confirm that, the holders of junior subordinated debentures will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;



•

in the case of covenant defeasance under clause (B) above, deliver to the trustee an opinion of counsel (as defined in the Indenture) or a ruling directed to the trustee received from the Internal Revenue Service to the effect that the holders of junior subordinated debentures will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and



•

comply with certain other Indenture requirements.

Under current federal income tax law, defeasance would likely be treated as a taxable exchange of such junior subordinated debentures for interests in the defeasance trust. As a consequence a holder would recognize gain or loss equal to the difference between the holder's cost or other tax basis for such junior subordinated debentures and the value of the holder's proportionate interest in the defeasance trust, and thereafter would be required to include in income a proportionate share of the income, gain and loss of the defeasance trust. Under current Federal income tax law, covenant defeasance would ordinarily not be treated as a taxable exchange of such Junior Subordinated Debt Securities. Purchasers of such Junior Subordinated Debt Securities should consult their own advisors with respect to the tax consequences to them of such defeasance and covenant defeasance, including the applicability and effect of tax laws other than the Federal income tax law.

BGE may exercise its defeasance option with respect to junior subordinated debentures notwithstanding its prior exercise of its covenant defeasance option. If BGE exercises its defeasance option, payment of the junior subordinated debentures may not be accelerated

35

because of an Event of Default. If BGE exercises its covenant defeasance option, payment of such junior subordinated debentures may not be accelerated by reference to the covenants noted under clause (B) above. However, if such an acceleration were to occur, the realizable value at the acceleration date of the money and U.S. Government Obligations in the defeasance trust could be less than the principal and interest then due on such junior subordinated debentures, in that the required deposit in the defeasance trust is based upon scheduled cash flows rather than market value, which will vary depending upon interest rates and other factors.

Subordination

The junior subordinated debentures will be subordinate in right of payment, to the extent set forth in the Indenture, to all Senior Indebtedness of BGE. If BGE defaults in the payment of any principal, premium, if any, or interest, if any, or any other amount payable on any Senior Indebtedness when the same becomes due and payable, whether at maturity or at a date fixed for redemption or by declaration of acceleration or otherwise, then, unless and until such default has been cured or waived or has ceased to exist or all Senior Indebtedness has been paid, no direct or indirect payment (in cash, property, securities, by set-off or otherwise) may be made or agreed to be made on the junior subordinated debentures, or in respect of any redemption, repayment, retirement, purchase or other acquisition of any of the junior subordinated debentures.

"Senior Indebtedness" shall mean the principal, premium, and interest BGE owes whether now outstanding or subsequently incurred on:

•

obligations for money borrowed (including Capital Lease Obligations and purchase money obligations with an original maturity in excess of one year) or evidenced by debentures (other than junior subordinated debentures issued under the Indenture), bonds, notes, bankers' acceptances or other corporate preferred securities or similar instruments issued by BGE;



•

letters of credit;



•

guarantees or assumptions of indebtedness of others of the type referred to in the above two bullet points including through an agreement to purchase, contingent or otherwise;



•

dividends of others for the payment of which BGE is responsible or liable as obligor, guarantor or otherwise;



•

obligations of others secured by any property or asset of BGE of the type referred to in the above four bullet points (whether or not such obligation is assumed by BGE), the amount of such obligation being the lesser of the value of such property or assets or the amount of the secured obligation; or



•

renewals, extensions or refundings of any of the obligations referred to in the above five bullet points unless, in the case of any particular obligation or renewal, extension or refunding thereof, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, the obligation or renewal, extension or refunding thereof is not superior in right of payment to, or is equal with, the junior subordinated debentures.

The term "Capital Lease Obligations" means any obligation that is required to be classified and accounted for as a capital lease on the face of a balance sheet prepared in accordance with generally accepted accounting principals.

The payment of the principal of and premium, if any, and any interest on the junior subordinated debentures (including making any deposit pursuant to the provisions described under "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Defeasance and Covenant Defeasance" or repurchasing, redeeming or otherwise retiring any junior subordinated debentures) will to the extent set forth in the Indenture be subordinated in right of payment to the prior payment in full of all of BGE's Senior Indebtedness.

Upon any payment or distribution of assets or securities to creditors upon BGE's dissolution, winding up, or total or partial liquidation or reorganization whether voluntary or involuntary or in bankruptcy, insolvency, receivership or similar proceedings, the holders of all BGE's

36

Senior Indebtedness will first be entitled to receive payment in full in cash or cash equivalents of the principal, premium or interest due before the holders of the junior subordinated debentures will be entitled to receive any payment or distribution.

In addition, if the Debenture Trustee under the Indenture or the holder of any junior subordinated debenture receives any payment or distribution of assets before all of BGE's Senior Indebtedness is paid in full, or effective provision is made for its payment, then such payment or distribution will be required to be paid or delivered to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other person making payment or distribution of BGE's assets for application to the payment of all BGE's Senior Indebtedness then due.

No direct or indirect payment by or on behalf of BGE of principal, premium or interest on the junior subordinated debentures, shall be made if, at the time of such payment, there exists:

(1)

a default in the payment of all or any portion of any Senior Indebtedness or any other default pursuant to which the maturity of any Senior Indebtedness has been accelerated; and

(2)

in either case, requisite notice has been given to the Debenture Trustee and such default shall not have been cured or waived by the Debenture Trustee or the holders of such Senior Indebtedness.

Subject to the payment in full of all of BGE's Senior Indebtedness, the holders of the junior subordinated debentures shall be subrogated to the rights of holders of BGE's Senior Indebtedness to receive payments or distributions of assets from BGE applicable to its Senior Indebtedness until the junior subordinated debentures are paid in full. As a result of these subordination provisions, in the event of BGE's insolvency, holders of the junior subordinated debentures may recover ratably less than holders of BGE's Senior Indebtedness.

Form, Exchange, and Transfer

Except in limited circumstances upon the dissolution of the trust (as described in the Indenture) the junior subordinated debentures will be issueable only in fully registered form without coupons and,, in denominations of $25 and any integral multiple thereof.

At the option of the holder, subject to the terms of the Indenture and the limitations applicable to global securities described herein, junior subordinated debentures will be exchangeable for other junior subordinated debentures, in any authorized denomination and of like tenor and aggregate principal amount.

Subject to the terms of the Indenture and the limitations applicable to global securities set forth herein, junior subordinated debentures may be presented for exchange or for registration of transfer (duly endorsed or with the form of transfer endorsed thereon duly executed) at the office of the Registrar or at the office of any transfer agent designated by BGE for such purpose without service charge upon payment of any taxes or other governmental charges as described in the Indenture. BGE has appointed the Debenture Trustee as Registrar. BGE may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that BGE will be required to maintain a transfer agent in each place of payment for the junior subordinated debentures.

If the junior subordinated debentures are to be redeemed, BGE will not be required to:

•

issue, register the transfer of, or exchange any junior subordinated debentures of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any such junior subordinated debentures that may be selected for redemption and ending at the close of business on the day of such mailing; or



•

register the transfer of or exchange any junior subordinated debentures so selected for redemption, in whole or in part, except the unredeemed portion of any such junior

37

subordinated debentures being redeemed in part.

Payment and Paying Agents

Payment of the interest on any junior subordinated debentures on any Interest Payment Date will be made to the person in whose name such junior subordinated debentures (or one or more predecessor securities) is registered at the close of business on the record date for such interest.

Principal of and any premium and interest on the junior subordinated debentures will be payable at the office of the paying agents designated by BGE, and, interest payments may be made by check mailed to the holder as such address appears in the Registrar. The corporate trust office of the Debenture Trustee in the City of New York will be designated as BGE's sole paying agent for payments with respect to the junior subordinated debentures. BGE will be required to maintain a paying agent in each place of payment for the junior subordinated debentures.

All moneys paid by BGE to a paying agent for the payment of the principal of or any premium or interest on any junior subordinated debenture which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to BGE, and the holder of the security thereafter may look only to BGE for payment thereof.

Trust Expenses

Pursuant to the Declaration, BGE shall be responsible for and shall pay for all obligations (other than with respect to the preferred and common securities) and all costs and expenses of the trust, any and all taxes attributable to the initial contribution of trust property (other than United States federal income taxes attributable to trust property) and all liabilities, costs and expenses with respect to such taxes of the trust. Such payment obligation will include any costs, expenses or liabilities of the trust that are required by applicable law to be satisfied in connection with a termination of the trust. Any taxes (other than United States federal income taxes attributable to trust property) that are not attributable to the initial contribution of trust property will be paid by the Property Trustee upon receipt of Additional Interest payments from BGE.

Information Concerning the Debenture Trustee

The Debenture Trustee will have and be subject to all the duties and responsibilities specified with respect to a debenture trustee under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee is not obligated to exercise any of the powers vested in it by the Indenture at the request of any holder of junior subordinated debentures, unless offered reasonable indemnity by the holder against the costs, expenses and liabilities which might be incurred thereby. The Debenture Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties under the Indenture.

Governing Law

The Indenture will be governed by and construed in accordance with the laws of the State of New York (other than the choice of law provisions thereof) except to the extent that the Trust Indenture Act shall be applicable.

DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE

General

BGE will execute the Preferred Securities Guarantee, which benefits the holders of the preferred securities, at the same time that the trust issues the preferred securities. The Preferred Securities Guarantee will be qualified as an indenture under the Trust Indenture Act. The Bank of New York will act as indenture trustee (Preferred Guarantee Trustee) under the Preferred Securities Guarantee for the purposes of compliance with the Trust Indenture Act. The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the preferred securities holders.

BGE will irrevocably agree, as described in the Preferred Securities Guarantee, to pay in full or on a subordinated basis, to the holders of the preferred securities issued by the trust, the

38

Preferred Securities Guarantee Payments (as defined below) (except to the extent previously paid), when and as due, regardless of any defense, right of set-off or counterclaim which the trust may have or assert. The following payments, to the extent not paid by the trust (Preferred Securities Guarantee Payments), will be covered by the Preferred Securities Guarantee:

•

any accumulated and unpaid distributions required to be paid on the preferred securities, to the extent that the trust has funds available to make the payment;



•

the redemption price and all accrued and unpaid distributions to the date of redemption with respect to any preferred securities called for redemption by the trust to the extent that the trust has funds available to make the payment; and



•

upon a voluntary or involuntary dissolution and liquidation of the trust (other than in connection with a distribution of junior subordinated debentures to holders of such preferred securities or the redemption of all such preferred securities), the lesser of



(1)

the aggregate of the Liquidation Amount for each preferred security plus all accrued and unpaid distributions on the preferred securities to the date of payment, to the extent the trust has funds available to make the payment; and



(2)

the amount of assets of the trust remaining available for distribution to holders of preferred securities upon a dissolution and liquidation of the trust (Liquidation Payment).

BGE's obligation to make a Preferred Securities Guarantee Payment may be satisfied by directly paying the required amounts to the holders of the preferred securities or by causing the trust to pay the amounts to the holders on a subordinated basis. While BGE's assets will not be available pursuant to the Preferred Securities Guarantee to pay any distribution, Liquidation Payment or redemption price on any preferred securities if the trust does not have funds available, BGE has agreed under the Declaration to pay all expenses of the trust except the trust's obligations under its preferred securities and for expenses that give rise to Additional Interest.

No single document executed by BGE related to the issuance of the preferred securities will provide for its full, irrevocable and unconditional guarantee of the preferred securities. It is only the combined operation of BGE's obligations under the Preferred Securities Guarantee, the Declaration, the junior subordinated debentures and the Indenture that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under its preferred securities.

Status of the Preferred Securities Guarantee

The Preferred Securities Guarantee will constitute an unsecured obligation of BGE and will rank:

•

subordinate and junior in right of payment to all of BGE's Senior Indebtedness to the extent and in the same manner set forth in the Indenture with respect to junior subordinated debentures;



•

equal with BGE's senior most preference stock now or hereafter issued by BGE, and with any guarantee now or hereafter issued by it in respect of preferred stock of any of its affiliates;



•

senior to any preferred or preference stock of the Guarantor ranking junior to the senior most preferred or preference stock of the Guarantor now or hereafter issued; and



•

senior to BGE's common stock.

The Declaration requires that the holder of preferred securities accept the subordination provisions and other terms of the Preferred Securities Guarantee. The Preferred Securities Guarantee will constitute a guarantee of payment and not of collection (in other words the holder of the guaranteed security may sue BGE, or seek other remedies, to enforce its rights under the Preferred Securities Guarantee without first suing any other person or entity). The Preferred Securities Guarantee will not be discharged except by payment of the Preferred Securities Guarantee Payments in full to the

39

extent not previously paid or upon distribution to the holders of the Preferred Securities of junior subordinated debentures pursuant to the Declaration.

The Preferred Securities Guarantee places no limitation on the amount of additional Senior Indebtedness that may be incurred by BGE. BGE expects from time to time to incur additional indebtedness constituting Senior Indebtedness.

Amendments and Assignment

Except with respect to any changes which do not materially adversely affect the rights of the preferred securities holders in any material respect (in which case no consent of the holders will be required), the Preferred Securities Guarantee may only be amended with the prior approval of the holders of at least a Majority in Liquidation Amount of the preferred securities (excluding any preferred securities held by BGE or one of its affiliates). A description of the way to obtain any approval is described under "DESCRIPTION OF THE PREFERRED SECURITIES—Voting Rights; Amendment of Declaration." All guarantees and agreements contained in the Preferred Securities Guarantee will be binding on BGE's successors, assigns, receivers, trustees and representatives and shall inure to the benefit of the holders of the preferred securities.

BGE may not assign its obligations under the Preferred Securities Guarantee except in connection with a consolidation, merger or sale involving BGE that is permitted under the terms of the Indenture and then only if any such successor or assignee agrees in writing to perform BGE's obligations under the Preferred Securities Guarantee.

Preferred Securities Guarantee Events of Default

An event of default under the Preferred Securities Guarantee (Preferred Securities Guarantee Event of Default) occurs if BGE fails to make any of its required payments or perform its obligations under the Preferred Securities Guarantee, provided that BGE shall have received notice of such default from the Preferred Guarantee Trustee and has not cured such default within 60 days after it receives the notice. However, these notice and cure provisions do not apply to an event of default resulting from BGE's failure to make any of the Preferred Securities Guarantee Payments.

The holders of not less than a Majority in Liquidation Amount of the preferred securities (excluding any preferred securities held by BGE or one of its affiliates) will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee relating to the Preferred Securities Guarantee or to direct the exercise of any trust or power given to the Preferred Guarantee Trustee under the Preferred Securities Guarantee.

The holders of not less than a Majority Liquidation Amount of the preferred securities have the right, by vote, to waive any past events of default and its consequences under the Preferred Securities Guarantee. If such a waiver occurs, any such event of default will cease to exist and be deemed to have been cured under the terms of the Preferred Securities Guarantee.

BGE, as guarantor, is required to file annually with the Preferred Guarantee Trustee a certificate as to whether or not BGE is in compliance with all the conditions and covenants applicable to it under the Preferred Securities Guarantee.

Information Concerning the Preferred Guarantee Trustee

The Preferred Guarantee Trustee, other than during the occurrence and continuance of a Preferred Securities Guarantee Event of Default, will only perform the duties that are specifically described in the Preferred Securities Guarantee. After a Preferred Securities Guarantee Event of Default has occurred and is continuing, the Preferred Guarantee Trustee will exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Preferred Guarantee Trustee is under no obligation to exercise any of its powers as described in the Preferred Securities Guarantee at the request of any preferred securities holder

40

unless it is offered reasonable indemnity against the costs, expenses and liabilities that it might incur. However, such a requirement does not relieve the Preferred Guarantee Trustee of its obligations to exercise its rights and powers under the Preferred Securities Guarantee upon the occurrence of a Preferred Securities Guarantee Event of Default.

Termination of the Preferred Securities Guarantee

The Preferred Securities Guarantee will terminate once the preferred securities are paid in full or upon distribution of the junior subordinated debentures to the holders of the preferred securities. The Preferred Securities Guarantee will continue to be effective or will be reinstated if at any time any holder of the preferred securities must restore payment of any sums paid under the preferred securities or the Preferred Securities Guarantee.

Governing Law

The Preferred Securities Guarantee will be governed by and construed in accordance with the laws of the State of New York.

RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES HELD BY THE TRUST

Payments of distributions and redemption and liquidation payments due on the preferred securities (to the extent the trust has funds available for the payments) will be guaranteed by BGE to the extent described under "DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE." No single document executed by BGE in connection with the issuance of the preferred securities will provide for its full, irrevocable and unconditional guarantee of the preferred securities. It is only the combined operation of BGE's obligations under the Preferred Securities Guarantee, the Declaration, the junior subordinated debentures and the Indenture that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under its preferred securities.

Notwithstanding anything to the contrary in the Indenture, BGE has the right to set-off any payment it is otherwise required to make thereunder with and to the extent BGE has theretofore made, or is concurrently on the date of such payment making, a payment under the Preferred Securities Guarantee.

A holder of any preferred security may sue BGE, or seek other remedies, to enforce its rights under the Preferred Securities Guarantee without first instituting a legal proceeding against the Preferred Guarantee Trustee, the trust or any other person or entity.

As long as BGE makes payments of interest and other payments when due on the junior subordinated debentures held by the trust, such payments will be sufficient to cover the payment of distributions and redemption and liquidation payments due on the preferred securities, primarily because:

•

the aggregate principal amount of the junior subordinated debentures will be equal to the sum of the aggregate liquidation amount of the preferred and common securities;



•

the interest rate and interest and other payment dates on the junior subordinated debentures will match the distribution rate and distribution and other payment dates for the preferred securities;



•

the Declaration provides that BGE shall pay for any and all costs, expenses and liabilities of the trust (either directly or, in case of certain taxes and related expenses, by making Additional Interest payments to the Property Trustee) except the trust's obligations under the preferred or common securities; and



•

the Declaration provides that the trust will not engage in any activity that is not consistent with the limited purposes of the trust.

41

If and to the extent that BGE does not make payments on such junior subordinated debentures, the trust will not have funds available to make payments of distributions or other amounts due on the preferred securities.

A principal difference between the rights of a holder of a preferred security (which represents an undivided beneficial interest in the assets of the trust) and a holder of a junior subordinated debenture is that a holder of a junior subordinated debenture will accrue, and (subject to any permissible extension of the interest payment period) is entitled to receive, interest on the principal amount of junior subordinated debentures held, while a holder of preferred securities is entitled to receive distributions only if and to the extent the trust has funds available for the payment of such distributions.

Upon any voluntary or involuntary dissolution or liquidation of the trust not involving a distribution of the junior subordinated debentures held by the trust, after satisfaction of liabilities to creditors of the trust, the holders of the preferred securities will be entitled to receive, out of assets held by the trust, the Liquidation Distribution in cash. See "DESCRIPTION OF THE PREFERRED SECURITIES—Liquidation Distribution Upon Dissolution." Upon any voluntary liquidation or bankruptcy of BGE, the trust, as holder of the junior subordinated debentures, would be a creditor of BGE, subordinated in right of payment to all Senior Indebtedness, but entitled to receive payment in full of principal, premium, if any, and interest, before any of BGE's common stockholders receive payments or distributions.

A default or event of default under any Senior Indebtedness would not constitute an Event of Default under the Indenture. However, in the event of payment defaults under, or acceleration of, Senior Indebtedness of BGE, the subordination provisions of the junior subordinated debentures provide that no payments may be made in respect of the junior subordinated debentures until such Senior Indebtedness has been paid in full or any payment default thereunder has been cured or waived. Failure to make required payments on junior subordinated debentures would constitute an Event of Default under the junior subordinated debentures.

BOOK ENTRY ISSUANCE

Purchases of preferred securities or junior subordinated debentures within the DTC system must be made by or through direct participants, which will receive a credit for the preferred securities or junior subordinated debentures on DTC's records. The ownership interest of each beneficial owner of each preferred security and each junior subordinated debenture within the DTC system is in turn to be recorded on the direct and indirect participants' records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which the beneficial owners purchased preferred securities or junior subordinated debentures. Transfers of ownership interests in the preferred securities or junior subordinated debentures within the DTC system are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in preferred securities or junior subordinated debentures, except if use of the book-entry system for the preferred securities of the trust or junior subordinated debentures is discontinued.

DTC has no knowledge of the actual beneficial owners of the preferred securities or junior subordinated debentures for which it acts as securities depositary; DTC's records reflect only the identity of the direct participants to whose accounts the preferred securities or junior subordinated debentures are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers.

So long as DTC, or its nominee, is the registered owner of the global security, DTC or its nominee, will be considered the sole owners or

42

holder of the preferred securities or the junior subordinated debentures represented by the global security for all purposes under the Indenture and the Declaration. Except as provided below in this subsection, owners of beneficial interests in a global security will not:

•

be entitled to have any of the individual preferred securities or the junior subordinated debentures represented by the global security registered in their names;



•

receive or be entitled to receive physical delivery of any of the preferred securities or the junior subordinated debentures in definitive form; or



•

be considered the owners or holders of the preferred securities or the junior subordinated debentures under the Indenture or the Declaration.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners and the voting rights of direct participants, indirect participants and beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices will be sent to Cede & Co. as the registered holder of the preferred securities or, in the case of junior subordinated debentures that are exchanged for a security in global form, the junior subordinated debentures. If less than all preferred securities or such junior subordinated debentures are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each direct participant to be redeemed.

Although voting with respect to the preferred securities or the junior subordinated debentures is limited to the holders of record of the preferred securities or the junior subordinated debentures, respectively, in those instances in which a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to preferred securities or the junior subordinated debentures held in global form. Under its usual procedures, DTC would mail an omnibus proxy to the relevant trustee as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants to whose accounts the preferred securities or the junior subordinated debentures held in global form are credited on the record date. Those direct participants are identified in a listing attached to the omnibus proxy.

BGE expects that DTC or its nominee, upon receipt of any payment of liquidation amount, premium or distributions, including any payment of redemption price, in respect of a global security representing any of the preferred securities or the junior subordinated debentures immediately will credit participants' accounts with payments in amounts proportionate to their respective beneficial interest in the aggregate liquidation amount of the global security for the preferred securities or the junior subordinated debentures as shown on the records of DTC or its nominee. BGE also expects that payments by participants to owners of beneficial interests in the global security held through these participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name". These payments will be the responsibility of these participants, subject to any statutory or regulatory requirements as may be in effect from time to time.

DTC's policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor's interest in a global security. The trustees have no responsibility for any aspect of DTC's actions or for its records of ownership interests in a global security. The trustees also do not supervise DTC in any way. The financial institutions through which you hold your interest in a global security, directly or indirectly, may also have their own policies affecting payments, notices and other matters relating to the securities. There may be more than one financial intermediary in the chain of ownership for an investor. The trustees will not monitor and are not responsible for the actions of any of those intermediaries.

43

No global security shall be exchangeable except for another global security of like denomination and tenor to be registered in the name of DTC or its nominee. Accordingly, each person owning a beneficial interest in a global security must rely on the procedures of DTC and, if that person is not a participant, on the procedures of the participant through which that person owns its interest, to exercise any rights of a holder under the global security or the Indenture.

Global securities will be exchangeable for certificate securities with the same terms in authorized denominations only if:

•

DTC is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by BGE within 90 days;



•

BGE determines not to require all of the preferred securities or the junior subordinated debentures to be represented by a global security and notifies the Property Trustee of its decision; or



•

In the case of preferred securities, an event of default under the Declaration has occurred and is continuing.

If the trust issues definitive securities in exchange for global securities, DTC as holder of the global securities, will surrender them against receipt of the definitive securities, cancel the book-entry securities, and distribute the definitive securities to the persons in the amounts that DTC specifies. Each person having an ownership or other interest in these securities must rely exclusively on the rules and procedures of DTC and any agreement with any participant of DTC or any other securities intermediary through which that person holds its interest to receive or direct the delivery or possession of any definitive security.

Definitive securities may be transferred in whole or in part in denominations of any whole number of securities upon surrender of the definitive securities certificates together with the form of transfer endorsed on it, duly completed and executed. If only part of a securities certificate is transferred, a new securities certificate representing the balance not transferred will be issued to the transferor. For more information regarding the transfer and exchange of definitive preferred securities, see "DESCRIPTION OF THE PREFERRED SECURITIES—Registrar and Transfer Agent." For more information regarding the transfer and exchange of definitive junior subordinated debentures, see "DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES—Form, Exchange and Transfer".

Definitive securities will be issued in registered form only in denominations of $25 and any integral multiples thereof. To the extent permitted by law, BGE and the trust and the trustees are entitled to treat the person in whose name any definitive security is registered as its absolute owner.

The laws of some states require that some purchasers of securities take physical delivery of the securities in definitive form. These limits and laws may impair the ability to transfer beneficial interests in a global security. In particular, you may not be able to sell interests in the preferred securities or in the junior subordinated debentures in global form to some insurance companies and to other institutions that are required by law to own securities in non-book-entry form; and you may not be able to pledge your interest in a global security in circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective.

DTC has informed BGE and the trust that it is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry

44

changes in participants' accounts, thereby eliminating the need for physical movement of securities certificates. DTC is owned by a number of its direct participants, which include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, and by The New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to indirect participants, which are securities brokers and dealers, banks and trust companies that clear through or maintain custodial relationships with direct participants, either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC.

According to DTC, the foregoing information has been provided to the financial community for information purposes only and is not intended to serve as a representation, warranty or contract notification of any kind. Neither BGE nor the trust has any responsibility for the performance by DTC or its participants of their respective obligations as described in this prospectus or under the rules and procedures governing their respective operations.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of the material United States federal income tax consequences of the purchase, ownership and disposition of preferred securities. This discussion only addresses those tax consequences to a person that acquires preferred securities on their original issue at their original offering price and that is a "United States person." A United States person is:

•

an individual citizen or resident of the United States;



•

a domestic corporation;



•

an estate the income of which is subject to United States federal income tax without regard to its source; or



•

a trust if a United States court is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust.

This discussion does not address all tax consequences that may be applicable to a United States person that is a beneficial owner of preferred securities, nor does it address the tax consequences to

•

persons that are not United States persons;



•

persons to whom special treatment may be applied under United States federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, traders in securities that elect to mark to market and dealers in securities or currencies;



•

persons that will hold preferred securities as part of a position in a "straddle" or as part of a "hedging," "conversion" or other integrated investment transaction for United States federal income tax purposes;



•

persons whose functional currency is not the United States dollar; or



•

persons that do not hold preferred securities as capital assets.

This discussion constitutes the opinion of Sullivan & Cromwell LLP, special tax counsel to BGE and the trust. This discussion is based upon the Internal Revenue Service Code of 1986, as amended (the "Code"), existing and proposed Treasury regulations, Internal Revenue Service ("IRS") rulings and pronouncements and judicial decisions now in effect, all of which may change at any time. Those changes may be applied retroactively in a manner that could cause the tax consequences to vary substantially from the consequences described in this section, possibly adversely affecting a beneficial owner of preferred securities. The authorities on which this discussion is based may be interpreted in various ways, and it is therefore possible that the United States federal income tax treatment of the purchase, ownership and disposition of preferred securities may differ from the treatment described in this section.

45

Prospective investors are advised to consult with their own tax advisors in light of their own particular circumstances as to the United States federal tax consequences of the purchase, ownership and disposition of preferred securities, as well as the effect of any state, local or foreign tax laws.

Classification of the Trust

Under current law and assuming compliance with the Declaration, the trust will not be classified as an association taxable as a corporation for United States federal income tax purposes. As a result, a United States person that is a beneficial owner of preferred securities, who is referred to as a "securityholder," will be required to include in its gross income its ratable share of the interest income, including any original issue discount ("OID"), paid or accrued with respect to the junior subordinated debentures whether or not cash is actually distributed to the securityholders. For more information on this inclusion, see "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES—Interest Income and Original Issue Discount." No amount included in income with respect to the preferred securities will be eligible for the dividends-received deduction, nor will any such amount be eligible for reduced rates for qualified dividend income in the hands of individual holders.

Interest Income and Original Issue Discount

Under applicable United States Treasury regulations, a contingency that stated interest will not be timely paid that is "remote" will be ignored in determining whether a debt instrument is issued with OID. As a result of terms and conditions of the junior subordinated debentures that prohibit payments with respect to BGE's capital stock and indebtedness if BGE elects to defer interest payments, BGE believes that the likelihood of it exercising its option to defer interest payments is remote. Based on the foregoing, BGE believes that the junior subordinated debentures will not be considered to be issued with OID at the time of their original issuance and, accordingly, a securityholder should include in gross income that holder's allocable share of interest on the junior subordinated debentures, although the IRS could take a contrary position. The following discussion assumes that unless and until BGE exercises its own option to defer interest on the junior subordinated debentures, the junior subordinated debentures will not be treated as issued with OID.

A securityholder will be taxed on interest as ordinary income either when it is received by the trust or, for taxpayers on an accrual method of accounting, when it accrues.

If BGE exercises its option to defer any payment of interest, the junior subordinated debentures will be treated as issued with OID at the time of that exercise, and all stated interest on the junior subordinated debentures will thereafter be treated as OID as long as the junior subordinated debentures remained outstanding. In that event, all of a securityholder's taxable interest income with respect to the junior subordinated debentures will be accounted for as OID on a constant yield method regardless of that holder's method of tax accounting, and actual distributions of stated interest would not be reported as taxable income. Consequently, a securityholder will be required to include OID in gross income even though BGE would not make any actual cash payments during an extension period.

Distribution of Junior Subordinated Debentures to Holders of the Preferred Securities

Under current law, a distribution by the trust of the junior subordinated debentures as described under the caption "DESCRIPTION OF THE PREFERRED SECURITIES—Redemption" and "—Liquidation Distribution Upon Dissolution" will be non-taxable and will result in the securityholder receiving directly its ratable share of the junior subordinated debentures previously held indirectly through the trust, with a holding period and aggregate tax basis equal to the holding period and aggregate tax basis that securityholder had in the preferred securities before that distribution. If, however, the liquidation of the trust were to occur because the trust is subject to United States federal income tax with respect to income accrued or received on the junior subordinated debentures,

46

as the case would be if the trust were treated as an association taxable as a corporation, the distribution of junior subordinated debentures to securityholders by the trust would be a taxable event to the trust and each securityholder, and each securityholder would recognize gain or loss as if the securityholder had exchanged the preferred securities for the junior subordinated debentures it received upon the liquidation of the trust and would take the junior subordinated debentures with a new holding period. A securityholder will include interest in income in respect of junior subordinated debentures received from the trust in the manner described above under "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES—Interest Income and Original Issue Discount."

Sale or Redemption of the Preferred Securities

A securityholder that sells preferred securities or completely redeems them for cash will recognize gain or loss equal to the difference between its adjusted tax basis in the preferred securities and the amount realized on the sale or redemption of the preferred securities. A securityholder's adjusted tax basis in the preferred securities generally will be its initial purchase price. If the junior subordinated debentures are deemed to be issued with OID as a result of BGE's deferral of interest payments, a securityholder's adjusted tax basis in the preferred securities generally will be its initial purchase price, increased by OID previously includible in that securityholder's gross income to the date of disposition and decreased by distributions or other payments received on the preferred securities since and including the date of the first extension period. That gain or loss generally will be capital gain or loss, except to the extent any amount realized is treated as a payment of accrued interest with respect to that securityholder's ratable share of the junior subordinated debentures required to be included in income. The capital gain or loss that is recognized upon sale or redemption will also be long-term capital gain or loss if the preferred securities have been held for more than one year.

If BGE exercises its option to defer any amount of interest on the junior subordinated debentures, the preferred securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the underlying junior subordinated debentures. If that deferral occurs, and if you dispose of your preferred securities between record dates for payments of distributions, and consequently do not receive a distribution from the trust for the period prior to that disposition, you will nevertheless be required:

•

to include as ordinary income accrued but unpaid interest on the junior subordinated debentures through the date of disposition; and



•

to add that amount to your adjusted tax basis in your preferred securities disposed of.

You would recognize a capital loss on the disposition of your preferred securities to the extent the selling price, which may not fully reflect the value of accrued but unpaid interest, is less than your adjusted tax basis in the preferred securities, which will include accrued but unpaid interest. Capital losses cannot be applied to offset ordinary income for United States federal income tax purposes, except in a few limited cases.

Backup Withholding Tax and Information Reporting

If you are a noncorporate securityholder, information-reporting requirements generally will apply to:

•

payments of interest, including the OID accrued, on preferred securities; and



•

payments of the proceeds from the disposition of preferred securities effected at a United States office of a broker.

Additionally, backup withholding will apply to those payments to a noncorporate securityholder that:

•

fails to provide an accurate taxpayer identification number;



•

is notified by the IRS that the securityholder has failed to report all interest and dividends required to be shown on their respective United States federal income tax return;

47

•

in some circumstances, fails to comply with applicable certification requirements.

Any amounts withheld from you under the backup withholding rules will be allowed as a refund or credit against your United States federal tax income tax liability, provided the required information is furnished.

ERISA CONSIDERATIONS

The following is a summary of certain considerations associated with the acquisition, holding and disposition of preferred securities by employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), Keogh plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code, and entities whose underlying assets are considered to include "plan assets" of such plans, accounts and arrangements (each, a "Plan").

General Fiduciary Matters

Each fiduciary of a Plan should consider the fiduciary standards of ERISA in the context of the Plan's particular circumstances before authorizing an investment in the preferred securities. Among other factors, the fiduciary should consider whether the investment is consistent with the documents and instruments governing the Plan and whether the investment would satisfy the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA and the Code.

Any insurance company proposing to invest assets of its general account in the preferred securities should consult with its counsel concerning the potential application of ERISA to such investment.

Prohibited Transaction Issues

Section 406 of ERISA and Section 4975 of the Code prohibit Plans from engaging in specified transactions involving "plan assets" with persons or entities who are "parties in interest," within the meaning of ERISA, or "disqualified persons," within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the Plan that engages in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code. It is possible, however, that a governmental plan may be subject to other federal, state or local laws that contain fiduciary and prohibited transaction provisions substantially similar to those under Title I of ERISA and Section 4975 of the Code ("Similar Laws").

Under a regulation (the "Plan Assets Regulation") issued by the U.S. Department of Labor, when a Plan acquires an equity interest in an entity, the Plan's assets include both the equity interest and an undivided interest in each of the underlying assets of the entity unless the equity interest is a "publicly offered security" or another exception applies. For purposes of the Plan Asset Regulation, a "publicly offered security" is a security that is (1) part of a class of securities that is "widely held" (that is, owned by 100 or more investors independent of the issuer and of one another), (2) "freely transferable", and (3) either (i) part of a class of securities registered under section 12(b) or 12(g) of the Securities Exchange Act of 1934 or (ii) sold to the Plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act of 1933 and registered under the Securities Exchange Act of 1934 within 120 days after the end (or such later time as may be allowed by the Securities and Exchange Commission) after the end of the fiscal year of the issuer during which the offering of such securities to the public occurred. It is expected that the preferred securities will meet the foregoing criteria for treatment as publicly offered securities, so that the underlying assets of the trust will not be

48

considered to be assets of any Plan investing in the preferred securities.

Regardless of whether the assets of the trust are deemed to be "plan assets", the acquisition and holding of the preferred securities with "plan assets" of a Plan could itself result in a prohibited transaction in some limited circumstances. The Department of Labor has issued several prohibited transaction class exemptions, or "PTCEs," that may provide exemptive relief for direct or indirect prohibited transactions resulting from the purchase, holding or disposition of preferred securities. These class exemptions include PTCE 84-14 for certain transactions determined by independent qualified professional asset managers, PTCE 90-1 for certain transactions involving insurance company pooled separate accounts, PTCE 91-38 for certain transactions involving bank collective investment funds, PTCE 95-60 for certain transactions involving life insurance company general accounts, and PTCE 96-23 for certain transactions determined by in-house asset managers.

Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing the preferred securities on behalf of or with "plan assets" of any Plan or governmental plan consult with their counsel regarding the potential consequences of an investment in the preferred securities and the availability of exemptive relief under PTCE 84-14, 90-1, 91-38, 95-60, or 96-23, or, in the case of any governmental plan, under the provisions of any Similar Law.

49

UNDERWRITING

        Under the terms and subject to the conditions of the underwriting agreement dated    , 2003, each underwriter named below, for whom                        are acting as representatives, has severally agreed to purchase from the trust, and the trust has agreed to see to such underwriter the number of preferred securities set forth opposite the name of such underwriters below.

Name	Number of Preferred Securities
Total	10,000,000

The underwriters are obligated to take and pay for the total number of preferred securities offered hereby in any such preferred securities are purchased. In the event of default by any underwriter, the underwriting agreement provides that, in certain circumstances, purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

The underwriting agreement provides that BGE and the trust will indemnify the several underwriters against certain liabilities under the Securities Act of 1933, as amended.

BGE's expenses associated with the offer and sale of the preferred securities are estimated to be $450,000. In view of the fact that the proceeds of the sale of the preferred securities will ultimately be used to purchase BGE's junior subordinated debentures, the underwriting agreement provides that BGE will pay as compensation to the underwriters [    ] per preferred security for the accounts of the several underwriters ($[    ] in the aggregate); provided that such compensation will be $[    ] per preferred security for sales to certain institutions. Therefore, to the extent of such sales, the actual amount of underwriters' compensation will be less than the aggregate amount specified in the preceding sentence.

The underwriters propose to offer the preferred securities, in part, directly to the public at the initial public offering price set forth on the cover page of this prospectus supplement and to certain dealers at such price less a concession of $[    ] per preferred security. The underwriters may allow, and such dealers may reallow, a concession not in excess of $[    ] per preferred security to certain brokers and dealers. After the preferred securities are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives of the underwriters.

Application will be made to list the preferred securities on the NYSE. If approved, trading of the preferred securities on the NYSE is expected to commence within a 30-day period after the initial delivery of the preferred securities. Prior to this offering, there has been no public market for the preferred securities. In order to meet one of the requirements for listing the preferred securities on the NYSE, the underwriters will undertake to sell lots of 100 or more preferred securities to a minimum of 400 beneficial holders.

BGE and the trust have agreed not to sell, offer to sell, grant any option for the sale of, or otherwise dispose of any preferred securities, any security convertible into or exchangeable into or exercisable for preferred securities or the junior subordinated debentures or any debt securities substantially similar to the junior subordinated debentures or equity securities substantially similar to the preferred securities (except for the junior subordinated debentures and the preferred securities issued pursuant to the underwriting agreement until the later of (i) the termination of trading restrictions for the preferred securities, as notified to BGE by the

50

underwriters and (ii) the closing date of the offering, without the prior written consent of the representatives.

In order to facilitate the offering of the preferred securities, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the preferred securities. Specifically, the underwriters may overallot in connection with the offering, creating a short position in the preferred securities for their own account. In addition, to cover overallotments or to stabilize the price of the preferred securities, the underwriters may bid for, and purchase, the preferred securities in the open market. Finally, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the preferred securities in the offering, if the syndicate repurchases previously distributed preferred securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the preferred securities above independent market levels. The underwriters are not required to engage in these activities, and if commenced, may end any of these activities at any time.

Certain of the underwriters and their affiliates have in the past provided, and may in the future provide, investment and/or commercial banking services to BGE and its affiliates in the ordinary course of business.

VALIDITY OF THE SECURITIES

Certain legal matters in connection with the junior subordinated debentures, preferred securities and Preferred Securities Guarantee will be passed on for BGE by the Managing Attorney, Corporate Finance, of Constellation Energy. Certain legal matters in connection with the junior subordinated debentures, preferred securities and Preferred Securities Guarantee will be passed on for the underwriters by Cahill Gordon & Reindel LLP, a limited liability partnership including a professional corporation, New York, NY. Certain matters of Delaware law relating to the validity of the preferred securities will be passed on for the trust by Richards, Layton & Finger, P.A., Wilmington, DE, special Delaware counsel to the trust. Certain United States federal income taxation matters will be passed upon for BGE and the trust by Sullivan & Cromwell LLP, special tax counsel to BGE and the trust. Cahill Gordon & Reindel LLP and Sullivan & Cromwell LLP from time to time perform legal services for BGE and its affiliates.

Cahill Gordon & Reindel LLP will rely on the opinion of Constellation Energy's lawyer as to matters of Maryland law, as well as the applicability of the Public Utility Holding Company Act of 1935, and will rely on the opinion of Richards, Layton & Finger, P.A. as to certain matters of Delaware law. Constellation Energy's Managing Attorney, Corporate Finance, will rely on the opinion of Richards, Layton & Finger, P.A. as to certain matters of Delaware law.

EXPERTS

BGE's financial statements incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on their authority as experts in auditing and accounting.

WHERE YOU CAN FIND
MORE INFORMATION

BGE files annual, quarterly and current reports, and other information with the SEC. You may read and copy any document filed by BGE at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information, regarding companies (including BGE) that file documents with the SEC electronically. BGE's SEC filings may also be obtained from Constellation Energy's web site at http://www.constellation.com.

The addresses for both the SEC's and BGE's website are inactive textual references only and the contents of those sites (other than the

51

documents incorporated by reference as set forth below) are not a part of this prospectus.

This prospectus is part of a registration statement BGE filed with the SEC. In addition, the SEC allows BGE to "incorporate by reference" the information it files with them, which means that BGE can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that BGE files with the SEC will automatically update and supercede this information. BGE incorporates by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 from now until the time the registration becomes effective and thereafter until BGE sells all the debt securities.

•

BGE's Annual Report on Form 10-K for the year ended December 31, 2002.



•

BGE's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (which has been superceded by Form 10-Q/A filed on July 30, 2003 which amendment affects only Part I Items 1, 2 and 4 of the previously filed quarterly report on Form 10-Q).



•

BGE's Current Report on Form 8-K filed on April 30, 2003 (other than information that is deemed not to have been filed in accordance with SEC rules).



•

BGE's Current Report on Form 8-K filed on July 31, 2003 (other than information that is deemed not to have been filed in accordance with SEC notes).

Any person, including any beneficial owner, may request a copy of these filings, at no cost, by writing or telephoning BGE at the following address:

Shareholder Services
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
410-234-5000

No separate financial statements of the trust are included in this prospectus. BGE and the trust do not consider that such financial statements would be material to holders of the preferred securities because the trust is a newly formed special purpose entity, has no operating history or independent operations and is not engaged in and does not propose to engage in any activity other than holding as trust assets the junior subordinated debentures of BGE and issuing preferred and common securities. Furthermore, taken together, BGE's obligations under the junior subordinated debentures, the Indenture, the Declaration, and the Preferred Securities Guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due under the preferred securities of the trust, and BGE does not expect the trust to file periodic reports under the Exchange Act with the SEC.

You should rely only on the information incorporated by reference or provided in this prospectus. BGE has not authorized anyone else to provide you with different information. BGE is not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of those documents.

52

$250,000,000

BGE CAPITAL TRUST II
    % Trust Preferred Securities

P  R  O  S  P  E  C  T  U  S
(Once the registration statement is effective, the date of the Prospectus will be inserted here)

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

Securities and Exchange Commission Registration Fee	$	20,225
Services of Independent Accountants		30,000	*
Trustee Fees and Expenses		15,000	*
Legal Fees and Expenses		150,000	*
Debt Securities Rating Fees		170,000	*
Printing and Delivery Expenses		50,000	*
Miscellaneous Expenses		14,775	*
Total	$	450,000	*

*

Estimated

Item 15. Indemnification of Directors and Officers.

        The following description of indemnification allowed under Maryland statutory law is a summary rather than a complete description. Reference is made to Section 2-418 of the Corporation and Associations Article of the Maryland Annotated Code, which is incorporated by reference herein, and the following summary is qualified in its entirely by such reference.

        By a Maryland statute, a Maryland corporation may indemnify any director who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative ("Proceeding") by reason of the fact that he is a present or former director of the corporation and any person who, while a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan ("Director"). Such indemnification may be against judgments, penalties, fines, settlements and reasonable expenses actually incurred by him in connection with the Proceeding unless it is proven that (a) the act or omission of the Director was material to the matter giving rise to the Proceeding and (i) was committed in bad faith, or (ii) was the result of active and deliberate dishonesty; or (b) the Director actually received an improper personal benefit in money, property, or services; or (c) in the case of any criminal proceeding, the Director had reasonable cause to believe his act or omission was unlawful. However, the corporation may not indemnify any Director in connection with a Proceeding by or in the right of the corporation if the Director has been adjudged to be liable to the corporation. A Director or officer who has been successful in the defense of any Proceeding described above shall be indemnified against reasonable expenses incurred in connection with the Proceeding. The corporation may not indemnify a Director in respect of any Proceeding charging improper personal benefits to the Director in which the Director was adjudged to be liable on the basis that personal benefit was improperly received. The corporation may not indemnify a director or advance expenses for a proceeding brought by the director against the corporation except if the proceeding is brought to enforce indemnification by the corporation or if the corporation's charter or bylaws, a board resolution or contract provides otherwise.

        Notwithstanding the above provisions, a court of appropriate jurisdiction, upon application of the Director or officer, may order indemnification if it determines that in view of all the relevant circumstances, the Director or officer is fairly and reasonably entitled to indemnification; however, indemnification with respect to any Proceeding by or in the right of the corporation or in which liability

II-1

was adjudged on the basis that personal benefit was improperly received shall be limited to expenses. A corporation may advance reasonable expenses to a Director under certain circumstances, including a written undertaking by or on behalf of such Director to repay the amount if it shall ultimately be determined that the standard of conduct necessary for indemnification by the corporation has not been met.

        A corporation may indemnify and advance expenses to an officer of the corporation to the same extent that it may indemnify Directors under the statute.

        The indemnification and advancement of expenses provided by statute is not exclusive of any other rights, by indemnification or otherwise, to which a Director or officer may be entitled under the charter, by-laws, a resolution of shareholders or directors, an agreement or otherwise.

        A corporation may purchase and maintain insurance on behalf of any person who is or was a Director or officer, whether or not the corporation would have the power to indemnify a Director or officer against liability under the provision of this section of Maryland law. Further, a corporation may provide similar protection, including a trust fund, letter of credit or surety bond, not inconsistent with the statute.

Article V of Baltimore Gas and Electric Company's (the "Company") Charter reads as follows:

        "A director or officer of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages except (i) to the extent that it is proved that the person actually received an improper benefit or profit in money, property, or services for the amount of the benefit or profit in money, property or services actually received or (ii) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person's action or failure to act was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. It is the intent of this Article that the liability of directors and officers shall be limited to the fullest extent permitted by the Maryland General Corporation Law, as amended from time to time.

        Any repeal or modification of the foregoing paragraph by the stockholders of the corporation shall not adversely affect any right or protection of a director or officer of the corporation existing at the time of such repeal or modification."

Article IV of the Company's By-Laws reads as follows:

        "Each person made or threatened to be made party to an action, suit or proceeding, whether, civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Company, or, at its request, is or was a director or officer of another corporation, shall be indemnified by the Company (to the extent indemnification is not otherwise provided by insurance) against the liabilities, costs and expenses of every kind actually and reasonable incurred by him as a result of such action, suit or proceeding, or any threat thereof or any appeal thereon, but in each case only if and to the extent permissible under applicable common or statutory law, state or federal. The foregoing indemnity shall not be inclusive of other rights to which such person may be entitled."

The Directors and officers of the Company are covered by insurance indemnifying them against certain liabilities which might be incurred by them in their capacities as such, including certain liabilities arising under the Securities Act of 1933. The premium for this insurance is paid by the Company.

        Under the Declaration, the Company will agree to indemnify each of the Trustees of the Issuer with respect thereto or any predecessor Trustee for the Issuer, and to hold such Trustees harmless against any loss, damage, claims, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the Declaration, including

II-2

the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under the Declaration.

        Also, see indemnification provisions in the Form of Purchase Agreement, included in Exhibit 1(a) to this Registration Statement.

Item 16. Exhibits.

        Reference is made to the Exhibit Index filed as a part of this Registration Statement.

Item 17. Undertakings.

(a) Each of the undersigned Registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described under Item 15 above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) Each of the undersigned Registrants hereby also undertakes that:

        (1)   For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this Registration Statement as of the time it was declared effective.

        (2)   For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, Baltimore Gas and Electric Company, the Registrant, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Baltimore, State of Maryland on the 5th day of August, 2003.

BALTIMORE GAS AND ELECTRIC COMPANY (Registrant)
By:	/s/  E. FOLLIN SMITH E. Follin Smith Senior Vice President and Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
Principal executive officer and director:
/s/  *F. O. HEINTZ	Director, Chief Executive Officer and President	August 5, 2003
Principal financial and accounting officer:
/s/  E. FOLLIN SMITH E. Follin Smith	Director, Senior Vice President Chief Financial Officer	August 5, 2003
/s/  * MAYO A. SHATTUCK III	Director	August 5, 2003

*By:
/s/  E. FOLLIN SMITH E. Follin Smith, Attorney-in-Fact

II-4

        Pursuant to the requirements of the Securities Act of 1933, BGE Capital Trust II certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Baltimore, State of Maryland, on the 5thday of August, 2003.

BGE Capital Trust II (Co-Registrant)
By:	Baltimore Gas and Electric Company, as Depositor
By:	/s/  THOMAS E. RUSZIN, JR. Thomas E. Ruszin, Jr.

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EXHIBIT INDEX

Exhibit Number
1(a)	—	Form of Purchase Agreement for the Preferred Securities.
4(a)	—	Certificate of Trust of BGE Capital Trust II
4(b)	—	Declaration of Trust of BGE Capital Trust II
4(c)	—	Form of Amended and Restated Declaration of Trust to be used in connection with the issuance of the Preferred Securities.
4(d)	—	Subordinated Indenture dated as of June 15, 1998 between the Company and The Bank of New York, as Trustee in connection with the issuance of the Junior Subordinated Debentures.
4(e)	—	Form of Supplemental Indenture between the Company and The Bank of New York, as Trustee in connection with the issuance of the Junior Subordinated Debentures.
4(f)	—	Form of Preferred Securities Guarantee.
4(g)	—	Form of Common Securities Guarantee.
4(h)	—	Form of Preferred Security (included in Exhibit 4(c))
4(i)	—	Form of Junior Subordinated Debenture (included in Exhibit 4(e))
5(a)	—	Opinion of Company Counsel.
5(b)	—	Opinion of Richards, Layton and Finger, P.A.
8	—	Tax Opinion of Sullivan & Cromwell LLP
12(a)*	—	Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred and Preference Dividend Requirements (Designated as Exhibit 12(b) in Form 10-Q) for the quarterly period ended March 31, 2003 filed on May 14, 2003 (File No. 1-1910).
23(a)	—	Consent of Company Counsel (included in Exhibit 5 (a)).
23(b)	—	Consent of Richards, Layton and Finger, P.A. (included in Exhibit 5(b)).
23(c)	—	Consent of PricewaterhouseCoopers, Independent Accountants
24	—	Power of Attorney.
25(a)	—	Statement of Eligibility under the Trust Indenture Act of 1939 (Form T-1) of The Bank of New York, as Trustee with respect to the Subordinated Indenture.
25(b)	—	Statement of Eligibility under the Trust Indenture Act of 1939 (Form T-1) of The Bank of New York, as Property Trustee with respect to the Trust.
25(c)	—	Statement of Eligibility under the Trust Indenture Act of 1939 (Form T-1) of The Bank of New York, as Trustee with respect to the Preferred Securities Guarantee.
99*	—	Corporations and Associations Article, Section 2-418 of the Annotated Code of Maryland (Designated as Exhibit 28 (b) to the Annual Report on Form 10-K for the year ended December 31, 1987, File No. 1-1910.

*

Incorporated by reference.

QuickLinks

TABLE OF CONTENTS
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE STOCK DIVIDENDS
The Offering
UNDERWRITING
PART II INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.
Item 15. Indemnification of Directors and Officers.
Item 16. Exhibits.

SIGNATURES
EXHIBIT INDEX

EX-1.(A)

                                                                   Exhibit _1(a)

                              BGE Capital Trust II

                         __% Trust Preferred Securities
                      (Liquidation amount $25 per security)
                       guaranteed to the extent the Trust
                             has available funds by
                       BALTIMORE GAS AND ELECTRIC COMPANY

                                     FORM OF
                               PURCHASE AGREEMENT



                                      - 2 -

                              BGE Capital Trust II

                         ___% Trust Preferred Securities
                     (Liquidation amount $_25 per security)
                       guaranteed to the extent the Trust
                             has available funds by

                       BALTIMORE GAS AND ELECTRIC COMPANY


                               PURCHASE AGREEMENT


                                  _______, 2003

Baltimore Gas and Electric Company
750 E. Pratt Street, 16th Floor
Baltimore, Maryland  21202

Dear Sirs:

     1.   INTRODUCTORY. Referring to the ___% Trust Preferred Securities due
____ (the "Preferred Securities") of BGE Capital Trust II (the "Trust"), the __%
BGE Deferrable Interest Subordinated Debentures, due ___, _ (the "Subordinated
Debentures") and the Guarantee Agreement (the "Guarantee" and, together with the
Preferred Securities and the Subordinated Debentures, the "Registered
Securities") between Baltimore Gas and Electric Company (the "Company")and The
Bank of New York, as trustee thereunder (the "Guarantee Trustee"), covered by
the registration statement on Form S-3 (No. 333-____) (such registration
statement, including (i) the prospectus included therein (such prospectus in the
form first filed under Rule 424(b) under the Securities Act of 1933, as amended
(the "Act"), including each document incorporated by reference therein is
hereinafter called the "Prospectus") and (ii) all documents filed as part
thereof or incorporated by reference therein, together with the registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the Act, are
hereinafter collectively called the "Registration Statement") on the basis of
the representations, warranties and agreements contained in this Agreement, but
subject to the terms and conditions herein set forth, the purchaser or
purchasers named in Schedule A hereto (the "Purchasers") agree to purchase,
severally, and the Trust agrees to sell to the Purchasers, severally, the
respective number of Preferred Securities set forth opposite the name of each
Purchaser on Schedule A hereto.



                                      - 3 -

     The Subordinated Debentures will be issued under the Indenture between the
Company and The Bank of New York as trustee thereunder (the "Debenture
Trustee"), dated as of the June 15, 1998, to be supplemented by the Second
Supplemental Indenture thereto relating to the Subordinated Debentures
(collectively the "Indenture") and the Preferred Securities will be issued under
the Amended and Restated Declaration of Trust for BGE Capital Trust II among the
Company, as depositor, and the trustees named therein (the "Declaration") to be
dated as of the Closing Date (as herein defined).

     The Preferred Securities will have the following terms:

     Fixed Distribution rate (if applicable): __________% per annum
                                            (accruing from _______)

     Distribution Payment Dates:            and

     Stated Maturity:

     Redeemable by the Company on or after at 100% of their Liquidation Amount,
plus accrued and unpaid distributions to the date of redemption

          2.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TRUST. The
Company and the Trust each represents and warrants to and agrees with each
Purchaser that:

          (a)  The Registration Statement has been filed with the Securities and
     Exchange Commission ("Commission") and has become effective.

          (b)  The Registration Statement conforms in all respects to the
     requirements of the Act and the pertinent published rules and regulations
     of the Commission thereunder (the "33 Act Rules and Regulations") and the
     Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
     does not include any untrue statement of a material fact or omit to state
     any material fact required to be stated therein or necessary to make the
     statements therein not misleading, except that the foregoing does not apply
     to statements or omissions in such document based upon written information
     furnished to the Trust or the Company by any Purchaser specifically for use
     therein. The documents incorporated by reference in the Registration
     Statement or the Prospectus pursuant to Item 12 of Form S-3 of the Act, at
     the time they were filed with the Commission, complied in all material
     respects with the requirements of the Securities Exchange Act of 1934, as
     amended (the "Exchange Act"), and the pertinent published rules and
     regulations thereunder (the "Exchange Act Rules and Regulations"). Any
     additional documents deemed to



                                      - 4 -

     be incorporated by reference in the Prospectus will, when they are filed
     with the Commission, comply in all material respects with the requirements
     of the Exchange Act and the Exchange Act Rules and Regulations and will not
     contain an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein, in light of the circumstances under which they were made, not
     misleading.

          (c)  The Trust has conducted and will conduct no business other than
     the transactions contemplated by this Agreement and described in the
     Prospectus with respect to the Registered Securities; the Trust is not a
     party to or bound by any agreement or instrument other than this Agreement,
     the Declaration and the agreements and instruments contemplated by the
     Declaration and described in the Prospectus with respect to the Registered
     Securities; and the Trust has no liabilities or obligations other than
     those arising out of the transactions contemplated by this Agreement and
     the Declaration and described in the Prospectus with respect to the
     Registered Securities.

          (d)  The financial statements contained in the Registration Statement
     comply with Regulation G under Item 10 of Regulation S-K under the Act.

          3.   DELIVERY AND PAYMENT. The price at which the Trust Preferred
Securities shall be purchased from the Company by the Purchasers shall be $25
per Preferred Security plus accrued distributions, if any, from _____________.
The Trust will deliver the Preferred Securities to you for the accounts of the
Purchasers, against payment of the purchase price by certified or official bank
check or checks in same day or New York or Baltimore Clearing House funds drawn
to the order of the Trust, at the office of the Company, 750 E. Pratt Street,
16th Floor, Baltimore, Maryland, at a.m. on , 2003 or at such other time not
later than seven full business days thereafter as you and the Company determine,
such time being herein referred to as the "Closing Date." The Preferred
Securities will be represented by a permanent global security (each such
security being referred to herein as a "Book-Entry Preferred Security"),
registered in the name of The Depository Trust Company, as depositary (the
"Depositary"), or a nominee of the Depositary. Beneficial interests in
Book-Entry Preferred Securities will only be evidenced by, and transfers thereof
will only be effected through, records maintained by the Depositary's
participants.

     As compensation to the Purchasers for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Preferred Securities will
be used by the Trust to purchase the Subordinated Debentures of the Company, the
Company hereby agrees to pay at the Closing Date to ________, for the accounts
of the several Purchasers, an amount equal to $__ per Preferred



                                      - 5 -

Security, except that such commission will be $__ per Preferred Security sold to
certain institutions.

     4.   OFFERING BY THE PURCHASERS. The several Purchasers propose to offer
the Preferred Securities for sale to the public as set forth in the Prospectus.

     5.   COVENANTS OF THE TRUST AND THE COMPANY. Each of the Company and Trust
jointly and severally, covenants and agrees with the several Purchasers that:

          (a)  It will promptly cause the Prospectus to be filed with the
     Commission as required by Rule 424.

          (b)  For as long as a prospectus relating to the Preferred Securities
     is required to be delivered under the Act, if any event relating to or
     affecting the Trust or the Company or of which the Trust or the Company
     shall be advised in writing by the Purchasers shall occur which, in the
     Company's and the Purchaser's opinion, should be set forth in a supplement
     or amendment to the Prospectus in order either to make the Prospectus
     comply with the requirements of the Act or which would require the making
     of any change in the Prospectus so that as thereafter delivered to
     purchasers such Prospectus will not contain any untrue statement of a
     material fact or omit to state a material fact necessary in order to make
     the statements therein, in light of the circumstances under which they
     were made, not misleading, the Company and the Trust will promptly amend
     or supplement the Prospectus by either (i) preparing and filing with the
     Commission supplement(s) or amendment(s) to the Prospectus, or (ii) making
     an appropriate filing pursuant to the Exchange Act, which will supplement
     or amend the Prospectus so that, as supplemented or amended, the Prospectus
     when the Prospectus is delivered to a purchaser will comply with the Act
     and will not contain any untrue statement of a material fact or omit to
     state any material fact necessary in order to make the statements therein,
     in light of the circumstances under which they were made, not misleading.
     Prior to any such filing, the Company shall give oral notice to
     the Purchasers.

          (c)  The Company will make generally available to its security holders
     as soon as practicable, but in any event not later than eighteen months
     after the effective date of the Registration Statement (as defined in Rule
     158(c) under the Act), an earnings statement of the Company and its
     subsidiaries (which need not be audited) complying with Section 11(a) of
     the Act and the rules and regulations of the Commission thereunder
     (including at the option of the Company Rule 158).

          (d)  The Company or the Trust will furnish to you copies of the
     following documents, in each case as soon as available after filing and in
     such quantities as you reasonably request



                                      - 6 -

     (i) the Registration Statement relating to the Preferred Securities as
     originally filed and all pre-effective amendments thereto (at least one of
     which will be signed and will include all exhibits except those
     incorporated by reference to previous filings with the Commission); (ii)
     each prospectus relating to the Preferred Securities; and (iii) during the
     time when a prospectus relating to the Preferred Securities is required to
     be delivered under the Act, all post-effective amendments and supplements
     to the Registration Statement or Prospectus, respectively (except
     supplements relating to securities that are not Preferred Securities).

          (e)  The Company and the Trust will take such action as the Purchasers
     may reasonably request to obtain the qualification of the Preferred
     Securities for sale and the determination of their eligibility for
     investment under the laws of such jurisdictions as you designate and will
     continue such qualifications in effect so long as required for the
     distribution, provided, however, that neither the Trust nor the Company
     shall be required to qualify as a foreign corporation or to file any
     consent to service of process under the laws of any jurisdiction or to
     comply with any other requirements deemed by the Company to be unduly
     burdensome.

          (f)  During the period of five years after the Closing Date, the
     Company will furnish to you, and upon request, to each of the other
     Purchasers (unless such reports are available electronically on the
     Commission's website or the Company's website): (i) as soon as practicable
     after the end of each fiscal year, a copy of its annual report to
     shareholders for such year, (ii) as soon as available, a copy of each
     report or definitive proxy statement of the Company filed with the
     Commission under the Exchange Act or mailed to shareholders, and (iii) from
     time to time, such other information concerning the Company as you or the
     Trust may reasonably request.

          (g)  The Company will pay all expenses incident to the performance of
     its and the Trust's obligations under this Agreement, and will reimburse
     the Purchasers for any expenses (including Blue Sky fees not exceeding
     $6,000 and disbursements of counsel) incurred by them in connection with
     qualification of the Preferred Securities for sale and determination of
     their eligibility for investment under the laws of such jurisdictions as
     you designate and the printing or reproduction of memoranda relating
     thereto, for any filing fees charged by investment rating agencies for the
     rating of the Preferred Securities, for any expenses incurred in connection
     with listing the Preferred Securities on a national securities exchange and
     for expenses incurred in distributing prospectuses to the Purchasers.



                                      - 7 -

          (h)  It will not offer, sell, contract to sell or otherwise dispose of
     any Preferred Securities, any other preferred beneficial interests in the
     Trust or any securities of BGE which are substantially similar to the
     Subordinated Debentures, the Guarantee or the Preferred Securities, or any
     securities convertible into or exchangeable for or representing the right
     to receive any of the aforementioned securities, until the later of (i) the
     termination of trading restrictions for the Preferred Securities, as
     notified to the Company by the Purchasers and (ii) the Closing Date,
     without the consent of the Purchasers.

          (i)  If the Company and the Trust elect to rely upon Rule 462(b), they
     shall file a Rule 462(b) Registration Statement with the Commission in
     compliance with Rule 462(b) and the Company shall at the time of filing
     either pay to the Commission the filing fee for the Rule 462(b)
     Registration Statement or give irrevocable instructions for the payment of
     such fee pursuant to Rule 111(b) under the Act.

          (j)  The Company will issue the Guarantee and the Subordinated
     Debentures concurrently with the issuance and sale of the Preferred
     Securities as contemplated herein; and

          (k)  It will use its best efforts to list, subject to notice of
     issuance, (i) the Preferred Securities and (ii) the Subordinated
     Debentures, upon any distribution upon the liquidation of the Trust to
     holders of the Preferred Securities, in each case on the New York Stock
     Exchange.

          6.   CONDITIONS OF THE OBLIGATIONS OF THE PURCHASERS. The obligations
of the several Purchasers to purchase and pay for the Preferred Securities will
be subject to the accuracy of the representations and warranties on the part of
the Trust and the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the Trust
and the Company of its obligations hereunder and to the following additional
conditions precedent:

          (a)  Subsequent to the signing of this Agreement, you shall have
     received a letter of PricewaterhouseCoopers LLP, dated the Closing Date,
     confirming that they are independent public accountants within the meaning
     of the Act and the 33 Act Rules and Regulations, and stating in effect
     that:

               (i)    In their opinion, the consolidated financial statements
          and supporting schedules audited by them which are included in the
          Company's Form 10-K dated __________(the "Form 10-K"), which is
          incorporated by reference in the Registration Statement comply in form
          in all material respects with the applicable accounting requirements
          of the Act and the 33 Act Rules and



                                      - 8 -

          Regulations and the Exchange Act and the Exchange Act Rules and
          Regulations;

               (ii)   On the basis of procedures specified in such letter (but
          not an audit in accordance with generally accepted auditing
          standards), including reading the minutes of meetings of the
          shareholders, the Board of Directors and the Executive Committee of
          the Company since the end of the year covered by the Form 10-K as set
          forth in the minute books through a specified date not more than five
          days prior to the Closing Date, performing procedures specified in
          Statement on Auditing Standards (SAS) No.71, Interim Financial
          Information, which has been superceded by SAS 100, Interim Financial
          Information, on the unaudited interim consolidated financial
          statements of the Company incorporated by reference in the
          Registration Statement, if any, and reading the latest available
          unaudited interim consolidated financial statements of the Company,
          and making inquiries of certain officials of the Company who have
          responsibility for financial and accounting matters as to whether the
          latest available financial statements not incorporated by reference in
          the Registration Statement are prepared on a basis substantially
          consistent with that of the audited consolidated financial statements
          incorporated in the Registration Statement, nothing has come to their
          attention that has caused them to believe that (1) any unaudited
          consolidated financial statements incorporated by reference in the
          Registration Statement do not comply in form in all material respects
          with the applicable requirements of the Act and the 33 Act Rules and
          Regulations and the Exchange Act and the Exchange Act Rules and
          Regulations or any material modifications should be made to those
          unaudited consolidated financial statements for them to be in
          conformity with generally accepted accounting principles; (2) at the
          date of the latest available balance sheet not incorporated by
          reference in the Registration Statement there was any change in the
          capital stock, increases in long-term debt or decrease in consolidated
          net assets or common shareholders' equity as compared with the amounts
          shown in the latest balance sheet incorporated by reference in the
          Registration Statement or for the period from the closing date of the
          latest income statement incorporated by reference in the Registration
          Statement to the closing date of the latest available income statement
          read by them there were any decreases, as compared with the
          corresponding period of the previous year, in operating revenues,
          operating income, net income, or in earnings per share of common stock
          except in all instances of changes or decreases that the Registration
          Statement discloses have occurred or may occur, or which are described
          in such letter; or (3) at a specified date not



                                      - 9 -

          more than five days prior to the Closing Date, there was any change in
          the capital stock or increases in long-term debt of the Company or, at
          such date, there was any decrease in net assets of the Company as
          compared with amounts shown in the latest balance sheet incorporated
          by reference in the Registration Statement, or for the period from the
          closing date of the latest income statement incorporated by reference
          in the Registration Statement to a specified date not more than five
          days prior to the Closing Date, there were any decreases as compared
          with the corresponding period of the previous year, in operating
          revenues, operating income, net income or in earnings applicable to
          common stock, except in all cases for changes or decreases which the
          Registration Statement discloses have occurred or may occur, or which
          are described in such letter; and

               (iii)  Certain specified procedures have been applied to certain
          financial or other statistical information (to the extent such
          information was obtained from the general accounting records of the
          Company) set forth or incorporated by reference in the Registration
          Statement and that such procedures have not revealed any disagreement
          between the financial and statistical information so set forth or
          incorporated by reference in the Registration Statement and the
          underlying general accounting records of the Company, except as
          described in such letter.

          (b)  Prior to the Closing Date, no stop order suspending the
     effectiveness of the Registration Statement shall have been issued and no
     proceedings for that purpose shall have been instituted, or to the
     knowledge of the Company, the Trust or you, shall be contemplated by the
     Commission, and if the Company and the Trust has elected to rely upon Rule
     462(b), the Rule 462(b) Registration Statement shall have become effective
     in accordance with Rule 462(b).

          (c)  Subsequent to the date of this Agreement, (i) there shall not
     have occurred any change or any development involving a prospective change
     not contemplated by the Prospectus as of the date of this Agreement in or
     affecting particularly the business or properties of the Company which, in
     the judgment of a majority in interest of the Purchasers including you,
     materially impairs the investment quality of the Preferred Securities, (ii)
     no rating of any of the Company's debt securities or any trust preferred
     securities guaranteed by the Company shall have been lowered, put on
     creditwatch or given a negative outlook by any "nationally recognized
     statistical rating organization," as that term is defined by the Commission
     for purposes of Rule 436(g) and (iii) trading in securities generally on
     the New York Stock Exchange shall not have been suspended nor limited,
     other than a temporary suspension in trading to provide for an



                                     - 10 -

     orderly market, nor shall minimum prices have been established on such
     Exchange, a banking moratorium shall not have been declared either by New
     York State or Federal authorities and there shall not have occurred an
     outbreak or escalation of major hostilities in which the United States is
     involved or other substantial national or international calamity or crisis
     (including one caused by a terrorist act), the effect of which on the
     financial markets of the United States is such as to make it, in your
     judgment, impracticable to market the Preferred Securities.

          (d)  There shall not be in effect on the Closing Date any order of the
     Public Service Commission of Maryland which would prevent the issuance,
     sale and delivery of the Subordinated Debentures and Guarantee in
     accordance with the terms contemplated by this Agreement.

          (e)  You shall have received an opinion, dated the Closing Date, of a
     counsel for the Company to the effect that:

               (i)    The Company has been duly incorporated and is validly
          existing as a corporation in good standing under the laws of the State
          of Maryland, with power and authority (corporate and other) to own its
          properties and conduct its business as described in the Prospectus;
          and the Company is duly qualified to do business as a foreign
          corporation in good standing in all other jurisdictions in which the
          conduct of its business or the ownership of its properties requires
          such qualification and the failure to do so would have a material and
          adverse impact on its financial condition;

               (ii)   The Declaration, the Guarantee, the Indenture and the
          Subordinated Debentures (collectively the "BGE Agreements") have been
          duly authorized, executed and delivered by the Company and are valid
          instruments, legally binding on the Company and enforceable in
          accordance with their terms, except as limited by bankruptcy,
          insolvency, or other laws affecting the enforcement of creditors'
          rights and by general principles of equity;

               (iii)  The issuance and sale of the Subordinated Debentures and
          Guarantee have been duly authorized by all necessary corporate action
          of the Company. The Subordinated Debentures (assuming that they have
          been duly authenticated by the Debenture Trustee or a duly designated
          Authentication Agent under the Indenture, which fact counsel need not
          verify by an inspection of the Subordinated Debentures), have been
          duly issued and constitute legal, valid, and binding obligations of
          the Company enforceable in accordance with their terms, and are
          entitled to the benefits provided by the Indenture except as such
          enforceability or entitlement may be



                                     - 11 -

          limited by bankruptcy, insolvency, or other laws affecting the
          enforcement of creditors' rights and by general principles of equity;

               (iv)   The Registration Statement has become effective under the
          Act and (a) to the best of such counsel's knowledge, no stop order
          suspending the effectiveness of the Registration Statement has been
          issued and no proceedings for that purpose have been instituted or are
          pending or contemplated under the Act; (b) the Registration Statement
          (as of its effective date) and the Prospectus (as of the date hereof
          and as of the Closing Date) and any amendments or supplements thereto,
          as of their respective dates, appeared to comply as to form in all
          material respects with the requirements of Form S-3 under the Act and
          the 33 Act Rules and Regulations and the Trust Indenture Act; (c) such
          counsel has no reason to believe that either the Registration
          Statement or the Prospectus, or any such amendment or supplement, as
          of such respective dates or as of the Closing Date, contained any
          untrue statement of a material fact or omitted to state any material
          fact required to be stated therein or necessary to make the statement
          therein not misleading; (d) the descriptions in the Registration
          Statement and Prospectus of statutes, legal and governmental
          proceedings and contracts and other documents are accurate and fairly
          present the information required to be shown; and (e) such counsel
          does not know of any legal or governmental proceedings required to be
          described in the Prospectus which are not described as required, or of
          any contracts or documents of a character required to be described in
          the Registration Statement or Prospectus or to be filed as exhibits to
          the Registration Statement which are not described or filed as
          required; it being understood that such counsel, in addressing the
          matters covered in this paragraph (iv) need express no opinion with
          respect to the financial statements, including the notes thereto or
          any other financial or statistical data found or derived from the
          internal accounting or other records of the Company and its
          subsidiaries set forth or referred to in the Registration Statement
          and Prospectus or incorporated therein or attached as an exhibit
          thereto or as to the Statement of Eligibility and Qualification on
          Form T-l of the Debenture Trustee under the Indenture, the Guarantee
          Trustee under the Guarantee, or the trustee under the Declaration;

               (v)    The approval of the Public Service Commission of Maryland
          necessary for the valid issuance by the Company of the Guarantee and
          the Subordinated Debentures pursuant to this Agreement has been
          obtained and continues in full force and effect. Counsel knows of no
          other approval of any other regulatory authority which is legally
          required



                                     - 12 -

          for the valid offering, issuance, sale and delivery of the Guarantee
          and the Subordinated Debentures by the Company under this Agreement
          (except that such opinion need not pass upon the requirements of state
          securities acts);

               (vi)   The consummation of the transactions contemplated in this
          Agreement and the compliance by the Company with all the terms of the
          Indenture did not and will not result in a breach of any of the terms
          and provisions of, or constitute a default under, the Company's
          Charter or By-Laws, or to the best of such counsel's knowledge, any
          indenture, mortgage or deed of trust or other agreement or instrument
          to which the Company is a party;

               (vii)  This Agreement has been duly authorized, executed and
          delivered by the Company;

               (viii) The Declaration, the Indenture and the Guarantee are each
          duly qualified under the Trust Indenture Act;

               (ix)   The issuance, sale and delivery of the Subordinated
          Debentures, the Guarantee and the Preferred Securities as contemplated
          by this Agreement are not subject to the approval of the Securities
          and Exchange Commission under the provisions of the Public Utility
          Holding Company Act of 1935 (the "1935 Act");

               (x)    The statements set forth in the Prospectus under the
          caption "Description of the Preferred Securities," "Description of the
          Preferred Securities Guarantee," and "Description of the Junior
          Subordinated Debentures and on the cover page of the Prospectus and in
          the summary insofar as they purport to constitute a summary of the
          terms of the Indenture, Guarantee and the Preferred Securities, are
          accurate, complete and fair;

               (xi)   To such counsel's knowledge, there are no legal or
          governmental proceedings pending to which the Trust is a party or of
          which any property of the Trust is the subject; and, to such counsel's
          knowledge, no such proceedings are threatened or contemplated by
          governmental authorities;

               (xii)  Neither the Trust nor the Company is and upon issuance and
          sale of preferred securities neither will be an "investment company"
          under the Investment Company Act of 1940, as amended;

               (xiii) The issuance and sale of the Preferred Securities and the
          Common Securities by the Trust, the compliance by the Trust with its
          obligations under this



                                     - 13 -

          Agreement, the purchase of the Subordinated Debentures by the Trust
          from the Company, the distribution of the Subordinated Debentures upon
          the liquidation of the Trust in the circumstances contemplated by the
          Declaration and described in the Prospectus, and the consummation of
          the transactions contemplated herein and in the Declaration, did not
          and will not result in a breach of any of the terms and provisions of,
          or constitute a default under, any agreement or instrument known to
          such counsel to which the Trust is a party or by which the Trust is
          bound or to which any of the property or assets of the Trust is
          subject, nor will such action result in any violation of the
          provisions of the Declaration, or any Maryland or Federal statute or
          any order, rule or regulation known to such counsel of any Maryland or
          Federal court or government agency or body having jurisdiction over
          the Trust or any of its properties; and

               (xiv)  At the Closing Date, all of the issued and outstanding
          Common Securities of the Trust will be directly owned by BGE subject
          only to the lien of its Mortgage and Deed of Trust, as amended and
          restated on June 20, 1995.

          In rendering such opinions, such counsel may rely as to all matters of
          Delaware law and legal conclusions therein upon the opinion of counsel
          referred to in Section 6(g) hereof.

          (f)  The Purchasers shall have received from Cahill Gordon & Reindel
LLP, counsel for the Purchasers, an opinion dated the Closing Date, with respect
to the matters referred to in paragraph 6(e) subheadings (ii), (iii), (iv)(b),
(v), (vii), (viii) and (x) and such other matters as the Purchasers shall
reasonably request and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass on such
matters.

               In rendering such opinion, Cahill Gordon & Reindel LLP may rely,
     as to the incorporation of the Company, the approval of the Public Service
     Commission of Maryland required for the issuance, sale and delivery of the
     Preferred Securities and all other matters governed by the laws of the
     State of Maryland and the applicability of the 1935 Act, upon the opinion
     of Counsel for the Company referred to above and has relied as to all
     matters of Delaware law and legal conclusions therein upon the opinion of
     counsel referred to in Section 6(g) hereof.

               In addition, such counsel shall state that it participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company and
representatives



                                     - 14 -

of the Purchasers at which the contents of the Registration Statement and
Prospectus and related matters were discussed. Given the limitations inherent in
the role of outside counsel and the character of determinations involved in the
preparation of the Registration Statement and Prospectus, such counsel shall not
pass upon and will not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and
Prospectus and have made no independent check or verification thereof. On the
basis of the foregoing, no facts have come to the attention of such counsel that
lead it to believe that the Registration Statement and Prospectus, as of its
date or as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel expresses no comment
with respect to the financial statements, including the notes thereto, or any
other financial or statistical data found in or derived from the internal
accounting or other records of the Company and its subsidiaries set forth or
referred to in the Registration Statement and Prospectus or incorporated therein
or as to the Statement of Eligibility and Qualification on Form T-l of the
Debenture Trustee under the Indenture, the Guarantee Trustee under the
Guarantee, or the property trustee under the Declaration).

     (g)  Richards, Layton & Finger P.A., special Delaware counsel for the Trust
and BGE, shall have furnished to the Representatives their written opinion,
dated the Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:

               (i)    The Trust has been duly created and is validly existing in
          good standing as a statutory trust under the Delaware Statutory Trust
          Act, and all filings required under the laws of the State of Delaware
          with respect to the creation and valid existence of the Trust as a
          statutory trust have been made;

               (ii)   Under the Delaware Statutory Trust Act and the
          Declaration, the Trust has the trust power and authority to own
          property and conduct its business as described in the Prospectus;

               (iii)  Under the Delaware Statutory Trust Act and the
          Declaration, the Trust has the trust power and authority (a) to
          execute and deliver, and to perform its obligations under, this
          Agreement and (b) to issue and perform its obligations under the
          Preferred Securities and the Common Securities;

               (iv)   Under the Delaware Statutory Trust Act and the
          Declaration, the execution and delivery by the Trust of this
          Agreement, and the performance by the Trust of its



                                     - 15 -

          obligations hereunder, have been duly authorized by all necessary
          trust action on the part of the Trust;

               (v)    The Declaration constitutes a valid and binding obligation
          of BGE and the Trustees, enforceable against BGE and the Trustees, in
          accordance with its terms, subject, as to enforcement to the effect
          upon the Declaration of (a) bankruptcy, insolvency, moratorium,
          receivership, liquidation, fraudulent conveyance, reorganization and
          other similar laws relating to or affecting the remedies and rights of
          creditors, (b) principles of equity, including applicable law relating
          to fiduciary duties (regardless of whether considered or applied in a
          proceeding in equity or at law) and (c) the effect of applicable
          public policy on the enforceability of provisions relating to
          indemnification or contribution;

               (vi)   The Preferred Securities have been duly authorized by the
          Declaration and are duly and validly issued and, subject to the
          qualifications set forth herein, fully paid and non-assessable
          undivided beneficial interests in the assets of the Trust; the holders
          of the Preferred Securities, as beneficial owners of the Trust (the
          "Securityholders"), are entitled to the same limitation of personal
          liability extended to stockholders of private corporations for profit
          organized under the General Corporation law of the State of Delaware;
          and provided that such counsel may note that the Securityholders may
          be obligated, pursuant to the Declaration, to (a) provide indemnity
          and/or security in connection with and pay a sum sufficient to cover
          any taxes or governmental charges arising from transfers or exchanges
          of Preferred Securities certificates and the issuance of replacement
          Preferred Securities certificates and (b) provide security and/or
          indemnity in connection with requests of or directions to the Property
          Trustee (as defined in the Declaration) to exercise its rights and
          powers under the Declaration; and under the Delaware Statutory Trust
          Act and the Declaration, the issuance of the Preferred Securities is
          not subject to preemptive or other similar rights;

               (vii)  The Common Securities have been duly authorized by the
          Declaration and are duly and validly issued and fully paid undivided
          beneficial interests in the assets of the Trust; and under the
          Delaware Statutory Trust Act and the Declaration, the issuance of the
          Common Securities is not subject to preemptive or other similar
          rights;

               (viii) The issuance and sale by the Trust of the Preferred
          Securities and the Common Securities, the



                                     - 16 -

          execution, delivery and performance by the Trust of this Agreement,
          the consummation by the Trust of the transactions contemplated herein
          and the compliance by the Trust with its obligations hereunder do not
          violate (a) any of the provisions of the Certificate of Trust of the
          Trust or the Declaration or (b) any applicable Delaware law or
          Delaware administrative regulation;

               (ix)   Assuming that the Trust derives no income from or
          connected with sources within the State of Delaware and has no assets,
          activities (other than having a Delaware trustee as required by the
          Delaware Statutory Trust Act and the filing of documents with the
          Secretary of State of the State of Delaware) or employees in the State
          of Delaware, no authorization, approval, consent or order of any
          Delaware court or Delaware governmental authority or Delaware agency
          is required to be obtained by the Trust solely as a result of the
          issuance and sale of the Preferred Securities, the consummation by the
          Trust of the transactions contemplated herein or the compliance by the
          Trust of its obligations hereunder; and

               (x)    Assuming that the Trust derives no income from or
          connected with sources within the State of Delaware and has no assets,
          activities (other than having a Delaware trustee as required by the
          Delaware Statutory Trust Act and the filing of documents with the
          Secretary of State of the State of Delaware) or employees in the State
          of Delaware, and assuming that the Trust is treated as a grantor trust
          for federal income tax purposes, the Securityholders (other than those
          holders of the Preferred Securities who reside or are domiciled in the
          State of Delaware) will have no liability for income taxes imposed by
          the State of Delaware solely as a result of their participation in the
          Trust, and the Trust will not be liable for any income tax imposed by
          the State of Delaware (in rendering the opinion expressed in this
          paragraph (g), such counsel need express no opinion concerning the
          securities laws of the State of Delaware).

          (h)  You shall have received from, Sullivan & Cromwell LLP, special
     tax counsel to the Company and the Trust, an opinion dated the Closing
     Date, to the effect that the statements made in the Prospectus under the
     caption "United States Federal Income Tax Consequences" to the extent they
     constitute matters of law or legal conclusions, have been reviewed by such
     counsel and are accurate and correct in all material respects and fairly
     present the information set forth therein, and that under current law and
     based on the representations, facts and assumptions described in
     Prospectus, and assuming full compliance with the terms of this Agreement,
     the Guarantee, the Indenture and the



                                     - 17 -

     Declaration, the Trust will be characterized for United States federal
     income tax purposes as a grantor trust and will not be taxable as a
     corporation.

          (i)  You shall have received (x) a certificate of the administrative
     trustee of the Trust stating that, to the best of his knowledge after
     reasonable investigation, and relying on opinions of counsel to the extent
     that legal matters are involved, that the representations and warranties of
     the Trust in this Agreement are true and correct in all material respects,
     that the Trust has complied with all agreements and satisfied all
     conditions on its part to be performed or satisfied at or prior to the
     Closing Date and (y) a certificate of the Chairman of the Board, President
     or any Vice President and a principal financial or accounting officer of
     the Company, dated the Closing Date, in which such officers shall state, to
     the best of their knowledge after reasonable investigation, and relying on
     opinions of counsel to the extent that legal matters are involved, that the
     representations and warranties of the Company in this Agreement are true
     and correct in all material respects, that the Company has complied with
     all agreements and satisfied all conditions on its part to be performed or
     satisfied at or prior to the Closing Date, that no stop order suspending
     the effectiveness of the Registration Statement has been issued and no
     proceedings for that purpose have been instituted or are contemplated by
     the Commission, and that, subsequent to the date of the most recent
     financial statements set forth or incorporated by reference in the
     Prospectus, there has been no material adverse change in the financial
     position or in the financial results of operation of the Company except as
     set forth or contemplated in the Prospectus.

          (j)  The Company will furnish you with such conformed copies of such
     opinions, certificates, letters and documents as you reasonably request.

          (k)  An application shall have been filed to list Preferred Securities
     on the New York Stock Exchange.

          (l)  The Declaration, the Guarantee and the Indenture shall have been
     executed and delivered, in each case in a form reasonably satisfactory to
     the Representatives.

          (m)  A Special Event (as defined in the Prospectus) shall not have
     occurred and be continuing.

          In case any such condition shall not have been satisfied, this
Agreement may be terminated by you upon notice in writing or by telecopy to the
Company and the Trust without liability or obligation on the part of the Company
or any Purchaser, except as set forth in Section 10 hereof.



                                     - 18 -

          7.   CONDITIONS OF THE OBLIGATIONS OF THE COMPANY AND THE TRUST . The
obligations of the Company and the Trust to sell and deliver the Subordinated
Debentures and Preferred Securities are subject to the following conditions
precedent:

          (a)  Prior to the Closing Date, no stop order suspending the
     effectiveness of the Registration Statement shall have been issued and no
     proceedings for that purpose shall have been instituted or, to the
     knowledge of the Company, the Trust or you, shall be contemplated by the
     Commission.

     (b) There shall not be in effect on the Closing Date any order of the
          Maryland Public Service Commission which would prevent the issuance,
          sale and delivery of the Subordinated Debentures or Guarantee or which
          contains conditions or provisions with respect thereto which are not
          acceptable to the Company or the Trust, it being understood that no
          order in effect at the date of this Agreement contains any such
          unacceptable conditions or provisions.

     (c)  A Special Event (as defined in the Prospectus) shall not have occurred
           and be continuing.

          If any such condition shall not have been satisfied, then the Company
     shall be entitled, by notice in writing or by telecopy to you, to terminate
     this Agreement without any liability on the part of the Company or any
     Purchaser, except as set forth in Section 10 hereof.

          8.   INDEMNIFICATION.

          (a)  The Company and the Trust, jointly and severally, will indemnify
     and hold harmless each Purchaser and each person, if any, who controls any
     Purchaser within the meaning of the Act or Exchange Act against any losses,
     claims, damages or liabilities, joint or several, to which such Purchaser
     or such controlling person may become subject, under the Act or otherwise,
     insofar as such losses, claims, damages or liabilities (or actions in
     respect thereof) arise out of or are based upon any untrue statement or
     alleged untrue statement of any material fact contained in the Registration
     Statement or the Prospectus (or any amendment or supplement thereto), or
     any related preliminary prospectus or arise out of or are based upon the
     omission or alleged omission to state therein a material fact required to
     be stated therein or necessary to make the statements therein not
     misleading; and will reimburse each Purchaser and each such controlling
     person for any legal or other expenses reasonably incurred by such
     Purchaser or such controlling person in connection with investigating or
     defending any such loss, claim, damage, liability or action as such
     expenses are incurred; provided, however, that the Company and the Trust
     will not be liable to such Purchaser or controlling person in



                                     - 19 -

     any such case to the extent that any such loss, claim, damage or liability
     arises out of or is based upon an untrue statement or alleged untrue
     statement or omission or alleged omission made in any such documents in
     reliance upon and in conformity with written information furnished to the
     Company or the Trust by such Purchaser or such controlling person
     specifically for use therein; and provided, further, that the Company shall
     not be liable to any Purchaser under the indemnity agreement in this
     subsection (a) with respect to any preliminary prospectus to the extent
     that any such loss, claim, damage or liability of such Purchaser results
     from the fact such Purchaser sold Preferred Securities to a person to whom
     there was not sent or given, at or prior to the written confirmation of
     such sale, a copy of the Prospectus (excluding documents incorporated by
     reference) or of the Prospectus as then amended or supplemented (excluding
     documents incorporated by reference) in any case where such delivery is
     required by the Act if the Company has previously furnished copies thereof
     to such Purchaser and the loss, claim, damage or liability of such
     Purchaser results from an untrue statement or omission of a material fact
     contained in the preliminary prospectus which was corrected in the
     Prospectus (or the Prospectus as amended or supplemented). This indemnity
     agreement will be in addition to any liability which the Company may
     otherwise have.

          (b)  Each Purchaser will indemnify and hold harmless the Company and
     the Trust, each director or officer of the Company or the Trust and each
     person, if any, who controls the Company or the Trust within the meaning of
     the Act or the Exchange Act, against any losses, claims, damages or
     liabilities to which the Company or the Trust or any such director, officer
     or controlling person may become subject, under the Act, or otherwise,
     insofar as such losses, claims, damages or liabilities (or actions in
     respect thereof) arise out of or are based upon any untrue statement or
     alleged untrue statement of any material fact contained in the Registration
     Statement or the Prospectus (or any amendment or supplement thereto), or
     any related preliminary prospectus or arise out of or are based upon the
     omission or the alleged omission to state therein a material fact required
     to be stated therein or necessary to make the statements therein not
     misleading, in each case to the extent, but only to the extent, that such
     untrue statement or alleged untrue statement or omission or alleged
     omission was made in reliance upon and in conformity with written
     information furnished to the Company or the Trust by such Purchaser
     specifically for use therein; and will reimburse any legal or other
     expenses reasonably incurred by the Company or the Trust or any such
     director, officer or controlling person in connection with investigating or
     defending any such loss, claim, damage, liability or action as such
     expenses are incurred. This indemnity agreement will be in addition to any
     liability which such Purchaser may otherwise have.



                                     - 20 -

          (c)  Promptly after receipt by an indemnified party under this Section
     of notice of the commencement of any action, such indemnified party will,
     if a claim in respect thereof is to be made against the indemnifying party
     under (a) and (b) above, notify the indemnifying party of the commencement
     thereof; but the omission so to notify the indemnifying party will not
     relieve it from any liability which it may have to any indemnified party
     otherwise than under this Section, except to the extent the indemnifying
     party has been materially prejudiced by such omission. In case any such
     action is brought against any indemnified party, and it notifies the
     indemnifying party of the commencement thereof, the indemnifying party will
     be entitled to participate therein, and, to the extent that it may wish,
     jointly with any other indemnifying party similarly notified, to assume the
     defense thereof with counsel satisfactory to such indemnified party (who
     may, with the consent of the indemnified party, be counsel to the
     indemnifying party) and who shall not be counsel to any other indemnified
     party who may have interests conflicting with those of such indemnified
     party, and after notice from the indemnifying party to such indemnified
     party of its election so to assume the defense thereof, the indemnifying
     party will not be liable to such indemnified party under this Section for
     any legal or other expenses subsequently incurred by such indemnified party
     in connection with the defense thereof other than reasonable costs of
     investigation.

          (d)  If recovery is not available under the foregoing indemnification
     provisions of this Section, for any reason other than as specified therein,
     the parties entitled to indemnification by the terms thereof shall be
     entitled to contribution to liabilities and expenses, except to the extent
     that contribution is not permitted under Section 11(f) of the Act. In
     determining the amount of contribution to which the respective parties are
     entitled, there shall be considered the relative benefits received by each
     party from the offering of the Preferred Securities and Subordinated
     Debentures (taking into account the portion of the proceeds of the offering
     realized by each), the parties' relative knowledge and access to
     information concerning the matter with respect to which the claim was
     asserted, the opportunity to correct and prevent any statement or omission,
     and any other equitable considerations appropriate under the circumstances.
     The Company, the Trust and the Purchasers and such controlling persons
     agree that it would not be equitable if the amount of such contribution
     were determined by pro rata or per capita allocation (even if the
     Purchasers and such controlling persons were treated as one entity for such
     purpose). Notwithstanding the provisions of this subsection (d), no
     Purchaser or controlling person shall be required to make contribution
     hereunder which in the aggregate exceeds the total public offering price of
     the Preferred Securities,



                                     - 21 -

     purchased by the Purchaser under this Agreement, less the aggregate amount
     of any damages which such Purchaser or such controlling person has
     otherwise been required to pay in respect of the same claim or any
     substantially similar claim. The Purchasers' obligations to contribute are
     several in proportion to their respective underwriting obligations and not
     joint.

          9.   DEFAULT OF PURCHASERS. If any Purchaser or Purchasers default in
their obligations to purchase Preferred Securities hereunder and the total
number of Preferred Securities which such defaulting Purchaser or Purchasers
agreed but failed to purchase is 10% of the total number of Preferred Securities
or less, the non-defaulting Purchasers may make arrangements satisfactory to the
Company and the Trust for the purchase of such Preferred Securities by other
persons, including any of the Purchasers, but if no such arrangements are made
by the Closing Date the non-defaulting Purchasers shall be obligated severally,
in proportion to their respective commitments hereunder, to purchase the
Preferred Securities which such defaulting Purchasers agreed but failed to
purchase. If any Purchaser or Purchasers so default and the total number of
Preferred Securities with respect to which such default or defaults occur is
more than the above percentage and arrangements reasonably satisfactory to you
and the Company for the purchase of such Preferred Securities by other persons
are not made within seventy-two hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Purchaser, the
Company or the Trust, except as provided in Section 10. In the event that any
Purchaser or Purchasers default in their obligation to purchase Preferred
Securities hereunder, the Company may, by prompt written notice to the
non-defaulting Purchasers, postpone the Closing Date for a period of not more
than seven full business days in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents, and the Company and the Trust will promptly file any amendments to
the Registration Statement or supplements to the Prospectus which may thereby be
made necessary. As used in this Agreement, the term "Purchaser" includes any
person substituted for a Purchaser under this Section. Nothing herein will
relieve a defaulting Purchaser from liability for its default.

          10.  SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties, and other
statements of the Company, the Trust or its officers and of the several
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Purchaser, the Company or the Trust
or any officer or director thereof or any controlling person, and will survive
delivery of and payment for the Preferred Securities. If this Agreement is
terminated pursuant to Section 6, 7 or 9 or if for any reason the purchase of
the



                                     - 22 -

Preferred Securities by the Purchasers is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant
to Section 5(g). In addition, in such event the respective obligations of the
Company, the Trust and the Purchasers pursuant to Section 8 shall remain in
effect; provided, however, that each Purchaser will use its best efforts to
promptly notify each other Purchaser and each dealer and prospective customer
to whom such Purchaser has delivered a Prospectus for the Preferred
Securities by telephone or telegraph, confirmed by letter in either case, of
such termination or failure to consummate, including in such notice
instructions regarding the continued use of the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus.

          11.  NOTICES. All communications hereunder will be in writing, and, if
sent to the Purchasers will be delivered or telecopied and confirmed to the
address set forth below, or, if sent to the Company or the Trust, will be
delivered or telecopied and confirmed to it, attention of Treasurer at 750 E.
Pratt Street, 16th Floor, Baltimore, Maryland 21202, telecopier (410) 783-3619.

          Notices to the Purchasers shall be sent to the following address(es)
or telecopier number(s):

          12.  SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligation hereunder.

          13.  CONSTRUCTION. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

          14.  COUNTERPARTS. This Agreement may be executed in one or more
counterparts and it is not necessary that the signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement.

          15.  AUTHORITY TO ACT AS REPRESENTATIVES. We represent that we are
authorized to act for the several Purchasers in connection with the transactions
contemplated in this Agreement , and that any action under this Agreement taken
by any of us will be binding upon all the Purchasers.



     If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Company, the Trust and the several
Purchasers in accordance with its terms.

                                           Very truly yours,

                                           [Firm Name]


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

                                           Title:
                                                 ---------------------------

                                           Acting on behalf of and as
                                           Representative(s) of the
                                           several Purchasers named in
                                           Schedule A hereto.*

The foregoing Purchase
Agreement is hereby confirmed
as of the date first above
written

BALTIMORE GAS AND ELECTRIC COMPANY


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

Title:
      ---------------------------


BGE Capital Trust II

By: Baltimore Gas and Electric Company, as Depositor


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

- ----------
*    To be deleted if the Agreement is not
     executed by one or more Purchasers acting as
     Representative(s) of the Purchasers for purposes of this
     Agreement.



                                   SCHEDULE A



Name of Purchaser                                             Amount
- -----------------                                             ------
                                                           





Total
                                                              --------------
                                                              $
                                                              ==============

EX-4.(A)

                                                                    Exhibit 4(a)

                              CERTIFICATE OF TRUST
                                       OF
                              BGE CAPITAL TRUST II

          THIS CERTIFICATE OF TRUST of BGE Capital Trust II (the "Trust"), dated
as of August 4, 2003, is being duly executed and filed by the undersigned, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
DEL. C. ss. 3801, et seq.).

          (i)  Name. The name of the statutory trust being formed hereby is BGE
Capital Trust II.

          (ii) Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are:

          The  Bank of New York (Delaware)
          White Clay Center, Route 273
          Newark, DE 19711

          (iii)     Effective Date. This Certificate of Trust shall be effective
as of its filing.

          IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.

                                The Bank of New York, as Trustee

                                By: /s/ Geovanni Barris
                                   -------------------------
                                   Name: Geovanni Barris
                                   Title: Vice President

                                The Bank of New York (Delaware), as
                                Trustee

                                By: /s/ William T. Lewis
                                   -------------------------
                                   Name: William T. Lewis
                                   Title: Sr. Vice President

                                     /s/ Thomas E. Ruszin, Jr.
                                ---------------------------------
                                 Thomas E. Ruszin, Jr., as Trustee

EX-4.(B)

                                                                    Exhibit 4(b)

                              DECLARATION OF TRUST

          This DECLARATION OF TRUST, dated as of August 4, 2003 (this
"Declaration"), is among Baltimore Gas and Electric Company, a Maryland
corporation, as "Depositor," and The Bank of New York, a New York banking
corporation, The Bank of New York (Delaware), a Delaware banking corporation,
and Thomas E. Ruszin, Jr., not in their individual capacities but solely as
trustees (the "Trustees"). The Depositor and the Trustees hereby agree as
follows:

          1. The trust created hereby shall be known as "BGE Capital Trust II,"
in which name the Trustees, or the Depositor to the extent provided herein, may
conduct the affairs of the Trust, make and execute contracts, and sue and be
sued.

          2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a statutory trust under Chapter 38 of Title 12
of the Delaware Code, 12 DEL. C. ss. 3801, et seq. (the "Statutory Trust Act"),
and that this document constitutes the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the provisions of
the Statutory Trust Act.

          3. The Depositor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.

          4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the

                                       -1-


Registration Statement on Form S-3 (the "1933 Act Registration Statement"),
including any pre-effective or post-effective amendments to the 1933 Act
Registration Statement (including the prospectus, prospectus supplements and the
exhibits contained therein), relating to the registration under the Securities
Act of 1933, as amended, of the Preferred Securities of the Trust and possibly
certain other securities and other necessary documents relating thereto and (b)
a Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended, including any
amendments thereto; (ii) to file with the New York Stock Exchange or any other
national stock exchange or The Nasdaq National Market (each, an "Exchange") and
execute on behalf of the Trust one or more listing applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on any of the Exchanges; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or blue sky laws of such jurisdictions as the Depositor, on behalf of the Trust,
may deem necessary or desirable and (iv) to negotiate the terms of and to
execute, deliver and perform on behalf of the Trust a purchase agreement
relating to the Preferred Securities, in each case among the Trust, the
Depositor and the several Purchasers named therein, substantially in the form
included as an exhibit to the 1933 Act Registration Statement. In the event that
any filing referred to in clauses (i), (ii) and (iii) above is required by the
rules and regulations of the Commission, an Exchange or state securities or blue
sky laws, to be executed on behalf of the Trust by any of the Trustees, Thomas
E. Ruszin, Jr., in his capacity as a Trustee of the Trust, is hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing. In connection with all of the foregoing, the
Depositor hereby constitutes and appoints Thomas E. Ruszin, Jr. as its true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for the Depositor or in the Depositor's name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Depositor might or could do in
person, hereby ratifying and

                                       -2-


confirming all that said attorney-in-fact and agent or his substitute or
substitutes, shall do or cause to be done by virtue hereof.

          5. This Declaration may be executed in one or more counterparts.

          6. The number of Trustees initially shall be three (3) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or decrease
the number of Trustees; provided, however, that to the extent required by the
Statutory Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. Any Trustee may resign upon thirty (30) days' prior notice to the
Depositor.

          7. The Bank of New York (Delaware), in its capacity as Trustee, shall
not have any of the powers of the Trustees set forth herein and shall be the
Trustee of the Trust for the sole purpose of satisfying the requirements of
Section 3807 of the Statutory Trust Act.

          8. This Declaration shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws of
principles).

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

                                         BALTIMORE GAS AND ELECTRIC
                                         COMPANY, as Depositor

                                         By:  /s/ Thomas E. Ruszin, Jr.
                                            -------------------------------
                                         Name:   Thomas E. Ruszin, Jr.
                                         Title:  Treasurer

                                         THE BANK OF NEW YORK, not in its
                                         individual capacity but solely as
                                         Trustee

                                         By: /s/ Geovanni Barris
                                            -------------------------
                                         Name: Geovanni Barris
                                         Title: Vice President

                                       -3-


                                         THE BANK OF NEW YORK (DELAWARE), not in
                                         its individual capacity but solely as
                                         Trustee

                                         By: /s/ William T. Lewis
                                            -----------------------------
                                         Name: William T. Lewis
                                         Title: Sr. Vice President

                                         Thomas E. Ruszin, Jr., not in his
                                         individual capacity but solely as
                                         Trustee

                                          /s/ Thomas E. Ruszin, Jr.
                                         -----------------------------

                                       -4-

EX-4.(C)

                                                                    EXHIBIT 4(c)

                                     FORM OF
                              AMENDED AND RESTATED
                  DECLARATION OF TRUST FOR BGE CAPITAL TRUST II
                                      among

                       BALTIMORE GAS AND ELECTRIC COMPANY
                                 (as Depositor)

                              THE BANK OF NEW YORK
                              (as Property Trustee)

                         THE BANK OF NEW YORK (DELAWARE)
                              (as Delaware Trustee)

                                       and

                     THE ADMINISTRATIVE TRUSTEE NAMED HEREIN


                                   Dated as of



                                TABLE OF CONTENTS



                                                                                                               Page
                                                                                                               ----
                                                                                                              
ARTICLE I Defined Terms...........................................................................................1
    Section 1.01.  Definitions....................................................................................1

ARTICLE II Continuation of the Trust.............................................................................11
    Section 2.01.  Name..........................................................................................11
    Section 2.02.  Office of the Delaware Trustee; Principal Place of Business...................................11
    Section 2.03.  Initial Contribution of Trust Property; Expenses of the Trust.................................12
    Section 2.04.  Issuance of the Trust Securities..............................................................13
    Section 2.05.  Purchase of Debentures........................................................................13
    Section 2.06.  Declaration...................................................................................14
    Section 2.07.  Authorization to Enter into Certain Transactions..............................................14
    Section 2.08.  Assets of Trust...............................................................................19
    Section 2.09.  Title to Trust Property.......................................................................19

ARTICLE III Payment Account......................................................................................20
    Section 3.01.  Payment Account...............................................................................20

ARTICLE IV Distributions; Redemption.............................................................................20
    Section 4.01.  Distributions.................................................................................20
    Section 4.02.  Redemption....................................................................................21
    Section 4.03.  Subordination of Common Securities............................................................24
    Section 4.04.  Payment Procedures............................................................................25
    Section 4.05.  Tax Returns and Reports.......................................................................25
    Section 4.06.  Payments under Indenture......................................................................25

ARTICLE V Trust Securities Certificates..........................................................................26
    Section 5.01.  Initial Ownership.............................................................................26
    Section 5.02.  The Trust Securities Certificates............................................................266
    Section 5.03.  Delivery of Trust Securities Certificates.....................................................26
    Section 5.04.  Registration of Transfer and Exchange of Preferred Securities Certificates....................27
    Section 5.05.  Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates............................29
    Section 5.06.  Persons Deemed Securityholders................................................................29
    Section 5.07.  Access to List of Securityholders' Names and Addresses........................................29
    Section 5.08.  Maintenance of Office or Agency...............................................................30
    Section 5.09.  Appointment of Paying Agent...................................................................30
    Section 5.10.  Transfer of Securities........................................................................31
    Section 5.11.  Book-Entry Preferred Securities Certificates;Common Securities Certificate....................31
    Section 5.12.  Definitive Preferred Securities Certificates..................................................33
    Section 5.13.  Rights of Securityholders.....................................................................34


                                       -i-


                                                                                                              
ARTICLE VI  Acts of Securityholders; Meetings; Voting............................................................37
    Section 6.01.  Limitations on Voting Rights..................................................................37
    Section 6.02.  Notice of Meetings............................................................................38
    Section 6.03.  Meetings of Preferred Securityholders.........................................................38
    Section 6.04.  Voting Rights.................................................................................39
    Section 6.05.  Proxies, etc..................................................................................39
    Section 6.06.  Securityholder Action by Written Consent......................................................39
    Section 6.07.  Record Date for Voting and Other Purposes.....................................................40
    Section 6.08.  Acts of Securityholders.......................................................................40
    Section 6.09.  Inspection of Records.........................................................................41

ARTICLE VII  The Trustees........................................................................................41
    Section 7.01.  Certain Duties and Responsibilities...........................................................41
    Section 7.02.  Notice of Defaults; Direct Action by Securityholders..........................................42
    Section 7.03.  Certain Rights of Property Trustee............................................................43
    Section 7.04.  Not Responsible for Recitals or Issuance of Securities........................................44
    Section 7.05.  May Hold Securities...........................................................................44
    Section 7.06.  Compensation; Indemnity; Fees.................................................................45
    Section 7.07.  Corporate Property Trustee Required; Eligibility of Trustees..................................48
    Section 7.08.  Conflicting Interests.........................................................................49
    Section 7.09.  Co-Trustees and Separate Trustee..............................................................49
    Section 7.10.  Resignation and Removal; Appointment of Successor.............................................51
    Section 7.11.  Acceptance of Appointment by Successor........................................................53
    Section 7.12.  Merger, Conversion, Consolidation or Succession to Business...................................53
    Section 7.13.  Preferential Collection of Claims Against Depositor or Trust..................................54
    Section 7.14.  Reports by Property Trustee...................................................................54
    Section 7.15.  Reports to the Property Trustee...............................................................55
    Section 7.16.  Evidence of Compliance with Conditions Precedent..............................................55
    Section 7.17.  Statements Required in Officers' Certificate and Opinion of Counsel...........................53
    Section 7.18.  Number of Trustees............................................................................53
    Section 7.19.  Delegation of Power...........................................................................54
    Section 7.20.  Voting........................................................................................54
    Section 7.21.  Property Trustee May File Proof of Claim

ARTICLE VIII  Dissolution and Liquidation........................................................................57
    Section 8.01.  Dissolution Upon Expiration Date..............................................................57
    Section 8.02.  Early Dissolution.............................................................................58
    Section 8.03.  Dissolution...................................................................................58
    Section 8.04.  Liquidation...................................................................................58



                                      -ii-


                                                                                                              
ARTICLE IX  Mergers, Etc.........................................................................................60
    Section 9.01.  Mergers, Consolidations, Amalgamations or Replacements of the Trust...........................60

ARTICLE X  Miscellaneous Provisions..............................................................................62
    Section 10.01. Limitation of Rights of Securityholders.......................................................62
    Section 10.02. Amendment.....................................................................................62
    Section 10.03. Severability..................................................................................63
    Section 10.04. Fiscal Year...................................................................................63
    Section 10.05. Certain Accounting Matters....................................................................64
    Section 10.06. Governing Law.................................................................................64
    Section 10.07. Payments Due on Non-Business Day..............................................................64
    Section 10.08. Successors and Assigns........................................................................64
    Section 10.09. Headings......................................................................................64
    Section 10.10. Reports, Notices and Demands..................................................................65
    Section 10.11. Agreement Not to Petition.....................................................................65
    Section 10.12. Trust Indenture Act; Conflict with Trust Indenture Act........................................66
    Section 10.13. Acceptance of Terms of Declaration, Guarantee and Indenture...................................66

ARTICLE XI  Representations of Property Trustee and Delaware Trustee.............................................67
    Section 11.01.  Representations and Warranties of Property Trustee...........................................67
    Section 11.02.  Representations and Warranties of Delaware Trustee...........................................68



                                      -iii-


                              BGE Capital Trust II

            Certain Sections of this Declaration of Trust relating to
                         Sections 310 through 318 of the

                           Trust Indenture Act of 1939



Trust Indenture                                                                               Declaration of Trust
  Act Section                                                                                              Section
- ---------------                                                                               --------------------
                                                                                               
Sections 310 (a)(1).........................................................................................  7.07
     (a)(2).................................................................................................  7.07
     (a)(3).................................................................................................  7.09
     (a)(4)........................................................................................... 2.07(a)(ii)
     (b)....................................................................................................  7.08
Sections 311 (a)............................................................................................. 7.13
     (b)..................................................................................................... 7.13
Sections 312 (a)............................................................................................. 5.07
     (b)..................................................................................................... 5.07
     (c)..................................................................................................... 5.07
Sections 313 (a)............................................................................................. 7.14
     (b)..................................................................................................... 7.14
     (c)..................................................................................................... 7.14
     (d)..................................................................................................... 7.14
Sections 314 (a)............................................................................................  7.15
     (b)..........................................................................................  Not Applicable
     (c)(1)...........................................................................................  7.16, 7.17
     (c)(2)...........................................................................................  7.16, 7.17
     (c)(3)........................................................................................ Not Applicable
     (d)..........................................................................................  Not Applicable
     (e)..................................................................................................... 7.17
Sections 315 (a)................................................................................  7.01(a), 7.03(a)
     (b).............................................................................................  7.02, 10.08
     (c).................................................................................................  7.01(a)
     (d)..............................................................................................  7.01, 7.03
     (e)........................................................................................... Not Applicable
Sections 316 (a)..................................................................................  Not Applicable
     (a)(1)(A)....................................................................................  Not Applicable
     (a)(1)(B)..................................................................................... Not Applicable
     (a)(2).......................................................................................  Not Applicable
     (b)..........................................................................................  Not Applicable
     (c)............................................................................................Not Applicable


                                      -iv-




                                                                                                               Page
                                                                                                               ----
                                                                                                 
Sections 317 (a)(1)...............................................................................  Not Applicable
     (a)(2)................................................................................................... 7.20
     (b)..................................................................................................... 5.09
Sections 318 (a).............................................................................................10.10


- --------------------
Note:    This reconciliation and tie sheet shall not, for any purpose, be deemed
     to be a part of the Declaration of Trust.

                                       -v-


     AMENDED AND RESTATED DECLARATION of BGE Capital Trust II (the "Trust"),
dated as of among (i) Baltimore Gas and Electric Company a, Maryland corporation
(the "Depositor"), (ii) The Bank of New York, a New York banking corporation, as
trustee (the "Property Trustee"), (iii) The Bank of New York (Delaware), whose
address in Delaware is White Clay Center, Route 273, Newark, Delaware 19711, as
Delaware trustee (the "Delaware Trustee"), (iv) Thomas E. Ruszin, Jr, an
individual whose address is 39 W. Lexington Street, Baltimore, Maryland 21201
(the "Administrative Trustee") (the Property Trustee, the Delaware Trustee and
the Administrative Trustee are referred to collectively as the "Trustees"), and
(v) the several Holders, as hereinafter defined.

                                   WITNESSETH:

7     WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and the
Administrative Trustee have heretofore duly declared and established a statutory
trust pursuant to the Delaware Statutory Trust Act by entering into a
Declaration of Trust, dated as of , 2003 (the "Original Declaration"), and by
executing and filing with the Secretary of State of the State of Delaware a
Certificate of Trust on ,2003, which is attached hereto as Exhibit A; and

     WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and the
Administrative Trustee desire to amend and restate the Original Declaration in
its entirety as set forth herein to provide for, among other things, (i) the
issuance of the Common Securities, as hereinafter defined, by the Trust to the
Depositor, (ii) the issuance and sale of the Preferred Securities, as
hereinafter defined, by the Trust pursuant to the Purchase Agreement, as
hereinafter defined, and (iii) the acquisition by the Trust from the Depositor
of all of the right, title and interest in the Debentures, as hereinafter
defined.

     NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, as hereinafter defined, hereby
amends and restates the Original Declaration in its entirety and agrees as
follows:

                                    ARTICLE I

                                  Defined Terms

     Section 1.  Definitions.  For all purposes of this Declaration, except as
otherwise expressly provided or unless the

                                       -1-


context otherwise requires:

          (a) each term defined in this Article I has the meaning assigned to it
in this Article I and includes the plural as well as the singular;

          (b) each of the other terms used herein that is defined in the Trust
Indenture Act, either directly or by reference therein, has the meaning assigned
to it therein;

          (c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Declaration; and

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

     "Act" has the meaning specified in Section 6.08.

     "Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Compounded Interest paid
by the Depositor on a Like Amount of Debentures for such period.

     "Additional Interest" has the meaning specified in Section 1.1(f) of the
Second Supplemental Indenture.

     "Administrative Trustee" means the individual identified as the
"Administrative Trustee" in the preamble to this Declaration, solely in his/her
capacity as Administrative Trustee of the Trust and not in his/her individual
capacity, or such Administrative Trustee's successor in interest in such
capacity, or any successor trustee appointed as herein provided.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Applicable Procedures" means, with respect to any transfer or
transaction involving a Book-Entry Preferred Security, the rules and procedures
of the Clearing Agency for such Book-Entry

                                       -2-


Preferred Security, in each case to the extent applicable to such transaction
and as in effect from time to time.

     "Bankruptcy Event" means, with respect to any Person, the occurrence of any
of the following events:

          (a) Such Person, pursuant to or within the meaning of any Bankruptcy
Law:

               (i) commences a voluntary case or proceeding;

               (ii) consents to the entry of an order for relief against it in
an involuntary case or proceeding;

               (iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, and such Custodian is not discharged
within 60 days;

               (iv) makes a general assignment for the benefit of its creditors;
or

               (v) admits in writing its inability to pay its debts generally as
they become due; or

          (b) A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

               (i) is for relief against such Person in an involuntary case or
proceeding;

               (ii) appoints a Custodian of such Person for all or substantially
all of its properties; or

               (iii) orders the liquidation of such Person,

and in each case the order or decree remains unstayed and in effect for 120
days.

     "Bankruptcy Laws" means Title 11 of the United States Code, or similar
federal or state law for the relief of debtors.

     "Board of Directors" means the board of directors of the Depositor or the
Executive Committee of the board of directors of the Depositor (or any other
committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of two or more members of the board of
directors of the Depositor or officers of the Depositor, or both.

                                       -3-


     "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Board of Directors or officers of the Depositor to which authority to act on
behalf of the Board of Directors has been delegated and to be in full force and
effect on the date of such certification, and delivered to the Trustees.

     "Book-Entry Preferred Securities Certificates" means certificates
representing Preferred Securities issued in global, fully registered form with
the Clearing Agency as described in Section 5.11.

     "Book-Entry Preferred Security" means a Preferred Security, the ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described iin Section 5.11.

     "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York or the
State of Maryland are authorized or obligated by law, regulation or executive
order to close.

     "Certificate Depository Agreement" means the agreement among the Trust, the
Depositor and DTC, as the same may be amended and supplemented from time to
time.

     "Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder. The Depository Trust Company
("DTC") will be the initial Clearing Agency.

     "Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.

     "Closing Date" means the Closing Date as defined in the Purchase Agreement,
which date is also the date of execution and delivery of this Declaration.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Declaration such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

                                       -4-


     "Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached hereto as Exhibit B.

     "Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Declaration, including the right to receive Distributions and a
Liquidation Distribution as provided herein.

     "Company Indemnified Person" means the Administrative Trustee or any
Affiliate, agent or representative thereof.

     "Compounded Interest" has the meaning specified in Section 4.1 of the
Second Supplemental Indenture.

     "Corporate Trust Office" means the principal corporate office of the
Property Trustee located in New York which at the date hereof is 101 Barclay
Street, Floor 21 West, New York, New York.

     "Creditor" has the meaning specified in Section 2.03(d).

     "Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian or similar official under any Bankruptcy Law.

     "Debenture Event of Default" means an "Event of Default" as defined in the
Indenture with respect to the Debentures.

     "Debenture Redemption Date" means "Redemption Date" as defined in the
Indenture with respect to the Debentures.

     "Debenture Trustee" means The Bank of New York, a New York banking
corporation, in its capacity as trustee under the Indenture, or any successor
thereto appointed in accordance with the terms and provisions of the Indenture.

     "Debentures" means the Depositor's % Deferrable Interest Subordinated
Debentures due [2043] issued pursuant to the Indenture.

     "Declaration" means this Amended and Restated Declaration, as the same may
be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Declaration and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a

                                       -5-


part of and govern this Declaration and any such modification, amendment or
supplement, respectively.

     "Definitive Preferred Securities Certificates" means certificates
representing Preferred Securities issued in certificated, fully registered form
as described in Section 5.12.

     "Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801, et seq., or any successor statute thereto, in each
case as it may be amended from time to time.

     "Delaware Trustee" means the entity identified as the "Delaware Trustee" in
the preamble to this Declaration solely in its capacity as Delaware Trustee of
the Trust and not in its individual capacity, or its successor in interest in
such capacity, or any successor Delaware Trustee appointed as herein provided.

     "Depositor" has the meaning specified in the preamble to this Declaration.

     "Distribution Date" has the meaning specified in Section 4.01(a).

     "Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.01.

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

     (a) the occurrence of a Debenture Event of Default ;

     (b) default by the Trust in the payment of any Distribution when it becomes
due and payable, and continuation of such default for a period of 30 days; or

     (c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or

     (d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Declaration (other than those
specified in clause (b) or (c) above) and continuation of such default or breach
for a period of 60 days after there has been given, by registered or certified

                                       -6-


mail, to the Trustees and to the Depositor by the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Preferred Securities a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "NOTICE OF DEFAULT" hereunder; or

     (e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee if a successor Property Trustee has not been appointed within 90 days
thereof.

     "Expiration Date" has the meaning specified in Section 8.01.

     "Extension Period" means the period or periods in which pursuant to the
Indenture payments of interest on the Debentures are deferred by extending the
interest payment periods thereof.

     "Guarantee" means the Preferred Securities Guarantee Agreement executed and
delivered by the Depositor to The Bank of New York, a New York banking
corporation, as trustee thereunder, contemporaneously with the execution and
delivery of this Declaration, for the benefit of the Holders of the Preferred
Securities, as amended from time, to time.

     "Indenture" means the Indenture, dated as of June 15, 1998 between the
Depositor and the Debenture Trustee, as trustee thereunder, as amended or
supplemented from time to time, providing for the issuance of Debentures of the
Depositor.

     "Investment Company" means any company subject to the 1940 Act.

     "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.

     "Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having an aggregate Liquidation Amount equal to the principal
amount of Debentures to be paid in accordance with the Indenture, (b) with
respect to a distribution of Debentures to Holders of Trust Securities in
connection with a dissolution and liquidation of the Trust, Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Trust
Securities in exchange for which such Debentures are distributed and (c) with
respect to any distribution of Additional Amounts to Holders of Trust
Securities, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities in respect of which

                                       -7-


such distribution is made.

     "Liquidation Amount" means the stated amount of $25 per Trust Security.

     "Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a dissolution and liquidation
of the Trust pursuant to Section 8.04(a).

     "Liquidation Distribution" has the meaning specified in Section 8.04(d).

     "Majority in Liquidation Amount of the Preferred Securities" or "Majority
in Liquidation Amount of the Common Securities" means, except as provided by the
Trust Indenture Act, Preferred Securities or Common Securities, as the case may
be, representing more than 50% of the aggregate Liquidation Amount of all then
Outstanding Preferred Securities or Common Securities, as the case may be.

     "1940 Act" means the Investment Company Act of 1940, or any successor
statute thereto, in each case as amended from time to time.

     "Officers' Certificate" means a certificate signed by the Chairman, the
Vice Chairman, the President or any Vice President, and the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Depositor.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor or an Affiliate of the
Depositor, and may be an employee of the Depositor, and who shall be acceptable
to the Property Trustee.

     "Original Declaration" has the meaning specified in the recitals to this
Declaration.

     "Outstanding", when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Declaration, except:

          (a) Trust Securities theretofore cancelled by the Administrative
Trustee or delivered to the Administrative Trustee for cancellation;

          (b) Trust Securities for whose redemption money in the

                                       -8-


necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Trust Securities; provided that, if such
Trust Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Declaration;

          (c) Trust Securities which have been paid or in exchange for, or in
lieu of, which other Trust Securities have been executed and delivered pursuant
to Sections 5.04, 5.05 and 5.11 other than any such Trust Securities in respect
of which there shall have been presented to the Property Trustee proof
satisfactory to it that such Trust Securities are held by a protected purchaser;
and

          (d) as provided in Section 8.04(c);

provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities which such Trustee actually knows to be so
owned shall be so disregarded and (b) the foregoing shall not apply at any time
when all of the Outstanding Preferred Securities are owned by the Depositor, one
or more of the Trustees and/or any such Affiliate. Preferred Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Administrative Trustee the
pledgee's right so to act with respect to such Preferred Securities and that the
pledgee is not the Depositor or any Affiliate of the Depositor.

     "Owner" means each Person who is the beneficial owner of Book-Entry
Preferred Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).

     "Paying Agent" means the Property Trustee and any co-paying agent appointed
pursuant to Section 5.09.

     "Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee in its

                                       -9-


trust department for the benefit of the Securityholders in which all amounts
paid to the Property Trustee in respect of the Debentures or the Guarantee will
be held and from which the Property Trustee or such other Paying Agent shall
make payments to the Securityholders in accordance with Article 4.

     "Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity of whatever nature.

     "Preferred Security" means a preferred security issued by the Trust,
constituting an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $25 and having rights provided therefor in this
Declaration, including the right to receive Distributions and a Liquidation
Distribution as provided herein.

     "Preferred Securities Certificate" means a certificate evidencing ownership
of one or more Preferred Securities, substantially in the form attached hereto
as Exhibit C.

     "Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the preamble to this Declaration solely in its
capacity as Property Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor Property Trustee
appointed as herein provided.

     "Purchase Agreement" means the Purchase Agreement, dated      , 2003 among
the Trust, the Depositor and the Purchasers named therein.

     "Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Declaration; provided
that each Debenture Redemption Date and the stated maturity of the Debentures
shall be a Redemption Date for a Like Amount of Trust Securities.

     "Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions thereon to the Redemption Date.

     "Second Supplemental Indenture" means the Second Supplemental Indenture,
dated as of      , 2003, to the Indenture.

                                      -10-


     "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.04.

     "Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person is a
beneficial owner within the meaning of the Delaware Statutory Trust Act.

     "Successor Securities" has the meaning specified in Section 9.01.

     "Trust" means the Delaware statutory trust created pursuant to the Original
Declaration and continued hereby and identified on the cover page to this
Declaration.

     "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this Declaration was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

     "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the trusts of this Declaration.

     "Trust Security" means any one of the Common Securities or the Preferred
Securities.

     "Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.

                                   ARTICLE II

                            Continuation of the Trust

     Section 2.01. Name. The Trust continued hereby shall be known as "BGE
Capital Trust II", as such name may be modified from time to time by the
Administrative Trustee following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.

     Section 2.02. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is White Clay
Center, Route 273, Newark,

                                      -11-


Delaware 19711 or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal place of business of the Trust is c/o Baltimore Gas and
Electric Company, 39 W. Lexington Street, Baltimore, MD 21201.

     Section 2.03. Initial Contribution of Trust Property; Expenses of the
Trust.

     (a) The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Declaration of the sum of $10, which constituted
the initial Trust Property.

     (b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees as provided in Section 7.06, the costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
Paying Agent(s), Securities Registrar, duplication, travel and telephone and
other telecommunications expenses and costs and expenses incurred in connection
with the disposition of the Trust Property).

     (c) The Depositor will pay any and all taxes (other than United States
federal income taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust except
in the case that such taxes give rise to Additional Interest.

     (d) The Depositor's obligations under this Section 2.03 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. The Property Trustee
and any such Creditor may enforce the Depositor's obligations under this Section
2.03 directly against the Depositor and the Depositor irrevocably waives any
right or remedy to require that the Property Trustee or any such Creditor take
any action against the Trust or any other Person before proceeding against the
Depositor. The Depositor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 2.03.

     (e) The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.

                                      -12-


     (f) Except as expressly set forth in this Declaration, the Debentures, the
Guarantee and the terms of the Preferred Securities, the Depositor shall not be
personally liable for the return of any portion of the capital contributions (or
any return thereon) of the Holders of the Preferred Securities which shall be
made solely from the Trust Property, and shall not be required to pay to the
Trust or to any Holder of Preferred Securities any deficit upon dissolution of
the Trust or otherwise.

     Section 2.04. Issuance of the Trust Securities.

     (a) The Trust may issue only one series of Preferred Securities and one
series of Common Securities.

     (b) The Depositor, both on its behalf and on behalf of the Trust pursuant
to the Original Declaration, executed and delivered the Purchase Agreement.
Contemporaneously with the execution and delivery of this Declaration, the
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.02 and deliver to the Purchasers named in the Purchase Agreement one
or more Book-Entry Preferred Securities Certificates, registered in the name of
the nominee of the initial Clearing Agency, representing 10,000,000 Preferred
Securities having an aggregate Liquidation Amount of $250,000,000, against
receipt by the Property Trustee of the aggregate purchase price of such
Preferred Securities of $250,000,000, which amount the Administrative Trustee
shall promptly deliver to the Property Trustee. Contemporaneously therewith, the
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.02 and deliver to the Depositor a Common Securities Certificate,
registered in the name of the Depositor, representing 309,278 Common Securities
having an aggregate Liquidation Amount of $7,731,950, and in satisfaction of the
purchase price of such Common Securities the Depositor shall deliver to the
Property Trustee the sum of 7,731,950.

     Section 2.05. Purchase of Debentures. Contemporaneously with the execution
and delivery of this Declaration, (i) the Administrative Trustee, on behalf of
the Trust, shall purchase $257,731,950 aggregate principal amount of Debentures
from the Depositor, registered in the name of the Property Trustee on behalf of
the Securityholders and the Trust and (ii) in satisfaction of the purchase price
for such Debentures, the Property Trustee, on behalf of the Trust, shall deliver
to the Depositor the sum of $257,731,950.

                                      -13-


     Section 2.06. Declaration.

     (a) The exclusive purposes and functions of the Trust are (1) to issue and
sell Trust Securities and use the gross proceeds from such sale to acquire the
Debentures, (2) to distribute the cash payments it receives from Debentures it
owns to holders of the Trust Securities and (3) except as otherwise limited
herein, to engage in only those activities necessary, appropriate, convenient or
incidental thereto. The Depositor hereby reaffirms the appointment of the
Trustees as trustees of the Trust, to have all the rights, powers and duties to
the extent set forth herein, and the Trustees hereby accept such appointment.
The Property Trustee hereby declares that it will hold the Trust Property in
trust upon and subject to the conditions set forth herein for the benefit of the
Trust and the Securityholders. The Administrative Trustee shall have all rights,
powers and duties set forth herein. The Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of the Property Trustee or the Administrative Trustee set
forth herein, except as mandated by the Delaware Statutory Trust Act. The
Delaware Trustee shall be one of the Trustees of the Trust for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Delaware
Statutory Trust Act.

     (b) The parties intend that the Trust will be classified as a grantor trust
for United States federal income tax purposes, that the Holders of the Trust
Securities will be treated as the owners of the Trust Property for United States
federal income tax purposes, and such Holders will include directly in their
gross income the income, gain, deduction or loss of the Trust. No party to this
Declaration will take any position for United States federal income tax purposes
which is contrary to the classification of the Trust as a grantor trust.

     Section 2.07. Authorization to Enter into Certain Transactions.

     (a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Declaration. Subject to the limitations set forth in paragraph
(b) of this Section, and in accordance with the following provisions (i) and
(ii), the Trustees shall have the authority to enter into all transactions and
agreements determined by the Trustees to be appropriate in exercising the
authority, express or implied, otherwise granted to the Trustees under this
Declaration, and to perform all acts in furtherance thereof, including without
limitation, the following:

                                      -14-


          (i)  As among the Trustees, the Administrative Trustee shall have
     the power and authority to act on behalf of the Trust with respect to the
     following matters:

               (A) the issuance and sale of the Trust Securities on behalf of
          the Trust;

               (B) causing the Trust to enter into, and executing, delivering
          and performing on behalf of the Trust, such agreements as, in the
          Administrative Trustee's opinion, may be necessary or desirable in
          connection with the purposes and function of the Trust, including the
          appointment of a depository and registrar as well as any successor
          thereto;

               (C) assisting in registering the Preferred Securities under the
          Securities Act of 1933, as amended, and under state securities or blue
          sky laws, and qualifying this Declaration as a trust indenture under
          the Trust Indenture Act;

               (D) assisting in the listing of the Preferred Securities upon
          such securities exchange or exchanges as the Depositor shall determine
          and the registration of the Preferred Securities under the Securities
          Exchange Act of 1934, as amended, and the preparation and filing of
          all periodic and other reports and other documents pursuant to the
          foregoing, if any;

               (E) acquiring the Debentures with the proceeds of the sale of the
          Preferred Securities and the Common Securities; PROVIDED, HOWEVER,
          that the Administrative Trustee shall cause legal title to the
          Debentures to be held of record in the name of the Property Trustee
          for the benefit of the Holders of the Preferred Securities, the Holder
          of Common Securities and the Trust;

               (F) to the extent provided in this Declaration, terminating and
          liquidating the Trust and preparing, executing and filing the
          certificate of cancellation with the Secretary of State of the State
          of Delaware;

               (G) sending notices or assisting the Property Trustee in sending
          notices and other information regarding the Trust Securities and the
          Debentures to Securityholders in accordance with this Declaration;

               (H) employing or otherwise engaging employees and

                                      -15-


          agents (who may be designated as officers with titles) and managers,
          contractors, advisors, and consultants and paying reasonable
          compensation for the services provided by such Persons;

               (I) causing the Trust to comply with the Trust's obligations
          under the Trust Indenture Act;

               (J) incurring expenses that are necessary, appropriate,
          convenient or incidental to carry out any of the purposes of the
          Trust;

               (K) taking all action that may be necessary or appropriate for
          the preservation and the continuation of the Trust's valid existence,
          rights, franchises and privileges as a statutory trust under the laws
          of the State of Delaware and of each other jurisdiction in which such
          existence is necessary to protect the limited liability of the Holders
          of the Preferred Securities or to enable the Trust to effect the
          purposes for which the Trust was created;

               (L) taking all action necessary to cause all applicable tax
          returns and tax information reports that are required to be filed with
          respect to the Trust to be duly prepared and filed by the
          Administrative Trustee, on behalf of the Trust;

               (M) taking all actions and performing such duties as may be
          required of the Administrative Trustee pursuant to the terms of this
          Declaration; and

               (N) taking any action incidental to the foregoing as the
          Administrative Trustee may from time to time determine is necessary or
          advisable to give effect to the terms of this Declaration for the
          benefit of the Securityholders (without consideration of the effect of
          any such action on any particular Securityholder).

          Any expenses incurred by the Administrative Trustee pursuant to this
Section 2.07 shall be reimbursed by the Depositor.

          (ii) As among the Trustees, the Property Trustee shall have the power,
     duty and authority to act on behalf of the Trust with respect to the
     following matters:

               (A) establishing and maintaining the Payment Account and
          appointing Paying Agents (subject to

                                      -16-


          Section 5.09);

               (B) receiving payment of the purchase price of the Trust
          Securities;

               (C) receiving and holding the Debentures;

               (D) collecting interest and principal payments on the Debentures
          and depositing them in the Payment Account;

               (E) making Distributions and other payments through a Paying
          Agent to the Securityholders in respect of the Trust Securities;

               (F) exercising all of the rights, powers and privileges of a
          holder of the Debentures;

               (G) sending notices of defaults, redemptions, Extension Periods,
          liquidations and other information regarding the Trust Securities and
          the Debentures to the Securityholders in accordance with this
          Declaration;

               (H) to the extent provided in this Declaration, terminating and
          liquidating the Trust, including distributing the Trust Property in
          accordance with the terms of this Declaration, and preparing,
          executing and filing the certificate of cancellation with the
          Secretary of State of the State of Delaware;

               (I) taking all action and performing such duties as may be
          required of the Property Trustee pursuant to the terms of this
          Declaration;

               (J) after an Event of Default (other than under paragraph (b),
          (c), (d) or (e) of such term if such Event of Default is by or with
          respect to the Property Trustee), taking any action incidental to the
          foregoing as the Property Trustee may from time to time determine is
          necessary or advisable to give effect to the terms of this Declaration
          and protect and conserve the Trust Property for the benefit of the
          Securityholders (without consideration of the effect of any such
          action on any particular Securityholder); and

               (K) registering transfers and exchanges of the Preferred
          Securities in accordance with this Declaration (but only if at such
          time the Property

                                      -17-


          Trustee shall be the Securities Registrar).

     (b) So long as this Declaration remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees acting on behalf of the Trust shall not (i)
acquire any assets or investments (other than the Debentures), reinvest the
proceeds derived from investments, possess any power or otherwise act in such a
way as to vary the Trust Property or engage in any activities not authorized by
this Declaration, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify as a grantor
trust for United States Federal income tax purposes, (iv) incur any indebtedness
for borrowed money or issue any other debt, (v) issue any securities or other
evidences of beneficial ownership of, or beneficial interests in, the Trust
other than the Trust Securities, or (vi) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustee shall defend all claims and demands of all Persons at any
time claiming any Lien on any of the Trust Property adverse to the interest of
the Trust or the Securityholders in their capacity as Securityholders.

     (c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Declaration are hereby ratified and confirmed in all respects):

          (i)    preparing for filing, filing with the Commission and executing
     on behalf of the Trust a registration statement on Form S-3 in relation to
     the Preferred Securities, including any amendments thereto;

          (ii)   determining the States in which to take appropriate action to
     qualify or register for sale all or part of the Preferred Securities and
     doing any and all such acts, other than actions which must be taken by or
     on behalf of the Trust, and advising the Trustees of actions they must take
     on behalf of the Trust, and preparing for execution and filing any
     documents to be executed and filed by the Trust or on behalf of the Trust,
     as the Depositor deems necessary or advisable in order to comply with the
     applicable laws of any such States;

                                      -18-


          (iii)  preparing for filing, filing and executing on behalf of the
     Trust an application to the New York Stock Exchange or any other national
     stock exchange or The Nasdaq National Market for listing upon notice of
     issuance of any Preferred Securities, and preparing for filing, filing and
     executing on behalf of the Trust all other applications, statements,
     certificates, agreements and other instruments as shall be necessary for
     such listing;

          (iv)   preparing for filing, filing with the Commission and executing
     on behalf of the Trust a registration statement on Form 8-A relating to the
     registration of the Preferred Securities under Section 12(b) or 12(g) of
     the Securities Exchange Act of 1934, as amended, including any amendments
     thereto;

          (v)    negotiating the terms of, executing, delivering and performing
     the Purchase Agreement providing for the sale of the Preferred Securities;
     and

          (vi)   taking any other actions necessary or desirable to carry out
     any of the foregoing activities.

     (d) Notwithstanding anything herein to the contrary, the Administrative
Trustee is authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that (i) the Trust will not be deemed to be an Investment
Company required to be registered under the 1940 Act, (ii) the Trust will not be
classified as an entity other than a grantor trust for United States Federal
income tax purposes; and (iii) the Debentures will be treated as indebtedness of
the Depositor for United States Federal income tax purposes. In this connection,
the Depositor and the Administrative Trustee are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust, as amended from
time to time, or this Declaration, that each of the Depositor and the
Administrative Trustee determines in their discretion to be necessary or
desirable for such purposes. In no event shall the Trustees be liable to the
Trust or the Holders for any failure to comply with this Section that results
from a change in law or regulation or in the interpretation thereof.

     Section 2.08.  Assets of Trust.  The assets of the Trust shall consist of
the Trust Property.

     Section 2.09. Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the

                                      -19-


Securityholders and the Trust in accordance with this Declaration.

                                   ARTICLE III

                                 Payment Account

     Section. 3.01  Payment Account.

     (a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee for the
exclusive benefit of the Securityholders. The Property Trustee shall have
exclusive control of the Payment Account for the purpose of making deposits in
and withdrawals from the Payment Account in accordance with this Declaration;
provided that any Paying Agent shall have the right of withdrawal with respect
to the Payment Account solely for the purpose of making the payments
contemplated under Article IV.

     (b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on the Debentures and any
amounts paid to the Property Trustee pursuant to the Guarantee. Amounts held in
the Payment Account shall not be invested pending distribution thereof.

                                   ARTICLE IV

                            Distributions; Redemption

     Section  4.01.  Distributions. The Trust Securities represent undivided
beneficial interests in the Trust Property, and Distributions (including any
Additional Amounts) will be made on the Trust Securities at the rate and on the
dates that payments of interest (including any Compounded Interest) are made on
the Debentures. Accordingly:

     (a) Distributions on the Trust Securities shall be cumulative, and shall
accumulate whether or not there are funds of the Trust available for the payment
of Distributions. Distributions shall accumulate from          , 2003 and,
except during an Extension Period for the Debentures pursuant to the Indenture,
shall be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on 2003. If any date on which Distributions
are otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distributions shall be made on the next succeeding day which is
a Business Day (and without any interest

                                      -20-


or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, payment of such Distributions shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date (each date on which Distributions are
payable in accordance with this Section 4.01(a) is referred to as a
"Distribution Date").

     Within five Business Days after receipt by the Property Trustee of notice
of an Extension Period pursuant to the Indenture, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.10, notice
thereof to the Securityholders and the Administrative Trustee, unless such
exercise shall have been revoked.

     (b) The Trust Securities represent undivided beneficial interests in the
Trust Property, and, subject to Sections 4.03 and 4.06 hereof, all Distributions
will be made pro rata on each of the Trust Securities. Distributions on the
Trust Securities shall be payable at a rate of % per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any full
quarterly period shall be computed on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full quarterly Distribution
period for which Distributions are computed, Distributions will be computed
based on the actual number of days elapsed per 90-day quarter. The amount of
Distributions payable for any period shall include any Additional Amounts in
respect of such period.

     (c) Distributions on the Trust Securities shall be made from the Payment
Account by the Property Trustee or any Paying Agent and shall be payable on each
Distribution Date only to the extent that the Trust has funds then available in
the Payment Account for the payment of such Distributions.

     (d) Distributions on the Trust Securities on each Distribution Date shall
be payable to the Holders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to such Distribution Date; provided, however, that in the event that
the Preferred Securities are not in book-entry-only form, the relevant record
date shall be the 15th day of the last month of each calendar quarter, whether
or not a Business Day.

     Section  4.02.  Redemption.

     (a) Upon receipt by the Trust of a notice of redemption of Debentures, the
Trust will call for redemption a Like Amount of Trust Securities at the
Redemption Price on the Debenture

                                      -21-


Redemption Date and will call for redemption all Outstanding Trust Securities on
the stated maturity date of the Debentures.

     (b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Securities Register. All notices of
redemption shall state:

          (i)    the Redemption Date;

          (ii)   the Redemption Price;

          (iii)  the CUSIP number;

          (iv)   the place or places where Trust Securities Certificates are to
     be surrendered for payment of the Redemption Price;

          (v)    that on the Redemption Date the Redemption Price will become
     payable upon each such Trust Security to be redeemed and that Distributions
     thereon will cease to accumulate on and after such date; and

          (vi)   if less than all of the Outstanding Trust Securities are to be
     redeemed, the identification and total Liquidation Amount of the particular
     Trust Securities to be redeemed.

     The Trust in issuing the Trust Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Property Trustee shall indicate the "CUSIP"
numbers of the Trust Securities in notices of redemption and related materials
as a convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Trust Securities or as contained in any notice of redemption and related
materials.

     (c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption or
payment at maturity of Debentures. Redemptions of the Trust Securities shall be
made and the Redemption Price shall be payable on each Redemption Date only to
the extent that the Trust has funds then available in the Payment Account for
the payment of such Redemption Price.

     (d) If the Trust, by action of the Property Trustee, gives a notice of
redemption in respect of any Trust Securities, then, on

                                      -22-


the Redemption Date, subject to Section 4.02(c), the Property Trustee will
irrevocably deposit with the Paying Agent funds sufficient to pay the Redemption
Price for the Trust Securities being redeemed on such date and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders of such Trust Securities upon surrender of their Trust Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
irrevocably deposited as required, then upon the date of such deposit, all
rights of Securityholders holding Trust Securities so called for redemption will
cease, except the right of such Securityholders to receive the Redemption Price,
but without interest, and such Trust Securities will cease to be Outstanding. In
the event that any date on which any Redemption Price is payable is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment will be made
on the immediately preceding Business Day, in each case, with the same force and
effect as if made on such date. In the event that payment of the Redemption
Price in respect of any Trust Securities called for redemption is improperly
withheld or refused, and not paid either by the Trust or by the Depositor
pursuant to the Guarantee, Distributions on such Trust Securities will continue
to accumulate, at the then applicable rate, from the Redemption Date originally
established by the Trust for such Trust Securities to the date such Redemption
Price is actually paid, in which case the actual payment date will be the date
fixed for redemption for purposes of calculating the Redemption Price.

     (e) Subject to Section 4.03(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated 3% to
the Common Securities and 97% to the Preferred Securities. The particular
Preferred Securities to be redeemed shall be selected by the Property Trustee
from the Outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate; provided
that so long as the Preferred Securities are represented by one or more
Book-Entry Preferred Securities Certificates, such selection shall be made in
accordance with the customary procedures for the Clearing

                                      -23-


Agency for the Book-Entry Preferred Securities. The Property Trustee shall
promptly notify the Securities Registrar in writing of the Preferred Securities
selected for redemption. If fewer than all of the Trust Securities represented
by a Trust Securities Certificate are redeemed, the Administrative Trustee shall
execute for the Holder a new Trust Securities Certificate representing the
unredeemed Trust Securities. For all purposes of this Declaration, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities which has been or is to be redeemed.

     Section  4.03.  Subordination of Common Securities.

     (a) Payment of Distributions (including Additional Amounts) on, and the
Redemption Price of, the Trust Securities, as applicable, shall be made, subject
to Section 4.02(e), pro rata based on the Liquidation Amount of the Trust
Securities; provided, however, that if on any Distribution Date or Redemption
Date, a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution (including Additional Amounts) on, or Redemption
Price of, any Common Security, and no other payment on account of the
liquidation of Common Securities, shall be made unless payment in full in cash
of all accumulated and unpaid Distributions (including Additional Amounts) on
all Outstanding Preferred Securities for all distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price, the full
amount of such Redemption Price on all Outstanding Preferred Securities then
being redeemed, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions (including Additional Amounts) on, or the
Redemption Price of, Preferred Securities then due and payable.

     (b) In the case of the occurrence and continuance of any Debenture Event of
Default, the Holder of Common Securities will be deemed to have waived any right
to act with respect to any related Event of Default under this Declaration and
such Debenture Event of Default until the effect of such related Event of
Default and such Debenture Event of Default has been cured, waived or otherwise
eliminated. Until any such Event of Default under this Declaration and such
Debenture Event of Default has been so cured, waived or otherwise eliminated,
the Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the

                                      -24-


right to direct the Property Trustee to act on their behalf.

     Section  4.04  Payment Procedures. Payments of Distributions pursuant to
Section 4.01 in respect of the Preferred Securities shall be made by check
mailed to the address of the Holder thereof as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency by wire transfer
in immediately available funds pursuant to the Applicable Procedures. Payments
of Distributions pursuant to Section 4.01 in respect of the Common Securities
shall be made in such manner as shall be mutually agreed between the Property
Trustee and the Holder of the Common Securities. Payment of the Redemption Price
or Liquidation Distribution of the Trust Securities shall be made in immediately
available funds upon surrender of the Trust Securities Certificate representing
such Trust Securities at the Corporate Trust Office of the Property Trustee.

     Section  4.05. Tax Returns and Reports. The Administrative Trustee shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States Federal, State and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustee shall (a) prepare and file (or cause to be prepared or
filed) all appropriate Internal Revenue Service forms required to be filed in
respect of the Trust by January 31 in each taxable year of the Trust and (b)
prepare and furnish (or cause to be prepared and furnished) to each
Securityholder the related Internal Revenue Service forms required to be
provided by the Trust. The Administrative Trustee shall provide the Depositor
and the Property Trustee with a copy of all such returns, reports and schedules
promptly after such filing or furnishing. The Trustees shall comply with United
States Federal withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Securityholders under the
Trust Securities.

     Section  4.06. Payments under Indenture. Any amount payable hereunder to
any Holder of Preferred Securities (or Owner with respect thereto) shall be
reduced by the amount of any corresponding payment such Holder (or Owner) has
directly received pursuant to Section 508 of the Indenture, pursuant to Section
5.13 of this Declaration or pursuant to the Guarantee.

     Section  4.07. Payment of Taxes, Duties, etc. of the Trust. Upon receipt
under the Debentures of Additional Interest, the Property Trustee shall promptly
pay any taxes, duties or governmental charges of whatsoever nature (other than
withholding

                                      -25-


taxes) imposed on the Trust by the United States or any other taxing authority.

                                    ARTICLE V

                          Trust Securities Certificates

     Section  5.01. Initial Ownership. Upon the creation of the Trust and the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
Outstanding, the Depositor shall be the sole beneficial owner of the Trust.

     Section  5.02. The Trust Securities Certificates. The Trust Securities
Certificates shall be issued representing one or more Trust Securities. Trust
Securities Certificates representing fractional interests shall not be issued.
The Trust Securities Certificates shall be executed on behalf of the Trust by
manual signature of the Administrative Trustee or by a facsimile signature of
the Administrative Trustee countersigned by the Securities Registrar. Trust
Securities Certificates bearing the manual signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Declaration, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.

     Section  5.03. Delivery of Trust Securities Certificates. On the Closing
Date, the Administrative Trustee shall cause Trust Securities Certificates, in
an aggregate Liquidation Amount as provided in Section 2.04, to be executed on
behalf of the Trust as provided in Section 5.02 and delivered, to or upon a
written order of, the Depositor signed by any of its Chairman of the Board, its
Vice Chairman, its President, any Vice President or the Treasurer, without
further corporate action by the Depositor, in authorized denominations. The
written order of the Depositor shall be accompanied by an Officers' Certificate
and an Opinion of Counsel. Upon their original issuance, Preferred Securities
Certificates shall be issued in the form of one or more Book-Entry Preferred
Securities Certificates registered in the name of DTC, as Clearing Agency, or
its nominee and deposited with DTC or a custodian for DTC for credit by DTC to
the respective accounts

                                      -26-


of the Owners thereof (or such other accounts as they may direct). A single
Common Securities Certificate representing the Common Securities shall be issued
to the Depositor in the form of a definitive Common Securities Certificate.

     Section  5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates.

     (a) A registrar appointed by the Depositor (the "Securities Registrar")
shall keep or cause to be kept, at the office or agency maintained pursuant to
Section 5.08, a register (the "Securities Register") in which, subject to such
reasonable regulations as it may prescribe, the Securities Registrar shall
provide for the registration of Trust Securities Certificates (subject to
Section 5.10 in the case of the Common Securities Certificates) and registration
of transfers and exchanges of Preferred Securities Certificates as herein
provided. The Property Trustee shall be the initial Securities Registrar; any
successor Securities Registrar shall be appointed by the Depositor.

     Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.08, the
Administrative Trustee shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities Certificates
representing the same number of Preferred Securities dated the date of execution
by the Administrative Trustee. At the option of a Holder, Preferred Securities
Certificates may be exchanged for other Preferred Securities Certificates upon
surrender of the Preferred Securities Certificates to be exchanged at the office
or agency maintained pursuant to Section 5.08. The Securities Registrar shall
not be required to register the transfer of any Preferred Securities that have
been called for redemption or after the Liquidation Date.

     Preferred Securities presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Administrative Trustee and the Securities Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Preferred Securities Certificate surrendered for registration of transfer
or exchange shall be cancelled and subsequently disposed of by the Securities
Registrar in accordance with its customary practice.

     No service charge shall be made for any registration of transfer or
exchange of Preferred Securities, but the Securities Registrar may require
payment of a sum sufficient to cover any

                                      -27-


tax or governmental charge that may be imposed in connection with any transfer
or exchange of Preferred Securities.

     (b) Notwithstanding any other provision of this Declaration, transfers and
exchanges of Preferred Securities Certificates and beneficial interests in a
Book-Entry Preferred Securities Certificate of the kinds specified in this
Section 5.04(b) shall be made only in accordance with this Section 5.04(b).

          (i)   Definitive Preferred Securities Certificate to Book-Entry
     Preferred Securities Certificate. If the Holder of a Preferred Securities
     Certificate wishes at any time to transfer all or any portion of such
     Preferred Securities Certificate to a Person who wishes to take delivery
     thereof in the form of a beneficial interest in a Book-Entry Preferred
     Securities Certificate, such transfer may be effected only in accordance
     with the provisions of this clause (b)(i) and subject to the Applicable
     Procedures. Upon receipt by the Securities Registrar of (A) such Preferred
     Securities Certificate as provided in Section 5.04(a) and instructions
     satisfactory to the Securities Registrar directing that a beneficial
     interest in the Book-Entry Preferred Securities Certificate of a specified
     number of Preferred Securities not greater than the number of Preferred
     Securities represented by such Preferred Securities Certificate be credited
     to a specified Clearing Agency Participant's account, then the Securities
     Registrar shall cancel such Preferred Securities Certificate (and issue a
     new Definitive Preferred Securities Certificate in respect of any
     untransferred portion thereof) as provided in Section 5.04(a) and increase
     the aggregate Liquidation Amount of the Book-Entry Preferred Securities
     Certificate by the Liquidation Amount represented by such Preferred
     Securities so transferred as provided in Section 5.11(c).

          (ii)  Definitive Preferred Securities Certificate to Definitive
     Preferred Securities Certificate. A Definitive Preferred Securities
     Certificate may be transferred, in whole or in part, to a Person who takes
     delivery in the form of another Definitive Preferred Securities Certificate
     as provided in Section 5.04(a).

          (iii) Exchanges between Book-Entry Preferred Securities Certificate
     and Definitive Preferred Securities Certificate. A beneficial interest in a
     Book-Entry Preferred Securities Certificate may be exchanged for a
     Definitive Preferred Securities Certificate as provided in Section 5.11.

                                      -28-


     Section  5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustee such security or indemnity as may be
required by them to hold the Securities Registrar and the Trust harmless, then
in the absence of notice that such Trust Securities Certificate shall have been
acquired by a bona fide purchaser, the Administrative Trustee, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like tenor. In connection with the issuance
of any new Trust Securities Certificate under this Section, the Administrative
Trustee or the Securities Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Securities Certificate issued pursuant to this
Section shall constitute conclusive evidence of an undivided beneficial interest
in the assets of the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Trust Securities Certificate shall be found at any time.

     Section  5.06. Persons Deemed Securityholders. Prior to due presentation of
a Trust Security Certificate for registration of transfer, the Administrative
Trustee, the Paying Agent or the Securities Registrar shall treat the Person in
whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner and Holder of such Trust Securities Certificate
for the purpose of receiving Distributions and for all other purposes
whatsoever, and neither the Trustees, the Paying Agent nor the Securities
Registrar shall be bound by any notice to the contrary.

     Section  5.07. Access to List of Securityholders' Names and Addresses. In
the event that the Property Trustee is no longer the Securities Registrar, the
Administrative Trustee or the Depositor shall furnish or cause to be furnished a
list, in such form as the Property Trustee may reasonably require, of the names
and addresses of the Securityholders as of the most recent record date (a) to
the Property Trustee, quarterly not later than 10 days prior to a Distribution
Date and (b) to the Property Trustee, promptly after receipt by the
Administrative Trustee or the Depositor of a request therefor from the Property
Trustee in order to enable the Paying Agent to pay Distributions in accordance
with Section 4.01 hereof, in each case to the extent such information is in the
possession or control of the

                                      -29-


Administrative Trustee or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee. The
rights of Securityholders to communicate with other Securityholders with respect
to their rights under this Declaration or under the Trust Securities, and the
corresponding rights of the Property Trustee shall be as provided in the Trust
Indenture Act. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold the Depositor, the
Property Trustee, the Administrative Trustee or the Delaware Trustee accountable
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.

     Section  5.08. Maintenance of Office or Agency. The Securities Registrar
shall maintain in New York, New York an office or offices or agency or agencies
where Preferred Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Trustees in respect of the
Trust Securities Certificates may be served. The Property Trustee shall give
prompt written notice to the Depositor and to the Securityholders of any change
in the location of the Securities Register or any such office or agency, which
shall initially be at the Corporate Trust Office of the Property Trustee.

     Section. 5.09  Appointment of Paying Agent. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrative
Trustee. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making Distributions. The Administrative
Trustee may revoke such power and remove the Paying Agent, provided that such
revocation and removal with respect to the sole Paying Agent shall not become
effective until the appointment of a successor. The Paying Agent shall initially
be the Property Trustee, and any co-paying agent chosen by the Property Trustee
and acceptable to the Administrative Trustee and the Depositor. Any Person
acting as Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Administrative Trustee and the Depositor, and, if
applicable, the Property Trustee, provided that such resignation with respect to
the sole Paying Agent shall not become effective until the appointment of a
successor. In the event that the Property Trustee shall no longer be the Paying
Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Administrative Trustee shall appoint a successor that is acceptable
to the Property Trustee (in the case of any other Paying Agent) and the
Depositor to act as Paying Agent (which shall be a bank or trust company and
have a combined

                                      -30-


capital and surplus of at least $50,000,000). The Administrative Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Administrative Trustee to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all of such sums remaining unclaimed to the Property Trustee and upon
removal of a Paying Agent such Paying Agent shall also return such sums in its
possession to the Property Trustee. The provisions of Sections 7.01, 7.03 and
7.06 shall apply to the Property Trustee also in its role as Paying Agent, for
so long as the Property Trustee shall act as Paying Agent and, to the extent
applicable, to any other Paying Agent appointed hereunder. Any reference in this
Declaration to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.

     Section  5.10. Transfer of Securities. Subject to this Article V, the
Depositor and any Affiliate may only transfer Common Securities to the Depositor
or an Affiliate of the Depositor; PROVIDED THAT, any such transfer is subject to
the condition precedent that the transferor obtain an opinion of counsel
experienced in such matters that such transfer would not cause more than an
insubstantial risk that:

          (i)  the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and

          (ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.

     Section  5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.

     (a) The Preferred Securities, upon original issuance on the Closing Date,
will not be engraved but will be issued in the form of one or more printed or
typewritten Book-Entry Preferred Securities Certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Trust. Such Book-Entry Preferred Securities Certificate or Certificates shall
initially be registered on the Securities Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency.

     (b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of

                                      -31-


a definitive Common Securities Certificate.

     (c) If any Book-Entry Preferred Securities Certificate is to be exchanged
for other Preferred Securities Certificates or canceled in part, or if any other
Preferred Securities Certificate is to be exchanged in whole or in part for
Book-Entry Preferred Securities represented by a Book-Entry Preferred Securities
Certificate, then either (i) such Book-Entry Preferred Securities Certificate
shall be so surrendered for exchange or cancellation as provided in this Article
V or (ii) the aggregate Liquidation Amount represented by such Book-Entry
Preferred Securities Certificate shall be reduced, subject to Section 5.02, or
increased by an amount equal to the Liquidation Amount represented by that
portion of the Book-Entry Preferred Securities Certificate to be so exchanged or
canceled, or equal to the Liquidation Amount represented by such other Preferred
Securities Certificates to be so exchanged for Book-Entry Preferred Securities
represented thereby, as the case may be, by means of an appropriate adjustment
made on the records of the Securities Registrar, whereupon the Property Trustee
shall instruct the Clearing Agency or its authorized representative to make a
corresponding adjustment to its records. Upon surrender to the Administrative
Trustees or the Securities Registrar of the Book-Entry Preferred Securities
Certificate or Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustee shall execute the Definitive Preferred
Securities Certificates in accordance with the instructions of the Clearing
Agency. None of the Securities Registrar, the Trustees or the Administrative
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Preferred Securities Certificates, the Trustees
shall recognize the Holders of the Definitive Preferred Securities Certificates
as Holders. The Definitive Preferred Securities Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrative Trustee, as evidenced by the execution thereof
by the Administrative Trustee.

     (d) Every Preferred Securities Certificate executed and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Book-Entry
Preferred Securities Certificate or any portion thereof, whether pursuant to
this Article V or Article IV or otherwise, shall be executed and delivered in
the form of, and shall be, a Book-Entry Preferred Securities Certificate, unless
such Preferred Securities Certificate is registered in the name of a Person
other than the Clearing Agency for such Book-Entry Preferred Securities
Certificate or a nominee thereof.

                                      -32-


     (e) The Clearing Agency or its nominee, as registered owner of a Book-Entry
Preferred Securities Certificate, shall be the Holder of such Book-Entry
Preferred Securities Certificate for all purposes under this Declaration and the
Book-Entry Preferred Securities Certificate, and Owners with respect to a
Book-Entry Preferred Securities Certificate shall hold such interests pursuant
to the Applicable Procedures. The Securities Registrar, the Administrative
Trustee and the Trustees shall be entitled to deal with the Clearing Agency for
all purposes of this Trust Agreement relating to the Book-Entry Preferred
Securities Certificates (including the payment of the Liquidation Amount of and
Distributions on the Book-Entry Preferred Securities represented thereby and the
giving of instructions or directions by Owners of Book-Entry Preferred
Securities represented thereby) as the sole Holder of the Book-Entry Preferred
Securities represented thereby and shall have no obligations to the Owners
thereof. None of the Property Trustee, the Administrative Trustees nor the
Securities Registrar shall have any liability in respect of any transfers
effected by the Clearing Agency. The rights of the Owners of the Book-Entry
Preferred Securities shall be exercised only through the Clearing Agency and
shall be limited to those established by law, the Applicable Procedures and
agreements between such Owners and the Clearing Agency and/or the Clearing
Agency Participants; PROVIDED that, solely for the purpose of determining
whether the Holders of the requisite amount of Preferred Securities have voted
on any matter provided for in this Declaration, so long as Definitive Preferred
Security Certificates have not been issued, the Trustees may conclusively rely
on, and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Owners' votes or assigning the right to vote on any matter to any other Persons
either in whole or in part. Pursuant to the Certificate Depository Agreement,
unless and until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.4(b), the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
payments on the Preferred Securities to such Clearing Agency Participants, and
none of the Depositor, the Administrative Trustee or the Trustees shall have any
responsibility or obligation with respect thereto.

     Section  5.12. Definitive Preferred Securities Certificates If (a) the
Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Preferred Securities Certificates or the Clearing Agency is no longer registered
or in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, and the Depositor is unable to locate a
qualified successor

                                      -33-


within 90 days, (b) the Depositor at its option advises the Trustees in writing
that it elects to terminate the book-entry system through the Clearing Agency or
(c) an Event of Default occurs and is continuing, then the Administrative
Trustee shall issue Definitive Preferred Securities Certificates. Upon surrender
to the Administrative Trustee of the Book-Entry Preferred Securities
Certificates by the Clearing Agency, accompanied by registration instructions,
the Administrative Trustee shall execute and deliver the Definitive Preferred
Securities Certificates in accordance with the instructions of the Clearing
Agency. Neither the Securities Registrar nor the Trustees shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. The Definitive Preferred
Securities Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustee, as evidenced by the execution thereof by the Administrative Trustee.

     Section  5.13. Rights of Securityholders; Waiver of Past Defaults.

     (a) The Securityholders shall not have any right or title to the Trust
Property other than the undivided beneficial interest in the assets of the Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Declaration. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor will
be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.

     (b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Preferred Securities then
Outstanding shall have the right to make such declaration by a notice in writing
to the Property Trustee, the Depositor and the Debenture Trustee.

                                      -34-


     At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities, by written notice to the Property Trustee, the Depositor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:

          (i)  the Depositor has paid or deposited with the Debenture Trustee a
     sum sufficient to pay

               (A) all overdue installments of interest on all of the
          Debentures,

               (B) any accrued Compounded Interest on all of the Debentures,

               (C) the principal of (and premium, if any, on) any Debentures
          that have become due otherwise than by such declaration of
          acceleration and interest and Compounded Interest thereon at the rate
          borne by the Debentures, and

               (D) all sums paid or advanced by the Debenture Trustee under the
          Indenture and the reasonable compensation, expenses, disbursements and
          advances of the Debenture Trustee and the Property Trustee, their
          agents and counsel; and

          (ii) all Events of Default with respect to the Debentures, other than
     the non-payment of the principal of the Debentures that has become due
     solely by such acceleration, have been cured or waived as provided in
     Section 5.13 of the Indenture.

     The Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past default or Event of Default under the Indenture, except a default or
Event of Default in the payment of principal or interest (unless such default or
Event of Default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default or Event of Default in
respect of a covenant or provision that under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such

                                      -35-


rescission shall affect any subsequent default or impair any right consequent
thereon.

     Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of any part of the
Preferred Securities a record date shall be established for determining Holders
of Outstanding Preferred Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; PROVIDED
that, unless such declaration of acceleration, or rescission and annulment, as
the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day that is 90 days after
such record date, such notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is identical to a
written notice that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.13(b).

     (c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Declaration and
the Indenture, upon a Debenture Event of Default specified in Section 501(1) or
501(2) of the Indenture, any Holder of Preferred Securities shall have the right
to institute a proceeding directly against the Depositor, pursuant to Section
508 of the Indenture, for enforcement of payment to such Holder of any amounts
payable in respect of Debentures having an aggregate principal amount equal to
the aggregate Liquidation Amount of the Preferred Securities of such Holder (a
"Direct Action"). Except as set forth in Section 5.13(b) and this Section
5.13(c), the Holders of Preferred Securities shall have no right to exercise
directly any right or remedy available to the holders of, or in respect of, the
Debentures.

     (d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.13, the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past

                                      -36-


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

     Section  5.14. Notices to Clearing Agency. To the extent that a notice or
other communication to the Holders is required under this Declaration, for so
long as Preferred Securities are represented by a Book-Entry Preferred
Securities Certificate, the Trustees shall give all such notices and
communications specified herein to be given to the Clearing Agency, and shall
have no obligations to the Owners.

                                   ARTICLE VI

                    Acts of Securityholders; Meetings; Voting

     Section  6.01. Limitations on Voting Rights.

     (a) Except as provided herein and in the Indenture and as otherwise
required by law, no Holder of Preferred Securities shall have any right to vote
or in any manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.

     (b) So long as any Debentures are held by the Property Trustee on behalf of
the Trust, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee or
execute any trust or power conferred on the Debenture Trustee with respect to
such Debentures, (ii) waive any past default which may be waived under Section
513 of the Indenture, (iii) exercise any right to rescind or annul an
acceleration of the principal of all the Debentures or (iv) consent to any
amendment or modification of the Indenture, where such consent shall be
required, without, in each case, obtaining the prior consent of the Holders of
at least a Majority in Liquidation Amount of the Preferred Securities; provided,
however, that where such consent under the Indenture would require the consent
of each holder of Debentures affected thereby, no such consent shall be given by
the Property Trustee without the prior written consent of each Holder of
Outstanding Preferred Securities. The Trustees shall not revoke any action

                                      -37-


previously authorized or approved by a vote of the Holders of Preferred
Securities, except by a subsequent vote of the Holders of Preferred Securities.
The Property Trustee shall notify all Holders of the Preferred Securities of any
notice received from the Debenture Trustee as a result of the Trust being the
holder of the Debentures. In addition to obtaining the consent of the Holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel
experienced in such matters to the effect that such action not cause the Trust
to be taxable as a corporation or classified as an entity other than a grantor
trust for United States Federal income tax purposes.

     (c) Subject to Section 10.02(c) hereof, if any proposed amendment to the
Declaration provides for, or the Trustees otherwise propose to effect, (i) any
action that would adversely affect in any material respect the powers,
preferences or special rights of the Preferred Securities, whether by way of
amendment to this Declaration or otherwise, or (ii) dissolution of or
liquidation of the Trust, other than pursuant to the terms of this Declaration,
then the Holders of Outstanding Preferred Securities will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a Majority in Liquidation
Amount of the Preferred Securities. Notwithstanding any other provision of this
Declaration, no amendment to this Declaration may be made if, as a result of
such amendment, it would cause the Trust to be taxable as a corporation or
classified as other than a grantor trust for United States Federal income tax
purposes.

     Section 6.02. Notice of Meetings. Notice of all meetings of the Preferred
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 10.10 to each Preferred
Securityholder of record, at his/her registered address, at least 15 days and
not more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice.

     Section 6.03. Meetings of Preferred Securityholders. No annual meeting of
Securityholders is required to be held. The Administrative Trustee, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Holders of at least 25% of the aggregate Liquidation Amount of
the Outstanding Preferred Securities and the Administrative Trustee or the
Property Trustee may, at any time in their discretion, call a meeting of
Preferred Securityholders to vote on any matters as to which the Preferred
Securityholders are

                                      -38-


entitled to vote.

     Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, present in person or by proxy, shall constitute a quorum at any
meeting of Preferred Securityholders.

     If a quorum is present at a meeting, an affirmative vote of the Holders of
at least a Majority in Liquidation Amount of the Preferred Securities present,
either in person or by proxy, at such meeting shall constitute the action of the
Preferred Securityholders, unless this Declaration requires a greater number of
affirmative votes.

     Section  6.04. Voting Rights. A Securityholder shall be entitled to one
vote for each Trust Security in respect of any matter as to which such
Securityholder is entitled to vote.

     Section  6.05. Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustee, or with such other officer or agent of the
Trust as the Administrative Trustee may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.

     Section  6.06. Securityholder Action by Written Consent. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Holders holding at least a Majority in Liquidation Amount of all Preferred
Securities entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any other provision of this Declaration) shall
consent to the action in writing. Any action that may be taken by the Holder of
all the Common Securities may be taken if such Holders shall consent to the
action in writing.

                                      -39-


     Section  6.07. Record Date for Voting and Other Purposes. For the purposes
of determining the Securityholders who are entitled to notice of and to vote at
any meeting or by written consent, or for the purpose of any other action, the
Administrative Trustee may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders, as a record date for the
determination of the identity of the Securityholders for such purposes.

     Section  6.08. Acts of Securityholders Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Declaration to be given, made or taken by Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders in person or by an agent duly appointed in writing; and,
except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to the
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Declaration and (subject to Section 7.02)
conclusive, if made in the manner provided in this Section.

     The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him/her the execution thereof. Where such execution
is by a signer acting in a capacity other than his/her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his/her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.

     The ownership of Trust Securities shall be proved by the Securities
Register.

     Any request, demand, authorization, direction, notice, consent, waiver or
other act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor

                                      -40-


or in lieu thereof in respect of anything done, omitted or suffered to be done
by the Trustees or the Trust in reliance thereon, whether or not notation of
such action is made upon such Trust Security.

     Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents, each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.

     If any dispute shall arise between the Securityholders and the
Administrative Trustee or among such Securityholders or Trustees with respect to
the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.

     Section  6.09. Inspection of Records. Upon reasonable notice to the
Administrative Trustee and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.

                                   ARTICLE VII

                                  The Trustees

     Section  7.01. Certain Duties and Responsibilities.

     (a) The duties and responsibilities of the Trustees shall be as provided by
this Declaration and, in the case of the Property Trustee, also by the Trust
Indenture Act. The Property Trustee, other than during the occurrence and
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in this Declaration and, upon an Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his/her own affairs. The Trustees shall have
all the privileges, rights and immunities provided by the Delaware Statutory
Trust Act. Notwithstanding the foregoing, no provision of this Declaration shall
require the Trustees to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers, if they shall have reasonable
grounds for

                                      -41-


believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Declaration relating to the conduct or
affecting the liability of or affording protection to the Trustees shall be
subject to the provisions of this Section. Nothing in this Declaration shall be
construed to release the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct. To the
extent that, at law or in equity, the Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, the Administrative Trustee shall not be liable to the Trust
or to any Securityholder for the Administrative Trustee's good faith reliance on
the provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of the Administrative
Trustee otherwise existing at law or in equity, are agreed by the Depositor and
the Securityholders to replace such other duties and liabilities of the
Administrative Trustee.

     (b) All payments made by the Property Trustee or any other Paying Agent in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property. Each Securityholder, by its acceptance of a Trust
Security, agrees that (i) it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to it as herein
provided and (ii) the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 7.01(b) does not limit the liability
of the Trustees expressly set forth elsewhere in this Declaration or, in the
case of the Property Trustee, in the Trust Indenture Act.

     (c) The Administrative Trustee shall not be responsible for monitoring the
compliance by the other Trustees or the Depositor with their respective duties
under this Declaration.

     (d) If an Event of Default has occurred and is continuing, the Property
Trustee shall enforce this Declaration for the benefit of the Holders.

     Section  7.02. Notice of Defaults. Within five Business Days after the
occurrence of any Event of Default actually known to the Property Trustee, the
Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.10, notice of such Event of Default to the Holder, the Administrative
Trustee, and the Depositor unless such Event of Default shall have been cured or
waived.

                                      -42-


     The Property Trustee shall not be deemed to have knowledge of any Event of
Default unless the Property Trustee shall have received written notice or a
Responsible Officer of the Property Trustee charged with the administration of
this Declaration shall have obtained actual knowledge of such Event of Default.

     Section  7.03. Certain Rights of Property Trustee.  Subject to the
provisions of Section 7.01:

          (a) the Property Trustee may rely and shall be protected in acting or
     refraining from acting in good faith upon any resolution, Opinion of
     Counsel, certificate, written representation of a Holder or transferee,
     certificate of auditors or any other certificate, statement, instrument,
     opinion, report, notice, request, consent, order, appraisal, bond,
     debenture, note, other evidence of indebtedness or other paper or document
     believed by it to be genuine and to have been signed or presented by the
     proper party or parties;

          (b) if, other than during the occurrence and continuance of an Event
     of Default, (i) in performing its duties under this Declaration, the
     Property Trustee is required to decide between alternative courses of
     action or (ii) in construing any of the provisions in this Declaration, the
     Property Trustee finds the same ambiguous or inconsistent with any other
     provisions contained herein or (iii) the Property Trustee is unsure of the
     application of any provision of this Declaration, then, except as to any
     matter as to which the Preferred Securityholders are entitled to vote under
     the terms of this Declaration, the Property Trustee shall deliver a notice
     to the Depositor requesting written instructions of the Depositor as to the
     course of action to be taken. The Property Trustee shall take such action,
     or refrain from taking such action, as the Property Trustee shall be
     instructed in writing to take, or to refrain from taking, by the Depositor;
     provided, however, that if the Property Trustee does not receive such
     instructions of the Depositor within ten Business Days after it has
     delivered such notice, or such reasonably shorter period of time set forth
     in such notice (which to the extent practicable shall not be less than two
     Business Days), it may, but shall be under no duty to, take or refrain from
     taking such action not inconsistent with this Declaration as it shall deem
     advisable and in the best interests of the Securityholders, in which event
     the Property Trustee shall have no liability except for its own negligent
     action, its own negligent failure to act or its own willful misconduct;

                                      -43-


          (c) the Property Trustee may consult with counsel or other experts of
     its selection (and shall notify the Depositor of such consultation) and the
     advice or opinion of such counsel or other experts with respect to legal
     matters or advice within the scope of such experts' area of expertise shall
     be full and complete authorization and protection in respect of any action
     taken, suffered or omitted by it hereunder in good faith and in reliance
     thereon;

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

          (e) the Property Trustee shall not be bound to make any investigation
     into the facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     approval, bond, debenture, note or other evidence of indebtedness or other
     paper or document, but the Property Trustee, in its discretion, may make
     such further inquiry or investigation into such facts or matters as it may
     see fit; and

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

     Section  7.04. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Depositor of the proceeds of the Debentures.

     Section  7.05. May Hold Securities. Any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Sections 7.08 and 7.13 and,
except as

                                      -44-


provided in the definition of the term Outstanding in Article I, may otherwise
deal with the Trust with the same rights it would have if it were not a Trustee
or such other agent.

     Section  7.06  Compensation; Indemnity; Fees.

          (a) The Depositor agrees to pay to the Trustees from time to time such
     compensation as shall have been agreed in writing with the Depositor for
     all services rendered by them hereunder (which compensation shall not be
     limited by any provision of law in regard to the compensation of a trustee
     of an express trust).

          (b) The Depositor agrees, except as otherwise expressly provided
     herein, to reimburse the Trustees upon request for all reasonable expenses,
     disbursements and advances incurred or made by the Trustees in accordance
     with any provision of this Declaration (including the reasonable
     compensation and the expenses and disbursements of its agents and counsel),
     except any such expense, disbursement or advance as may be attributable to
     its own negligent action, its own negligent failure to act or its own
     willful misconduct (or, in the case of the Administrative Trustee, any such
     expense, disbursement or advance as may be attributable to his/her gross
     negligence).

          (c) The Depositor agrees to indemnify each of the Property and
     Delaware Trustees or any predecessor of such Trustee for, and to hold such
     Trustees harmless against, any and all loss, damage, claims, liability,
     penalty or expense including taxes (other than taxes based on the income of
     such Trustee) incurred without its own negligent action, its own negligent
     failure to act or its willful misconduct, arising out of or in connection
     with the acceptance or administration of this Declaration, including the
     reasonable costs and expenses of defending itself against any claim or
     liability in connection with the exercise or performance of any of its
     powers or duties hereunder.

          (d)(i) The Depositor shall indemnify, to the full extent permitted by
     law, any Company Indemnified Person who was or is a party or is threatened
     to be made a party to any threatened, pending or completed action, suit or
     proceeding, whether civil, criminal, administrative or investigative (other
     than an action by or in the right of the Trust) by reason of the fact that
     he is or was a Company Indemnified Person against expenses (including
     attorneys' fees), judgments, fines and amounts paid in settlement actually
     and reasonably incurred by him in connection with such action,

                                      -45-


     suit or proceeding if he acted in good faith and in a manner he reasonably
     believed to be in or not opposed to the best interests of the Trust, and,
     with respect to any criminal action or proceeding, had no reasonable cause
     to believe his conduct was unlawful. The termination of any action, suit or
     proceeding by judgment, order, settlement, conviction, or upon a plea of
     NOLO CONTENDERE or its equivalent, shall not, of itself, create a
     presumption that the Company Indemnified Person did not act in good faith
     and in a manner which he reasonably believed to be in or not opposed to the
     best interests of the Trust, and, with respect to any criminal action or
     proceeding, had reasonable cause to believe that his conduct was unlawful;

          (ii)   The Depositor shall indemnify, to the full extent permitted by
     law, any Company Indemnified Person who was or is a party or is threatened
     to be made a party to any threatened, pending or completed action or suit
     by or in the right of the Trust to procure a judgment in its favor by
     reason of the fact that he is or was a Company Indemnified Person against
     expenses (including attorneys' fees) actually and reasonably incurred by
     him in connection with the defense or settlement of such action or suit if
     he acted in good faith and in a manner he reasonably believed to be in or
     not opposed to the best interests of the Trust and except that no such
     indemnification shall be made in respect of any claim, issue or matter as
     to which such Company Indemnified Person shall have been adjudged to be
     liable to the Trust unless and only to the extent that the Court of
     Chancery of Delaware or the court in which such action or suit was brought
     shall determine upon application that, despite the adjudication of
     liability but in view of all the circumstances of the case, such Person is
     fairly and reasonably entitled to indemnity for such expenses which such
     Court of Chancery or such other court shall deem proper;

          (iii)  To the extent that a Company Indemnified Person shall be
     successful on the merits or otherwise (including dismissal of an action
     without prejudice or the settlement of an action without admission of
     liability) in defense of any action, suit or proceeding referred to in
     paragraphs (i) and (ii) of this Section 7.06(d), or in defense of any
     claim, issue or matter therein, he shall be indemnified, to the full extent
     permitted by law, against expenses (including attorneys' fees) actually and
     reasonably incurred by him in connection therewith.

          (iv)   Expenses (including attorneys' fees) incurred by a

                                      -46-


     Company Indemnified Person in defending a civil, criminal, administrative
     or investigative action, suit or proceeding referred to in paragraphs (i)
     and (ii) of this Section 7.06(d) shall be paid by the Depositor in advance
     of the final disposition of such action, suit or proceeding upon receipt of
     an undertaking by or on behalf of such Company Indemnified Person to repay
     such amount if it shall ultimately be determined that he is not entitled to
     be indemnified by the Depositor as authorized in this Section 7.06(d).
     Notwithstanding the foregoing, no advance shall be made by the Depositor if
     a determination is reasonably and promptly made (i) by independent legal
     counsel in a written opinion or (ii) the Common Security Holder of the
     Trust, that, based upon the facts known to the counsel or the Common
     Security Holder at the time such determination is made, such Company
     Indemnified Person acted in bad faith or in a manner that such Person did
     not believe to be in or not opposed to the best interests of the Trust, or,
     with respect to any criminal proceeding, that such Company Indemnified
     Person believed or had reasonable cause to believe his conduct was
     unlawful. In no event shall any advance be made in instances where the
     independent legal counsel or Common Security Holder reasonably determine
     that such person deliberately breached his duty to the Trust or its Common
     or Preferred Security Holders.

          (v)    The indemnification and advancement of expenses provided by, or
     granted pursuant to, the other paragraphs of this Section 7.06(d) shall not
     be deemed exclusive of any other rights to which those seeking
     indemnification and advancement of expenses may be entitled under any
     agreement, vote of stockholders or disinterested directors of the Depositor
     or Preferred Security Holders of the Trust or otherwise, both as to action
     in his official capacity and as to action in another capacity while holding
     such office. All rights to indemnification under this Section 7.06(d) shall
     be deemed to be provided by a contract between the Depositor and each
     Company Indemnified Person who serves in such capacity at any time while
     this Section 7.06(d) is in effect. Any repeal or modification of this
     Section 7.06(d) shall not affect any rights or obligations then existing.

          (vi)   The Depositor or the Trust may purchase and maintain insurance
     on behalf of any person who is or was a Company Indemnified Person against
     any liability asserted against him and incurred by him in any such
     capacity, or arising out of his status as such, whether or not the
     Depositor would have the power to indemnify him against such liability
     under the provisions of this Section 7.06(d).

                                      -47-


          (vii)  The indemnification and advancement of expenses provided by, or
     granted pursuant to, this Section 7.06(d) shall, unless otherwise provided
     when authorized or ratified, continue as to a Person who has ceased to be a
     Company Indemnified Person and shall inure to the benefit of the heirs,
     executors and administrators of such a Person.

     No Trustee may claim any Lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 7.06.

     The provisions of this Section 7.06 shall survive the termination of this
Declaration.

     The Depositor, any Trustee and any Paying Agent may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Trust Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, any Paying Agent nor any Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and the Depositor, any Trustee or any Paying Agent shall have the right to take
for its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment or other opportunity. Any Trustee or
Paying Agent may engage or be interested in any financial or other transaction
with the Depositor or any Affiliate of the Depositor, or may act as depository
for, trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Depositor or its Affiliates.

     Section  7.07. Corporate Property Trustee Required; Eligibility of
Trustees.

     (a) There shall at all times be a Property Trustee hereunder. The Property
Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least $50,000,000.
If any such Person publishes reports of condition at least annually, pursuant to
law or to the requirements of its supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be

                                      -48-


its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

     (b) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.

     (c) There shall at all times be a Delaware Trustee. The Delaware Trustee
shall either be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.

     Section  7.08. Conflicting Interests. If the Property Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Declaration. The Guarantee and the Indenture shall
be deemed to be specifically described in this Trust Agreement for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

     Section  7.09. Co-Trustees and Separate Trustee. Unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of the Trust Property may at the time be located, the
Depositor and the Administrative Trustee (and if more than one Administrative
Trustee, by agreed action of the majority of such Trustees) shall have power (i)
to appoint, and upon the written request of the Administrative Trustee the
Depositor shall for such purpose join with the Administrative Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint one or more Persons approved by the Property Trustee either
to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and (ii) to vest in such Person or Persons in the
capacity aforesaid,

                                      -49-


any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Depositor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.

     Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.

     Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:

          (a) The Trust Securities shall be executed and delivered and all
     rights, powers, duties, and obligations hereunder in respect of the custody
     of securities, cash and other personal property held by, or required to be
     deposited or pledged with, the Trustees specified hereunder, shall be
     exercised, solely by such Trustees and not by such co-trustee or separate
     trustee.

          The rights, powers, duties, and obligations hereby conferred or
     imposed upon the Property Trustee in respect of any property covered by
     such appointment shall be conferred or imposed upon and exercised or
     performed by the Property Trustee or by the Property Trustee and such
     co-trustee or separate trustee jointly, as shall be provided in the
     instrument appointing such co-trustee or separate trustee, except to the
     extent that under any law of any jurisdiction in which any particular act
     is to be performed, the Property Trustee shall be incompetent or
     unqualified to perform such act, in which event such rights, powers, duties
     and obligations shall be exercised and performed by such co-trustee or
     separate trustee.

          (b) The Property Trustee at any time, by an instrument in writing
     executed by it, with the written concurrence of the Depositor, may accept
     the resignation of or remove any

                                      -50-


     co-trustee or separate trustee appointed under this Section, and, in case a
     Debenture Event of Default has occurred and is continuing, the Property
     Trustee shall have power to accept the resignation of, or remove, any such
     co-trustee or separate trustee without the concurrence of the Depositor.
     Upon the written request of the Property Trustee, the Depositor shall join
     with the Property Trustee in the execution, delivery, and performance of
     all instruments and agreements necessary or proper to effectuate such
     resignation or removal. A successor to any co-trustee or separate trustee
     so resigned or removed may be appointed in the manner provided in this
     Section 7.09.

          (c) No co-trustee or separate trustee hereunder shall be personally
     liable by reason of any act or omission of the Property Trustee, or any
     other trustee hereunder.

          (d) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.

          (e) Any Act of Holders delivered to the Property Trustee shall be
     deemed to have been delivered to each such co-trustee and separate trustee.

     Section  7.10. Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.11.

     Subject to the immediately preceding paragraph, any Trustee may resign at
any time with respect to the Trust Securities by giving written notice thereof
to the Securityholders.

     Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Holder of the Common
Securities. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time only by Act of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities then Outstanding, delivered to
such Trustee (in its individual capacity and on behalf of the Trust). The
Administrative Trustee may only be removed by the Holder of Common Securities at
any time.

     If the instrument of acceptance by the successor Trustee required by
Section 7.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of

                                      -51-


resignation or removal, the Trustee may petition, at the expense of the
Depositor, any court of competent jurisdiction for the appointment of a
successor Trustee.

     If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Holder of Common Securities, by Act of the Holder of Common
Securities delivered to the retiring Trustee, shall promptly appoint a successor
Trustee or Trustees of the Trust, and the retiring Trustee shall comply with the
applicable requirements of Section 7.11. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default has occurred and is continuing, the Holders of
Preferred Securities, by Act of the Securityholders of at least a Majority in
Liquidation Amount of the Preferred Securities then Outstanding delivered to the
retiring Trustee, shall promptly appoint a successor Trustee or Trustees, and
such successor Trustee shall comply with the applicable requirements of Section
7.11. If any Administrative Trustee shall resign, be removed or become incapable
of acting as Administrative Trustee at a time when a Debenture Event of Default
shall have occurred and be continuing, the Holder of Common Securities shall
appoint a successor Administrative Trustee. If no successor Trustee shall have
been so appointed by the Holder of Common Securities or the Holders of a
Majority in Liquidation Amount of the Preferred Securities, as the case may be,
and accepted appointment in the manner required by Section 7.11, any
Securityholder who has been a Securityholder of Trust Securities for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.

     The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 10.10 and shall give notice to the Depositor.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office if it is the Property Trustee.

     Notwithstanding the foregoing or any other provision of this Declaration,
in the event any Administrative Trustee or Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Depositor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (a) the unanimous act of the remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the

                                      -52-


Depositor (with the successor in each case being a Person who satisfies the
eligibility requirements for Administrative Trustee or for the Delaware Trustee,
as the case may be, set forth in Section 7.07).

     Section  7.11. Acceptance of Appointment by Successor In case of the
appointment hereunder of a successor Trustee, the retiring Trustee and each
successor Trustee shall execute and deliver to the Trust and the retiring
Trustee an amendment hereto wherein each successor Trustee shall accept such
appointment and which (a) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee and (b) shall add
to or change any of the provisions of this Declaration as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such amendment
shall constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee and upon
the execution and delivery of such amendment the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee and the Trust; but, on request of the Trust or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Trustee hereunder.

     Upon request of any such successor Trustee, the Trust shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the first or
second preceding paragraph, as the case may be.

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

     Section  7.12. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which any of the Trustees may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee hereunder, provided such
Person shall be otherwise qualified and

                                      -53-


eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.

     Section  7.13. Preferential Collection of Claims Against Depositor or
Trust. If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor (whether directly or indirectly, secured or unsecured) of the
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), including under the terms of Section 7.05 hereof, the Property
Trustee or the Delaware Trustee, as the case may be, shall be subject to and
shall take all actions necessary in order to comply with the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
Trust (or any such other obligor).

     Section  7.14. Reports by Property Trustee. Not later than 60 days after
May 15 of each year commencing with May 15, 2004, the Property Trustee shall
transmit to all Holders in accordance with Section 10.10, and to the Depositor,
a brief report, dated as of May 15 of such year, with respect to: (i)its
eligibility under Section 7.07 or, in lieu thereof, if to the best of its
knowledge it has continued to be eligible under said Section, a written
statement to such effect; (ii) a statement that the Property Trustee has
complied with all of its obligations under this Declaration during the
twelve-month period (or, in the case of the initial report, the period since the
Closing Date) ending with such December 31 or, if the Property Trustee has not
complied in any material respect with such obligations, a description of such
noncompliance; and (iii)any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action taken by
the Property Trustee in the performance of its duties hereunder which it has not
previously reported and which in its opinion materially affects the Trust
Securities. In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Declaration
as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.

     A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each national stock exchange, the
Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Depositor. The Trust will promptly
notify the Property Trustee when any Preferred Securities are listed on any
stock exchange.

                                      -54-


     Section  7.15. Reports to the Property Trustee. The Depositor and the
Administrative Trustee on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. The Depositor and the
Administrative Trustee on behalf of the Trust shall annually file with the
Property Trustee a certificate specifying whether such Person is in compliance
with all of the terms and covenants applicable to such Person hereunder.

     Section  7.16. Evidence of Compliance with Conditions Precedent. The
Depositor and the Administrative Trustee on behalf of the Trust shall provide to
the Property Trustee evidence of compliance with the conditions precedent, if
any, provided for in this Declaration that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act.

     Section  7.17. Statements Required in Officers' Certificate and Opinion of
Counsel. Each Officers' Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Declaration shall
include:

          (1) a statement that each Person making such Officers' Certificate or
     Opinion of Counsel has read such covenant or condition;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     Officers' Certificate or Opinion of Counsel are based;

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

          (4) a statement that, in the opinion of such Person, such covenant or
     condition has been complied with; provided, however, that with respect to
     matters of fact not involving any legal conclusion, an Opinion of Counsel
     may rely on an Officers' Certificate or certificates of public officials.

     Section  7.18. Number of Trustees.

     (a) The number of Trustees shall be three, provided that the Holder of all
of the Common Securities by written instrument may

                                      -55-


increase and, if increased, may decrease the number of Administrative Trustees.

     (b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 7.18(a), or if the
number of Trustees is increased pursuant to Section 7.18(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 7.10.

     (c) The death, resignation, retirement, removal, bankruptcy, dissolution,
termination, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 7.10, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of this
Declaration), shall have all the powers granted to the Administrative Trustee
and shall discharge all the duties imposed upon the Administrative Trustees by
this Declaration.

     Section. 7.19  Delegation of Power.

     (a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his or her
power for the purpose of executing any documents contemplated in Section
2.07(a), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and

     (b) the Administrative Trustees shall have power to delegate from time to
time to such of their number, if there is more than one Administrative Trustee,
or to the Depositor the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrative
Trustees or otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.

     Section  7.20. Voting. Except as otherwise provided in this Declaration,
the consent or vote of the Trustees shall be approved by not less than a
majority of the Administrative Trustees.

     Section  7.21  Property Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Trust Securities
or the

                                      -56-


property of the Trust or of such other obligor or their creditors, the Property
Trustee (irrespective of whether any Distributions on the Trust Securities shall
then be due and payable and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered by intervention in such proceeding or otherwise:

     (b) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Trust Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Property Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and

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

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

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

                                  ARTICLE VIII

                           Dissolution and Liquidation

     Section  8.01. Dissolution Upon Expiration Date. Unless earlier dissolved,
the Trust shall automatically dissolve on
          (the "Expiration Date").

     Section  8.02. Early Dissolution. The earliest to occur of any of the
following events is an "Early Dissolution Event" upon

                                      -57-


the occurrence of which the Trust shall be dissolved:

          (a) the occurrence of a Bankruptcy Event in respect of, or the
     dissolution or liquidation of the Depositor or an acceleration of the
     maturity of the Debentures pursuant to Section 502 of the Indenture;

          (b) upon the election of the Depositor to liquidate the Trust and
     cause the distribution of a Like Amount of Debentures to the Holders of the
     Trust Securities (which election is optional and wholly within the
     discretion of the Depositor);

          (c) the redemption of all of the Trust Securities; and

          (d) an order for dissolution of the Trust shall have been entered by a
     court of competent jurisdiction.

     The election of the Depositor pursuant to Section 8.02(b) shall be made by
the Depositor giving written notice to the Trustees not less than 30 days prior
to the date of distribution of the Debentures. Such notice shall specify the
date of distribution of the Debentures.

     Section  8.03. Dissolution. The respective obligations and responsibilities
of the Trustees and the Trust continued hereby shall terminate upon the latest
to occur of the following: (a) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 8.04, or
upon the redemption of all of the Trust Securities pursuant to Section 4.02, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustee, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.

     Section  8.04. Liquidation.

     (a) If an Early Dissolution Event specified in clause (a) or (d) of Section
8.02 occurs or upon the Expiration Date, the Trust shall be liquidated by the
Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 8.04(d). If an Early Dissolution Event specified in clause
(b) occurs, the Trust shall be liquidated by the Trustee on the date of
distribution of the Debentures specified by the Depositor in its notice
delivered pursuant to Section 8.02. Notice of liquidation shall be given by the

                                      -58-


Property Trustee by first-class mail, postage prepaid, mailed not later than 30
nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:

          (ii)   state the Liquidation Date;

          (ii)   state that from and after the Liquidation Date, the Trust
     Securities will no longer be deemed to be Outstanding and any Trust
     Securities Certificates not surrendered for exchange will be deemed to
     represent a Like Amount of Debentures; and

          (iii)  provide such information with respect to the mechanics by which
     Holders may exchange Trust Securities Certificates for certificates
     evidencing Debentures, or, if Section 8.04(d) applies, receive a
     Liquidation Distribution, as the Administrative Trustee or the Property
     Trustee shall deem appropriate.

     (b) Except where Section 8.02(c) or 8.04(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debentures to Securityholders,
the Property Trustee, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Debentures in exchange for
the Outstanding Trust Securities Certificates.

     (c) Except where Section 8.02(c) or 8.04(d) applies, on or after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustee or its agent for exchange, (iii) the
Depositor shall use its best efforts to have the Debentures listed on the New
York Stock Exchange or such other exchange, interdealer quotation system or
self-regulatory organization as the Preferred Securities are then listed and
shall take any reasonable action necessary to effect the distribution of the
Debentures, (iv) any Trust Securities Certificates not so surrendered for
exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last Distribution
Date on which a Distribution was made on such Trust Securities Certificates
until such certificates are so surrendered (and until such certificates are so
surrendered, no payments or interest or principal will be made to Holders of
Trust Securities

                                      -59-


Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.

     (d) In the event that, notwithstanding the other provisions of this Section
8.04, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, or if an Early Dissolution Event specified in clause (c) of Section
8.02 occurs, the Trust Property shall be liquidated, and the Trust shall be
dissolved, by the Property Trustee in such manner as the Property Trustee
determines. In such event, on the date of the dissolution of the Trust,
Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities will be entitled to receive Liquidation Distributions
upon any such dissolution pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Debenture Event of Default specified in
Section 501(1) or 501(2) of the Indenture has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities, and no
Liquidation Distribution will be paid to the Holders of the Common Securities
unless and until receipt by all Holders of the Preferred Securities of the
entire Liquidation Distribution payable in respect thereof.

                                   ARTICLE IX

                                  Mergers, Etc.

     Section  9.01. Mergers, Consolidations, Amalgamations or Replacements of
the Trust. The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person except as described below
or under Article VIII. The Trust may, at the request of the Depositor, with the
consent of the Administrative Trustee and

                                      -60-


without the consent of the Holders of the Preferred Securities, merge with or
into, consolidate, amalgamate, or be replaced by, a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Preferred Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank with respect to the payment of Distributions and
payments upon liquidation and redemption, (ii) the Depositor expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Debentures, (iii) the Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which the
Preferred Securities are then listed, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the material rights, preferences and
privileges of the Holders of the Preferred Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation or replacement, the Depositor has received an
Opinion of Counsel to the effect that (a) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation or replacement, neither the Trust nor such successor
entity will be required to register as an Investment Company and (viii) the
Depositor or any permitted successor assignee owns all of the common securities
of such successor entity and guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the Guarantee
and this Declaration. Notwithstanding the foregoing, the Trust shall not, except
with the consent of all Holders of the Preferred Securities, merge with or into,
consolidate, amalgamate, or be replaced by, any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity not to be classified as a grantor trust for United States
Federal income tax purposes.

                                    ARTICLE X

                                      -61-


                            Miscellaneous Provisions

     Section. 10.01. Limitation of Rights of Securityholders. The death or
incapacity, bankruptcy, dissolution and termination of any Person having an
interest, beneficial or otherwise, in Trust Securities shall not operate to
terminate this Declaration, or dissolve, terminate or annul the Trust, nor
entitle the legal representatives or heirs of such Person or any Securityholder
for such Person, to claim an accounting, take any action or bring any proceeding
in any court for a partition or winding-up of the arrangements contemplated
hereby, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

     Section. 10.02  Amendment.

     (a) This Declaration may be amended from time to time by the Trustees and
the Depositor, without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provisions in this Declaration that may be
inconsistent with any other provision or to make any other provisions with
respect to matters or questions arising under this Declaration which shall not
be inconsistent with the other provisions of this Declaration; (ii) to modify,
eliminate or add to any provisions of this Declaration to such extent as shall
be necessary to ensure that the Trust will not be taxable as a corporation or
partnership and instead will be classified as a grantor trust for United States
federal income tax purposes at all times that any Trust Securities are
outstanding,to ensure that the Debentures will be treated as indebtedness of the
Depositor or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act; provided that in the case
of either clauses (i) or (ii) such action shall not adversely affect in any
material respect the interests of any Securityholder. Any amendments of this
Declaration pursuant to Section 10.02(a) shall become effective when notice
thereof is given to the Securityholders.

     (b) Except as provided in Section 10.02(a) and 10.02(c) hereof, any
provision of this Declaration may be amended by the Trustees and the Depositor
with the consent of Holders of at least a Majority of the Liquidation Amount of
the Preferred Securities.

     (c) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.03 or 6.06 hereof), this Declaration
may not be amended

                                      -62-


to (i) change the amount, timing or currency of any Distribution or Liquidation
Distribution on the Trust Securities or otherwise adversely affect the method of
payment of any Distribution or Liquidation Distribution required to be made in
respect of the Trust Securities as of a specified date;and (ii) restrict the
right of a Securityholder to institute suit for the enforcement of any such
payment on or after the related date; and, notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.03 or 6.06 hereof), paragraph (b) of this
Section 10.02 may not be amended.

     (d) Notwithstanding any other provisions of this Declaration, no amendment
to this Declaration shall be made without receipt by the Trust of an Opinion of
Counsel experienced in such matters to the effect that such amendment will not
affect the Trust's status as a grantor trust for United States Federal income
tax purposes or its exemption from regulation as an Investment Company.

     (e) Notwithstanding anything in this Declaration to the contrary, without
the consent of the Depositor, this Declaration may not be amended in a manner
which imposes any additional obligation on the Depositor.

     (f) In the event that any amendment to this Declaration is made, the
Administrative Trustee shall promptly provide to the Depositor a copy of such
amendment.

     (g) In executing any amendment to this Declaration, the Property Trustee
shall be entitled to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Declaration. Except as
contemplated by Section 7.11, a Trustee may, but shall not be obligated to,
enter into any amendment to this Declaration which affects the Trustee's own
rights, duties or immunities under this Declaration or otherwise.

     Section  10.03. Severability. In case any provision in this Declaration or
in the Trust Securities Certificates shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

     Section  10.4.  Fiscal Year.  The fiscal year ("Fiscal Year") of the Trust
shall be the calendar year, or such other year as is required by the Code.

                                      -63-


     Section  10.05. Certain Accounting Matters. At all times during the
existence of the Trust, the Administrative Trustee shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrative Trustee.

     Section  10.06. Governing Law. THIS DECLARATION AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS DECLARATION AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES. THE PORVISONS OF SECTION 3540 OF TITLE
12 OF THE DELAWARE CODE SHALL NOT APPLY TO THIS TRUST.

     Section  10.07. Payments Due on Non-Business Day. If the date fixed for any
payment on any Trust Security shall be a day which is not a Business Day, then
such payment need not be made on such date but may be made on the next
succeeding day which is a Business Day (except as otherwise provided herein,
with the same force and effect as though made on the date fixed for such
payment), and no interest shall accumulate thereon for the period after such
date to the date of payment on such succeeding day.

     Section  10.08. Successors and Assigns. This Declaration shall be binding
upon and shall inure to the benefit of any successor to the Trust or successor
Trustee or both, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article Eight of the Indenture and pursuant to which the
assignee agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.

     Section  10.09. Headings.  The Article and Section headings are for
convenience only and shall not affect the construction of this Declaration.

     Section  10.10. Reports, Notices and Demands. Any report, notice, demand or
other communication which by any provision of this Declaration is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or

                                      -64-


served in writing by deposit thereof, certified mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Holder of a
Preferred Security, to such Holder of a Preferred Security as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Holder of a Common Security or the Depositor, to Baltimore
Gas and Electric Company, 39 W. Lexington Street, Baltimore, MD 21201,,
Attention: Treasurer, facsimile no.: (410)-234-5367, or such other address as
may be specified by the Holder or the Depositor, as the case may be, to the
Property Trustee. Such notice, demand or other communication to or upon a
Securityholder or the Depositor shall be deemed to have been sufficiently given
or made, for all purposes, upon receipt.

     Any notice, demand or other communication which by any provision of this
Declaration is required or permitted to be given or served to or upon the Trust,
the Property Trustee or the Administrative Trustee shall be given in writing
addressed (until another address is published by the Trust) as follows: (a) with
respect to the Property Trustee to The Bank of New York, 101 Barclay Street,
Floor 21 West, New York, New York, Attention: Corporate Trust Office; (b) with
respect to the Delaware Trustee to The Bank of New York (Delaware), White Clay
Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust
Department; and (c) with respect to the Administrative Trustee, to the address
above for notices to the Depositor, marked "Attention: Administrative Trustee of
BGE Capital Trust II c/o Treasurer." Such notice, demand or other communication
to or upon the Trust, the Delaware Trustee or the Property Trustee shall be
deemed to have been sufficiently given or made only upon actual receipt of the
writing by the Trust, the Delaware Trustee or the Property Trustee, as the case
may be.

     Section  10.11. Agreement Not to Petition Each of the Trustees and the
Depositor agree for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
VIII, they shall not file, or join in the filing of, a petition against the
Trust under any Bankruptcy Laws or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor or any of the Trustees takes action in violation of this Section
10.11, the Property Trustee agrees, for the benefit of Securityholders, that at
the expense of the Depositor, it shall file an answer with the bankruptcy court
or otherwise properly contest the filing of such petition by the Depositor or
any of the Trustees, as applicable, against the Trust or the commencement of
such action and raise the defense that the Depositor or Trustee, as applicable,
has agreed in writing not to take such action and should be stopped

                                      -65-


and precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Trust may assert. The provisions of this Section 10.11
shall survive the termination of this Declaration.

     Section  10.12. Trust Indenture Act; Conflict with Trust Indenture Act.

     (a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.

     (b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.

     (c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Declaration by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Declaration modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Declaration as so modified or
excluded, as the case may be.

     (d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Trust Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.

     Section  10.13  Acceptance of Terms of Declaration, Guarantee and
Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT
ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTERST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS DECLARATION AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS DECLARATION SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.

     Section  10.14. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

                                      -66-


                                   ARTICLE XI

            Representations of Property Trustee and Delaware Trustee

     Section  11.01. Representations and Warranties of Property Trustee. The
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Depositor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Depositor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:

          (a) the Property Trustee is a banking corporation with trust powers,
     duly organized, validly existing and in good standing under the laws of its
     state of organization, with trust power and authority to execute and
     deliver, and to carry out and perform its obligations under the terms of,
     the Declaration;

          (b) the execution, delivery and performance by the Property Trustee of
     the Declaration has been duly authorized by all necessary corporate action
     on the part of the Property Trustee. The Declaration has been duly executed
     and delivered by the Property Trustee, and it constitutes a legal, valid
     and binding obligation of the Property Trustee, enforceable against it in
     accordance with its terms, subject to applicable bankruptcy,
     reorganization, moratorium, insolvency, and other similar laws affecting
     creditors' rights generally and to generally principles of equity and the
     discretion of the court (regardless of whether the enforcement of such
     remedies is considered in a proceeding in equity or at law);

          (c) the execution, delivery and performance of the Declaration by the
     Property Trustee does not conflict with or constitute a breach of the
     Articles of Organization or By-laws of the Property Trustee; and

          (d) no consent, approval or authorization of, or registration with or
     notice to, any State or Federal banking authority is required for the
     execution, delivery or performance by the Property Trustee, of the
     Declaration.

     Section  11.02. Representations and Warranties of Delaware Trustee.

     The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Depositor at the date of this Declaration, and each
Successor Delaware Trustee represents

                                      -67-


and warrants to the Trust and the Depositor at the time of the Successor
Delaware Trustee's acceptance of its appointment as Delaware Trustee that:

          (a) The Delaware Trustee is a Delaware banking corporation with trust
     powers, duly organized, validly existing and in good standing under the
     laws of the State of Delaware, with trust power and authority to execute
     and deliver, and to carry out and perform its obligations under the terms
     of, the Declaration;

          (b) The Delaware Trustee has been authorized to perform its
     obligations under the Certificate of Trust and the Declaration. The
     Declaration under Delaware law constitutes a legal, valid and binding
     obligation of the Delaware Trustee, enforceable against it in accordance
     with its terms, subject to applicable bankruptcy, reorganization,
     moratorium, insolvency, and other similar laws affecting creditors' rights
     generally and to general principles of equity and the discretion of the
     court (regardless of whether the enforcement of such remedies is considered
     in a proceeding in equity or at law);

          (c) No consent, approval or authorization of, or registration with or
     notice to, any State or Federal banking authority is required for the
     execution, delivery or performance by the Delaware Trustee, of the
     Declaration; and

          (d) The Delaware Trustee is a natural person who is a resident of the
     State of Delaware or, if not a natural person, an entity which has its
     principal place of business in the State of Delaware.

                                            BALTIMORE GAS AND ELECTRIC COMPANY,
                                            as Depositor

                                            By:
                                               ---------------------------------
                                                 Name:
                                                 Title: Vice President

                                            THE BANK OF NEW YORK
                                            Property Trustee

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

                                            THE BANK OF NEW YORK (DELAWARE)
                                            as Delaware Trustee

                                      -68-


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

                                            as Administrative Trustee

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

                                      -69-


                                                                       EXHIBIT A

                              CERTIFICATE OF TRUST
                                       OF
                                BGE CAPITAL TRUST

          THIS CERTIFICATE OF TRUST of BGE Capital Trust II (the "Trust"), dated
as of____________, is being duly executed and filed by the undersigned, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. C. Section 3801, et seq.).

          (i)    Name.  The name of the statutory trust being formed hereby is
BGE Capital Trust II.

          (ii)   Delaware Trustee.  The name and business address of the trustee
of the Trust in the State of Delaware are :

          The Bank of New York (Delaware)
          White Clay Center, Route 273
          Newark, DE 19711

          (iii)  Effective Date.  This Certificate of Trust shall be effective
as of its filing.

                                       A-1


          IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.


                                            The Bank of New York, as Trustee

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



                                            The Bank of New York, Delaware, as
                                            Trustee

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



                                            ------------------------------------
                                            , as Trustee


                                       A-2


                                                                       EXHIBIT B

           THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
               SECTION 5.10 OF THE DECLARATION REFERRED TO HEREIN

                               Certificate Number

                                       C-1

                           Number of Common Securities
                                   ----------
                    Certificate Evidencing Common Securities
                                       of
                              BGE Capital Trust II

                            _____% Common Securities
                  (liquidation amount $25 per Common Security)

     BGE Capital Trust II, a statutory trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that Baltimore Gas and Electric
Company (the "Holder") is the registered owner of ________________________
(_______) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated as the _____% Common
Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). In accordance with Section 5.10 of the Declaration (as defined
below) the Common Securities are transferable upon the books and records of the
Trust only to the Holder or any Affiliate of the Holder, subject to the
procedures and conditions set forth in Section 5.10 of the Declaration. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
the Trust dated as of _________, 2003 as the same may be amended from time to
time (the "Declaration") among Baltimore Gas and Electric Company, as Depositor,
The Bank of New York, as Property Trustee, The Bank of New York (Delaware) as
Delaware Trustee and the Administrative Trustee named therein. The Trust will
furnish a copy of the Declaration to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.

     Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.

     IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed
this certificate this ____ day of__________,2003.

                                       B-1


                                        BGE CAPITAL TRUST II


                                        By:
                                             ---------------------------
                                        Name:                , as
                                        Administrative Trustee

                                       B-2


                                                                       EXHIBIT C

                               Certificate Number

                                       P-1


                                                  Number of Preferred Securities
                                                            CUSIP NO. __________

                   Certificate Evidencing Preferred Securities
                                       of
                              BGE Capital Trust II

                        _____% Trust Preferred Securities
                 (liquidation amount $25 per Preferred Security)

     BGE Capital Trust II, a statutory trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is
the registered owner of _________, _________________________ (_________)
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the BGE Capital Trust II _____% Trust
Preferred Securities (liquidation amount $25 per Preferred Security)(the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.04 of the Declaration (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Declaration of the Trust dated as of __________, 2003 as the same may be amended
from time to time (the "Declaration")") among Baltimore Gas and Electric
Company, as Depositor, The Bank of New York, as Property Trustee, The Bank of
New York (Delaware) as Delaware Trustee and the Administrative Trustee named
therein. The Holder is entitled to the benefits of the Preferred Securities
Guarantee Agreement entered into by Baltimore Gas and Electric Company, a
Maryland, corporation, and The Bank of New York as guarantee trustee, dated as
of _________, 2003 (the "Preferred Securities Guarantee") to the extent provided
therein, together with the obligations of Baltimore Gas and Electric Company
under the Declaration, its _________% Deferrable Interest Subordinated
Debentures, and the Indenture related to such Deferrable Interest Subordinated
Debentures. The Trust will furnish a copy of the aforementioned agreements and
instruments to the Holder without charge upon written request to the Trust at
its principal place of business



or registered office.

     Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.

     This Preferred Securities Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.

     IN WITNESS WHEREOF, the Administrative Trustee of the Trust has executed
this certificate this ____ day of _________, 2003.


                                        BGE CAPITAL TRUST II


                                        By:
                                             ----------------------------------
                                               Name:
                                               as Administrative Trustee

Countersigned:

THE BANK OF NEW YORK, as Securities Registrar


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

     [To be included on face of Book-Entry Preferred Securities Certificate]

     THIS PREFERRED SECURITY IS A BOOK-ENTRY PREFERRED SECURITIES CERTIFICATE
WITHIN THE MEANING OF THE DECLARATION PREVIOUSLY REFERRED TO AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE OF
THE DEPOSITORY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY
OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION.

     UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, (55 WATER STREET, NEW
YORK) TO BGE CAPITAL TRUST II OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME
OF



CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.

                          [FORM OF REVERSE OF SECURITY]

     Distributions payable on each Preferred Security will be fixed at a rate
per annum of _____% (the "Coupon Rate") of the stated liquidation amount of $25
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.

     Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing on __________, 2003, which payment dates
shall correspond to the interest payment dates on the Debentures. The Issuer of
the Debentures has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarters or the final maturity date of the
Debentures (each an "Extension Period") and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the issuer of the Debentures may further extend such Extension Period; PROVIDED
THAT such Extension Period together with all such previous and further
extensions thereof may not exceed 20



consecutive quarters or the final maturity date of the Debentures. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period or, if earlier, upon redemption of the Debentures. Upon the termination
of any Extension Period and the payment of all amounts then due, the issuer of
the Debentures may commence a new Extension Period, subject to the above
requirements.

     The Preferred Securities shall be redeemable as provided in the
Declaration.



                                   ----------

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:

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

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

- --------------------------------------------------------------------------------
        (Insert assignee's social security or tax identification number)

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

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

- --------------------------------------------------------------------------------
                    (Insert address and zip code of assignee)


and irrevocably appoints

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

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

- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

Date:
      -----------------------------

Signature:
           ------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

Signature Guaranty:
                    ----------------------------

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the [Registrar], which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the [Registrar] in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

EX-4.(D)

                                                                    Exhibit 4(d)
================================================================================


                       Baltimore Gas and Electric Company,

                                    as Issuer

                                       To

                              The Bank of New York,

                                   as Trustee


                                    INDENTURE

                          SUBORDINATED DEBT SECURITIES

                            DATED AS OF JUNE 15, 1998


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



                       BALTIMORE GAS AND ELECTRIC COMPANY

           Reconciliation and tie between Trust Indenture Act of 1939
                    and Indenture, dated as of June 15, 1998



Trust Indenture                                                                      Indenture Section
  Act Section
                                                                                  
Section 310(a)(1) ..............................................................     609
           (a)(2) ..............................................................     609
           (a)(3) ..............................................................     Not Applicable
           (a)(4) ..............................................................     Not Applicable
           (a)(5) ..............................................................     609
           (b)   ...............................................................     608, 610
Section 311(a)   ...............................................................     613
           (b)   ...............................................................     613
Section 312(a)   ...............................................................     701, 702(a)
           (b)   ...............................................................     702(b)
           (c)   ...............................................................     702(c)
Section 313(a)   ...............................................................     703(a)
           (b)   ...............................................................     Not Applicable
           (c)   ...............................................................     703(a)
           (d)   ...............................................................     703(b)
Section 314(a)   ...............................................................     704
           (b)   ...............................................................     Not Applicable
           (c)(1) ..............................................................     102
           (c)(2) ..............................................................     102
           (c)(3) ..............................................................     Not Applicable
           (d)   ...............................................................     Not Applicable
           (e)   ...............................................................     102
Section 315(a)   ...............................................................     601(a)
           (b)   ...............................................................     602
           (c)   ...............................................................     601(b)
           (d)   ...............................................................     601(c)
           (d)(1) ..............................................................     601(a), 601(c)
           (d)(2) ..............................................................     601(c)
           (d)(3) ..............................................................     601(c)
           (e)   ...............................................................     514
Section 316(a)(last sentence) ..................................................     101
           (a)(1)(A) ...........................................................     512
           (a)(1)(B) ...........................................................     502, 513
           (a)(2) ..............................................................     Not Applicable
           (b)   ...............................................................     508
Section 317(a)(1) ..............................................................     503
           (a)(2) ..............................................................     504
           (b)   ...............................................................     1008
Section 318(a)   ...............................................................     107


- ----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.



                                TABLE OF CONTENTS



                                                                                    Page
                                                                                 
RECITALS OF THE COMPANY.............................................................1

                                   ARTICLE ONE
             Definitions and other Provisions of General Application

SECTION 101.  Definitions...........................................................1
     ACT............................................................................2
     AFFILIATE......................................................................2
     AUTHENTICATING AGENT...........................................................2
     BANKRUPTCY LAW.................................................................2
     BGE Trust......................................................................2
     BOARD OF DIRECTORS.............................................................2
     BOARD RESOLUTION...............................................................2
     BUSINESS DAY...................................................................2
     CAPITAL LEASE OBLIGATIONS......................................................3
     COMMISSION.....................................................................3
     COMPANY........................................................................3
     COMPANY REQUEST or COMPANY ORDER...............................................3
     CORPORATE TRUST OFFICE.........................................................3
     COVENANT DEFEASANCE............................................................3
     CUSTODIAN......................................................................3
     DEFAULT........................................................................3
     DEFAULTED INTEREST.............................................................3
     DEFEASANCE.....................................................................3
     DEPOSITORY.....................................................................4
     DOLLARS and $..................................................................4
     EVENT OF DEFAULT...............................................................4
     EXCHANGE ACT...................................................................4
     GAAP...........................................................................4
     GLOBAL SECURITY................................................................4
     HOLDER or SECURITYHOLDER.......................................................4
     INDENTURE......................................................................4
     INTEREST.......................................................................4
     INTEREST PAYMENT DATE..........................................................4
     MATURITY.......................................................................4
     OFFICER........................................................................4
     OFFICER'S CERTIFICATE..........................................................5
     OPINION OF COUNSEL.............................................................5
     ORIGINAL ISSUE DISCOUNT SECURITY...............................................5
     OUTSTANDING....................................................................5
     PAYING AGENT...................................................................6
     PERIODIC OFFERING..............................................................6
     PERSON.........................................................................6
     PLACE OF PAYMENT...............................................................6
     PREDECESSOR SECURITY...........................................................6
     PREFERRED SECURITIES...........................................................6
     BGE TRUST......................................................................6
     REDEMPTION DATE................................................................6
     REDEMPTION PRICE...............................................................6
     REGISTERED SECURITY............................................................7
     REGULAR RECORD DATE............................................................7


                                       -i-


                                                                                
     RESPONSIBLE OFFICER........................................................... 7
     SECURITIES.................................................................... 7
     SECURITY REGISTER and SECURITY REGISTRAR...................................... 7
     SENIOR INDEBTEDNESS........................................................... 7
     SPECIAL RECORD DATE........................................................... 8
     STATED MATURITY............................................................... 8
     TRANCHE....................................................................... 8
     TRUST INDENTURE ACT........................................................... 8
     TRUST SECURITIES.............................................................. 8
     TRUSTEE....................................................................... 8
     U.S. GOVERNMENT OBLIGATIONS................................................... 8
     VICE PRESIDENT................................................................ 9
SECTION 102.      Compliance Certificates and Opinions............................. 9
SECTION 103.      Form of Documents Delivered to Trustee........................... 9
SECTION 104.      Acts of Holders..................................................10
SECTION 105.      Notices, Etc., to Trustee and Company............................11
SECTION 106.      Notice to Holders; Waiver........................................12
SECTION 107.      Conflict with Trust Indenture Act................................12
SECTION 108.      Effect of Headings and Table of Contents.........................12
SECTION 109.      Successors and Assigns...........................................12
SECTION 110.      Separability Clause..............................................13
SECTION 111.      Benefits of Indenture............................................13
SECTION 112.      Governing Law....................................................13
SECTION 113.      Legal Holidays...................................................13
SECTION 114.      No Recourse Against Others.......................................13

                                   ARTICLE TWO
                                 Security Forms

SECTION 201.      Forms Generally..................................................14
SECTION 202.      Form of Trustee's Certificate of Authentication..................14

                                  ARTICLE THREE
                                 The Securities

SECTION 301.      Amount Unlimited; Issuable in Series.............................14
SECTION 302.      Denominations....................................................17
SECTION 303.      Execution, Authentication, Delivery and Dating...................17
SECTION 304.      Temporary Securities.............................................21
SECTION 305.      Registration, Registration of Transfer and Exchange..............21
SECTION 306.      Mutilated, Destroyed, Lost and Stolen Securities.................23
SECTION 307.      Payment of Interest; Interest Rights Preserved...................24
SECTION 308.      Persons Deemed Owners............................................26
SECTION 309.      Cancellation.....................................................26
SECTION 310.      Computation of Interest..........................................26

                                  ARTICLE FOUR
                           Satisfaction and Discharge

SECTION 401.      Satisfaction and Discharge of Indenture..........................27



                                      -ii-


                                                                                
SECTION 402.      Application of Trust Money.......................................28

                                  ARTICLE FIVE
                                    Remedies

SECTION 501.      Events of Default................................................28
SECTION 502.      Acceleration of Maturity; Rescission and
                  Annulment........................................................29
SECTION 503.      Collection of Indebtedness and Suits for Enforcement by Trustee..31
SECTION 504.      Trustee May File Proofs of Claim.................................32
SECTION 505.      Trustee May Enforce Claims Without Possession of
                  Securities.......................................................32
SECTION 506.      Application of Money Collected...................................33
SECTION 507.      Limitation on Suits..............................................33
SECTION 508.      Unconditional Right of Holders to Receive Principal,
                  Premium and Interest.............................................34
SECTION 509.      Restoration of Rights and Remedies...............................34
SECTION 510.      Rights and Remedies Cumulative...................................34
SECTION 511.      Delay or Omission Not Waiver.....................................35
SECTION 512.      Control by Holders...............................................35
SECTION 513.      Waiver of Past Defaults..........................................35
SECTION 514.      Undertaking for Costs............................................36

                                   ARTICLE SIX
                                   The Trustee

SECTION 601.      Certain Duties and Responsibilities of
                  the Trustee......................................................36
SECTION 602.      Notice of Defaults...............................................37
SECTION 603.      Certain Rights of Trustee........................................37
SECTION 604.      Not Responsible for Recitals or Issuance of
                  Securities.......................................................38
SECTION 605.      May Hold Securities..............................................38
SECTION 606.      Money Held in Trust..............................................39
SECTION 607.      Compensation and Reimbursement...................................39
SECTION 608.      Disqualification; Conflicting Interests..........................39
SECTION 609.      Corporate Trustee Required; Eligibility..........................40
SECTION 610.      Resignation and Removal; Appointment of
                  Successor........................................................40
SECTION 611.      Acceptance of Appointment by Successor...........................42
SECTION 612.      Merger, Conversion, Consolidation
                  or Succession to Business........................................43
SECTION 613.      Preferential Collection of Claims Against
                  Company..........................................................43
SECTION 614.      Appointment of Authenticating Agent..............................43

                                  ARTICLE SEVEN
                Holders' Lists and Reports by Trustee and Company

SECTION 701.      Company to Furnish Trustee Names and Addresses of Holders........45
SECTION 702.      Preservation of Information; Communications to Holders...........46



                                      -iii-


                                                                                
SECTION 703.      Reports by Trustee...............................................47
SECTION 704.      Intentionally Left Blank.........................................47

                                  ARTICLE EIGHT
                 Consolidation, Merger, Lease, Sale or Transfer

SECTION 801.      When Company May Merge, Etc......................................47
SECTION 802.      Opinion of Counsel...............................................48
SECTION 803.      Successor Corporation Substituted................................48

                                  ARTICLE NINE
                             Supplemental Indentures

SECTION 901.      Supplemental Indentures Without Consent of Holders...............48
SECTION 902.      Supplemental Indentures with Consent of Holders..................50
SECTION 903.      Execution of Supplemental Indentures.............................52
SECTION 904.      Effect of Supplemental Indentures................................52
SECTION 905.      Conformity with Trust Indenture Act..............................52
SECTION 906.      Reference in Securities to Supplemental Indentures...............52

                                   ARTICLE TEN
                                    Covenants

SECTION 1001.     Payments of Securities...........................................52
SECTION 1002.     Maintenance of Office or Agency..................................53
SECTION 1003.     Corporate Existence..............................................53
SECTION 1004.     Payment of Taxes and Other Claims................................53
SECTION 1005.     Compliance Certificates..........................................53
SECTION 1006.     Commission Reports...............................................54
SECTION 1007.     Waiver of Stay, Extension or Usury Laws..........................54
SECTION 1008.     Money for Securities Payments to Be Held
                  in Trust.........................................................55

                                 ARTICLE ELEVEN
                            Redemption of Securities

SECTION 1101.     Applicability of Article.........................................56
SECTION 1102.     Election to Redeem; Notice to Trustee............................56
SECTION 1103.     Selection by Trustee of Securities to Be Redeemed................56
SECTION 1104.     Notice of Redemption.............................................58
SECTION 1105.     Deposit of Redemption Price......................................59
SECTION 1106.     Securities Payable on Redemption Date............................59
SECTION 1107.     Securities Redeemed in Part......................................59

                                 ARTICLE TWELVE
                                  Sinking Funds

SECTION 1201.     Applicability of Article.........................................60
SECTION 1202.     Satisfaction of Sinking Fund Payments with Securities............60
SECTION 1203.     Redemption of Securities for Sinking Fund........................60



                                      -iv-


                                                                                
                                ARTICLE THIRTEEN
                       Defeasance and Covenant Defeasance

SECTION 1301.     Applicability of Article; Company's Option to
                  Effect Defeasance or Covenant Defeasance.........................61
SECTION 1302.     Defeasance and Discharge.........................................61
SECTION 1303.     Covenant Defeasance..............................................62
SECTION 1304.     Conditions to Defeasance or Covenant Defeasance..................62
SECTION 1305.     Deposited Money and Government Obligations To Be Held
                  In Trust.........................................................64

                                ARTICLE FOURTEEN
                                  Subordination

SECTION 1401.     Agreement of Securityholders that Securities
                  Subordinated to Extent Provided..................................65
SECTION 1402.     Company not to Make Payments with Respect to
                  Securities in Certain Circumstances..............................65
SECTION 1403.     Securities Subordinated to Prior Payment of all Senior
                  Indebtedness on Dissolution, Liquidation
                  or Reorganization of Company.....................................66
SECTION 1404.     Securityholders to be Subrogated to Right of Holders
                  of Senior Indebtedness...........................................67
SECTION 1405.     Obligation of the Company Unconditional..........................67
SECTION 1406.     Trustee Entitled to Assume Payments Not
                  Prohibited in Absence of Notice..................................68
SECTION 1407.     Application by Trustee of Monies Deposited
                  With It..........................................................68
SECTION 1408.     Subordination Rights not Impaired by Acts or Omissions
                  of Company or Holders of Senior Indebtedness.....................69
SECTION 1409.     Securityholders Authorize Trustee to Effectuate
                  Subordination of Securities......................................69
SECTION 1410.     Right of Trustee to Hold Senior Indebtedness.....................69
SECTION 1411.     Article Fourteen Not to Prevent Events
                  of Default.......................................................69

                                 ARTICLE FIFTEEN
                                  Miscellaneous

SECTION 1501.     Miscellaneous....................................................69



                                       -v-


          INDENTURE, dated as of June 15, 1998, between BALTIMORE GAS AND
ELECTRIC COMPANY, a corporation duly organized and existing under the laws of
the State of Maryland (herein called the "COMPANY"), having its principal office
at 39 W. Lexington Street, Baltimore, Maryland 21201, and The Bank of New York,
a New York banking corporation, as Trustee (herein called the "TRUSTEE"), having
its principal place of business at 101 Barclay Street, Floor 21 West, New York,
New York 10081.

                             RECITALS OF THE COMPANY

          The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "SECURITIES"), to be issued in one or more series, authenticated and
delivered, as in this Indenture provided.

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

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of the
Securities of any series, without giving priority of any one Security or series
over any other, except as otherwise expressly provided herein, as follows:

                                   ARTICLE ONE

                        Definitions and other Provisions
                             of General Application

SECTION 101.  Definitions.

          For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

          (1)  the terms defined in this Article have the meanings assigned to
     them in this Article and include the plural as well as the singular;

          (2)  all other terms used herein which are defined in the Trust
     Indenture Act, either directly or by reference therein, have the meanings
     assigned to them therein;

          (3)  all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with GAAP;

          (4)  the word "INCLUDING" (and with correlative meaning

                                       -1-


     "INCLUDE") means including, without limiting the generality of, any
     description preceding such term; and

          (5)  the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
     similar import refer to this Indenture as a whole and not to any particular
     Article, Section or other subdivision.

     Certain terms, used principally in Article Six, are defined in that
     Article.

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

          "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

          "AUTHENTICATING AGENT" means with respect to any Security, any Person
authorized by the Trustee pursuant to Section 614 to act on behalf of the
Trustee to authenticate such Securities.

          "BANKRUPTCY LAW" means Title 11, U.S. Code, as in effect from time to
time, or any similar federal or state law for the relief of debtors.

          "BGE TRUST" means a statutory business trust created by the Company
for the purpose of issuing Trust Securities and to use the proceeds of the sale
thereof to purchase one or more series of Securities.

          "BOARD OF DIRECTORS" means the board of directors of the Company;
provided, however, that when the context refers to actions or resolutions of the
Board of Directors, then the term "Board of Directors" shall also mean any duly
authorized committee of the Board of Directors of the Company or Officer
authorized to act with respect to any particular matter to exercise the power of
the Board of Directors of the Company.

          "BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

          "BUSINESS DAY", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by
law, regulation or executive

                                       -2-


order to close.

          "CAPITAL LEASE OBLIGATIONS" of a person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP.

          "COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

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

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

          "CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date hereof is located at 101 Barclay Street, Floor 21 West,
New York, New York 10081.

          "COVENANT DEFEASANCE" has the meaning specified in Section 1303.

          "CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.

          "DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

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

          "DEFEASANCE" has the meaning specified in Section 1302.

          "DEPOSITORY" means, with respect to the Securities of any series, or
any Tranche thereof, issuable or issued in whole or in part in the form of one
or more Global Securities, the Person designated as Depository by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Exchange Act until a successor Depository shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depository" shall mean
or include each Person who is then a Depository hereunder, and if at

                                       -3-


any time there is more than one such Person, "Depository" shall mean the
Depository with respect to the Securities of that series or Tranche.

          "DOLLARS" and "$" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debt.

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

          "EXCHANGE ACT" means the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder, in each case as amended from time to
time.

          "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Standards Accounting Board, and as are applicable to the financial
statements of the Company, in each case as of the date of any computation
required hereunder.

          "GLOBAL SECURITY" means a Security that evidences all or part of the
Securities of any series, or any Tranche thereof.

          "HOLDER" or "SECURITYHOLDER" means, with respect to a Security, the
Person in whose name such Security is registered in the Security Register (which
terms, in the case of a Global Security, mean the Depository with respect to
such Security).

          "INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities, and any Tranche
thereof, established as contemplated by Section 301.

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

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

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

          "OFFICER" means the Chairman of the Board, the Vice Chairman of the
Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Assistant

                                       -4-


Secretary of the Company.

          "OFFICER'S CERTIFICATE" means a certificate signed by an Officer and
delivered to the Trustee.

          "OPINION OF COUNSEL" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably acceptable
to the Trustee.

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

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

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

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

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

          (iv)  Securities which have been defeased pursuant to Section 1302;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon the occurrence of an
Event of Default and the continuation thereof pursuant to the terms of such
Original Issue Discount Security as of the date of such determination and (b)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company (other

                                       -5-


than a BGE Trust) or of such other obligor shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

          "PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest, if any, on any Securities on
behalf of the Company. The Company may act as Paying Agent with respect to any
Securities issued hereunder.

          "PERIODIC OFFERING" means an offering of Securities of a series from
time to time any or all of the specific terms of which Securities, which may be
in one or more Tranches, including the rate or rates of interest, if any,
thereon, the Stated Maturity or Maturities thereof and the redemption
provisions, if any, with respect thereto, are to be determined by the Company or
its agents from time to time subsequent to the initial request for
authentication and delivery of such Securities by the Trustee, all as
contemplated in Section 301.

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

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

          "PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.

          "PREFERRED SECURITIES" means the preferred securities issued by a BGE
Trust.

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

          "REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant

                                       -6-


to this Indenture.

          "REGISTERED SECURITY" means any Security issued hereunder and
registered in the Security Register.

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

          "RESPONSIBLE OFFICER", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

          "SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

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

          "SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
interest, if any, on the following, whether outstanding on the date of execution
of this Indenture or thereafter incurred or created: (i) all obligations of the
Company for money borrowed by the Company (including Capital Lease Obligations
and purchase money obligations with an original maturity in excess of one year)
or evidenced by debentures (other than the Securities), bonds, notes, bankers'
acceptances or other corporate debt securities or similar instruments issued by
the Company; (ii) all obligations of the Company with respect to letters of
credit; (iii) all obligations of the Company constituting a guarantee or
assumption of indebtedness of others of the type referred to in the preceding
clauses (i) and (ii), including through an agreement to purchase, contingent or
otherwise; (iv) all dividends of others for the payment of which the Company is
responsible or liable as obligor, guarantor or otherwise; (v) all obligations of
the type referred to in clauses (i) through (iv) of others secured by any
property or asset of the Company (whether or not such obligation is assumed by
the Company), the amount of such obligation being deemed to be the lesser of the
value of such property or asset or the amount of the obligation so secured or
(vi) renewals, extensions or refundings of any of the obligations referred to in
the preceding clauses (i) through (v); unless, in the case of any particular
obligation, renewal, extension or refunding, under the express provisions of the
instrument creating or evidencing the same, or pursuant to which the same is
outstanding, such obligation or such

                                       -7-


renewal, extension or refunding thereof is not superior in right of payment to
or is pari passu with the Securities.

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

          "STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

          "TRANCHE" means a group of Securities which (a) are of the same series
and (b) are identical except as to principal amount and/or date of issuance.

          "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed;
provided, however, that in the event that such Act is amended after such date,
"TRUST INDENTURE ACT" means, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.

          "TRUST SECURITIES" means the undivided beneficial interests in a BGE
Trust.

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

          "U.S. GOVERNMENT OBLIGATIONS" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed by the full
faith and credit of the United States of America which, in either case, are not
callable or redeemable at the option of the issuer thereof or otherwise subject
to prepayment, and shall also include a depository receipt issued by a New York
Clearing House bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment or interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt or from any amount held by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.

                                       -8-


          "VICE PRESIDENT", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".

SECTION 102.    Compliance Certificates and Opinions.

          Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, other than an action permitted
by Sections 614 and 704 hereof, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

          Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

          a.    a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

          b.    a brief statement as to the nature and scope of the examination
     or investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

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

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

SECTION 103.    Form of Documents Delivered to Trustee.

          In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

          Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion

                                       -9-


of, or representations by, counsel, unless such Officer has actual knowledge
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an Officer or
Officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel has
actual knowledge that the certificate or opinion or representations with respect
to such matters are erroneous.

          The provisions above requiring that certain persons have actual
knowledge that certain matters or opinions are erroneous shall not be read to
impose any duty of examination or investigation upon such persons.

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 104.    Acts of Holders.

          (a)   Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

          (b)   The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit or written statement (which
need not be notarized) of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take acknowledgments of
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate,
affidavit or written statement shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee and the Company deem sufficient.

          (c)   The ownership of Registered Securities shall be proved

                                      -10-


by the Security Register.

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

          (e)   If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by Company Order, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining (i) whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record date
and/or (ii) which Holders may revoke any such Act (notwithstanding subsection
(f) of this Section).

          (f)   Until such time as written instruments shall have been delivered
to the Trustee with respect to the requisite percentage of principal amount of
Securities for the action contemplated by such instruments, any such instrument
executed and delivered by or on behalf of a Holder may be revoked with respect
to any or all of such Securities by written notice by such Holder or any
subsequent Holder, proven in the manner in which such instrument was proven.

SECTION 105.    Notices, Etc., to Trustee and Company.

          Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

          (a)   the Trustee by any Holder or by the Company shall be sufficient
     for every purpose hereunder if made, given, furnished or filed in writing
     to or with the Trustee and received by the Trustee at its Corporate Trust
     Office, Attention: Corporate Trust Administrator, or

          (b)   the Company by the Trustee or by any Holder shall be sufficient
     for every purpose hereunder (unless otherwise herein expressly provided) if
     in writing and mailed, first-class postage prepaid, to the Company
     addressed to it at the address of its

                                      -11-


     principal office specified in the first paragraph of this Indenture,
     attention: Secretary, or at any other address previously furnished in
     writing to the Trustee by the Company.

SECTION 106.    Notice to Holders; Waiver.

          Where this Indenture or any Security provides for notice to Holders of
any event, such notice shall be deemed sufficiently given (unless otherwise
herein or in such Security expressly provided) if in writing and mailed
(first-class postage prepaid), delivered by courier service, or sent by
facsimile transmission (promptly confirmed in writing), to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given, neither the
failure to deliver such notice, nor any defect in any notice, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
or the validity of the proceedings to which such notice relates. Where this
Indenture or any Security provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

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

SECTION 107.    Conflict with Trust Indenture Act.

          If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or shall be
excluded, as the case may be.

SECTION 108.    Effect of Headings and Table of Contents.

          The headings of the Articles and Sections herein and the Table of
Contents are for convenience of reference only and shall not be taken to be any
part of or to control or affect the meaning, construction or effect of
provisions of this Indenture.

SECTION 109.    Successors and Assigns.

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

                                      -12-


SECTION 110.    Separability Clause.

          If any provision of this Indenture or of the Securities, or the
application of any such provision to any Person or circumstance, shall be held
to be invalid, illegal or unenforceable, the remainder of this Indenture or of
the Securities, or the application of such provision to Persons or circumstances
other than those as to whom or which it is invalid, illegal or unenforceable,
shall not in any way be affected or impaired thereby.

SECTION 111.    Benefits of Indenture.

          Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

SECTION 112. Governing Law.

          This Indenture and the Securities shall be governed by and construed
in accordance with the laws (other than the choice of law provisions) of the
State of New York except to the extent that the Trust Indenture Act shall be
applicable.

SECTION 113.    Legal Holidays.

          In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day in any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities, other than a provision in Securities of any series, or any Tranche
thereof, or in the indenture supplemental hereto, Board Resolution or Officer's
Certificate that establishes the terms of the Securities of such series or
Tranche, which specifically states that such provision shall apply in lieu of
this Section) payment of interest or principal and premium, if any, need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, and, if such payment is made or duly provided for on such Business
Day, no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, to such Business Day.

SECTION 114.    No Recourse Against Others.

          A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder, by accepting
a Security, waives and releases all such liability. Such waivers and releases
are part of the consideration for the issuance of the Securities.

                                      -13-


                                   ARTICLE TWO

                                 Security Forms

SECTION 201.    Forms Generally.

          The definitive Securities of each series shall be in substantially
such form or forms established as shall be established pursuant to Section 301,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as the Company may deem appropriate and as are not contrary to the
provisions of this Indenture, or as may be required to comply with the rules of
any securities exchange or of any automated quotation or book-entry system, or
to conform to usage, all as may be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.

          The Securities of each series shall be issuable in registered form
without coupons. The definitive Securities shall be produced in such manner as
shall be determined by the officers executing such Securities, as evidenced by
their execution thereof.

SECTION 202.    Form of Trustee's Certificate of Authentication.

          The Trustee's certificate of authentication shall be in substantially
the form set forth below:

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

                                             --------------------------
                                                   as Trustee

Dated: _____________                    By:
                                             --------------------------
                                                   Authorized Signatory

                                  ARTICLE THREE

                                 The Securities

SECTION 301.    Amount Unlimited; Issuable in Series.

          The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

          The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution, and set forth
in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:

                                      -14-


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

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

          (3)   whether any Securities of the series, or any Tranche thereof,
     are to be issuable in global form with or without coupons and, if so, (i)
     whether beneficial owners of interests in any such Global Security may
     exchange such interests for Securities of such series and Tranche and of
     like tenor of any authorized form and denomination and the circumstances
     under which any such exchanges may occur, if other than in the manner
     provided in Section 305, and (ii) the name of the Depository with respect
     to any Global Security;

          (4)   the date or dates on which the principal of the Securities of
     the series, or any Tranche thereof, is payable;

          (5)   the rate or rates at which the Securities of the series, or any
     Tranche thereof, shall bear interest, if any (including the rate or rates
     at which overdue principal shall bear interest, if different from the rate
     or rates at which such Securities shall bear interest prior to Maturity,
     and, if applicable, the rate or rates at which overdue premium or interest
     shall bear interest, if any), or any formulary or other method or other
     means by which any such rate or rates shall be determined, by reference to
     an index or other fact or event ascertainable outside this Indenture or
     otherwise; the date or dates from which such interest shall accrue, the
     Interest Payment Dates on which such interest shall be payable and the
     Regular Record Date for the interest payable on any Interest Payment Date
     or any formulary or other method or other means by which such date or dates
     shall be determined, by reference to an index or other fact or event
     ascertainable outside of this Indenture or otherwise (without regard to any
     provisions for redemption, prepayment, acceleration, purchase or extension
     and, if applicable to such series of Securities, or any Tranche thereof,
     the basis points and United States Treasury rate(s) and any other rates to
     be used in calculating the reset rate;

          (6)   the place or places where the principal of (and premium, if any)
     and interest, if any (if such interest is not to be paid as specified in
     Section 307), on Securities of the series, or any Tranche thereof, shall be
     payable;

          (7)   the right of the Company, if any, to defer any payment of
     principal of or interest on the Securities of the series, or

                                      -15-


     any Tranche thereof, and the maximum length of any such deferral period;

          (8)   the period or periods within which, the price or prices at which
     and the terms and conditions upon which Securities of the series, or any
     Tranche thereof, may be redeemed, in whole or in part, at the option of the
     Company, pursuant to any sinking fund or otherwise;

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

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

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

          (12)  additional Events of Default with respect to Securities of the
     series, or any Tranche thereof, if any, other than those set forth herein;

          (13)  if either or both of Section 1302 and Section 1303 shall be
     inapplicable to the Securities of the series, or any Tranche thereof,
     (provided that if no such inapplicability shall be specified, then both
     Section 1302 and Section 1303 shall be applicable to the Securities of the
     series, or any Tranche thereof);

          (14)  if other than U.S. dollars, the currency or currencies or units
     based on or related to currencies in which the Securities of such series,
     or any Tranche thereof, shall be denominated and in which payments or
     principal of, and any premium and interest on, such Securities shall or may
     by payable;

          (15)  additional covenants with respect to Securities of the series,
     or any Tranche thereof, if any, other than those set forth herein;

          (16)  if other than the Trustee, the identity of the Registrar and any
     Paying Agent; and

          (17)  any exceptions to Section 113 or in the definition of "Business
     Day" with respect to Securities of the series, or any

                                      -16-


     Tranche thereof,

          (18)  any other terms of the Securities of the series, or any Tranche
     thereof (which terms shall not be inconsistent with the provisions of this
     Indenture).

          All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officer's Certificate or in any
such indenture supplemental hereto.

          With respect to Securities of a series subject to a Periodic Offering,
the indenture supplemental hereto or the Board Resolution which establishes such
series, or the Officer's Certificate pursuant to such Board Resolution, may
provide general terms or parameters for Securities of such series and provide
either that the specific terms of Securities of such series, or any Tranche
thereof, shall be specified in a Company Order or that such terms shall be
determined by the Company or its agents in accordance with procedures specified
in a Company Order as contemplated by Section 303.

          Anything herein to the contrary notwithstanding, the Trustee shall be
under no obligation to authenticate and deliver Securities of any series the
terms of which, established as contemplated by this Section, would affect the
rights, duties, obligations, liabilities or immunities of the Trustee under this
Indenture.

SECTION 302.    Denominations.

          The Securities shall be issuable in registered form without coupons in
such denominations as shall be specified as contemplated by Section 301. In the
absence of any such provisions with respect to the Securities of any series, or
any Tranche thereof, the Securities of such series or Tranche shall be issuable
in denominations of $1,000 and any integral multiple thereof.

SECTION 303.    Execution, Authentication, Delivery and Dating.

          The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.

          Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any

                                      -17-


of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities.

          At any time and from time to time after the original execution and
delivery of this Indenture, the Company may deliver Securities of any series,
executed by the Company, to the Trustee for authentication. Except as otherwise
provided in this Article Three, the Trustee shall thereupon authenticate and
make available for delivery, or cause to be authenticated and delivered, said
Securities to or upon a Company Order, without any further action by the Issuer;
provided, however, that the Trustee shall authenticate and make available for
delivery Securities of such series for original issue from time to time in the
aggregate principal amount established for such series pursuant to such
procedures, acceptable to the Trustee and to such recipients, as may be
specified from time to time by a Company Order. The Stated Maturity, original
issue dates, interest rates and any other terms of the Securities of such
series, or any Tranche thereof, shall be determined by or pursuant to such
Company Order and procedures. If provided for in such procedures, such Company
Order may authorize authentication and delivery pursuant to oral instructions
from the Company or its duly authorized agent, which instructions shall be
promptly confirmed in writing.

          In authenticating the Securities of such series and accepting the
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, prior to the initial authentication of the
Securities of such series, and (subject to Section 601) shall be fully protected
in relying upon:

          (1)   a Board Resolution relating thereto certified by the Secretary
     or Assistant Secretary of the Company;

          (2)   an Officer's Certificate or an executed supplemental indenture
     setting forth the terms of such Securities as provided in Section 301;

          (3)   an Officer's Certificate which shall state that all conditions
     precedent provided for in this Indenture relating to the issuance of such
     Securities have been complied with, that no Event of Default with respect
     to any series of Securities, or any Tranche thereof, has occurred and is
     continuing and that the issuance of such Securities does not constitute and
     will not result in (i) any Event of Default or any event or condition,
     which, upon the giving of notice or the lapse of time or both, would become
     an Event of Default or (ii) any default under the provisions of any other
     instrument or agreement by which the Company is bound; and

          (4)   an Opinion of Counsel, which shall state:

          (a)   that the form or forms of such Securities have been duly
     authorized by the Company and have been established in conformity with the
     provisions of this Indenture;

                                      -18-


          (b)   that the term or terms of such Securities have been duly
     authorized by the Company and have been established in conformity with the
     provisions of this Indenture;

          (c)   that such Securities, when authenticated and delivered by the
     Trustee and issued by the Company in the manner and subject to any
     conditions specified in such Opinion of Counsel, will constitute valid and
     legally binding obligations of the Company, enforceable in accordance with
     their terms, except to the extent enforceability may be limited by
     applicable bankruptcy, insolvency, reorganization, moratorium and other
     similar laws affecting the enforcement of creditors' rights generally and
     by the effect of general principles of equity (regardless of whether
     enforceability is considered in a proceeding in equity or at law); and

          (d)   that no consent, approval, authorization, order, registration or
     qualification of or with any court or any governmental agency or body
     having jurisdiction over the Company is required for the execution and
     delivery of such Securities by the Company, except such as have been
     obtained (except that no opinion need be expressed as to state securities
     or Blue Sky laws).

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture in a manner that in the
written opinion of counsel to the Trustee (which counsel may be an employee of
the Trustee) such authentication may not lawfully be made or would involve the
Trustee in personal liability.

          Notwithstanding the provisions of Section 301 and of the immediately
preceding paragraph, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive the Officer's
Certificate otherwise required pursuant to Section 303(3) and the Opinion of
Counsel required by Section 303(4) only once at or prior to the time of the
first authentication and delivery of such Securities (provided that such Opinion
of Counsel addresses the authentication and delivery of all such Securities) and
that, in lieu of the opinions described in clauses (b) and (c) above, Counsel
may opine that:

                    (x) when the terms of such Securities shall have been
          established pursuant to a Company Order or Orders or pursuant to such
          procedures as may be specified from time to time by a Company Order or
          Orders, all as contemplated by and in accordance with the instrument
          or instruments delivered pursuant to clause (a) above, such terms will
          have been duly authorized by the Company and will have been
          established in conformity with the provisions of this Indenture; and

                                      -19-


                    (y) when such Securities shall have been authenticated and
          delivered by the Trustee in accordance with this Indenture and the
          Company Order or Orders or the specified procedures referred to in
          paragraph (x) above and issued and delivered by the Company in the
          manner and subject to any conditions specified in such Opinion of
          Counsel, such Securities will constitute valid obligations of the
          Company enforceable in accordance with their terms except to the
          extent enforceability may be limited by applicable bankruptcy,
          insolvency, reorganization, moratorium and other similar laws
          affecting the enforcement of creditors rights generally and by the
          effect of general principles of equity (regardless of whether
          enforceability is considered in a proceeding in equity or at law).

          With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the forms and terms thereof, the validity thereof and the
compliance of the authentication and delivery thereof with the terms and
conditions of this Indenture, upon the Opinion or Opinions of Counsel, the
Officer's Certificate and the certificates and other documents delivered
pursuant to this Section 303 at or prior to the time of the first authentication
and delivery of Securities of such series until any of such opinions,
certificates or other documents have been superseded or revoked or expire by
their terms; provided, however, that any request by the Company to the Trustee
to authenticate and deliver Securities of such series shall constitute a
representation and warranty by the Company that as of the date of such request
the statements made in the most recent Officer's Certificate delivered pursuant
to Section 303(3) are true and correct as if made on and as of the date thereof.

          If the Company shall establish pursuant to Section 301 that the
Securities of a series, or any Tranche thereof, are to be issued in the form of
one or more Global Securities, then the Company shall execute and the Trustee
shall, in accordance with this Section and the Company Order with respect to the
authentication and delivery of such series or Tranche, authenticate and deliver
one or more Global Securities that (i) shall be in an aggregate amount equal to
the aggregate principal amount specified in such Company Order, (ii) shall be
registered in the name of the Depository therefor or its nominee, and (iii)
shall be made available for delivery by the Trustee to such Depository or
pursuant to such Depository's instruction.

          Each Depository designated pursuant to Section 301 must, at the time
of its designation and at all times while it serves as Depository, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.

          Unless otherwise provided for in the form of Security, each Security
shall be dated the date of its authentication and except that any substitute
Security under Section 306 shall be dated so that neither gain nor loss in
interest shall result from any mutilation,

                                      -20-


destruction, loss or theft of the relevant Predecessor Security.

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

SECTION 304.    Temporary Securities.

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

          In the case of Securities of any series, or any Tranche thereof, such
temporary Securities may be in global form, representing all or a portion of the
Outstanding Securities of such series or Tranche.

          Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of Section 305), if temporary
Securities of any series, or any Tranche thereof, are issued, the Company will
cause definitive Securities of that series or Tranche thereof to be prepared
without unreasonable delay. After the preparation of definitive Securities of
such series, or any Tranche thereof, the temporary Securities of such series or
Tranche shall be exchangeable for definitive Securities of such series or
Tranche thereof upon surrender of the temporary Securities of such series or
Tranche thereof at the office or agency of the Company in a Place of Payment for
that series or Tranche without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series, or any
Tranche thereof, the Company shall execute and the Trustee shall authenticate
and make available for delivery in exchange therefor a like principal amount of
definitive Securities of the same series, or Tranche thereof, of authorized
denominations and of like tenor. Until so exchanged, the temporary Securities of
any series, or any Tranche thereof, shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series, or
any Tranche thereof.

SECTION 305.    Registration, Registration of Transfer and Exchange.

          The Company shall cause to be kept at the Corporate Trust

                                      -21-


Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "SECURITY REGISTER") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities of each series, or Tranche thereof, and of
registration of transfers of Securities of each series, or Tranche thereof. The
Trustee is hereby appointed "SECURITY REGISTRAR" for the purpose of registering
Securities and transfers of Securities as herein provided.

          Upon surrender for registration of transfer of any Security of any
series or any Tranche thereof, at the office or agency of the Company in the
Place of Payment for that series or Tranche thereof, the Company shall execute,
and the Trustee shall authenticate and make available for delivery, in the name
of the designated transferee or transferees, one or more new Securities of the
same series and Tranche, of any authorized denominations and of a like aggregate
principal amount and Stated Maturity.

          At the option of the Holder, Securities of any series or any Tranche
thereof, may be exchanged for other Securities of the same series and Tranche,
of any authorized denominations and of a like aggregate principal amount and
Stated Maturity, upon surrender of the Securities to be exchanged at such office
or agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.

          The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

          (1)   Each Global Security authenticated under this Indenture shall be
     registered in the name of the Depository designated for such Global
     Security or a nominee thereof and delivered to such Depository or a nominee
     thereof or custodian therefor, and each such Global Security shall
     constitute a single Security for all purposes of this Indenture.

          (2)   Notwithstanding any other provision in this Indenture, no Global
     Security may be exchanged in whole or in part for Securities registered,
     and no transfer of a Global Security in whole or in part may be registered,
     in the name of any Person other than the Depository for such Global
     Security or a nominee thereof unless (A) such Depository (i) has notified
     the Company that it is unwilling or unable to continue as Depository for
     such Global Security or (ii) has ceased to be a clearing agency registered
     under the Exchange Act, (B) there shall have occurred and be continuing an
     Event of Default with respect to such Global Security or (C) there shall
     exist such circumstances, if any, in addition to or in lieu of the
     foregoing as have been specified for this purpose as contemplated by
     Section 301.

          (3)   Subject to Clause (2) above, any exchange of a Global

                                      -22-


     Security for other Securities may be made in whole or in part, and all
     Securities issued in exchange for a Global Security or any portion thereof
     shall be registered in such names as the Depository for such Global
     Security shall direct.

          (4)   Every Security authenticated and delivered upon registration of
     transfer of, or in exchange for or in lieu of, a Global Security or any
     portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
     1107 or otherwise, shall be authenticated and delivered in the form of, and
     shall be, a Global Security, unless such Security is registered in the name
     of a Person other than the Depository for such Global Security or a nominee
     thereof.

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

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

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

          The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series, or any Tranche thereof, during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of that series or Tranche selected for
redemption under Section 1103 and ending at the close of business on the day of
such mailing, or (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.

SECTION 306.    Mutilated, Destroyed, Lost and Stolen Securities.

          If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a new Security of the same series and Tranche, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.

                                      -23-


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

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

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

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

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

SECTION 307.    Payment of Interest; Interest Rights Preserved.

          Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, or Tranche thereof, interest on any Security
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest at the office or agency of any Paying
Agent therefor; provided however, that unless otherwise specified as
contemplated by Section 301 with respect to the Securities of any series, or any
Tranche thereof, interest on any Security shall be paid by check mailed to the
address of the Person entitled thereto as such address appears on the Security
Register.

          Any interest on any Security of any series, or Tranche thereof, which
is payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "DEFAULTED INTEREST")

                                      -24-


shall forthwith cease to be payable to the Holder on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause (1) or
(2) below:

          (1)   The Company may elect to make payment of any Defaulted Interest
     to the Persons in whose names the Securities of such series or Tranche
     thereof (or their respective Predecessor Securities) are registered at the
     close of business on a Special Record Date for the payment of such
     Defaulted Interest, which shall be fixed in the following manner. The
     Company shall notify the Trustee in writing of the amount of Defaulted
     Interest proposed to be paid on each Security of such series or any Tranche
     thereof and the date of the proposed payment, and at the same time the
     Company shall deposit with the Trustee an amount of money equal to the
     aggregate amount proposed to be paid in respect of such Defaulted Interest
     or shall make arrangements satisfactory to the Trustee for such deposit
     prior to the date of the proposed payment, such money when deposited to be
     held in trust for the benefit of the Persons entitled to such Defaulted
     Interest as in this Section 307 provided. Thereupon the Trustee shall fix a
     Special Record Date for the payment of such Defaulted Interest which shall
     be not more than 15 days and not less than 10 days prior to the date of the
     proposed payment and not less than 10 days after the receipt by the Trustee
     of the notice of the proposed payment. The Trustee shall promptly notify
     the Company of such Special Record Date and, in the name and at the expense
     of the Company, shall cause notice of the proposed payment of such
     Defaulted Interest and the Special Record Date therefor to be mailed,
     first-class postage prepaid, to each Holder of Securities of such series or
     any Tranche thereof at his address as it appears in the Security Register,
     not less than 10 days prior to such Special Record Date. Notice of the
     proposed payment of such Defaulted Interest and the Special Record Date
     therefor having been so mailed, such Defaulted Interest shall be paid to
     the Persons in whose names the Securities of such series or any Tranche
     thereof (or their respective Predecessor Securities) are registered at the
     close of business on such Special Record Date and shall no longer be
     payable pursuant to the following Clause (2).

          (2)   The Company may make payment of any Defaulted Interest on the
     Securities of any series, or any Tranche thereof, in any other lawful
     manner not inconsistent with the requirements of any securities exchange on
     which such Securities may be listed, and upon such notice as may be
     required by such exchange, if, after notice given by the Company to the
     Trustee of the proposed payment pursuant to this Section 307, such manner
     of payment shall be deemed practicable by the Trustee.

          Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were

                                      -25-


carried by such other Security.

SECTION 308.    Persons Deemed Owners.

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

          None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by any Depository (or its nominee), as a Holder, with respect to such
Security in global form or impair, as between such Depository and owners of
beneficial interests in such Security in global form, the operation of customary
practices governing the exercise of the right of such Depository (or its
nominee) as holder of such Security in global form.

SECTION 309.    Cancellation.

          All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities shall be held by the Trustee and
shall be returned to the Company upon written request.

SECTION 310.    Computation of Interest.

          Except as otherwise specified as contemplated by Section 301 for
Securities of any series, or any Tranche thereof, interest, if any, on the
Securities of each series shall be computed on the basis of a 360 day year
consisting of twelve 30-day months and, with respect to any period less than a
full calendar month, on the basis of the actual number of days elapsed during
such period in relation to the

                                      -26-


deemed 30 days of such month.

                                  ARTICLE FOUR

                           Satisfaction and Discharge

SECTION 401.    Satisfaction and Discharge of Indenture.

          This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for or in the form of Security for such series or Tranche),
when the Trustee, upon Company Request and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when

          (1)   either

          (A)   all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money or U.S. Government Obligations has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section 1008) have
been delivered to the Trustee for cancellation; or

          (B)   all such Securities not theretofore delivered to the Trustee for
cancellation

             (i)    have become due and payable, or

            (ii)    will become due and payable at their Stated Maturity within
one year, or

           (iii)    are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has deposited with the
Trustee as trust funds in trust for the purpose (a) money in the necessary
amount or (b) U.S. Government Obligations, the principal of and the interest on
which when due, and without any regard to reinvestment thereof, in the opinion
of an independent accountant, and, in the opinion of the officers of the Company
executing an Officer's Certificate to that effect, will provide moneys which,
together with the moneys, if any, deposited with or held by the Trustee, shall
be sufficient to pay when due the principal of, premium, if any, and interest
due and to become due on said Securities or portions thereof on the Redemption
Date or the Stated Maturity thereof, as the case may be, in trust to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and

                                      -27-


interest, if any, to the date of such deposit (in the case of Securities which
have become due and payable) or the Stated Maturity or Redemption Date, as the
case may be;

          (2)   the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

          (3)   the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.

          Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money or U.S.
Government Obligations shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1008 shall survive.

SECTION 402.    Application of Trust Money.

          Subject to the provisions of the last paragraph of Section 1008, all
money or U.S. Government Obligations deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any) and interest, if any, for whose payment such
money or U.S. Government Obligations has been deposited with or received by the
Trustee.

                                  ARTICLE FIVE

                                    Remedies

SECTION 501.    Events of Default.

          "EVENT OF DEFAULT," wherever used herein with respect to the
Securities of any series means any one of the following events:

          (1)   failure to pay interest on any Security of that series when such
interest becomes due and payable and such failure continues for a period of 30
days and the time for payment of such interest has not been extended; provided,
however that if the Company is permitted by the terms of the Securities of the
applicable series to defer the payment in question, the date on which such
payment is due and payable shall be the date on which the Company is required to
make payment following such deferral, if such deferral has been elected pursuant
to the terms of the Securities of that series; or

          (2)   failure to pay principal of (or premium, if any, on)

                                      -28-


any Security of that series when the same becomes due and payable at Maturity
(including redemptions under Article Eleven but excluding any failure by the
Company to deposit money with the Trustee in connection with any redemption at
the option of the Company) and the time for payment of such principal (or
premium, if any), has not been extended; provided, however, that if the Company
is permitted by the terms of the Securities of the applicable series to defer
the payment in question, the date on which such payment is due and payable shall
be the date on which the Company is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Securities of that series; or

          (3)   the Company fails to observe or perform any of its other
covenants, warranties or agreements in the Securities of that series or in this
Indenture (other than a covenant, agreement or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt with
or which has expressly been included in this Indenture solely for the benefit of
series of Securities other than that series), and the failure to observe or
perform continues for the period and after the notice specified in the last
paragraph of this Section; or

          (4)   the Company pursuant to or within the meaning of any Bankruptcy
Law (A) commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to or acquiesces in the institution of bankruptcy or insolvency
proceedings against it, (D) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the Company or for any
material part of its property, (E) makes a general assignment for the benefit of
its creditors, (F) admits in writing its inability to pay its debts generally as
they become due, or (G) takes any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or

          (5)  (i)  a court of competent jurisdiction enters a judgment, decree
or order for relief in respect of the Company in an involuntary case or
proceeding under any Bankruptcy Law which shall (A) approve as properly filed a
petition seeking reorganization, arrangement, adjustment or composition in
respect of the Company, (B) appoint a Custodian of the Company or for any
material part of its property or (C) order the winding-up or liquidation of its
affairs, and such judgment, decree or order shall remain unstayed and in effect
for a period of 120 consecutive days; or (ii) any bankruptcy or insolvency
petition or application is filed, or any bankruptcy or insolvency proceeding is
commenced against the Company and such petition, application or proceeding is
not dismissed within 120 days; or (iii) a warrant of attachment is issued
against any material portion of the property of the Company which is not
released within 120 days of service; or

          (6)   failure to pay any installment of interest, when the same shall
become due and payable, on any other series of Securities

                                      -29-


issued or hereafter issued pursuant to this Indenture and such failure shall
continue for a period of 30 days, or failure to pay the principal of (or
premium, if any, on) any such other series of Securities when the same shall
become due and payable at Maturity (including upon redemption but excluding any
failure by the Company to deposit money with the Trustee in connection with any
redemption at the option of the Company), and the time for payment of such
interest or principal (or premium, if any) shall not have been extended;
provided, however, that if the Company is permitted by the terms of the
Securities of the applicable series to defer the payment in question, the date
on which such payment is due shall be the date on which the Company is required
to make payment following such deferral, if such deferral has been elected
pursuant to the terms of the Securities of that series; or

          (7)   any other Event of Default provided with respect to Securities
of that series as contemplated by Section 301.

          A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company in writing of the
Default and the Company does not cure the Default within 60 days after receipt
of the notice. The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default". When a Default under clause
(3) above is cured within such 60-day period, it ceases.

SECTION 502.    Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default with respect to Securities of any series,
(other than an Event of Default specified in clause (4) or (5) of Section 501)
occurs and is continuing, the Trustee by notice in writing to the Company, or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of the affected series by notice in writing to the Company and the
Trustee, may declare the unpaid principal of and accrued interest, if any, to
the date of acceleration (or, if the Securities of that series, or any Tranche
thereof, are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) on all the Outstanding
Securities of that series, to be due and payable immediately and, upon any such
declaration, the Outstanding Securities of that series (or specified principal
amount) shall become and be immediately due and payable.

          If an Event of Default specified in clause (4) or (5) of Section 501
occurs, all unpaid principal of and accrued interest, if any, on the Outstanding
Securities of all series (or specified principal amount) shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.

          The Holders of a majority in principal amount of the Outstanding
Securities of the affected series (subject to, in the case of any series of
Securities held as trust assets of a BGE Trust,

                                      -30-


obtaining the consent of the holders of the Trust Securities of such BGE Trust
as may be required by the applicable declaration of such BGE Trust) by notice to
the Trustee may rescind an acceleration and its consequences if (i) all existing
Events of Default, other than the nonpayment of the principal and interest of
the Securities of that series that has become due solely by such declaration of
acceleration, have been cured or waived, (ii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal that has become due otherwise than by such declaration of acceleration
have been paid, (iii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (iv) all payments due to the
Trustee and any predecessor Trustee under Section 607 have been made.

SECTION 503.    Collection of Indebtedness and Suits for Enforcement by Trustee.

          The Company covenants that if:

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

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

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, if any, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate or rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the reasonable costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

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

          If an Event of Default with respect to any Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders thereof by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or

                                      -31-


in aid of the exercise of any power granted herein, or to secure any other
proper remedy.

SECTION 504.    Trustee May File Proofs of Claim.

          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

               (i)  to file and prove a claim for the whole amount of principal
     (and premium, if any) and interest, if any, owing and unpaid in respect of
     the Securities and to file such other papers or documents as may be
     necessary or advisable in order to have the claims of the Trustee
     (including any claim for the reasonable compensation, expenses,
     disbursements and advances of the Trustee, its agent and counsel) and of
     the Holders allowed in such judicial proceedings, and

              (ii)  to collect and receive any moneys or other property payable
     or deliverable on any such claims and to distribute the same; and any
     custodian, receiver, assignee, trustee, liquidator, sequestrator or other
     similar official in any such judicial proceeding is hereby authorized by
     each Holder to make such payments to the Trustee and, in the event that the
     Trustee shall consent to the making of such payments directly to the
     Holders, to pay to the Trustee any amount due it for the reasonable
     compensation, expenses, disbursements and advances of the Trustee, its
     agents and counsel, and any other amounts due the Trustee under Section
     607.

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

SECTION 505.    Trustee May Enforce Claims Without Possession of Securities.

          All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the

                                      -32-


payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.

SECTION 506.    Application of Money Collected.

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

          First:    To the payment of all amounts due the Trustee under Section
607 applicable to such series;

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

          Third:    To the Company.

          The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 506. At least fifteen (15) days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and the amount to be paid.

SECTION 507.    Limitation on Suits.

          No Holder of any series of Securities shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

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

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

          (3)   such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

                                      -33-


          (4)   the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and

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

SECTION 508.    Unconditional Right of Holders to Receive Principal, Premium and
                Interest.

          Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Notwithstanding any other provision of this Indenture, if the Securities of a
series are then held by a BGE Trust, each holder of Preferred Securities of such
BGE Trust shall have the right to bring suit directly against the Company for
the enforcement of payment to such holder in respect of Securities of such
series in a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder.

SECTION 509.    Restoration of Rights and Remedies.

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

SECTION 510.    Rights and Remedies Cumulative.

          Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be

                                      -34-


exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

SECTION 511.    Delay or Omission Not Waiver.

          No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 512.    Control by Holders.

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

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

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

          (3)   subject to Section 601, the Trustee need not take any action
which might involve the Trustee in personal liability or be unduly prejudicial
to the Holders not joining therein.

SECTION 513.    Waiver of Past Defaults.

          The Holders of not less than a majority in principal amount of the
Outstanding Securities of any affected series (or, if the affected series of
Securities is held by a BGE Trust, the holders of at least a majority of the
aggregate liquidation amount of the Preferred Securities of such BGE Trust) may
by written notice to the Trustee on behalf of the Holders of all the Securities
of such series waive any Default or Event of Default with respect to such series
and its consequences, except a Default or Event of Default

          (1)   in respect of the payment of the principal of (or premium, if
any) or interest, if any, on any Security of such series, or

          (2)   in respect of a covenant or other provision hereof which under
Article Nine cannot be modified or amended without the

                                      -35-


consent of the Holder of each Outstanding Security of such series affected.

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

SECTION 514.    Undertaking for Costs.

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

                                   ARTICLE SIX

                                   The Trustee

SECTION 601.    Certain Duties and Responsibilities of the Trustee.

          The Trustee hereby accepts the Trusts herein created. The Trustee
further undertakes and agrees, as follows:

          (a)   Except during the continuance of an Event of Default, the
Trustee's duties and responsibilities under this Indenture shall be governed by
Section 315(a) of the Trust Indenture Act.

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

          (c)   None of the provisions of Section 315(d) of the Trust Indenture
Act shall be excluded from this Indenture.

                                      -36-


SECTION 602.    Notice of Defaults.

          Within 30 days after the occurrence of any Default or Event of Default
with respect to any Securities of any series, the Trustee shall give to all
Holders of Securities of that series, as their names and addresses appear in the
Security Register, notice of such Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any) or interest, if
any, on any Security or in the payment of any sinking fund installment with
respect to Securities, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or directors
or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders of the affected
Securities.

SECTION 603.    Certain Rights of Trustee.

          Subject to the provisions of the Trust Indenture Act:

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

          (b)   any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;

          (c)   whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;

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

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

                                      -37-


request or direction;

          (f)   prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such Events
of Default which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval or other paper or document, or the books and records of the
Company, unless requested in writing to do so by the Holders of a majority in
principal amount of the Outstanding Securities of any series; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is not, in the opinion of the Trustee, reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding; the reasonable expense of every
such investigation shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand;

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

          (h)   the Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of its rights or powers.

SECTION 604.    Not Responsible for Recitals or Issuance of Securities.

          The recitals herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

SECTION 605.    May Hold Securities.

          The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

                                      -38-


SECTION 606.    Money Held in Trust.

          Money held by the Trustee in trust hereunder (including amounts held
by the Trustee as Paying Agent) need not be segregated from other funds except
to the extent required by law.

          The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed upon in writing with the
Company.

SECTION 607.    Compensation and Reimbursement.

          The Company agrees

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

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

          (3)   to indemnify the Trustee for, and to hold it harmless against,
     any loss, liability, damage, claim or expense, including taxes (other than
     taxes based upon or determined or measured by the income of the Trustee),
     incurred without negligence or bad faith on its part, arising out of or in
     connection with the acceptance or administration of the trust or trusts
     hereunder, including reasonable costs and expenses of defending itself
     against any claim or liability in connection with the exercise or
     performance of any of its powers or duties hereunder.

          When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(4) or Section 501(5), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.

          The provisions of this Section 607 shall survive the discharge of this
Indenture.

SECTION 608.    Disqualification; Conflicting Interests.

          The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act. Nothing shall prevent the
Trustee from filing with the

                                      -39-


Commission the application referred to in the second to last paragraph of
Section 310(b) of the Trust Indenture Act.

SECTION 609.    Corporate Trustee Required; Eligibility.

          There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act
having a combined capital and surplus of at least $50,000,000 subject to
supervision or examination by federal or State authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. Neither the Company nor any Person directly or
indirectly controlling, controlled by, or under common control with the Company
may serve as Trustee. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.

SECTION 610.    Resignation and Removal; Appointment of Successor.

          (a)   No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

          (b)   The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

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

          (d)   If at any time:

          (1)   the Trustee shall fail to comply with Section 310(b) of the
     Trust Indenture Act after written request therefor by the Company or by any
     Holder who has been a bona fide Holder of a Security for at least six
     months; or

          (2)   the Trustee shall cease to be eligible under Section 609 and
     shall fail to resign after written request therefor by the Company or by
     any such Holder of a Security who has been a bona fide Holder of a Security
     for at least six months; or

                                      -40-


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

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.

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

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

                                      -41-


SECTION 611.    Acceptance of Appointment by Successor.

          (a)   In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.

          (b)   In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.

          (c)   Upon request of any such successor Trustee, the

                                      -42-


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

          (d)   No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under the Trust Indenture Act.

SECTION 612.    Merger, Conversion, Consolidation or Succession to Business.

          Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

SECTION 613.    Preferential Collection of Claims Against Company.

          The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.

SECTION 614.    Appointment of Authenticating Agent.

          At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities, or any Tranche thereof, which shall be authorized to act on
behalf of, and subject to the direction of, the Trustee to authenticate
Securities of such series or Tranche issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at

                                      -43-


all times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.

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

          An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series, or Tranche thereof, with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.

          The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

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

                                      -44-


                         Form of Authenticating Agent's
                          Certificate of Authentication

Dated:_________________

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

                                                                      As Trustee

                                        By

                                                         As Authenticating Agent

                                                            Authorized Signatory

          If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel), shall appoint, in accordance with this Section and in accordance with
such procedures as shall be acceptable to the Trustee, an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.

                                  ARTICLE SEVEN

                Holders' Lists and Reports by Trustee and Company

SECTION 701.    Company to Furnish Trustee Names and Addresses of Holders.

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

          (a)   semi-annually, not later than January 15 and July 15 in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of the preceding December 15 or June 15, as the
case may be; and

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

                                      -45-


provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.

SECTION 702.    Preservation of Information; Communications to Holders.

          (a)   The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

          (b)   If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, at its election, either

              (i)   afford such applicants access to the information preserved
     at the time by the Trustee in accordance with Section 702(a); or

             (ii)   inform such applicants as to the approximate number of
     Holders whose names and addresses appear in the information preserved at
     the time by the Trustee in accordance with Section 702(a), and as to the
     approximate cost of mailing to such Holders the form of proxy or other
     communication, if any, specified in such application.

          If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such

                                      -46-


objections, the Commission shall find, after notice and opportunity for hearing,
that all objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such Holders
with reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.

          (c)   Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).

SECTION 703.    Reports by Trustee.

          (a)   If required by and in compliance with Section 313(a) of the
Trust Indenture Act, within 60 days after May 15 of each year commencing with
the year 1999, the Trustee shall transmit by mail to all Holders of Securities
as provided in Section 313(c) of the Trust Indenture Act, a brief report dated
as of May 15.

          (b)   A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.

SECTION 704.    Intentionally left blank.

                                  ARTICLE EIGHT

                 Consolidation, Merger, Lease, Sale or Transfer

SECTION 801.    When Company May Merge, Etc.

          The Company shall not consolidate with, or merge with or into any
other corporation (whether or not the Company shall be the surviving
corporation), or sell, assign, transfer or lease all or substantially all of its
properties and assets as an entirety or substantially as an entirety to any
Person or group of affiliated Persons, in one transaction or a series of related
transactions, unless:

          (1)   either the Company shall be the continuing Person or the Person
     (if other than the Company) formed by such consolidation or with which or
     into which the Company is merged or the Person (or group of affiliated
     Persons) to which all or substantially all the properties and assets of the
     Company as an entirety or substantially as an entirety are sold, assigned,

                                      -47-


     transferred or leased shall be a corporation (or constitute corporations)
     organized and existing under the laws of the United States of America or
     any State thereof or the District of Columbia and shall expressly assume,
     by an indenture supplemental hereto, executed and delivered to the Trustee,
     in form satisfactory to the Trustee, all the obligations of the Company
     under the Securities and this Indenture; and

          (2)   immediately before and after giving effect to such transaction
     or series of related transactions, no Event of Default, and no Default,
     shall have occurred and be continuing.

SECTION 802.    Opinion of Counsel.

          The Company shall deliver to the Trustee prior to the proposed
     transaction(s) covered by Section 801 an Officer's Certificate and an
     Opinion of Counsel stating that the transaction(s) and such supplemental
     indenture comply with this Indenture and that all conditions precedent to
     the consummation of the transaction(s) under this Indenture have been met.

SECTION 803.    Successor Corporation Substituted.

          Upon any consolidation by the Company with or merger by the Company
     into any other corporation or any lease, sale, assignment, or transfer of
     all or substantially all of the property and assets of the Company in
     accordance with Section 801, the successor corporation formed by such
     consolidation or into which the Company is merged or the successor
     corporation or affiliated group of corporations to which such lease, sale,
     assignment, or transfer is made shall succeed to, and be substituted for,
     and may exercise every right and power of, the Company under this Indenture
     with the same effect as if such successor corporation or corporations had
     been named as the Company herein, and thereafter, except in the case of a
     lease, the predecessor corporation or corporations shall be relieved of all
     obligations and covenants under this Indenture and the Securities and in
     the event of such conveyance or transfer, except in the case of a lease,
     any such predecessor corporation may be dissolved and liquidated.

                                  ARTICLE NINE

                             Supplemental Indentures

SECTION 901.    Supplemental Indentures Without Consent of Holders.

          Without notice to or the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

          (1)   to evidence the succession of another corporation to the Company
     and the assumption by any such successor of the

                                      -48-


     covenants of the Company herein and in the Securities; or

          (2)   to add to the covenants of the Company for the benefit of the
     Holders of all or one or more specified series of Securities or one or more
     specified Tranches thereof (and if such covenants are to be for the benefit
     of fewer than all series of Securities or fewer than all Securities of a
     Series, stating that such covenants are expressly being included solely for
     the benefit of such series or one or more Tranches of such series) or to
     surrender any right or power herein conferred upon the Company; or

          (3)   to add any additional Events of Default with respect to all or
     one or more series of Securities; or

          (4)   to add or change any of the provisions of this Indenture to such
     extent as shall be necessary to permit or facilitate the issuance of
     Securities in bearer form, registrable or not registrable as to principal,
     and with or without interest coupons; or

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

          (6)   to secure the Securities; or

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

          (8)   to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series and to add to or change any of the provisions of this Indenture
     as shall be necessary to provide for or facilitate the administration of
     the trusts hereunder by more than one Trustee, pursuant to the requirements
     of Section 611(b); or

          (9)   to cure any ambiguity, defect or inconsistency or to correct or
     supplement any provision herein which may be defective or inconsistent with
     any other provision herein; or

          (10)  to make any change to the provisions hereof or to add other
     provisions with respect to matters or questions arising under this
     Indenture; provided that such changes or additions shall not materially
     adversely affect the interests of the Holders of Securities of any series.

          Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the original execution and delivery of
this Indenture or at any time thereafter shall be amended and

                                      -49-


               (x)  if any such amendment shall require one or more changes to
          any provisions hereof or the inclusion herein of any additional
          provisions, or shall by operation of law be deemed to effect such
          changes or incorporate such provisions by reference or otherwise this
          Indenture shall be deemed to have been amended so as to conform to
          such amendment to the Trust Indenture Act, and the Company and the
          Trustee may, without the consent of any Holders, enter into an
          indenture supplemental hereto to evidence such amendment hereof; or

               (y)  if any such amendment shall permit one or more changes to,
          or the elimination of, any provisions hereof which, at the date of the
          original execution and delivery hereof or at any time thereafter, are
          required by the Trust Indenture Act to be contained herein or are
          contained herein to reflect any provisions of the Trust Indenture Act
          as in effect at such date, this Indenture shall be deemed to have been
          amended to effect such changes or elimination, and the Company and the
          Trustee may, without the consent of any Holders, enter into an
          indenture supplemental hereto to evidence such amendment hereof.

          Upon request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon receipt
by the Trustee of the documents described in (and subject to the last sentence
of) Section 903, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.

SECTION 902.    Supplemental Indentures with Consent of Holders.

          Subject to the provisions of Section 901, with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities of all series then Outstanding under this Indenture, considered as
one class, by Act of said Holders delivered to the Company and the Trustee, the
Company and the Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture; provided, however, that if
there shall be Securities of more than one series Outstanding hereunder and if a
proposed supplemental indenture shall directly affect the rights of the Holders
of Securities of one or more, but fewer than all, of such series, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but fewer than all, of such Tranches, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and provided, further, that no such supplemental
indenture shall without the consent of each Holder affected thereby:

                                      -50-


          (1)   change the Stated Maturity of the principal of, or any
     installment of principal of or interest on, any Security, or reduce the
     principal amount thereof or the rate of interest thereon or any premium
     payable upon the redemption thereof or extend the time for payment thereof,
     or reduce the amount of the principal of an Original Issue Discount
     Security that would be due and payable upon a declaration of acceleration
     of the Maturity thereof pursuant to Section 502, or change any Place of
     Payment where, or the coin or currency in which, the principal of any
     Security or any premium or interest thereon is payable, or impair the right
     to institute suit for the enforcement of any such payment on or after the
     Stated Maturity thereof (or, in the case of redemption, on or after the
     Redemption Date) or modify the provisions of the Indenture with respect to
     the subordination of the Securities in a manner adverse to any Holder;

          (2)   reduce the percentage in principal amount of the Outstanding
     Securities of any series, the consent of whose Holders is required for any
     such supplemental indenture, or the consent of whose Holders is required
     for any waiver of compliance with certain provisions of this Indenture or
     Defaults or Events of Default hereunder and their consequences provided for
     in this Indenture; or

          (3)   change the redemption provisions (including Article Eleven)
     hereof in a manner adverse to such Holder; or

          (4)   modify any of the provisions of this Section or Section 513,
     except to increase any such percentage or to provide that certain other
     provisions of this Indenture cannot be modified or waived without the
     consent of the Holder of each Outstanding Security affected thereby;
     provided, however, that this clause shall not be deemed to require the
     consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant changes in this Section, or the deletion of this
     proviso, in accordance with the requirements of Sections 611(b) and 901(8),

provided that, in the case of Outstanding Securities of a series then held by a
BGE Trust, no such supplemental indenture shall adversely affect the holders of
the Preferred Securities of such BGE Trust without the prior consent of each
holder of such Preferred Securities.

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

          It shall not be necessary for any Act of Holders under this

                                      -51-


Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

SECTION 903.    Execution of Supplemental Indentures.

          The Trustee shall sign any supplemental indenture authorized pursuant
to this Article, subject to the last sentence of this Section 903. In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.

SECTION 904.    Effect of Supplemental Indentures.

          Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 905.    Conformity with Trust Indenture Act.

          Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

SECTION 906.    Reference in Securities to Supplemental Indentures.

          Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE TEN

                                    Covenants

SECTION 1001.   Payments of Securities.

          The Company will duly and punctually pay the principal of (and
premium, if any) and interest, if any, on the Securities of each

                                      -52-


series in accordance with the terms of such Securities and this Indenture, and
will duly comply with all the other terms, agreements and conditions contained
in, or made in the Indenture for the benefit of, the Securities of such series
or any Tranche thereof.

SECTION 1002.   Maintenance of Office or Agency.

          The Company will maintain an office or agency in each Place of Payment
where Securities of each series, or any Tranche thereof, may be surrendered for
registration of transfer or exchange or for presentation for payment, and where
notices and demands to or upon the Company in respect of such Securities and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in location, of such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee as set forth in Section 105 hereof.

          The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series, or any Tranche
thereof, may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

          The Company hereby initially designates the office of The Bank of New
York as such office of the Company.

SECTION 1003.   Corporate Existence.

          Subject to Article 8 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence.

SECTION 1004.   Payment of Taxes and Other Claims.

          The Company will pay or discharge, or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income,
profits or property of the Company, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a material lien
upon the property of the Company; provided, however, that the Company shall not
be required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.

SECTION 1005.   Compliance Certificates.

          (a)   The Company shall deliver to the Trustee within 120 days after
     the end of each fiscal year of the Company (which

                                      -53-


     fiscal year currently ends on December 31), an Officer's Certificate
     stating whether or not the signer knows of any Default or Event of Default
     by the Company that occurred prior to the end of the fiscal year and is
     then continuing. If the signer does know of such a Default or Event of
     Default, the certificate shall describe each such Default or Event of
     Default and its status and the specific section or sections of this
     Indenture in connection with which such Default or Event of Default has
     occurred. The Company shall also promptly notify the Trustee in writing
     should the Company's fiscal year be changed so that the end thereof is on
     any date other than the date on which the Company's fiscal year currently
     ends. The certificate need not comply with Section 102 hereof.

          (b)   The Company shall deliver to the Trustee forthwith upon becoming
     aware of a Default or Event of Default (but in no event later than 10
     Business Days after the occurrence of each Default or Event of Default that
     is continuing), an Officer's Certificate setting forth the details of such
     Default or Event of Default and the action that the Company proposes to
     take with respect thereto and the specific section or sections of this
     Indenture in connection with which such Default or Event of Default has
     occurred.

SECTION 1006.   Commission Reports.

          The Company shall file with the Trustee, within 30 days after it is
     required to file them with the Commission, copies of the quarterly and
     annual reports and of the information, documents, and other reports (or
     copies of such portions of any of the foregoing as the Commission may by
     rules and regulations prescribe) which the Company is required to file with
     the Commission pursuant to Section 13 or 15(d) of the Exchange Act. The
     Company also shall comply with the other provisions of Section 314(a) of
     the Trust Indenture Act.

SECTION 1007.   Waiver of Stay, Extension or Usury Laws.

          The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim, and will actively resist any and all efforts to be compelled to take the
benefit or advantage of, any stay or extension law or any usury law or other
law, which would prohibit or forgive the Company from paying all or any portion
of the principal of and/or interest, if any, on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                      -54-


SECTION 1008.   Money for Securities Payments to Be Held in Trust.

          If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, or any Tranche thereof, it will, on or
before each due date of the principal of (and premium, if any) or interest, if
any, on any of the Securities of that series, or any Tranche thereof, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) or interest, if any, so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.

          Whenever the Company shall have one or more Paying Agents for any
series of Securities, or any Tranche thereof, it will, prior to each due date of
the principal of (and premium, if any) or interest, if any, on any Securities of
that series, or any Tranche thereof, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, if any, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure to so act.

          The Company will cause each Paying Agent for any series of Securities,
or any Tranche thereof (other than the Trustee) to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:

          (1)   hold all sums held by it for the payment of the principal of
     (and premium, if any) or interest, if any, on Securities of that series, or
     any Tranche thereof, in trust for the benefit of the Persons entitled
     thereto until such sums shall be paid to such Persons or otherwise disposed
     of as herein provided;

          (2)   give the Trustee notice of any default by the Company (or any
     other obligor upon the Securities of that series, or any Tranche thereof)
     in the making of any payment of principal (and premium, if any) or
     interest, if any, on the Securities of that series, or any Tranche thereof;
     and

          (3)   at any time during the continuance of any such default, upon the
     written request of the Trustee, forthwith pay to the Trustee all sums so
     held in trust by such Paying Agent.

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

                                      -55-


Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

          Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest, if any, on any Security of any series and remaining unclaimed
for two years after such principal (and premium, if any) or interest, if any,
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee of such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

                                 ARTICLE ELEVEN

                            Redemption of Securities

SECTION 1101.   Applicability of Article.

          Securities of any series, or any Tranche thereof, which are redeemable
before their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 301 for Securities
of any series, or any Tranche thereof) in accordance with this Article.

SECTION 1102.   Election to Redeem; Notice to Trustee.

          The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of fewer than all the Securities of any series, or any Tranche
thereof, the Company shall, at least 45 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officer's Certificate evidencing compliance with such
restriction.

SECTION 1103.   Selection by Trustee of Securities to Be Redeemed.

                                      -56-


          If fewer than all the Securities of any series, or any Tranche
thereof, are to be redeemed, and if at the time the Company shall have given
notice of redemption to the Trustee in accordance with Section 1102, there shall
not be on file with the Trustee and in effect a Holders' Redemption Agreement,
as hereinafter defined then the particular Securities to be redeemed shall be
selected by the Trustee, from the Outstanding Securities of such series or
Tranche not previously called for redemption, substantially pro rata, by lot or
by any other method as the Trustee considers fair and appropriate and that
complies with the requirements of the principal national securities exchange, if
any, on which such Securities are listed, and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or Tranche or any integral multiple
thereof) of the principal amount of Securities of such series or Tranche of a
denomination larger than the minimum authorized denomination for Securities of
that series or Tranche; provided that in case the Securities of such series or
Tranche have different terms and maturities, the Securities to be redeemed shall
be selected by the Company and the Company shall give notice thereof to the
Trustee; provided however, that if, as indicated in an Officer's Certificate,
the Company shall have offered to purchase all or any principal amount of the
Securities then Outstanding of any series, or any Tranche thereof, and fewer
than all of such Securities as to which such offer was made shall have been
tendered to the Company for such purchase, the Trustee, if so directed by
Company Order, shall select for redemption all or any principal amount of such
Securities which have not been so tendered.

          If at the time the Company shall have given notice of redemption to
the Trustee in accordance with Section 1102, there shall be on file with the
Trustee and in effect a Holders' Redemption Agreement, as hereinafter defined,
then the Trustee shall select, in accordance with the provisions of said
Holders' Redemption Agreement, the Securities or parts thereof to be redeemed.

          For the purposes of this Indenture, the term "Holders' Redemption
Agreement" shall mean an agreement, reasonably satisfactory to the Trustee,
executed as provided in this Section, which provides for the method to be
followed by the Trustee in selecting Securities or parts of Securities for
redemption out of any funds held by the Trustee to be applied to such
redemption. A Holders' Redemption Agreement may be made with respect to a single
series of Securities, or Tranche thereof, in which case it shall be executed by
or on behalf of the Holders of all Outstanding Securities of such series or
Tranche, or it may be made with respect to all Outstanding Securities, in which
case it shall be executed by or on behalf of the Holders of all Securities
Outstanding hereunder.

          The Trustee shall promptly notify the Company and the Securities
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.

          For all purposes of this Indenture, unless the context

                                      -57-


otherwise requires, all provisions relating to the redemption of the Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

SECTION 1104.   Notice of Redemption.

          Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

          All notices of redemption shall state:

          (1)   the Redemption Date;

          (2)   the Redemption Price;

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

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

          (5)   the place or places where such Securities are to be surrendered
     for payment of the Redemption Price;

          (6)   that the redemption is for a sinking or other fund, if such is
     the case;

          (7)   the CUSIP number, if any, of the Securities to be redeemed; and

          (8)   unless otherwise provided as to a particular series of
     Securities or any Tranche thereof, if at the time of publication or mailing
     of any notice of redemption the Company shall not have deposited with the
     Trustee or Paying Agent and/or irrevocably directed the Trustee or Paying
     Agent to apply, from money held by it available to be used for the
     redemption of Securities, an amount in cash sufficient to redeem all of the
     Securities called for redemption, including accrued interest, if any, to
     the Redemption Date, such notice shall state that it is subject to the
     receipt of the redemption moneys by the Trustee or Paying Agent before the
     Redemption Date (unless such redemption is mandatory) and such notice shall
     be of no effect unless such moneys are so received before such date.

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

                                      -58-


the Company. Notice of mandatory redemption of Securities shall be given by the
Trustee in the name and at the expense of the Company.

SECTION 1105.   Deposit of Redemption Price.

          Prior to 11:00 a.m., New York Time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1009) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest, if any, on, all the Securities which are to be redeemed on
that date.

SECTION 1106.   Securities Payable on Redemption Date.

          Notice of redemption having been given as aforesaid, and the Company
having on or before the Redemption Date deposited with the Trustee (and/or
having irrevocably directed the Trustee to apply, from money held by it
available to be used for the redemption of Securities) an amount in cash
sufficient to redeem all of the Securities to be redeemed, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date such Securities
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security shall be paid by the Company at
the Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular or Special Record Dates according to
their terms and the provisions of Section 307.

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

SECTION 1107.   Securities Redeemed in Part.

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

                                      -59-


                                 ARTICLE TWELVE

                                  Sinking Funds

SECTION 1201.   Applicability of Article.

          The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series or any Tranche thereof, except as
otherwise specified as contemplated by Section 301 for Securities of such
series, or Tranche.

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

SECTION 1202.   Satisfaction of Sinking Fund Payments with Securities.

          The Company (1) may deliver Securities of a series, or Tranche (other
than any Securities previously called for redemption) and (2) may apply as a
credit Securities of a series or Tranche which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series or Tranche required
to be made pursuant to the terms of such Securities as provided for by the terms
of such series or Tranche thereof; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such
purpose by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.

SECTION 1203.   Redemption of Securities for Sinking Fund.

          Not fewer than 45 days prior to each sinking fund payment date for any
series of Securities or any Tranche thereof, the Company will deliver to the
Trustee an Officer's Certificate specifying the amount of the next ensuing
sinking fund payment for that series or Tranche pursuant to the terms of that
series or Tranche, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series or Tranche pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund

                                      -60-


payment date the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.

                                ARTICLE THIRTEEN

                       Defeasance and Covenant Defeasance

SECTION 1301.   Applicability of Article; Company's Option to Effect Defeasance
                or Covenant Defeasance.

          Unless pursuant to Section 301 provision is made for the
inapplicability of either or both of (a) Defeasance of the Securities of a
series, or any Tranche thereof, under Section 1302 or (b) Covenant Defeasance of
the Securities of a series, or any Tranche thereof, under Section 1303, then the
provisions of such Section or Sections, as the case may be, together with the
other provisions of this Article, shall be applicable to the Securities of such
series or Tranche, and the Company may at its option by Board Resolution, at any
time, with respect to the Securities of such series, or Tranche, elect to have
either Section 1302 (unless inapplicable) or Section 1303 (unless inapplicable)
be applied to the Outstanding Securities of such series or Tranche upon
compliance with the applicable conditions set forth below in this Article.

SECTION 1302.   Defeasance and Discharge.

          Upon the Company's exercise of the option provided in Section 1301 to
defease the Outstanding Securities of a particular series or Tranche, the
Company shall be discharged from its obligations with respect to the Outstanding
Securities of such series or Tranche on the date the applicable conditions set
forth in Section 1304 are satisfied (hereinafter, "DEFEASANCE"). Defeasance
shall mean that the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the Outstanding Securities of such series or
Tranche and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same); provided, however, that the following rights, obligations, powers,
trusts, duties and immunities shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Outstanding Securities of
such series or Tranche to receive, solely from the trust fund provided for in
Section 1304, payments in respect of the principal of (and premium, if any) and
interest, if any, on such Securities when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1008, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article,
the

                                      -61-


Company may exercise its option with respect to Defeasance under this Section
1302 notwithstanding the prior exercise of its option with respect to Covenant
Defeasance under Section 1303 in regard to the Securities of such series or
Tranche.

SECTION 1303.   Covenant Defeasance.

          Upon the Company's exercise of the option provided in Section 1301 to
obtain a Covenant Defeasance with respect to the Outstanding Securities of a
particular series, or Tranche thereof, the Company shall be released from its
obligations under this Indenture (except its obligations under Sections 304,
305, 306, 506, 509, 610, 1001, 1002, 1006, 1007 and 1008) with respect to the
Outstanding Securities of such series, or Tranche thereof, on and after the date
the applicable conditions set forth in Section 1304 are satisfied (hereinafter,
"COVENANT DEFEASANCE"). Covenant Defeasance shall mean that, with respect to the
Outstanding Securities of such series, or Tranche thereof, the Company may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in this Indenture (except its obligations under Sections
304, 305, 306, 506, 509, 610, 1001, 1002, 1005, 1007 and 1008), whether directly
or indirectly by reason of any reference elsewhere herein or by reason of any
reference to any other provision herein or in any other document, and such
omission to comply shall not constitute an Event of Default under Section 501(3)
with respect to Outstanding Securities of such series, and the remainder of this
Indenture and of the Securities of such series or Tranche shall be unaffected
thereby.

SECTION 1304.   Conditions to Defeasance or Covenant Defeasance.

          The following shall be the conditions to Defeasance under Section 1302
and Covenant Defeasance under Section 1303:

                    (1)  the Company shall irrevocably have deposited or caused
          to be deposited with the Trustee (or another trustee satisfying the
          requirements of Section 609 who shall agree to comply with the
          provisions of this Article applicable to it), under the terms of an
          irrevocable trust agreement in form and substance reasonably
          satisfactory to such Trustee, as trust funds in trust for the purpose
          of making the following payments, specifically pledged as security
          for, and dedicated solely to, the benefit of the Holders of such
          Securities, (A) Dollars in an amount, or (B) U.S. Government
          Obligations which through the scheduled payment of principal and
          interest in respect thereof in accordance with their terms will
          provide, not later than the due date of any payment, money in an
          amount, or (C) a combination thereof, in each case sufficient, after
          payment of all federal, state and local taxes or other charges or
          assessments in respect thereof payable by the Trustee, in the opinion
          of a nationally recognized firm of independent public accountants
          expressed in a written certification thereof delivered to the Trustee,
          to pay and discharge, and which shall be applied by the Trustee (or
          other qualifying trustee) to pay

                                      -62-


          and discharge, (i) the principal of (and premium, if any, on) and each
          installment of principal of (and premium, if any) and interest, if
          any, on the Outstanding Securities of such series or Tranche on the
          Stated Maturity of such principal or installment of principal or
          interest and (ii) any mandatory sinking fund payments or analogous
          payments applicable to the Outstanding Securities of such series or
          Tranche on the day on which such payments are due and payable in
          accordance with the terms of this Indenture and of such Securities.

                    (2) No Default or Event of Default with respect to the
          Securities of such series shall have occurred and be continuing on the
          date of such deposit or shall occur as a result of such deposit, and
          no Default or Event of Default under clause (4) or (5) of Section 501
          hereof shall occur and be continuing, at any time during the period
          ending on the 91st day after the date of such deposit (it being
          understood that this condition shall not be deemed satisfied until the
          expiration of such period).

                    (3) Such deposit, Defeasance or Covenant Defeasance shall
          not result in a breach or violation of, or constitute a default under,
          any other agreement or instrument to which the Company is a party or
          by which it is bound.

                    (4) Such Defeasance or Covenant Defeasance shall not cause
          any Securities of such series, or Tranche thereof, then listed on any
          national securities exchange registered under the Exchange Act to be
          delisted.

                    (5) In the case of an election with respect to Section 1302,
          the Company shall have delivered to the Trustee either (A) a ruling
          directed to the Trustee received from the Internal Revenue Service to
          the effect that the Holders of the Outstanding Securities of such
          series, or Tranche thereof, will not recognize income, gain or loss
          for federal income tax purposes as a result of such Defeasance and
          will be subject to federal income tax on the same amounts, in the same
          manner and at the same times as would have been the case if such
          Defeasance had not occurred or (B) an Opinion of Counsel, based on
          such ruling or on a change in the applicable federal income tax law
          since the date of this Indenture, in either case to the effect that,
          and based thereon such opinion shall confirm that, the Holders of the
          Outstanding Securities of such series, or Tranche thereof, will not
          recognize income, gain or loss for federal income tax purposes as a
          result of such Defeasance and will be subject to federal income tax on
          the same amounts, in the same manner and at the same times as would
          have been the case if such Defeasance had not occurred.

                    (6) In the case of an election with respect to Section 1303,
          the Company shall have delivered to the

                                      -63-


          Trustee an Opinion of Counsel or a ruling directed to the Trustee
          received from the Internal Revenue Service to the effect that the
          Holders of the Outstanding Securities of such series or Tranche
          thereof will not recognize income, gain or loss for federal income tax
          purposes as a result of such Covenant Defeasance and will be subject
          to federal income tax on the same amounts, in the same manner and at
          the same times as would have been the case if such Covenant Defeasance
          had not occurred.

                    (7) Such Defeasance or Covenant Defeasance shall be effected
          in compliance with any additional terms, conditions or limitations
          which may be imposed on the Company in connection therewith pursuant
          to Section 301.

                    (8) The Company shall have delivered to the Trustee an
          Officer's Certificate and an Opinion of Counsel, each stating that all
          conditions precedent provided for relating to either the Defeasance
          under Section 1302 or the Covenant Defeasance under Section 1303 (as
          the case may be) have been complied with.

SECTION 1305.   Deposited Money and Government Obligations To Be Held In Trust.

          Subject to the provisions of the last paragraph of Section 1008, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee--collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities of a particular series, or Tranche, shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal (and premium, if any) and interest,
if any, but such money need not be segregated from other funds except to the
extent required by law.

          The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities of such series or
Tranche.

          Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver to pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 1304 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited for

                                      -64-


the purpose for which such money or Government Obligations were deposited.

                                ARTICLE FOURTEEN

                                  Subordination

SECTION 1401.   Agreement of Securityholders that Securities Subordinated to
                Extent Provided.

          The Company, for itself, its successors and assigns, covenants and
agrees and each Holder of the Securities by his acceptance thereof likewise
covenants and agrees that the payment of the principal of, premium, if any, and
interest, if any, on each and all of the Securities (other than Securities
discharged pursuant to Article Four or defeased pursuant to Article Thirteen) is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, to the prior payment in full, in cash or cash equivalents, of all Senior
Indebtedness. The provisions of this Article shall constitute a continuing offer
to all persons who, in reliance upon such provisions, become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders of Senior Indebtedness, and such holders are hereby made
obligees hereunder the same as if their names were written herein as such, and
they and/or each of them may proceed to enforce such provisions.

SECTION 1402.   Company not to Make Payments with Respect to Securities in
                Certain Circumstances.

          (a)   No direct or indirect payment by or on behalf of the Company of
principal of or premium, if any, or interest on the Securities (other than
Securities which have been discharged pursuant to Article Four or defeased
pursuant to Article Thirteen), whether pursuant to the terms of the Securities
or upon acceleration or otherwise, shall be made if, at the time of such
payment, there exists (i) a default in the payment of all or any portion of any
Senior Indebtedness and the Trustee has received written notice thereof from the
Company, from holders of Senior Indebtedness or from any trustee, representative
or agent therefor, or (ii) any other default affecting Senior Indebtedness as a
result of which the maturity of such Senior Indebtedness has been accelerated
and the Trustee has received written notice from the Company, from holders of
Senior Indebtedness or from any trustee, representative or agent therefor, and
such default shall not have been cured or waived by or on behalf of the holders
of such Senior Indebtedness.

          (b)   In the event that notwithstanding the provisions of this Section
1402, the Company shall make any payment to the Trustee on account of the
principal of or premium, if any, or interest, if any, on the Securities, or on
account of any sinking fund, or the Holders of the Securities shall receive any
such payment when such payment is prohibited by this Section 1402 and before all
amounts

                                      -65-


payable on, under or in connection with Senior Indebtedness are paid in full in
cash or cash equivalents, then and in such event, such payment (subject to the
provisions of Sections 1406 and 1407) shall be held by the Trustee or the
Holders of the Securities, as the case may be, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with the terms of such Senior Indebtedness,
after giving effect to any concurrent payment or distribution or provision
therefor to or for the holders of Senior Indebtedness. The Company shall give
prompt written notice to the Trustee of any default under any Senior
Indebtedness or under any agreement pursuant to which Senior Indebtedness may
have been issued.

SECTION 1403.   Securities Subordinated to Prior Payment of all Senior
                Indebtedness on Dissolution, Liquidation or Reorganization of
                Company.

          Upon any payment or distribution of assets or Securities of the
Company, as the case may be, of any kind or character, whether in cash, property
or securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary,
or in bankruptcy, insolvency, receivership or similar proceedings of the
Company:

          (a)   the holders of all Senior Indebtedness shall first be entitled
     to receive payment in full in cash or cash equivalents of the principal
     thereof, premium, if any, and interest (including any interest accrued on
     such Senior Indebtedness subsequent to the commencement of a bankruptcy,
     insolvency, receivership or similar proceeding), if any, due thereon before
     the Holders of the Securities are entitled to receive any payment on
     account of the principal of, premium, if any, or interest, if any, on the
     Securities or any distribution of any assets or securities;

          (b)   any payment or distribution of assets of the Company of any kind
     or character, whether in cash, property or securities, to which the Holders
     of the Securities or the Trustees would be entitled except for the
     provisions of this Article Fourteen, shall be paid by the trustee in
     bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
     other person making such payment or distribution directly to the holders of
     Senior Indebtedness or their representative or representatives, or to the
     trustee or trustees under any indenture under which any instruments
     evidencing any of such Senior Indebtedness may have been issued, to the
     extent necessary to make payment in full of all Senior Indebtedness
     remaining

                                      -66-


     unpaid, after giving effect to any concurrent payment or distribution or
     provision therefor to the holders of such Senior Indebtedness;

          (c)   in the event that notwithstanding the foregoing provisions of
     this Section 1403, the Company shall make any payment to the Trustee on
     account of the principal of or premium, if any, or interest, if any, on the
     Securities, or on account of any sinking fund, or the Holders of the
     Securities shall receive any such payment when such payment is prohibited
     by this Section 1403 and before all amounts payable on, under or in
     connection with Senior Indebtedness are paid in full in cash or cash
     equivalents, then and in such event, such payment (subject to the
     provisions of Sections 1406 and 1407) shall be held by the Trustee or the
     Holders of the Securities, as the case may be, in trust for the benefit of,
     and shall be paid over and delivered forthwith to the trustee in
     bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
     other person making payment or distribution of assets of the Company for
     application to the payment of all Senior Indebtedness remaining unpaid to
     the extent necessary to pay all Senior Indebtedness in full in accordance
     with the terms of such Senior Indebtedness, after giving effect to any
     concurrent payment or distribution or provision therefor to the holders of
     such Senior Indebtedness.

SECTION 1404.   Securityholders to be Subrogated to Right of Holders of Senior
                Indebtedness.

          Subject to the payment in full in cash or cash equivalents of all
Senior Indebtedness, the Holders of the Securities shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full, and for the
purpose of such subrogation no payments or distributions to the holders of the
Senior Indebtedness by or on behalf of the Company or by or on behalf of the
Holders of the Securities by virtue of this Article which otherwise would have
been made to the Holders of the Securities shall, as between the Company, its
creditors other than holders of the Senior Indebtedness and the Holders of the
Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article
Fourteen are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness, on the other hand.

SECTION 1405.   Obligation of the Company Unconditional.

          Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair as between the
Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of, premium, if any, and interest, if any, on the Securities as and
when the same shall become

                                      -67-


due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Fourteen of
the holders of Senior Indebtedness in respect of cash, property, or securities
of the Company received upon the exercise of any such remedy. Upon any
distribution of assets of the Company referred to in this Article Fourteen, the
Trustee, subject to the provisions of Section 601, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such liquidation, dissolution, winding up, or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Fourteen.

SECTION 1406.   Trustee Entitled to Assume Payments Not Prohibited in Absence of
                Notice.

          The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
to or by the Trustee, unless and until a Responsible Officer of the Trustee
shall have received written notice thereof from the Company or from one or more
holders of Senior Indebtedness or from any trustee therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 601, shall be entitled to assume conclusively that no such facts exist.

SECTION 1407.   Application by Trustee of Monies Deposited With It.

          Anything in this Indenture to the contrary notwithstanding, any
deposit of monies by the Company with the Trustee or any paying agent (whether
or not in trust) for the payment of the principal of or premium, if any, or
interest, if any, on any Securities shall be subject to the provisions of
Sections 1401, 1402, 1403 and 1404 except that, if prior to the date on which by
the terms of this Indenture any such monies may become payable for any purpose
(including, without limitation, the payment of either the principal of or the
interest or premium, if any, on any Security) a Responsible Officer of the
Trustee shall not have received with respect to such monies the notice provided
for in Section 1406, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such date.

SECTION 1408.   Subordination Rights not Impaired by Acts or Omissions

                                      -68-


                of Company or Holders of Senior Indebtedness.

          No right of any present or future holders of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.

SECTION 1409.   Securityholders Authorize Trustee to Effectuate Subordination of
                Securities.

          Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Fourteen and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business and assets of the Company, the
immediate filing of a claim for the unpaid balance of its or his Securities in
the form required in said proceedings and cause said claim to be approved.

SECTION 1410.   Right of Trustee to Hold Senior Indebtedness.

          The Trustee shall be entitled to all of the rights set forth in this
Article Fourteen in respect of any Senior Indebtedness at any time held by it to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 613 or elsewhere in this Indenture shall be construed to deprive the
Trustee of any of its rights as such Holder.

SECTION 1411.   Article Fourteen Not to Prevent Events of Default.

          The failure to make a payment on account of principal, interest or
sinking fund by reason of any provision in this Article Fourteen shall not be
construed as preventing the occurrence of an Event of Default under Section 501.

                                 ARTICLE FIFTEEN

                                  Miscellaneous

SECTION 1501.   Miscellaneous.

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

                                      -69-


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

                                        BALTIMORE GAS AND ELECTRIC
                                        COMPANY


                                        By  /s/ David A. Brune
                                        Name:  David A. Brune
                                        Title: Vice President

Attest: /s/ Thomas E. Rszin, Jr.
Name:  Thomas E. Ruszin, Jr.
Title: Assistant Secretary


                                        THE BANK OF NEW YORK,
                                                as Trustee


                                             By  /s/ Mary Beth Lewicki
                                             Name: Mary Beth Lewicki
                                             Title: Assistant Vice President

                                      -70-

EX-4.(E)

                                                                    Exhibit 4(e)

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

                                     FORM OF
                          SECOND SUPPLEMENTAL INDENTURE

                             Dated as of __________

                                     between

                       BALTIMORE GAS AND ELECTRIC COMPANY

                                    AS ISSUER

                                       and

                              THE BANK OF NEW YORK

                                   AS TRUSTEE

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



                                TABLE OF CONTENTS



                                                                               Page
                                                                              
I        DEFINITIONS..............................................................3
         1.1.     Definition of Terms.............................................3

II       GENERAL TERMS AND CONDITIONS OF THE DEBENTURES...........................4
         2.1.     Designation and Principal Amount................................5
         2.2.     Maturity........................................................5
         2.3.     Form and Payment................................................5
         2.4.     Global Debenture................................................5
         2.5.     Interest........................................................7
         2.6.     Redemption......................................................8
         2.7      No Sinking Fund.................................................8
         2.8      Depository......................................................8
         2.9      Appointment of Agents...........................................9

III      REDEMPTION OF THE DEBENTURES.............................................9
         3.1.     Special Event Redemption........................................9
         3.2.     Optional Redemption by Company.................................10

IV       EXTENSION OF INTEREST PAYMENT PERIOD....................................11
         4.1.     Extension of Interest Payment Period...........................11
         4.2.     Notice of Extension............................................11
         4.3.     Limitation of Transactions.....................................12

V        EXPENSES................................................................13
         5.1.     Payment of Expenses............................................13
         5.2.     Payment Upon Resignation or Removal............................14

VI       SUBORDINATION...........................................................14
         6.1.     Subordination..................................................14

VII      COVENANT TO LIST ON EXCHANGE............................................14
         7.1.     Listing on an Exchange.........................................14

VIII     FORM OF DEBENTURE.......................................................15
         8.1.     Form of Debenture..............................................15

IX       ORIGINAL ISSUE OF DEBENTURES............................................23
         9.1.     Original Issue of Debentures...................................23

X        MISCELLANEOUS...........................................................24
         10.1. Ratification of Indenture.........................................24
         10.2. Trustee Not Responsible for Recitals..............................24
         10.3. Governing Law.....................................................24
         10.4. Separability......................................................24
         10.5. Counterparts......................................................24


                                        i


          SECOND SUPPLEMENTAL INDENTURE, dated as of               , 2003 (the
"Second Supplemental Indenture"), between Baltimore Gas and Electric Company, a
corporation duly organized and existing under the laws of the State of Maryland,
having its principal office at 39 W. Lexington Street, Baltimore, Maryland 21201
(the "Company"), and The Bank of New York, a New York banking corporation,
having its principal place of business at 101 Barclay Street, Floor 21 West, New
York, New York 10286, as trustee (the "Trustee") under the Indenture dated as of
June 15, 1998 (the "Indenture"), between the Company and the Trustee.

          WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
debentures, notes or other evidence of indebtedness (the "Securities"), to be
issued from time to time in one or more series as might be determined by the
Company under the Indenture;

          WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its % Deferrable Interest Subordinated Debentures due [2043] (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this Second Supplemental Indenture;

          WHEREAS, BGE Capital Trust II, a Delaware statutory trust (the
"Trust"), intends to offer to the public $250 million aggregate liquidation
amount of its % Trust Preferred Securities (the "Preferred Securities"),
representing preferred undivided beneficial interests in the assets of the
Trust, and proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by the Trust to the Company of $7,731,975
million aggregate liquidation amount of its % Common Securities, in $257,731,975
million aggregate principal amount of the Debentures; and

          WHEREAS, the Company has requested that the Trustee execute and
deliver this Second Supplemental Indenture, and all requirements necessary to
make this Second Supplemental Indenture a valid instrument in accordance with
its terms, and to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this Second
Supplemental Indenture has been duly authorized in all respects.

          NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form

                                       -2-


and substance of the Debentures and the terms, provisions and conditions
thereof, the Company covenants and agrees with the Trustee as follows:

                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1.   DEFINITION OF TERMS

          Unless the context otherwise requires:

          (a)  a term defined in the Indenture has the same meaning when used in
this Second Supplemental Indenture;

          (b)  a term defined anywhere in this Second Supplemental Indenture has
the same meaning throughout;

          (c)  the singular includes the plural and vice versa;

          (d)  headings are for convenience of reference only and do not affect
interpretation;

          (e)  the following terms have the meanings given to them in the
Declaration: (i) Administrative Trustee; (ii) Business Day; (iii) Clearing
Agency; (iv) Delaware Trustee; (v) Guarantee; (vi) Preferred Securities
Certificate; (vii) Purchase Agreement; (viii) Property Trustee; and (ix) Trust
Securities; and

          (f)  the following terms have the meanings given to them in this
Section 1.1(f):

          "Additional Interest" shall have the meaning set forth in Section
2.5(c).

          "Change in 1940 Act Law" shall have the meaning set forth in Section
3.1.

          "Compounded Interest" shall have the meaning set forth in Section 4.1.

          "Coupon Rate" shall have the meaning set forth in Section 2.5(a).

          "Declaration" means the Amended and Restated Declaration of Trust of
BGE Capital Trust II, a Delaware statutory trust, dated as of , 2003.

          "Deferred Interest" shall have the meaning set forth in Section 4.1.

                                       -3-


          "Dissolution Event" means that the Trust is to be dissolved in
accordance with the Declaration, and the Debentures held by the Property Trustee
are to be distributed to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Declaration.

          "Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.

          "Global Debenture" shall have the meaning set forth in Section 2.4(a).

          "Interest Payment Date" shall have the meaning set forth in Section
2.5(a).

          "Investment Company Event" shall have the meaning set forth in Section
3.1.

          "Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional Interest,
if any.

          "90 Day Period" shall have the meaning set forth in Section 3.1.

          "Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4(a).

          "Optional Redemption Price" shall have the meaning set forth in
Section 3.2(a).

          "Redemption Price" shall have the meaning set forth in Section 3.1.

          "Special Event" shall have the meaning set forth in Section 3.1.

          "Tax Event" shall have the meaning set forth in Section 3.1.

                                   ARTICLE II
                 GENERAL TERMS AND CONDITIONS OF THE DEBENTURES

SECTION 2.1.   DESIGNATION AND PRINCIPAL AMOUNT.

          There is hereby authorized a series of Securities designated the " %
Deferrable Interest Subordinated Debentures due         , [2043]", limited in
aggregate principal amount to $257,731,975 million, to be substantially in the
form set forth

                                       -4-


in Article VIII hereof, subject to changes in the form thereof made by the
Company and acceptable to the Trustee.

SECTION 2.2.   MATURITY.

          The Maturity Date of the Debentures is , [2043].

SECTION 2.3.   FORM AND PAYMENT.

          Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons in denominations of
$25 or integral multiples of $25. The Place of Payment for the Debentures issued
in certificated form where the transfer of such Debentures will be registrable
and where such Debentures will be exchangeable for Debentures bearing identical
terms and provisions shall be the Corporate Trust Office of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee will be made at such place and to such
account as may be designated to the Company in writing by the Property Trustee.

SECTION 2.4.   GLOBAL DEBENTURE.

          (a)  In connection with a Dissolution Event,

               (i)     the Debentures in certificated form may be presented to
     the Trustee by the Property Trustee in exchange for a global Debenture in
     an aggregate principal amount equal to the aggregate principal amount of
     all outstanding Debentures (a "Global Debenture"), to be registered in the
     name of the Depository, or its nominee, and delivered by the Trustee to the
     Depository for crediting to the accounts of its participants pursuant to
     the instructions of the Administrative Trustee. The Company upon any such
     presentation shall execute a Global Debenture in such aggregate principal
     amount and deliver the same to the Trustee for authentication and delivery
     in accordance with the Indenture and this Second Supplemental Indenture.
     Payments on the Debentures issued as a Global Debenture will be made to the
     Depository; and

               (ii)    if any Preferred Securities are held in non book-entry
     certificated form, the Debentures in certificated form may be presented to
     the Trustee by the Property Trustee

                                       -5-


     and any Preferred Security Certificate which represents Preferred
     Securities other than Preferred Securities held by the Clearing Agency or
     its nominee ("Non Book-Entry Preferred Securities") will be deemed to
     represent beneficial interests in Debentures presented to the Trustee by
     the Property Trustee having an aggregate principal amount equal to the
     aggregate liquidation amount of the Non Book-Entry Preferred Securities
     until such Preferred Security Certificates are presented to the Security
     Registrar for transfer or reissuance at which time such Preferred Security
     Certificates will be cancelled and a Debenture, registered in the name of
     the holder of the Preferred Security Certificate or the transferee of the
     holder of such Preferred Security Certificate, as the case may be, with an
     aggregate principal amount equal to the aggregate liquidation amount of the
     Preferred Security Certificate cancelled, will be executed by the Company
     and delivered to the Trustee for authentication and delivery in accordance
     with the Indenture and this Second Supplemental Indenture. On issue of such
     Debentures, Debentures with an equivalent aggregate principal amount that
     were presented by the Property Trustee to the Trustee will be deemed to
     have been cancelled.

          (b)  Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only to
another nominee of the Depository, or to a successor Depository selected or
approved by the Company or to a nominee of such successor Depository.

          (c)  If at any time the Depository notifies the Company that it is
unwilling or unable to continue as Depository or if at any time the Depository
shall no longer be a clearing agency registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depository is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such condition,
as the case may be, the Company will execute, and, subject to Article Three of
the Indenture, the Trustee, upon written notice from the Company, will
authenticate and deliver the Debentures in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture in exchange for such Global
Debenture. In addition, the Company may at any time determine that the
Debentures shall no longer be represented by the Global Debenture. In such event
the Company will execute, and subject to Section 303 of the Indenture, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized

                                       -6-


denominations, the Global Debenture shall be cancelled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture shall be registered in such names and in such authorized denominations
as the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Debentures to the Depository for delivery to the Persons in whose names
such Debentures are so registered.

SECTION 2.5.   INTEREST.

          (a)  Each Debenture will bear interest at the rate of % per annum (the
"Coupon Rate") from the original date of issuance until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each, an "Interest Payment Date")
commencing on , 2003, to the Person in whose name such Debenture or any
predecessor Debenture is registered, at the close of business on the regular
record date for such interest installment, which, in respect of (i) Debentures
of which the Property Trustee is the Holder and the Preferred Securities are in
book-entry only form or (ii) a Global Debenture, shall be the close of business
on the Business Day next preceding that Interest Payment Date. Notwithstanding
the foregoing sentence, if (i) the Debentures are held by the Property Trustee
and the Preferred Securities are no longer in book-entry only form or (ii) the
Debentures are not held by the Property Trustee and not represented by a Global
Debenture, the regular record date for such interest installment which shall be
the fifteenth calendar day prior to such Interest Payment Date.

          (b)  The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 90-day period. In the event
that any date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other

                                       -7-


payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.

(c)  If, at any time while the Property Trustee is the Holder of any Debentures,
the Trust or the Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than United States
federal income taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed. Whenever in the Indenture,
this Second Supplemental Indenture, or the Securities there is a reference in
any context to the payment of principal of or interest on the Securities, such
mention shall be deemed to include mention of the payments of the Additional
Interest provided for in this clause (c) of Section 2.5 to the extent that, in
such context, Additional Interest is, was or would be payable in respect thereof
pursuant to the provisions of this clause (c) of Section 2.5 and express mention
of the payment of Additional Interest (if applicable) in any provisions hereof
shall not be construed as excluding Additional Interest in those provisions
hereof where such express mention is not made; PROVIDED, HOWEVER, that the
deferral of the payment of interest pursuant to Section 4.1 or the Securities
shall not defer the payment of any Additional Interest that may be due and
payable.

SECTION 2.6.   REDEMPTION.

          The Debentures are not subject to redemption at the option of the
Holder and are subject to redemption solely at the option of the Company or
otherwise as provided in Article III hereof.

SECTION 2.7    NO SINKING FUND.

          The Debentures shall not be entitled to the benefit of any sinking
fund or analogous provision.

SECTION 2.8    DEPOSITORY.

          The Depository Trust Company shall act as the initial

                                       -8-


Depository for any Global Debenture which may be issued pursuant to this Second
Supplemental Indenture.

SECTION 2.9    APPOINTMENT OF AGENTS.

          The Company hereby appoints, or confirms the appointment of, The Bank
of New York as the initial Trustee, Securities Registrar and Paying Agent with
respect to the Debentures, subject to the provisions of the Indenture with
respect to resignation, removal and succession, and subject, further, to the
right of the Company to appoint additional agents (including Paying Agents).

                                   ARTICLE III
                          REDEMPTION OF THE DEBENTURES

SECTION 3.1.   SPECIAL EVENT REDEMPTION.

          If a Special Event (as defined below) has occurred and is continuing
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company
shall have the right upon not less than 30 days nor more than 60 days notice to
the Holders of the Debentures to redeem the Debentures, in whole but not in
part, for cash within 90 days following the occurrence of such Special Event
(the "90 Day Period") at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest thereon, including
Compounded Interest and Additional Interest, if any, to the date of such
redemption (the "Redemption Price"). The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New York
time, on the date such Redemption Price is to be paid.

          A "Special Event" shall mean either a Tax Event or an Investment
Company Event. "Tax Event" shall mean that the Company shall have received an
opinion of counsel (which may be regular counsel to the Company or an Affiliate,
but not an employee thereof, which must be reasonably acceptable to the Property
Trustee of the Trust) experienced in such matters to the effect that, as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or (b) any interpretation or application of such laws or regulations by any
court, governmental agency or regulatory authority, in each case which amendment
or

                                       -9-


change is enacted, promulgated, issued or announced or which interpretation or
application is issued or announced on or after the date of original issuance of
Preferred Securities, there is more than an insubstantial risk that (i) the
Trust is or will be within 90 days of the date of the opinion of counsel subject
to United States Federal income tax with respect to interest received on the
Debentures, (ii) interest payable by the Company to the Trust on the Debentures
is not or will not be within 90 days of the date of the opinion of counsel
deductible in whole or in part for United States Federal income tax purposes, or
(iii) the Trust is or will be within 90 days of the date of the opinion of
counsel subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges. "Investment Company Event" shall mean
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law") to the effect that
the Trust is or will be considered an "Investment Company" that is required to
be registered under the Investment Company Act of 1940, as amended, which Change
in 1940 Act Law becomes effective on or after the date of original issuance of
the Preferred Securities.

SECTION 3.2.   OPTIONAL REDEMPTION BY COMPANY

          (a)  Subject to the provisions of Section 3.2(b) and to the provisions
of Article Eleven of the Indenture, subject to Section 3.2(c), the Company shall
have the right to redeem the Debentures, in whole or in part, from time to time,
on or after , [2008], upon not less than 30 days nor more than 60 days notice to
the Holder of the Debentures at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon,
including Compounded Interest and Additional Interest, if any, to the date of
such redemption (the "Optional Redemption Price").

          If the Debentures are only partially redeemed pursuant to this Section
3.2, the Debentures will be redeemed pro rata or by lot or by any other method
utilized by the Trustee. The Optional Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Optional Redemption Price by 10:00 a.m.,
New York time, on the date such Optional Redemption Price is to be paid.

          (b)  If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
then listed, the Company shall not be permitted to effect such partial
redemption and may

                                      -10-


only redeem the Debentures in whole.

                                   ARTICLE IV
                      EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.1.   EXTENSION OF INTEREST PAYMENT PERIOD.

          The Company shall have the right, at any time and from time to time
during the term of the Debentures, so long as no Event of Default with respect
to the Debentures has occurred and is continuing, to defer payments of interest
by extending the interest payment period of such Debentures for a period not
exceeding 20 consecutive quarters (the "Extended Interest Payment Period"),
during which Extended Interest Payment Period no interest shall be due and
payable; provided that no Extended Interest Payment Period may extend beyond the
Maturity Date. To the extent permitted by applicable law, interest, the payment
of which has been deferred because of the extension of the interest payment
period pursuant to this Section 4.1, will bear interest thereon at the Coupon
Rate compounded quarterly for each quarter of the Extended Interest Payment
Period ("Compounded Interest"). At the end of the Extended Interest Payment
Period, the Company shall pay all interest accrued and unpaid on the Debentures,
including any Additional Interest and Compounded Interest (together, "Deferred
Interest") that shall be payable to the Holders of the Debentures in whose names
the Debentures are registered in the Security Register on the first record date
after the end of the Extended Interest Payment Period. Before the termination of
any Extended Interest Payment Period, the Company may further extend such
period, provided that such period together with all such further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond the Maturity
Date. Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except (i) at the end thereof and (ii) upon a redemption of the Debentures
during an Extended Interest Payment Period, but the Company may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.

SECTION 4.2.   NOTICE OF EXTENSION.

          (a)  If the Property Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written

                                      -11-


notice to the Administrative Trustee, the Property Trustee and the Trustee of
its selection of such Extended Interest Payment Period one Business Day before
the earlier of (i) the next succeeding date on which Distributions on the
Preferred Securities issued by the Trust would be payable but for such deferral,
or (ii) the date the Trust is required to give notice of the record date, or the
date such Distributions are payable, to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.

          (b)  If the Property Trustee is not the only Holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least one Business Day
before the earlier of (i) the next succeeding regular record date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to the New York Stock Exchange or other applicable
self-regulatory organization.

          (c)  The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.

SECTION 4.3.   LIMITATION OF TRANSACTIONS.

          If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, (ii) there shall have occurred any Event of
Default, as defined in the Indenture, or (iii) the Company shall be in default
with respect to its payment obligations under the Guarantee, then (a) the
Company shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) as a result of a
reclassification of its capital stock or the exchange or conversion of one class
or series of its capital stock for another class or series of its capital stock,
(ii) any declaration of a dividend in connection with the implementation of a
shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(iii) purchases of its common stock related to the issuance of such stock under
any of the Company's benefit plans for its directors, officers or employees,
(iv) obligations under any dividend reinvestment plan or stock purchase plan of
the Company, or (v) the purchase of

                                      -12-


fractional interests in shares of its capital stock pursuant to the conversion
or exchange provisions of such capital stock or security being converted or
exchanged) or make any guarantee payment with respect thereto, (b) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company which rank
PARI PASSU with or junior to the Debentures and (c) the Company shall not make
any guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee and any similar guarantee issued by the Company on behalf of holders
of preferred securities issued by an issuer holding Securities issued under the
Indenture).

                                    ARTICLE V
                                    EXPENSES

SECTION 5.1.   PAYMENT OF EXPENSES.

          In connection with the offering, sale and issuance of the Debentures
to the Property Trustee and in connection with the sale of the Trust Securities
by the Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall:

          (a)  pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Purchase Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 607 of the Indenture;

          (b)  pay all costs, expenses and other obligations (other than with
respect to the Trust Securities) of the Trust (including, but not limited to,
costs and expenses relating to the organization of the Trust, the offering, sale
and issuance of the Trust Securities (including commissions to the underwriters
in connection therewith), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets);

          (c)  be primarily liable for any indemnification obligations arising
with respect to the Declaration; and

          (d)  pay any and all taxes (other than United States

                                      -13-


Federal income taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust except
for taxes that give rise to Additional Interest payments for which the Company
is obligated to pay Additional Interest to the Property Trustee.

SECTION 5.2.   PAYMENT UPON RESIGNATION OR REMOVAL

          Upon termination of this Second Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to this Section
5.2, the Company shall pay to the Trustee all amounts accrued to the date of
such termination, removal or resignation.

                                   ARTICLE VI
                                  SUBORDINATION

SECTION 6.1.   SUBORDINATION.

          The indebtedness evidenced by the Debentures shall be, to the extent
and in the manner set forth in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture) with respect to the Debentures, and the Debentures shall rank
PARI PASSU in right of payment with each other series of Securities issued under
the Indenture, with the exception of any series of Securities which by its terms
provides otherwise.

                                   ARTICLE VII
                          COVENANT TO LIST ON EXCHANGE

SECTION 7.1.   LISTING ON AN EXCHANGE

          If the Debentures are to be distributed to the holders of Preferred
Securities as described in Section 2.4(a), the Company will, if the Debentures
are not already so listed, use its best efforts to list such Debentures on the
New York Stock Exchange, Inc. or on such other exchange as the Preferred
Securities are then listed.

                                  ARTICLE VIII
                                FORM OF DEBENTURE

SECTION 8.1.   FORM OF DEBENTURE

          The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:

                                      -14-


                           (FORM OF FACE OF DEBENTURE)

          [IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT -- THIS
DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY.

          UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

No. ____________________
$ ______________________
CUSIP No. ______________

                       BALTIMORE GAS AND ELECTRIC COMPANY

             ___% DEFERRABLE INTEREST JUNIOR SUBORDINATED DEBENTURE
                                   DUE _______

          BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland, a Colorado corporation
(the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ______________ or registered assigns, the principal sum of _____________
Dollars ($___________) on _________, ____, and to pay interest on said principal
sum from ____________, or from the most recent interest payment date (each such
date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
March 31, June 30, September 30 and December 31 of each year
commencing_________, at the rate of ___% per annum (together with Additional
Interest, if any, as provided in Section 2.5(c) of the Second Supplemental
Indenture referred to below) until the

                                      -15-


principal hereof is paid or duly provided for or made available for payment,
provided that any overdue principal, premium or Additional Interest and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) any overdue installment of interest shall bear interest at the
same rate per annum compounded quarterly from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand. The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year of twelve 30-day months. Except
as provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a 90-day
period. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the regular record date for such interest
installment, [which shall be the close of business on the Business Day next
preceding such Interest Payment Date.] [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE DEBENTURES ARE NOT HELD BY THE PROPERTY TRUSTEE AND NOT
REPRESENTED BY A GLOBAL DEBENTURE -- which shall be the close of business on the
fifteenth calendar day next preceding such Interest Payment Date.] Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such regular record date and
may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of this series
of Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Company maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for

                                      -16-


payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the registered
Holder at such address as shall appear in the Security Register. Notwithstanding
the foregoing, so long as the Holder of this Debenture is the Property Trustee,
the payment of the principal of (and premium, if any) and interest on this
Debenture will be made at such place and to such account as may be designated by
the Property Trustee.

          The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.

          Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth in this place.

          This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.

          Unless the certificate of authentication has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Debenture
shall not be entitled to the benefit of the Indenture or be valid or obligatory
for any purpose.

          IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.

Dated
     -----------------------

                                          BALTIMORE GAS AND ELECTRIC COMPANY

                                      -17-


                                          By:
                                             -----------------------------------
                                               Name:
                                               Title: Vice President

Attest:


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

                     (FORM OF CERTIFICATE OF AUTHENTICATION)

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.

Dated
     -----------------------
                                          THE BANK OF NEW YORK, as Trustee

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

                         [FORM OF REVERSE OF DEBENTURE]

          This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), issued or to be
issued in one or more series under and pursuant to an Indenture (as supplemented
by the Second Supplemental Indenture dated as of __________, 2003, between the
Company and the Trustee, the "Indenture") dated as of June 15, 1998 duly
executed and delivered between the Company and The Bank of New York, as Trustee
(the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Debentures and the terms upon which
the Debentures are, and are to be, authenticated and delivered. By the terms of
the Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This Debenture is one of

                                      -18-


the series of Securities designated on the face hereof, limited in aggregate
principal amount to $257,731,975.

          Except as provided in the next paragraph, and subject to the terms and
conditions of Article Eleven of the Indenture, the Debentures may not be
redeemed by the Company prior to ______________, [2008]. The Company shall have
the right to redeem this Debenture at the option of the Company, without premium
or penalty, in whole or in part at any time and from time to time on or after
___________, [2008] (an "Optional Redemption"), at the Optional Redemption Price
(as defined in the Indenture). Any redemption pursuant to this paragraph will be
made upon not less than 30 nor more than 60 days' notice, at the Optional
Redemption Price.

          If a Special Event (as defined below) has occurred and is continuing
then the Company shall have the right upon not less than 30 days nor more than
60 days notice to the Holders of the Debentures to redeem the Debentures, in
whole but not in part, for cash within 90 days following the occurrence of such
Special Event (the "90 Day Period") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon,
including Compounded Interest and Additional Interest, if any, to the date of
such redemption (the "Redemption Price"). The Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemption or such
earlier time as the Company determines, provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m.,
New York time, on the date such Redemption Price is to be paid.

          A "Special Event" shall mean either a Tax Event or an Investment
Company Event. "Tax Event" shall mean that the Company shall have received an
opinion of counsel (which may be regular counsel to the Company or an Affiliate,
but not an employee thereof, which must be reasonably acceptable to the Property
Trustee of the Trust) experienced in such matters to the effect that, as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or (b) any interpretation or application of such laws or regulations by any
court, governmental agency or regulatory authority, in each case which amendment
or change is enacted, promulgated, issued or announced or which interpretation
or application is issued or announced on or after the date of original issuance
of Preferred Securities, there is more than an insubstantial risk that (i) the
Trust is or will be within 90 days of the date of the opinion of counsel subject
to United States Federal income tax with respect to interest received on

                                      -19-


the Debentures, (ii) interest payable by the Company to the Trust on the
Debentures is not or will not be within 90 days of the date of the opinion of
counsel deductible in whole or in part for United States Federal income tax
purposes, or (iii) the Trust is subject or will be within 90 days of the date of
the opinion of counsel to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges. "Investment Company Event" shall mean
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law") to the effect that
the Trust is or will be considered an "Investment Company" that is required to
be registered under the Investment Company Act of 1940, as amended, which Change
in 1940 Act Law becomes effective on or after the date of original issuance of
the Preferred Securities.

          Any redemption pursuant to the occurrence of a Special Event will be
made upon not less than 30 days nor more than 60 days notice, at the Redemption
Price. If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided that if, at the time of
redemption, the Debentures are registered as a Global Debenture, the Depository
shall determine the principal amount of such Debentures held by each Debenture
Holder to be redeemed in accordance with its procedures.

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

          The Indenture contains provisions for the satisfaction and discharge
of the entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth in the Indenture.

          In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.

               The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee at any time to enter into a supplemental
indenture or indentures for the purpose of modifying in any manner the rights
and obligations of the Company and of the Holders, with the consent of the

                                      -20-


Holders of not less than a majority in aggregate principal amount of the
outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in aggregate principal amount of the Securities of each
series at the time outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Debenture shall be conclusive
and binding upon such Holder and upon all future Holders of this Debenture and
of any Debenture issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon the Debenture.

          No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Compound Interest) on this Debenture at
the time and place and at the rate and in the money herein prescribed.

          So long as no Event of Default with respect to the Debentures has
occurred and is continuing, the Company shall have the right at any time during
the term of the Debentures from time to time to extend the interest payment
period of such Debentures for up to 20 consecutive quarters (an "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with the interest thereon at the rate
specified for the Debentures to the extent that payment of such interest is
enforceable under applicable law). In the event that the Company exercises this
right during the Extended Interest Payment Period, then (a) the Company shall
not declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of its capital stock (other than (i) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (ii) any declaration of a dividend in connection with the implementation
of a shareholder rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(iii) purchases of its common stock related to the issuance of such stock under
any of the Company's benefit plans for its directors, officers or employees,
(iv) obligations under any dividend reinvestment plan or stock purchase plan of
the Company, or (v) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted

                                      -21-


or exchanged) or make any guarantee payments with respect to the foregoing), (b)
the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Company that rank PARI PASSU with or junior to such
Debentures, and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Guarantee and any similar
guarantee issued by the Company on behalf of holders of preferred securities
issued by an issuer holding Securities issued under the Indenture). Prior to the
termination of any such Extended Interest Payment Period, the Company may
further extend the interest payment period; provided, that such Extended
Interest Payment Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the maturity
date of the Debenture. At the termination of any such Extended Interest Payment
Period and upon the payment of all Deferred Interest then due, the Company may
commence a new Extended Interest Payment Period, subject to the above
requirements.

          The Company shall [IF PROPERTY TRUSTEE IS NOT THE ONLY HOLDER OF THE
DEBENTURES INSERT -- give the Holder of this Security and the Trustee notice of
its election to begin any Extended Interest Payment Period at least one Business
Day before the earlier of (i) the next succeeding regular record date or (ii)
the date the Company is required to give notice of the record or payment date of
such interest payment to the New York Stock Exchange or other applicable
self-regulatory organization.] OR - IF THE PROPERTY TRUSTEE IS THE ONLY
REGISTERED HOLDER OF THE DEBENTURES INSERT - or so long as such Debentures are
held by the Trust, at least one Business Day prior to the earlier of (i) the
next succeeding date on which Distributions on the Preferred Securities issued
by the Trust would be payable but for such deferral or (ii) the date the Trust
is required to give notice of the record date, or the date such Distributions
are payable, to the New York Stock Exchange or such other applicable
self-regulatory organization or to holders of the Preferred Securities issued by
the Trust, but in any event at least one Business Day before such record date.

          As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Trustee in the City
of New York and State of New York, duly endorsed or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized

                                      -22-


denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.

          Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest (including Compound Interest) due hereon and
for all other purposes, and neither the Company nor the Trustee nor any paying
agent nor any Security Registrar shall be affected by any notice to the
contrary.

          No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

          [This Global Debenture is exchangeable for Debentures in definitive
form only under certain limited circumstances set forth in the Indenture. The
Debentures so issued are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures so issued are exchangeable for a like aggregate principal amount of
Debentures of a different authorized denomination, as requested by the Holder
surrendering the same.

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

          All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the

                                      -23-


Indenture.

                                   ARTICLE IX
                          ORIGINAL ISSUE OF DEBENTURES

SECTION 9.1.   ORIGINAL ISSUE OF DEBENTURES.

          Debentures in the aggregate principal amount of $257,731,950 may, upon
execution of this Second Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.

                                    ARTICLE X
                                  MISCELLANEOUS

SECTION 10.1.  RATIFICATION OF INDENTURE.

          The Indenture, as supplemented by this Second Supplemental Indenture,
is in all respects ratified and confirmed, and this Second Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.

SECTION 10.2.  TRUSTEE NOT RESPONSIBLE FOR RECITALS.

          The recitals herein and each Debenture, except the Trustee's
certificate of authentication, shall be taken as statements of the Company, and
the Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this Second
Supplemental Indenture or of the Debentures. The Trustee shall not be
accountable for the use or application by the Company of Debentures or the
proceeds thereof.

SECTION 10.3.  GOVERNING LAW.

          This Second Supplemental Indenture and each Debenture shall be
governed by and construed in accordance with the laws (other than the choice of
law provisions) of the State of New York, (except to the extent that the Trust
Indenture Act shall be applicable).

SECTION 10.4.  SEPARABILITY.

                                      -24-


          In case any one or more of the provisions contained in this Second
Supplemental Indenture or in the Debentures or the application of any such
provision to any Person or circumstance, shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Second
Supplemental Indenture or of the Debentures, or the application of such
provision to Persons or circumstances other than those as to whom or which it is
invalid, illegal or unenforceable, but this Second Supplemental Indenture and
the Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.

                                      -25-


SECTION 10.5.  COUNTERPARTS.

          This Second Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                      -26-


          IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.

                                          BALTIMORE GAS AND ELECTRIC COMPANY


                                          By:
                                               -------------------------------
                                               Name:
                                               Title: Vice President

                                          THE BANK OF NEW YORK
                                          as Trustee

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

                                      -27-

EX-4.(F)

                                                                    Exhibit 4(f)


                                     Form of

                               Guarantee Agreement

                                     between

                       BALTIMORE GAS AND ELECTRIC COMPANY
                                 (as Guarantor)

                                       and

                              The Bank of New York
                        (as Preferred Guarantee Trustee)


                                   Dated as of



                                TABLE OF CONTENTS



                                                                                                               Page
                                                                                                               ----
                                                                                                              
ARTICLE I     DEFINITIONS
    SECTION 1.01.  Definitions....................................................................................2

ARTICLE II    TRUST INDENTURE ACT
    SECTION 2.01.  Trust Indenture Act; Application...............................................................4
    SECTION 2.02.  List of Holders................................................................................5
    SECTION 2.03.  Reports by the Preferred Guarantee Trustee.....................................................5
    SECTION 2.04.  Periodic Reports to Preferred Guarantee Trustee................................................5
    SECTION 2.05.  Evidence of Compliance with Conditions Precedent...............................................5
    SECTION 2.06.  Events of Default; Waiver......................................................................6
    SECTION 2.07.  Event of Default; Notice.......................................................................6
    SECTION 2.08.  Conflicting Interests..........................................................................7

ARTICLE III   POWERS, DUTIES AND RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE
    SECTION 3.01.  Powers and Duties of the Preferred Guarantee Trustee...........................................7
    SECTION 3.02.  Certain Rights of Preferred Guarantee Trustee..................................................9

ARTICLE IV    PREFERRED GUARANTEE TRUSTEE
    SECTION 4.01.  Preferred Guarantee Trustee; Eligibility......................................................11
    SECTION 4.02.  Appointment, Removal and Resignation of the Preferred Guarantee Trustee.......................12

ARTICLE V     GUARANTEE
    SECTION 5.01.  Guarantee.....................................................................................12
    SECTION 5.02.  Waiver of Notice and Demand...................................................................13
    SECTION 5.03.  Obligations Not Affected......................................................................13
    SECTION 5.04.  Rights of Holders.............................................................................14
    SECTION 5.05.  Guarantee of Payment..........................................................................14
    SECTION 5.06.  Subrogation...................................................................................14
    SECTION 5.07.  Independent Obligations.......................................................................14

ARTICLE VI    SUBORDINATION
    SECTION 6.01.  Ranking.......................................................................................15
    SECTION 6.02.  PARI PASSU Guarantees.........................................................................15

ARTICLE VII   TERMINATION
    SECTION 7.01.  Termination...................................................................................16


                                       -i-


                                                                                                              
ARTICLE VIII  INDEMNIFICATION
    SECTION 8.01.  Exculpation...................................................................................16
    SECTION 8.02.  Indemnification...............................................................................16

ARTICLE IX    MISCELLANEOUS
    SECTION 9.01.  Successors and Assigns........................................................................17
    SECTION 9.02.  Amendments....................................................................................18
    SECTION 9.03.  Notices.......................................................................................18
    SECTION 9.04.  Benefit.......................................................................................19
    SECTION 9.05.  Interpretation................................................................................19
    SECTION 9.06.  Governing Law.................................................................................19
    SECTION 9.07.  Counterparts..................................................................................19



                                      -ii-


                              CROSS-REFERENCE TABLE



Section of                                                                                    Section of
Trust Indenture Act                                                                         Guarantee of
1939, as Amended                                                                               Agreement
- -------------------                                                                         ------------
                                                                                       
310(a)....................................................................................       4.01(a)
310(b).................................................................................... 4.01(c), 2.08
310(c)....................................................................................  Inapplicable
311(a)....................................................................................       2.02(b)
311(b)....................................................................................       2.02(b)
311(c)....................................................................................  Inapplicable
312(a)....................................................................................       2.02(a)
312(b)....................................................................................       2.02(b)
313.......................................................................................          2.03
314(a)....................................................................................          2.04
314(b)....................................................................................  Inapplicable
314(c)....................................................................................          2.05
314(d)....................................................................................  Inapplicable
314(e)....................................................................................1.01,2.05,3.02
314(f)....................................................................................    2.01, 3.02
315(a)....................................................................................       3.01(d)
315(b)....................................................................................          2.07
315(c)....................................................................................          3.01
315(d)....................................................................................       3.01(d)
316(a)....................................................................................1.01,2.06,5.04
316(b)....................................................................................          5.03
316(c)....................................................................................          8.02
317(a)....................................................................................  Inapplicable
317(b)....................................................................................  Inapplicable
318(a)....................................................................................       2.01(b)
318(b)....................................................................................          2.01
318(c)....................................................................................       2.01(a)


- ----------
*    This Cross-Reference Table does not constitute part of the Guarantee
     Agreement and shall not affect the interpretation of any of its terms or
     provisions.

                                      -iii-


                               GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of________, 2003 is executed and delivered by Baltimore Gas and Electric
Company, a Maryland corporation (the "Guarantor"), to The Bank of New York, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of BGE Capital Trust II, a Delaware statutory trust (the "Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of among the Trustees named therein, the Guarantor, as
Depositor, and the Holders from time to time of undivided beneficial interests
in the assets of the Issuer, the Issuer is issuing $250,000,000aggregate
liquidation amount of its Trust Preferred Securities (liquidation amount of
$25.00 per preferred security) (the "Preferred Securities") representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Declaration;

     WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the sale by the Issuer of its
Common Securities, will be used to purchase the Debentures (as defined in the
Declaration) of the Guarantor which will be deposited with The Bank of New York,
as Property Trustee under the Declaration, as Trust Property (as defined in the
Declaration);

     WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and

     WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default (as
defined in the Indenture) has occurred and is continuing, the Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.

     NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor

                                       -1-


hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the Holders from time to
time of the Preferred Securities.

                                    ARTICLE I

                                   DEFINITIONS

     SECTION  1.01. Definitions. As used in this Preferred Securities Guarantee,
each of the terms set forth below shall, unless the context otherwise requires,
have the following meaning. Each capitalized or otherwise defined term used but
not otherwise defined herein shall have the meaning assigned to such terms in
the Declaration as in effect on the date hereof.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Common Securities" means the common securities representing undivided
beneficial interests in the assets of the Issuer and having the rights provided
therefor in the Declaration.

     "Covered Person" means any Holder or beneficial owner of Preferred
Securities.

     "Event of Default" shall have the meaning specified in Section 2.06 (a).

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer pursuant to the Declaration or by the
Guarantor pursuant to the Indenture: (i) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, to the extent the
Issuer shall have funds available therefor, (ii) the Redemption Price with
respect to any Preferred Securities called for redemption by the Issuer to the
extent the Issuer shall have funds available therefor, and (iii) upon a
voluntary or involuntary dissolution and liquidation of the Issuer (other than
in connection with a Distribution of Debentures to Holders of such Preferred
Securities or the redemption of all such Preferred Securities), the lesser of
(a) the aggregate of the liquidation

                                       -2-


amount of $25.00 per Preferred Security plus all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Issuer shall have funds available therefor and (b) the amount of assets of
the Issuer remaining available for Distribution to Holders of Preferred
Securities upon a dissolution and liquidation of the Issuer (in either case, the
"Liquidation Distribution").

     "Holder" means a Person in whose name a Preferred Security is registered in
the Securities Register; provided, however, that in determining whether the
holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Preferred Guarantee Trustee or any Affiliate of the Guarantor or
the Preferred Guarantee Trustee.

     "Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.

     "Indenture" means the Indenture dated as of June 15, 1998, as amended or
supplemented from time to time, between Baltimore Gas and Electric Company and
The Bank of New York, as trustee thereunder.

     "List of Holders" has the meaning specified in Section 2.02(a).

     "Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holders of more than 50%
of the aggregate liquidation amount of all then outstanding Preferred Securities
issued by the Issuer.

     "Officers' Certificate" means a certificate signed by the Chairman, the
Vice Chairman, the President, or any Vice President and the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Guarantor.

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

     "Preferred Guarantee Trustee" means The Bank of New York, soley as
Preferred Guarantee Trustee and not in its individual capacity,until a Successor
Preferred Guarantee Trustee (as defined below) has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred

                                       -3-


Guarantee Trustee.

     "Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any Vice President, any Assistant Vice President, any Secretary, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer or any other
officer of the Corporate Trust Department of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.

     "Senior Indebtedness" means Senior Indebtedness as defined in the
Indenture.

     "Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.02.

     "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939, as so amended.

                                   ARTICLE II

                               TRUST INDENTURE ACT

     SECTION  2.01.  Trust Indenture Act; Application.

     (a) This Preferred Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Preferred Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.

     (b) If, and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, through operation of Section
318(c) thereof, such imposed duties shall control. If any provision of this
Preferred Securities Guarantee modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Preferred Securities Guarantee as so modified or to
be excluded, as the case may be.

                                       -4-


     SECTION  2.02.  List of Holders.

     (a) The Guarantor shall furnish or cause to be furnished to the Preferred
Guarantee Trustee (i) semiannually, on or before January 15 and July 15 of each
year, a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (ii) at such other
times as the Preferred Guarantee Trustee may request in writing, within 30 days
after the receipt by the Guarantor of any such request, a List of Holders as of
a date not more than 15 days prior to the time such list is furnished, in each
case to the extent such information is in the possession or control of the
Guarantor and is not identical to a previously supplied List of Holders or has
not otherwise been received by the Preferred Guarantee Trustee in its capacity
as such. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.

     (b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

     SECTION  2.03. Reports by the Preferred Guarantee Trustee. Within 60 days
after May 15 of each year, the Preferred Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.

     SECTION  2.04. Periodic Reports to Preferred Guarantee Trustee. The
Guarantor shall provide to the Preferred Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form and
manner and at the times required by Section 314 of the Trust Indenture Act.

     SECTION  2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Preferred Securities Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Each Officers' Certificate and
Opinion of Counsel delivered with respect to compliance with a condition or
covenant provided for in this Preferred Securities Guarantee shall include:

                                       -5-


          (a)  a statement that each person signing the Officers' Certificate or
     Opinion of Counsel has read the covenant or condition and the definition
     relating thereto;

          (b)  a brief statement of the nature and scope of the examination or
     investigation undertaken and upon which the statements contained therein
     are based;

          (c)  a statement that each such person has made such examination or
     investigation as, in such person's opinion, is necessary to enable such
     person to express an informed opinion as to whether or not such covenant or
     condition has been complied with; and

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

     SECTION  2.06.  Events of Default; Waiver.

     (a) An Event of Default means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee;
provided, that except with respect to a default resulting from a failure to pay
any Guarantee Payment, the Guarantor shall have received notice of such default
and shall not have cured such default within 60 days after receipt of such
notice.

     (b) The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities Guarantee, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.

     SECTION  2.07.  Event of Default; Notice.

     (a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice; provided that, except in the case of a default in the payment of a
Guarantee Payment, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as the Board of Directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders.

                                       -6-


     (b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with the
administration of the Preferred Securities Guarantee shall have obtained written
notice, of such Event of Default.

     SECTION  2.08. Conflicting Interests. The Declaration and the Indenture
shall be deemed to be specifically described in this Preferred Securities
Guarantee for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.

                                   ARTICLE III

                        POWERS, DUTIES AND RIGHTS OF THE
                           PREFERRED GUARANTEE TRUSTEE

     SECTION  3.01.  Powers and Duties of the Preferred Guarantee Trustee.

     (a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.04(iv) or to
a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee
upon acceptance by such Successor Preferred Guarantee Trustee of its appointment
hereunder and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.

     (b) If an Event of Default has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders. If an event of default under the Indenture has occurred
and is continuing, the rights of holders of the Common Securities to receive
payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments.

     (c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred

                                       -7-


Securities Guarantee, and no implied covenants shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee. In case an Event
of Default has occurred and is continuing (and has not been cured or waived
pursuant to Section 2.06), the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use in the conduct of his or her own affairs.

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

          (i)  prior to the occurrence of any Event of Default and after the
     curing or waiving of all such Events of Default that may have occurred:

               (A) the duties and obligations of the Preferred Guarantee Trustee
          shall be determined solely by the express provisions of this Preferred
          Securities Guarantee, and the Preferred Guarantee Trustee shall not be
          liable except for the performance of such duties and obligations as
          are specifically set forth in this Preferred Securities Guarantee, and
          no implied covenants or obligations shall be read into this Preferred
          Securities Guarantee against the Preferred Guarantee Trustee; and

               (B) in the absence of bad faith on the part of the Preferred
          Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
          rely, as to the truth of the statements and the correctness of the
          opinions expressed therein, upon any certificates or opinions
          furnished to the Preferred Guarantee Trustee and conforming to the
          requirements of this Preferred Securities Guarantee; but in the case
          of any such certificates or opinions that by any provision hereof or
          of the Trust Indenture Act are specifically required to be furnished
          to the Preferred Guarantee Trustee, the Preferred Guarantee Trustee
          shall be under a duty to examine the same to determine whether or not
          they conform to the requirements of this Preferred Securities
          Guarantee;

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

                                       -8-


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

          (iv) no provision of this Preferred Securities Guarantee shall require
     the Preferred Guarantee Trustee to expend or risk its own funds or
     otherwise incur personal financial liability in the performance of any of
     its duties or in the exercise of any of its rights or powers, if the
     Preferred Guarantee Trustee shall have reasonable grounds for believing
     that the repayment of such funds or liability is not reasonably assured to
     it under the terms of this Preferred Securities Guarantee or reasonable
     indemnity against such risk or liability is not reasonably assured to it.

     SECTION  3.02.  Certain Rights of Preferred Guarantee Trustee.

     (a) Subject to the provisions of Section 3.01:

          (i)   The Preferred Guarantee Trustee may rely and shall be fully
     protected in acting or refraining from acting upon any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     direction, consent, order, bond, debenture, note, other evidence of
     indebtedness or other paper or document believed by it to be genuine and to
     have been signed, sent or presented by the proper party or parties.

          (ii)  Any direction or act of the Guarantor contemplated by this
     Preferred Securities Guarantee shall be sufficiently evidenced by an
     Officers' Certificate unless otherwise prescribed herein.

          (iii) Whenever, in the administration of this Preferred Securities
     Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
     matter be proved or established before taking, suffering or omitting to
     take any action hereunder, the Preferred Guarantee Trustee (unless other
     evidence is herein specifically prescribed) may, in the absence of bad
     faith on its part, request and rely upon an Officers' Certificate which,
     upon receipt of such request from the Preferred Guarantee Trustee, shall be
     promptly delivered by the Guarantor.

                                       -9-


          (iv)  The Preferred Guarantee Trustee may consult with legal counsel,
     and the written advice or opinion of such legal counsel with respect to
     legal matters shall be full and complete authorization and protection in
     respect of any action taken, suffered or omitted to be taken by it
     hereunder in good faith and in accordance with such advice or opinion. Such
     legal counsel may be legal counsel to the Guarantor or any of its
     Affiliates and may be one of its employees. The Preferred Guarantee Trustee
     shall have the right at any time to seek instructions concerning the
     administration of this Preferred Securities Guarantee from any court of
     competent jurisdiction.

          (v)   The Preferred Guarantee Trustee shall be under no obligation to
     exercise any of the rights or powers vested in it by this Preferred
     Securities Guarantee at the request or direction of any Holder, unless such
     Holder shall have provided to the Preferred Guarantee Trustee such
     reasonable indemnity as would satisfy a reasonable person in the position
     of the Preferred Guarantee Trustee, against the costs, expenses (including
     attorneys' fees and expenses) and liabilities that might be incurred by it
     in complying with such request or direction; provided that nothing
     contained in this Section 3.02(a)(v) shall be taken to relieve the
     Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
     its obligation to exercise the rights and powers vested in it by this
     Preferred Securities Guarantee.

          (vi)  The Preferred Guarantee Trustee shall not be bound to make any
     investigation into the facts or matters stated in any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     direction, consent, order, bond, debenture, note, other evidence of
     indebtedness or other paper or document, but the Preferred Guarantee
     Trustee, in its discretion, may make such further inquiry or investigation
     into such facts or matters as it may see fit.

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

          (viii) Whenever in the administration of this Preferred Securities
     Guarantee the Preferred Guarantee Trustee shall deem it desirable to
     receive instructions with

                                      -10-


     respect to enforcing any remedy or right or taking any other action
     hereunder, the Preferred Guarantee Trustee (A) may request instructions
     from the Holders, (B) may refrain from enforcing such remedy or right or
     taking such other action until such instructions are received, and (C)
     shall be protected in acting in accordance with such instructions.

     (b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty to act in
accordance with such power and authority.

                                   ARTICLE IV

                           PREFERRED GUARANTEE TRUSTEE

     SECTION  4.01.  Preferred Guarantee Trustee; Eligibility.

     (a) There shall at all times be a Preferred Guarantee Trustee which shall:

          (i)    not be an Affiliate of the Guarantor; and

          (ii)   be a Person that is eligible pursuant to the Trust Indenture
     Act to act as such and has a combined capital and surplus of at least fifty
     million U.S. dollars ($50,000,000), and shall be a corporation meeting the
     requirements of Section 310(a) of the Trust Indenture Act. If such
     corporation publishes reports of condition at least annually, pursuant to
     law or to the requirements of the supervising or examining authority, then,
     for the purposes of this Section and to the extent permitted by the Trust
     Indenture Act, the combined capital and surplus of such corporation shall
     be deemed to be its combined capital and surplus as set forth in its most
     recent report of condition so published.

     (b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).

     (c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and

                                      -11-


Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act. In determining whether the Preferred Guarantee Trustee
has a "conflicting interest" within the meaning of Section 310(b)(1) of the
Trust Indenture Act, the provisions contained in the proviso to Section
310(b)(1) of the Trust Indenture Act and the Preferred Guarantee Trustee's
Statement of Eligibility on Form T-1 shall be deemed incorporated herein.

     SECTION  4.02.  Appointment, Removal and Resignation of the Preferred
Guarantee Trustee.

     (a) Subject to Section 4.02(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

     (b) The Preferred Guarantee Trustee shall not be removed until a new,
eligible Preferred Guarantee Trustee has been appointed (a "Successor Preferred
Guarantee Trustee") and has accepted such appointment and assumed the applicable
obligations hereunder by written instrument executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor.

     (c) The Preferred Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing executed by the
Preferred Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.

     (d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Preferred Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Preferred
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee.

                                    ARTICLE V

                                    GUARANTEE

     SECTION  5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer pursuant to the
Declaration or by the Guarantor pursuant to the Indenture), as and when due,

                                      -12-


regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders, at the Guarantor's option or by causing the Issuer to pay such amounts
to the Holders.

     SECTION  5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Preferred Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Preferred Guarantee Trustee, the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

     SECTION  5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from an Extension Period on the Debentures as so
provided in the Indenture), Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities;

     (c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

     (e) any invalidity of, or defect or deficiency in, the

                                      -13-


Preferred Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

     (g) to the extent permitted by law, any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor (other than payments of the underlying obligation), it being the
intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.

     SECTION  5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Preferred Securities Guarantee will be deposited with the
Preferred Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Preferred Guarantee Trustee has the right to enforce this Preferred Securities
Guarantee on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee in respect of this Preferred Securities
Guarantee or exercise or direct the exercise of any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities Guarantee;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred Securities Guarantee,
without first instituting a legal proceeding against the Preferred Guarantee
Trustee, the Issuer or any other Person.

     SECTION  5.05. Guarantee of Payment. This Preferred Securities Guarantee
creates a guarantee of payment and not of collection (i.e., the guaranteed party
may institute a legal proceeding directly against the Guarantor to enforce its
rights under the Preferred Securities Guarantee without first instituting a
legal proceeding against any other person or entity). This Preferred Securities
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not previously paid or upon Distribution to the Holders of
the Preferred Securities of the Debentures as provided in the Declaration.

     SECTION  5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Preferred Securities Guarantee and shall
have the right to waive payment by the Issuer pursuant to Section 5.01;
provided, however, that the Guarantor shall not (except to

                                      -14-


the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.

     SECTION  5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.03
hereof.

                                   ARTICLE VI

                                  SUBORDINATION

     SECTION  6.01. Ranking. This Preferred Securities Guarantee shall
constitute an unsecured obligation of the Guarantor and shall rank (a)
subordinate and junior in right of payment to all Senior Indebtedness of the
Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article VIII of the Indenture
will apply, MUTATIS MUTANDIS, to the obligations of the Guarantor hereunder. The
obligations of the Guarantor hereunder do not constitute Senior Indebtedness (as
defined in the Indenture) of the GUARANTOR; (b) PARI PASSU with the senior most
preferred stock now or hereafter issued by the Guarantor and with any guarantee
now or hereafter issued by the Guarantor in respect of preferred stock of any
affiliate of the Guarantor;(c) senior to any preferred or preference stock of
the Guarantor ranking junior to the senior most preferrred or preference stock
of the Guarantor now or hereafter issued and (d) senior to the Guarantor's
common stock.

     SECTION  6.02. PARI PASSU Guarantees. The obligations of the Guarantor
under this Preferred Securities Guarantee shall rank PARI PASSU with the
obligations of the Guarantor under (i) any similar guarantee agreements issued
by the Guarantor on behalf of the holders of preferred or capital securities
issued by any BGE Trust (as defined in the Indenture), (ii) the Indenture and
the Securities (as defined therein) issued thereunder, (iii) any expense
agreements entered into by the Guarantor in connection with the offering of
Trust Securities (as defined in the

                                      -15-


Indenture) by any BGE Trust (as defined in the Indenture), and (iv) any other
security, guarantee or other agreement or obligation that is expressly stated to
rank PARI PASSU with the obligations of the Guarantor under this Preferred
Securities Guarantee or with any obligation that ranks PARI PASSU with the
obligations of the Guarantor under this Preferred Securities Guarantee.

                                   ARTICLE VII

                                   TERMINATION

     SECTION  7.01. Termination. This Preferred Securities Guarantee shall
terminate and be of no further force and effect upon full payment of the
Redemption Price or Liquidation Distribution for the Preferred Securities or
upon Distribution of the Debentures to the Holders of the Preferred Securities.
This Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of the Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or this Preferred Securities Guarantee.

                                  ARTICLE VIII

                                 INDEMNIFICATION

     SECTION  8.01. Exculpation.

     (a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Preferred Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.

     (b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts

                                      -16-


pertinent to the existence and amount of assets from which Distributions to
Holders of Preferred Securities might properly be paid.

     SECTION  8.02. Indemnification.

     (a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Preferred Securities Guarantee,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.

     (b) To the fullest extent permitted by applicable law, reasonable expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).

     (c) The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of the Preferred Securities Guarantee.

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION  9.01. Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. The Guarantor may not consolidate with or merge with or into, or
sell, convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to, any Person unless permitted under Article Eight of the
Indenture. In connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eight of the Indenture the Person
formed by or surviving such consolidation or merger or to which

                                      -17-


such sale, conveyance, transfer or lease shall have been made, if other than the
Guarantor, shall expressly assume all of the obligations of the Guarantor
hereunder.

     SECTION  9.02. Amendments. Except with respect to any changes which do not
materially adversely affect the rights of the Holders in any material respect
(in which case no consent of the Holders will be required), this Preferred
Securities Guarantee may only be amended with the prior approval of the Holders
of a Majority in liquidation amount of the Preferred Securities (excluding any
Preferred Securities held by the Guarantor or an Affiliate thereof). The
provisions of Article VI of the Declaration concerning meetings of the Holders
shall apply to the giving of such approval.

     SECTION  9.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing and delivered, telecopied
or mailed by first class mail, postage prepaid, as follows:

          (a)  if given to the Guarantor, to the address set forth below or such
     other address as the Guarantor may give notice of to the Holders:

          Baltimore Gas and Electric Company
          750 East Pratt Street 16th floor
          Baltimore, Maryland 21202
          Facsimile No: (410) 783-3619
          Attention:  Treasurer

          (b)  if given to the Issuer, in care of the Preferred Guarantee
     Trustee, at the Issuer's (and the Preferred Guarantee Trustee's) address
     set forth below or such other address as the Preferred Guarantee Trustee on
     behalf of the Issuer may give notice to the Holders:

          BGE Capital Trust II
          c/o Baltimore Gas and Electric Company
          750 East Pratt Street 16th floor
          Baltimore, Maryland 21202
          Facsimile No:  (410) 783-3619
          Attention:  Treasurer

     with a copy to:

          The Bank of New York
          101 Barclay Street, 21st Floor
          New York, NY 10286
          Facsimile No:
          Attention:

          (c) if given to any Holder, at the address set forth

                                      -18-


in the Securities Register.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by certified mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.

     SECTION  9.04. Benefit. This Preferred Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Preferred
Securities.

     SECTION  9.05. Interpretation. In this Preferred Securities Guarantee,
unless the context otherwise requires:

          (a)  all references to "the Preferred Securities Guarantee" or "this
     Preferred Securities Guarantee" are to this Preferred Securities Guarantee
     as modified, supplemented or amended from time to time;

          (b)  all references in this Preferred Securities Guarantee to Articles
     and Sections are to Articles and Sections of this Preferred Securities
     Guarantee unless otherwise specified;

          (c)  a term defined in the Trust Indenture Act has the same meaning
     when used in this Preferred Securities Guarantee unless otherwise defined
     in this Preferred Securities Guarantee or unless the context otherwise
     requires;

          (d)  a reference to the singular includes the plural and vice versa;
     and

          (e)  the masculine, feminine or neuter genders used herein shall
     include the masculine, feminine and neuter genders.

     SECTION  9.06. Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

     SECTION  9.07 Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

                                      -19-


     THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                          BALTIMORE GAS AND ELECTRIC COMPANY,
                                             as Guarantor

                                          By:
                                             ---------------------------------
                                             Name:
                                             Title:Vice President

                                          THE BANK OF NEW YORK,
                                             as Preferred Guarantee Trustee

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

                                      -20-

EX-4.(G)

                                                                    Exhibit 4(g)

                                     Form of
                      Common Securities Guarantee Agreement

                              BGE Capital Trust II


                                   Dated as of



                                TABLE OF CONTENTS



                                                                          Page
                                                                          ----
                                                                       
                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01.   Definitions..................................................2
SECTION 1.02.   Interpretation...............................................3

                                   ARTICLE II

                                    GUARANTEE

SECTION 2.01.   Guarantee....................................................4
SECTION 2.02.   Waiver of Notice and Demand..................................4
SECTION 2.03.   Obligations Not Affected.....................................4
SECTION 2.04.   Rights of Holders............................................5
SECTION 2.05.   Guarantee of Payment.........................................6
SECTION 2.06.   Subrogation..................................................6
SECTION 2.07.   Independent Obligations......................................6

                                   ARTICLE III

                                  SUBORDINATION

SECTION 3.01.   Ranking......................................................6
SECTION 3.02.   PARI PASSU Guarantees........................................7

                                   ARTICLE IV

                                   TERMINATION

SECTION 4.01.   Termination..................................................7

                                    ARTICLE V

                                  MISCELLANEOUS

SECTION 5.01.   Successors and Assigns.......................................8
SECTION 5.02.   Amendments...................................................8
SECTION 5.03.   Notices......................................................8
SECTION 5.04.   Benefit......................................................9
SECTION 5.05.   Governing Law................................................9
SECTION 5.06.   Counterparts.................................................9


                                       -i-


                               GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as
of________, is executed and delivered by Baltimore Gas and Electric Company, a
Maryland corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of BGE Capital Trust II, a Delaware statutory trust (the "Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________ among the Trustees named therein, the
Guarantor, as Depositor, and the Holders from time to time of common undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof common securities having an aggregate liquidation amount of $25.00
per security) for an aggregate stated liquidation amount of $7,731,950,
designated the ___% Common Securities (the "Common Securities") representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Declaration;

     WHEREAS, the Common Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the sale by the Issuer of its
Preferred Securities (as defined herein), will be used to purchase the
Debentures (as defined in the Declaration) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Declaration,
as Trust Property (as defined in the Declaration);

     WHEREAS, as incentive for the Holders to purchase Common Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Common Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and

     WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities, except that if an Event of Default (as defined in the
Indenture) has occurred and is continuing, the rights of the Holders of the
Common Securities to receive Guarantee Payments under this Common Securities
Guarantee



are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments under the Preferred Securities Guarantee.

     NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders from time to time of the Common Securities.

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01   Definitions. As used in this Common Securities Guarantee,
each of the terms set forth below shall, unless the context otherwise requires,
have the following meaning. Each capitalized or otherwise defined term used but
not otherwise defined herein shall have the meaning assigned to such terms in
the Declaration as in effect on the date hereof.

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Common Securities, to the extent not paid or
made by or on behalf of the Issuer pursuant to the Declaration or by the
Guarantor pursuant to the Indenture: (i) any accumulated and unpaid
Distributions required to be paid on the Common Securities, to the extent the
Issuer shall have funds available therefor, (ii) the Redemption Price with
respect to any Common Securities called for redemption by the Issuer to the
extent the Issuer shall have funds available therefor, and (iii) upon a
voluntary or involuntary dissolution and liquidation of the Issuer (other than
in connection with a Distribution of Debentures to Holders in exchange for
Common Securities as provided in the Declaration or the redemption of all such
Common Securities), the lesser of (a) the aggregate of the liquidation amount of
$25.00 per Common Security plus all accrued and unpaid Distributions on the
Common Securities to the date of payment, to the extent the Issuer shall have
funds available therefor and (b) the amount of assets of the Issuer remaining
available for Distribution to Holders upon a dissolution and liquidation of the
Issuer (in either case, the "Liquidation Distribution").

                                       -2-


     "Holder" means any holder, as registered on the books and records of the
Issuer, of any Common Securities.

     "Indenture" means the Indenture dated as of June 15, 1998, as amended or
supplemented from time to time, between Baltimore Gas and Electric Company and
The Bank of New York, as trustee thereunder.

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

     "Preferred Securities" means the preferred securities representing
undivided beneficial interests in the assets of the Issuer and having the rights
provided therefor in the Declaration.

     "Senior Indebtedness" means Senior Indebtedness as defined in the
Indenture.

     SECTION 1.02   Interpretation. In this Common Securities Guarantee,
unless the context otherwise requires:

          (a)  capitalized terms used in this Common Securities Guarantee but
     not defined in the preamble above have the respective meanings assigned to
     them in this Section 1;

          (b)  terms defined in the Declaration as at the date of execution of
     this Common Securities Guarantee have the same meaning when used in this
     Common Securities Guarantee unless otherwise defined in this Common
     Securities Guarantee;

          (c)  a term defined anywhere in this Common Securities Guarantee has
     the same meaning throughout;

          (d)  all references to "the Common Securities Guarantee" or "this
     Common Securities Guarantee" are to this Common Securities Guarantee as
     modified, supplemented or amended from time to time;

          (e)  all references in this Common Securities Guarantee to Articles
     and Sections are to Articles and Sections of this Common Securities
     Guarantee unless otherwise specified;

                                       -3-


          (f)  a reference to the singular includes the plural and vice versa;

          (g)  the masculine, feminine or neuter genders used herein shall
     include the masculine, feminine and neuter genders; and

          (h)  the word "or" is not exclusive, and the words "herein," "hereof"
     and "hereunder" refer to this Common Securities Guarantee as a whole.

                                   ARTICLE II

                                    GUARANTEE

     SECTION 2.01   Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer pursuant to the
Declaration or by the Guarantor pursuant to the Indenture), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders, at the Guarantor's option or by causing the Issuer to pay such amounts
to the Holders.

     SECTION 2.02   Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Common Securities Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

     SECTION 2.03   Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Common Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:

          (a)  the release or waiver, by operation of law or otherwise, of the
     performance or observance by the Issuer of any express or implied
     agreement, covenant, term or condition relating to the Common Securities to
     be performed or observed by the Issuer;

                                       -4-


          (b)  the extension of time for the payment by the Issuer of all or any
     portion of the Distributions (other than an extension of time for payment
     of Distributions that results from an Extension Period on the Debentures as
     so provided in the Indenture), Redemption Price, Liquidation Distribution
     or any other sums payable under the terms of the Common Securities or the
     extension of time for the performance of any other obligation under,
     arising out of, or in connection with, the Common Securities;

          (c)  any failure, omission, delay or lack of diligence on the part of
     the Holders to enforce, assert or exercise any right, privilege, power or
     remedy conferred on the Holders pursuant to the terms of the Common
     Securities, or any action on the part of the Issuer granting indulgence or
     extension of any kind;

          (d)  the voluntary or involuntary liquidation, dissolution, sale of
     any collateral, receivership, insolvency, bankruptcy, assignment for the
     benefit of creditors, reorganization, arrangement, composition or
     readjustment of debt of, or other similar proceedings affecting, the Issuer
     or any of the assets of the Issuer;

          (e)  any invalidity of, or defect or deficiency in, the Common
     Securities;

          (f)  the settlement or compromise of any obligation guaranteed hereby
     or hereby incurred; or

          (g)  to the extent permitted by law, any other circumstance whatsoever
     that might otherwise constitute a legal or equitable discharge or defense
     of a guarantor (other than payments of the underlying obligation), it being
     the intent of this Section 2.03 that the obligations of the Guarantor
     hereunder shall be absolute and unconditional under any and all
     circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.

     SECTION 2.04   Rights of Holders. The Guarantor expressly acknowledges
that any Holder may institute a legal proceeding directly against the Guarantor
to enforce its

                                       -5-


rights under this Common Securities Guarantee, without first instituting a legal
proceeding against the Issuer or any other Person.

     SECTION 2.05   Guarantee of Payment. This Common Securities Guarantee
creates a guarantee of payment and not of collection (i.e., the guaranteed party
may institute a legal proceeding directly against the Guarantor to enforce its
rights under the Common Securities Guarantee without first instituting a legal
proceeding against any other person or entity). This Common Securities Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not previously paid or upon Distribution to the Holders of the Common
Securities of the Debentures as provided in the Declaration.

     SECTION 2.06   Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Common Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

     SECTION 2.07   Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Common Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Common Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 2.03
hereof.

                                   ARTICLE III

                                  SUBORDINATION

     SECTION 3.01   Ranking. This Common Securities Guarantee shall
constitute an unsecured obligation of the

                                       -6-


Guarantor and shall rank (a) subordinate and junior in right of payment to
all Senior Indebtedness of the Guarantor to the extent and in the manner set
forth in the Indenture with respect to the Debentures, and the provisions of
Article Eight of the Indenture will apply, MUTATIS MUTANDIS, to the
obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder do not constitute Senior Indebtedness (as defined in the Indenture)
of the Guarantor; (b) PARI PASSU with the senior most preferred stock now or
hereafter issued by the Guarantor and with any guarantee now or hereafter
issued by the Guarantor in respect of preferred stock of any Affiliate of the
Guarantor; (c) senior to any preferred or preference stock of the Guarantor
ranking junior to the senior most preferred or preference stock of the
Guarantor now or hereafter issued and (d) senior to the Guarantor's common
stock. If an Event of Default has occurred and is continuing under the
Declaration, the rights of the Holders to receive Guarantee Payments under
this Common Securities Guarantee shall be subordinated to the rights of the
holders of the Preferred Securities to receive payment of all amounts due and
owing under the terms of the Preferred Securities Guarantee.

     SECTION 3.02   PARI PASSU Guarantees. The obligations of the Guarantor
under this Common Securities Guarantee shall rank PARI PASSU with the
obligations of the Guarantor under (i) any similar guarantee agreements issued
by the Guarantor on behalf of the holders of preferred or capital securities
issued by any BGE Trust (as defined in the Indenture), (ii) the Indenture and
the Securities (as defined therein) issued thereunder, (iii) any expense
agreements entered into by the Guarantor in connection with the offering of
Trust Securities (as defined in the Indenture) by any BGE Trust (as defined in
the Indenture), and (iv) any other security, guarantee or other agreement or
obligation that is expressly stated to rank PARI PASSU with the obligations of
the Guarantor under this Common Securities Guarantee or with any obligation that
ranks PARI PASSU with the obligations of the Guarantor under this Common
Securities Guarantee.

                                   ARTICLE IV

                                   TERMINATION

     SECTION 4.01   Termination. This Common Securities Guarantee shall
terminate and be of no further force and effect upon full payment of the
Redemption Price or Liquidation Distribution for the Common Securities or upon
Distribution of the Debentures to the Holders of the Common

                                       -7-


Securities. This Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of the Common
Securities must restore payment of any sums paid under the Common Securities or
this Common Securities Guarantee.

                                    ARTICLE V

                                  MISCELLANEOUS

     SECTION 5.01   Successors and Assigns. All guarantees and agreements
contained in this Common Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Common Securities then outstanding.
The Guarantor may not consolidate with or merge with or into, or sell, convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety (either in one transaction or a series of transactions) to, any
Person unless permitted under Article Eight of the Indenture. In connection with
a consolidation, merger or sale involving the Guarantor that is permitted under
Article Eight of the Indenture the Person formed by or surviving such
consolidation or merger or to which such sale, conveyance, transfer or lease
shall have been made, if other than the Guarantor, shall expressly assume all of
the obligations of the Guarantor hereunder.

     SECTION 5.02   Amendments. Except with respect to any changes which do not
materially adversely affect the rights of the Holders in any material respect
(in which case no consent of the Holders will be required), this Common
Securities Guarantee may only be amended with the prior approval of the Holders
of a majority in liquidation amount of the outstanding Common Securities. The
provisions of Article VI of the Declaration concerning meetings of the Holders
shall apply to the giving of such approval.

     SECTION 5.03.  Notices. All notices provided for in this Common Securities
Guarantee shall be in writing and delivered, telecopied or mailed by first class
mail, postage prepaid, as follows:

          (a)  if given to the Guarantor, to the address set forth below or such
     other address as the Guarantor may give notice of to the Holders:

                                       -8-


          Baltimore Gas and Electric Company
          750 East Pratt Street 16th floor
          Baltimore, Maryland 21202
          Facsimile No: (410) 783-3619
          Attention:  Treasurer

          (b)  if given to the Issuer, in care of the Administrative Trustee, at
     the Issuer's mailing address set forth below or such other address as the
     Issuer may give notice to the Holders:

          BGE Capital Trust II
          c/o Baltimore Gas and Electric Company
          750 East Pratt Street 16th floor
          Baltimore, Maryland 21202
          Facsimile No:  (410) 783-3619
          Attention:  Thomas E. Ruszin, Jr.

          (c)  if given to any Holder, at the address set forth on the books and
     records of the Issuer.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by certified mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.

     SECTION 5.04   Benefit. This Common Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Common
Securities.

     SECTION 5.05   Governing Law. THIS COMMON SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

     SECTION 5.06   Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

                                       -9-


     THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.


                                             BALTIMORE GAS AND ELECTRIC
                                             COMPANY,
                                                as Guarantor

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

                                             BGE CAPITAL TRUST II

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

                                      -10-

EX-5.(A)

                                                                    Exhibit 5(a)


                                                           Charles A. Berardesco
                                             Managing Attoney, Corporate Finance
                                                     750 E. Pratt St. 17th floor
                                                  Baltimore, Maryland 21202-3106
                                                                    410-783-3011
                                                                410-783-3049 Fax
                                            Charles.berardesco@constellation.com

                                 August 4, 2003


Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland  21201

Ladies and Gentlemen:

     This opinion is provided in connection with the Registration Statement on
Form S-3 (the "Registration Statement") being filed by Baltimore Gas and
Electric Company ("BGE") with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933, as amended, regarding, among
other things: (i) the proposed issuance of junior subordinated debentures (the
"Notes") by the Company to be issued in accordance with the provisions of an
indenture between BGE and The Bank of New York, as trustee, which is
incorporated by reference as an exhibit to the Registration Statement, and to be
supplemented by a supplemental indenture thereto, the form of which is filed as
an exhibit to the Registration Statement (collectively, the "Indenture") and
(ii) the proposed execution and delivery of a preferred securities guarantee
agreement to be entered into between BGE and The Bank of New York, as trustee,
the form of which is filed as an exhibit to the Registration Statement (the
"Guarantee").

     I am the Managing Attorney, Corporate Finance, of Constellation Energy
Group, Inc., the parent company of BGE. I am generally familiar with BGE's
corporate history, properties, operations, Charter (including amendments,
supplements, and restatements thereto), the issuance of its securities
outstanding, and the indentures under which its debt is issued. In connection
with this opinion, I have considered, among other things: (i) the Charter of
BGE; (ii) the By-Laws of BGE; (iii) the Indenture under which the Notes will be
issued; (iv) the corporate proceedings for the approval of the issuance and sale
of the Notes and the execution and delivery of the Guarantee; (v) the
Registration Statement; (vi) the Guarantee; (vii) the provisions of the Public
Utility Holding Company Act of 1935, as amended; and (viii) such other
documents, transactions, and matters of law as I deemed necessary in order to
render this opinion.

     This opinion is subject to (i) the proper execution, authentication, and
delivery of the Notes upon receipt of the purchase price; (ii) the qualification
of the Indenture and the Guarantee under the Trust Indenture Act of 1939, as
amended; (iii) the Registration Statement becoming effective under the
Securities Act of 1933, as amended; and (iv) the approval of the Public Service
Commission of Maryland for the issuance of the Notes and the execution and
delivery of the Guarantee by BGE.





Baltimore Gas and Electric Company
Page 2
- -------------------------------------------------------------------------------

     Based on the foregoing, I am of the opinion that:

     1. The Notes, when issued and delivered pursuant to the Indenture, will
constitute legally issued and binding obligations of BGE, enforceable against
BGE in accordance with their terms, except as enforcement may be limited by
(i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar laws or equitable principles relating to or limiting creditors'
rights and remedies generally, and (ii) the application of general principles
of equity.

     2. The Guarantee when executed and delivered by BGE, will constitute a
legally binding obligation of BGE, enforceable against BGE in accordance with
its terms except as enforcement may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws or equitable
principles relating to or limiting creditors rights and remedies generally, and
(ii) the application of general principles of equity.

     I express no opinion as to the law of any jurisdiction other than the law
of the State of Maryland and the law of the United States of America. The
opinion expressed herein concerns only the effect of the law (excluding the
principles of conflicts of law) of the State of Maryland and the United States
of America as currently in effect.

     This opinion is provided solely for your benefit and may not be relied upon
by, or quoted to, any other person or entity, in whole or in part, without my
prior written consent.

     I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to me in the Registration Statement
(and any amendments thereto) or the prospectus constituting a part of the
Registration Statement (and any amendments or supplements thereto).


                                          Very truly yours,

                                          /S/ Charles A. Berardesco
                                          -------------------------------------
                                          Charles A.  Berardesco
                                          Managing Attorney, Corporate Finance

EX-5.(B)

                                                                    Exhibit 5(b)


                                 August 4, 2003



BGE Capital Trust II
c/o Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201


                  Re: BGE CAPITAL TRUST II


Ladies and Gentlemen:

     We have acted as special Delaware counsel for Baltimore Gas and Electric
Company, a Maryland corporation (the "Company"), and BGE Capital Trust II, a
Delaware statutory trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.

     For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:

                           (a) The Certificate of Trust of the Trust, dated
                  August 4, 2003, as filed with the office of the Secretary of
                  State of the State of Delaware (the "Secretary of State") on
                  August 4, 2003;

                           (b) The Declaration of Trust of the Trust, dated as
                  of August 4, 2003, between the Company and the trustees of the
                  Trust named therein;

                           (c) The Registration Statement (the "Registration
                  Statement") on Form S-3, including a preliminary prospectus
                  with respect to the Trust (the "Prospectus"), relating to the
                  Preferred Securities of the Trust representing preferred
                  undivided beneficial interests in the assets of the Trust
                  (each, a "Preferred Security" and collectively, the "Preferred



BGE Capital Trust II
August 4, 2003
Page 2

                  Securities"), filed by the Company and the Trust with the
                  Securities and Exchange Commission on or about August 4, 2003;

                           (d) A form of Amended and Restated Declaration of
                  Trust of the Trust, to be entered into between the Company,
                  the trustees of the Trust named therein, and the holders, from
                  time to time, of the undivided beneficial interests in the
                  assets of such Trust (including the exhibits thereto) (the
                  "Declaration"), attached as an exhibit to the Registration
                  Statement; and

                           (e) A Certificate of Good Standing for the Trust,
                  dated August 4, 2003, obtained from the Secretary of State.

     Initially capitalized terms used herein and not otherwise defined are used
as defined in the Declaration.

     For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.

     With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.

     For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate of Trust
are in full force and effect and have not been amended, (ii) except to the
extent provided in paragraph 1 below, the due organization or due formation, as
the case may be, and valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction governing its
organization or formation, (iii) the legal capacity of natural persons who are
parties to the documents examined by us, (iv) that each of the parties to the
documents examined by us has the power and authority to execute and deliver, and
to perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Security Certificate for such Preferred Security and the payment for




BGE Capital Trust II
August 4, 2003
Page 3

such Preferred Security, in accordance with the Declaration and the Registration
Statement, and (vii) that the Preferred Securities are issued and sold to the
Preferred Security Holders in accordance with the Declaration and the
Registration Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.

     This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.

     Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:

     1. The Trust has been duly created and is validly existing in good standing
as a statutory trust under the Delaware Statutory Trust Act.

     2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.

     3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.

     We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. We hereby consent to the
use of our name under the heading "Legal Matters" in the Prospectus. In giving
the foregoing consent, we do not thereby admit that we come within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied upon by, any
other person for any purpose.

                                          Very truly yours,

                                          /s/ Richards Layton and Finger PA
CDK

EX-8

                                                                       Exhibit 8

                     [Letterhead of Sullivan & Cromwell LLP]






                                                              August 5, 2003

Baltimore Gas and Electric Company
BGE Capital Trust II
39 W. Lexington Street
Baltimore, MD  21201

Ladies and Gentlemen:

     As special tax counsel to BGE Capital Trust II and Baltimore Gas and
Electric Company in connection with the issuance of $250,000,000 aggregate
liquidation amount of the Cumulative Trust Preferred Securities, as described in
the Registration Statement dated August 5, 2003, we hereby confirm to you our
opinion as set forth under the heading "United States Federal Income Tax
Consequences" in such Registration Statement, subject to the limitations set
forth therein.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "United
States Federal Income Tax Consequences" in the Registration Statement. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933.


                                                  Very truly yours,


                                                  /s/ Sullivan & Cromwell LLP

EX-23.(C)

                                                                   EXHIBIT 23(C)


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 29, 2003 relating to the
financial statements and financial statement schedule, which appears in
Baltimore Gas and Electric Company's Annual Report on Form 10-K for the year
ended December 31, 2002. We also consent to the references to us under the
heading "Experts" in such Registration Statement.



/s/ PricewaterhouseCoopers LLC

Baltimore, Maryland
July 31, 2003

EX-24

                                                                      Exhibit 24

                       BALTIMORE GAS AND ELECTRIC COMPANY

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers
of Baltimore Gas and Electric Company (the "Company") hereby constitute and
appoint E. Follin Smith as their true and lawful attorney and agent to do any
and all acts and things and to execute, in their name any and all instruments
which said attorney and agent may deem necessary or advisable to enable the
Company to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof in connection with the registration under said Act of not
exceeding $250,000,000 of Preferred Securities of BGE Capital Trust II and
related Junior Subordinated Debentures and Preferred Securities Guarantee of the
Company (collectively, the "Securities"), maturing not more than forty-five
years after the date as of which they are issued, all as authorized by
Resolutions adopted by the Company of Baltimore Gas Electric Company effective
even date herewith, including specifically, but without limiting the generality
of the foregoing, power and authority to sign the names of the undersigned
directors and officers in the capacities indicated below, to any registration
statement to be filed with the Securities and Exchange Commission in respect of
the Securities, to any and all amendments to any registration statement in
respect to the Securities, or to any instruments or registration statement or
amendments to such documents; and each of the undersigned hereby ratifies and
confirms all that said attorneys and agents or any of the, shall do or cause to
be done by virtue hereof.

     IN WITNESS WHEREOF, each of the undersigned has subscribed, or caused to be
subscribed, these presents this 30th day of July 2003.

                                                 Signature

Principal Executive
 Officer and Director:                       /s/     Frank O. Heintz
                                            ------------------------
                                                   Frank O. Heintz
                                            President, Chief Executive Officer
                                                    and Director


Director:                                   /s/ Mayo A. Shattuck, III
                                            -------------------------
                                                 Mayo A. Shattuck, III

EX-25.(A)

                                                                   Exhibit 25(a)
================================================================================

                                    FORM T-1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                         SECTION 305(b)(2)       |__|

                                   ----------

                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                13-5160382
(State of incorporation                                 (I.R.S. employer
if not a U.S. national bank)                            identification no.)

One Wall Street, New York, N.Y.                         10286
(Address of principal executive offices)                (Zip code)

                                   ----------

                       Baltimore Gas and Electric Company
               (Exact name of obligor as specified in its charter)

Maryland                                                52-0280210
(State or other jurisdiction of                         (I.R.S. employer
incorporation or organization)                          identification no.)

39 W. Lexington Street
Baltimore, Maryland                                     21201
(Address of principal executive offices)                (Zip code)

                                   ----------

                   % Junior Subordinated Debentures, Series A
                       (Title of the indenture securities)

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



1.   GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (a)  NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
          IT IS SUBJECT.
                      Name                               Address
- --------------------------------------------------------------------------------
     Superintendent of Banks of the State of    2 Rector Street, New York, N.Y.
     New York                                   10006, and Albany, N.Y. 12203

     Federal Reserve Bank of New York           33 Liberty Plaza, New York, N.Y.
                                                10045

     Federal Deposit Insurance Corporation      Washington, D.C.  20429

     New York Clearing House Association        New York, New York   10005

     (b)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

     Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
     INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
     7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
     229.10(d).

     1.   A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which contains the
          authority to commence business and a grant of powers to exercise
          corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
          filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
          Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
          to Form T-1 filed with Registration Statement No. 33-29637.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with Registration Statement No. 33-31019.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement No.
          33-44051.)

                                       -2-


     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.

                                       -3-


                                    SIGNATURE

     Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 31st day of July, 2003.

                                        THE BANK OF NEW YORK


                                        By: /S/ STACEY POINDEXTER
                                            ------------------------------------
                                            Name:  STACEY POINDEXTER
                                            Title: ASSISTANT TREASURER

                                       -4-


                                                                       EXHIBIT 7

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2003,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.



                                                           Dollar Amounts
                                                             In Thousands
                                                       
ASSETS
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency and coin .   $     4,389,492
   Interest-bearing balances ..........................         3,288,212
Securities:
   Held-to-maturity securities ........................           654,763
   Available-for-sale securities ......................        17,626,360
Federal funds sold in domestic offices ................         1,759,600
Securities purchased under agreements to
   resell .............................................           911,600
Loans and lease financing receivables:
   Loans and leases held for sale .....................           724,074
   Loans and leases, net of unearned
     income ...........................................        32,368,718
   LESS: Allowance for loan and
     lease losses .....................................           826,505
   Loans and leases, net of unearned
     income and allowance .............................        31,542,213
Trading Assets ........................................         7,527,662
Premises and fixed assets (including capitalized
   leases) ............................................           825,706
Other real estate owned ...............................               164
Investments in unconsolidated subsidiaries and
   associated companies ...............................           260,940
Customers' liability to this bank on acceptances
   outstanding ........................................           225,935
Intangible assets
   Goodwill ...........................................         2,027,675
   Other intangible assets ............................            75,330


                                       -5-


                                                       
Other assets ..........................................         4,843,295
                                                          ---------------
Total assets ..........................................   $    76,683,021
                                                          ===============
LIABILITIES
Deposits:
   In domestic offices ................................   $    33,212,852
   Noninterest-bearing ................................        12,997,086
   Interest-bearing ...................................        20,215,766
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ...........................        24,210,507
   Noninterest-bearing ................................           595,520
   Interest-bearing ...................................        23,614,987
Federal funds purchased in domestic
  offices .............................................           375,322
Securities sold under agreements to repurchase ........           246,755
Trading liabilities ...................................         2,335,466
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ..........................           959,997
Bank's liability on acceptances executed and
   outstanding ........................................           227,253
Subordinated notes and debentures .....................         2,090,000
Other liabilities .....................................         5,716,796
                                                          ---------------
Total liabilities .....................................   $    69,374,948
                                                          ===============
Minority interest in consolidated
   subsidiaries .......................................           540,772

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus ............................................                 0
Common stock ..........................................         1,135,284
Surplus ...............................................         1,056,295
Retained earnings .....................................         4,463,720
Accumulated other comprehensive income ................          (112,002)
Other equity capital components .......................                 0
                                                          ---------------
Total equity capital ..................................         6,767,301
                                                          ---------------
Total liabilities minority interest and equity capital    $    76,683,021
                                                          ===============



                                       -6-


     I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                       Thomas J. Mastro,
                                   Senior Vice President and Comptroller

     We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell                        Directors
Alan R. Griffith

                                       -7-

EX-25.(B)

                                                                   Exhibit 25(b)
================================================================================

                                    FORM T-1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                         SECTION 305(b)(2)       |__|

                                   ----------

                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                13-5160382
(State of incorporation                                 (I.R.S. employer
if not a U.S. national bank)                            identification no.)

One Wall Street, New York, N.Y.                         10286
(Address of principal executive offices)                (Zip code)

                                   ----------

                              BGE Capital Trust II
               (Exact name of obligor as specified in its charter)

Delaware                                                Applied for
(State or other jurisdiction of                         (I.R.S. employer
incorporation or organization)                          identification no.)

39 W. Lexington Street
Baltimore, Maryland                                     21201
(Address of principal executive offices)                (Zip code)

                                   ----------

                              Preferred Securities
                       (Title of the indenture securities)

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



1.   GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (a)  NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
          IT IS SUBJECT.

                           Name                               Address
     Superintendent of Banks of the State       2 Rector Street, New York, N.Y.
     of New York                                10006, and Albany, N.Y. 12203

     Federal Reserve Bank of New York           33 Liberty Plaza, New York, N.Y.
                                                10045

     Federal Deposit Insurance Corporation      Washington, D.C.  20429

     New York Clearing House Association        New York, New York   10005

     (b)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

     Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
     AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
     INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
     7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
     229.10(d).

     1.   A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which contains the
          authority to commence business and a grant of powers to exercise
          corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
          filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
          Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
          to Form T-1 filed with Registration Statement No. 33-29637.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with Registration Statement No. 33-31019.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement No.
          33-44051.)

                                       -2-


     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.

                                       -3-


                                    SIGNATURE

     Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 31st day of July, 2003.


                                        THE BANK OF NEW YORK


                                        By: /S/    STACEY POINDEXTER
                                            ------------------------------------
                                            Name:  STACEY POINDEXTER
                                            Title: ASSISTANT TREASURER

                                       -4-


                                                                       EXHIBIT 7

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2003,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.



                                                           Dollar Amounts
                                                             In Thousands
                                                       
ASSETS
Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin .   $     4,389,492
   Interest-bearing balances ..........................         3,288,212
Securities:
   Held-to-maturity securities ........................           654,763
   Available-for-sale securities ......................        17,626,360
Federal funds sold in domestic offices ................         1,759,600
Securities purchased under agreements to
   resell .............................................           911,600
Loans and lease financing receivables:
   Loans and leases held for sale .....................           724,074
   Loans and leases, net of unearned
     income ...........................................        32,368,718
   LESS: Allowance for loan and
     lease losses .....................................           826,505
   Loans and leases, net of unearned
     income and allowance .............................        31,542,213
Trading Assets ........................................         7,527,662
Premises and fixed assets (including capitalized
   leases) ............................................           825,706
Other real estate owned ...............................               164
Investments in unconsolidated subsidiaries and
   associated companies ...............................           260,940
Customers' liability to this bank on acceptances
   outstanding ........................................           225,935
Intangible assets
   Goodwill ...........................................         2,027,675
   Other intangible assets ............................            75,330


                                       -5-


                                                       
Other assets ..........................................         4,843,295
                                                          ---------------
Total assets ..........................................   $    76,683,021
                                                          ===============
LIABILITIES
Deposits:
   In domestic offices ................................   $    33,212,852
   Noninterest-bearing ................................        12,997,086
   Interest-bearing ...................................        20,215,766
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ...........................        24,210,507
   Noninterest-bearing ................................           595,520
   Interest-bearing ...................................        23,614,987
Federal funds purchased in domestic
  offices .............................................           375,322
Securities sold under agreements to repurchase ........           246,755
Trading liabilities ...................................         2,335,466
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ..........................           959,997
Bank's liability on acceptances executed and
   outstanding ........................................           227,253
Subordinated notes and debentures .....................         2,090,000
Other liabilities .....................................         5,716,796
                                                          ---------------
Total liabilities .....................................   $    69,374,948
                                                          ===============
Minority interest in consolidated
   subsidiaries .......................................           540,772

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus ............................................                 0
Common stock ..........................................         1,135,284
Surplus ...............................................         1,056,295
Retained earnings .....................................         4,463,720
Accumulated other comprehensive income ................          (112,002)
Other equity capital components .......................                 0
                                                          ---------------
Total equity capital ..................................         6,767,301
                                                          ---------------
Total liabilities minority interest and equity capital    $    76,683,021
                                                          ===============



                                       -6-


     I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                        Thomas J. Mastro,
                                    Senior Vice President and Comptroller

     We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell                        Directors
Alan R. Griffith

                                       -7-

EX-25.(C)

                                                                   Exhibit 25(c)
================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                         SECTION 305(b)(2)          |__|

                                   ----------

                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                13-5160382
(State of incorporation                                 (I.R.S. employer
if not a U.S. national bank)                            identification no.)

One Wall Street, New York, N.Y.                         10286
(Address of principal executive offices)                (Zip code)

                                   ----------

                       Baltimore Gas and Electric Company
               (Exact name of obligor as specified in its charter)

Maryland                                                52-0280210
(State or other jurisdiction of                         (I.R.S. employer
incorporation or organization)                          identification no.)

39 W. Lexington Street
Baltimore, Maryland                                     21201
(Address of principal executive offices)                (Zip code)

                                   ----------

             Guarantee of BGE Capital Trust II Preferred Securities
                       (Title of the indenture securities)

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



1.   GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (a)  NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
          IT IS SUBJECT.

                           Name                               Address
- --------------------------------------------------------------------------------
     Superintendent of Banks of the State of    2 Rector Street, New York, N.Y.
     New York                                   10006, and Albany, N.Y. 12203

     Federal Reserve Bank of New York           33 Liberty Plaza, New York, N.Y.
                                                10045

     Federal Deposit Insurance Corporation      Washington, D.C.  20429

     New York Clearing House Association        New York, New York   10005

     (b)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

     Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
     AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
     INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
     7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
     229.10(d).

     1.   A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which contains the
          authority to commence business and a grant of powers to exercise
          corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
          filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
          Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
          to Form T-1 filed with Registration Statement No. 33-29637.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with Registration Statement No. 33-31019.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement No.
          33-44051.)

                                       -2-


     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.

                                       -3-


                                    SIGNATURE

     Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 31st day of July, 2003.


                                        THE BANK OF NEW YORK


                                        By: /S/    STACEY POINDEXTER
                                            ------------------------------------
                                            Name:  STACEY POINDEXTER
                                            Title: ASSISTANT TREASURER

                                       -4-


                                                                       EXHIBIT 7

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2003,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.



                                                           Dollar Amounts
                                                             In Thousands
                                                       
ASSETS
Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin..   $     4,389,492
   Interest-bearing balances ..........................         3,288,212
Securities:
   Held-to-maturity securities ........................           654,763
   Available-for-sale securities ......................        17,626,360
Federal funds sold in domestic offices ................         1,759,600
Securities purchased under agreements to
   resell .............................................           911,600
Loans and lease financing receivables:
   Loans and leases held for sale .....................           724,074
   Loans and leases, net of unearned
     income............................................        32,368,718
   LESS: Allowance for loan and
     lease losses......................................           826,505
   Loans and leases, net of unearned
     income and allowance .............................        31,542,213
Trading Assets ........................................         7,527,662
Premises and fixed assets (including capitalized
   leases) ............................................           825,706
Other real estate owned ...............................               164
Investments in unconsolidated subsidiaries and
   associated companies ...............................           260,940
Customers' liability to this bank on acceptances
   outstanding ........................................           225,935
Intangible assets
   Goodwill ...........................................         2,027,675
   Other intangible assets ............................            75,330


                                       -5-


                                                       
Other assets ..........................................         4,843,295
                                                          ---------------
Total assets ..........................................   $    76,683,021
                                                          ===============
LIABILITIES
Deposits:
   In domestic offices ................................   $    33,212,852
   Noninterest-bearing ................................        12,997,086
   Interest-bearing ...................................        20,215,766
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ...........................        24,210,507
   Noninterest-bearing ................................           595,520
   Interest-bearing ...................................        23,614,987
Federal funds purchased in domestic
  offices .............................................           375,322
Securities sold under agreements to repurchase ........           246,755
Trading liabilities ...................................         2,335,466
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ..........................           959,997
Bank's liability on acceptances executed and
   outstanding ........................................           227,253
Subordinated notes and debentures .....................         2,090,000
Other liabilities .....................................         5,716,796
                                                          ---------------
Total liabilities .....................................   $    69,374,948
                                                          ===============
Minority interest in consolidated
   subsidiaries .......................................           540,772

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus ............................................                 0
Common stock ..........................................         1,135,284
Surplus ...............................................         1,056,295
Retained earnings .....................................         4,463,720
Accumulated other comprehensive income ................          (112,002)
Other equity capital components .......................                 0
                                                          ---------------
Total equity capital ..................................         6,767,301
                                                          ---------------
Total liabilities minority interest and equity capital    $    76,683,021
                                                          ===============



                                       -6-


     I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                        Thomas J. Mastro,
                                    Senior Vice President and Comptroller

     We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell                        Directors
Alan R. Griffith

                                       -7-