exh411s.htm


    Exhibit 4.11

       

      This instrument
prepared by and

      after
recording should be mailed to:

       

       

      Wayne F.
Osoba

      Foley & Lardner
LLP

      321 North Clark
Street

      Suite
2800

      Chicago,
IL  60654-5313

       

      


      
        	
                 

                 

                The Peoples
      Gas Light and Coke Company

                 

                to

                 

                U.S.
      Bank National Association

                Trustee

                 

                Supplemental
      Indenture

                 

                Dated as of
      November 1, 2008

                 

                First and
      Refunding Mortgage 7.00% Bonds, Series SS

                 

                 

              


      

      



      
        
          
             

             

          

           


        

        
           


          
            

          

        

        
           


        

      


      Table
of Contents

       

      
      

       

      
        	 	 	 	
                PAGE

              
	 	 
	ARTICLE I FIRST AND
      REFUNDING MORTGAGE 7.00% BONDS, SERIES
      SS 	
                 9

              
	
                 

              	 Section 1.	 Designation, Maturity and
      Interest Rate of
      Bonds	
                 9

              
	
                 

              	 Section
      2.	 Issuance
      of
      Bonds	
                 9

              
	 	 Section
      3.	 Exchanges of
      Bonds	
                 10

              
	 	 Section
      4.	 Execution and Authentication
      of
      Bonds	
                 10

              
	 	 Section
      5.	 Redemption of Bonds by
      Company	
                 11

              
	 	 Section
      6.	 Notice of
      Redemption	
                 13

              
	 	 Section
      7.	 Form of
      Bonds	
                 14

              
	 	 Section
      8.	 Definitions	
                 14

              
	 	 Section
      9.	 Date of
      Payments	
                 16

              
	
                 

              	 Section
      10.	 Reservation of Right to Amend
      Mortgage	
                 16

              
	 	 Section
      11.	 Private Placement of
      Bonds	
                 18

              
	 	 Section
      12.	 Private Placement
      Legend	
                 18

              
	 	 	 	 
	ARTICLE II COVENANTS OF
      THE COMPANY 	
                 18

              
	 	 Section
      1.	 Covenants of Company under
      Indenture	
                 18

              
	 	 Section
      2.	 After-Acquired Property
      Subject to
      Mortgage	
                 27

              
	 	 Section
      3.	 Documents to Furnish Upon
      Acquisition of
      Land	
                 27

              
	 	 Section
      4.	 Discharge of Prior
      Liens	
                 29

              
	
                 

              	 	 	 
	ARTICLE III
      MISCELLANEOUS 	
                 29

              
	 	 Section
      1.	 Trustee’s
      Acceptance	
                 29

              
	 	 Section
      2.	 Execution of Supplemental
      Indenture	
                 29

              
	 	 Section
      3.	 Assignment	
                 30

              
	 	 Section
      4.	 Effective Time of Supplemental
      Indenture	
                 30

              
	 	 Section
      5.	 Governing
      Law	
                 30

              
	 	 Section
      6.	 Counterparts	
                 30

              


      

      
         

      

      



      
        
          
            -i-

          

           


        

        
           


          
            

          

        

        
           


        

      


      This Supplemental
Indenture, dated as of November 1, 2008, made and entered into by and between
The Peoples Gas Light and Coke Company, a corporation organized and existing
under the laws of the State of Illinois (hereinafter called the “Company”) and U.S. Bank
National Association (hereinafter called the “Trustee”), a corporation
organized and existing under the laws of the United States of America and
successor to Illinois Merchants Trust Company, as trustee under the indenture of
Chicago By-Product Coke Company to said Illinois Merchants Trust Company, as
trustee, dated January 2, 1926.

       

      Witnesseth:

       

      Whereas, Chicago
By-Product Coke Company, a corporation organized and existing under the laws of
the State of Delaware, heretofore gave its mortgage in the form of an indenture
(hereinafter called the “Original Mortgage”) to
Illinois Merchants Trust Company, as trustee, under date of the second day of
January, 1926; and

       

      Whereas, the
Company executed and delivered to said Illinois Merchants Trust Company, as
trustee under the Original Mortgage, an indenture bearing date the first day of
March, 1928, whereby, among other things, the Company assumed and agreed to pay
the principal and interest of all bonds issued or to be issued under the
Original Mortgage and secured thereby, and to perform and fulfill all of the
terms, covenants, and conditions of the Original Mortgage binding upon said
Chicago By-Product Coke Company, and in and by said indenture the Company
subjected to the lien of the Original Mortgage, subject to the existing liens
permitted by Section 2 of Article XIV of the Original Mortgage but with
statements required by said Section 2 with regard to such existing liens, all of
the property then owned by the Company or thereafter acquired by it (excepting
such of its property as the Company was by said Section 2 of Article XIV of the
Original Mortgage expressly authorized to reserve from the lien of the Original
Mortgage); and

       

      Whereas, by virtue
of all the things done as in the next preceding paragraph recited, the Company
has become the successor corporation under the Original Mortgage, subject to all
the terms, conditions and restrictions thereof; and

       

      Whereas, thereafter
the Company has made, executed and delivered other indentures supplemental to
the Original Mortgage, of which the indentures supplemental to the Original
Mortgage delivered to U.S. Bank National Association, as Trustee, successor to
Illinois Merchants Trust Company, as Trustee under the Original Mortgage, dated,
respectively, May 20, 1936, March 10, 1950, as of June 1, 1951,
as of August 15, 1967, as of September 15, 1970, as of March 1,
2000, as of February 1, 2003, as of February 1, 2003, as of
February 15, 2003, as of April 15, 2003, as of October 1, 2003,
as of October 1, 2003, as of November 1, 2003, and as of
January 1, 2005 are wholly or partially in full force and effect (said
Original Mortgage, and said Indenture dated March 1, 1928, as so
supplemented and amended, being collectively called the “Mortgage”, and said Mortgage,
as supplemented by this Supplemental Indenture, being collectively called the
“Mortgage as
supplemented”); and

       

      Whereas, all bonds
which have heretofore been issued and outstanding under the Mortgage have been
retired and cancelled, except that as of November 1, 2008, there were bonds of
the following series outstanding in the aggregate principal amounts indicated
below:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  Bonds

                	
                  Due
      Date

                	
                  Aggregate

                  Principal
      Amount

                
	 
    	 
    	 
    
	
                  Series
      HH

                	
                  March 1,
      2030

                	
                  $50,000,000

                
	
                  Series
      KK

                	
                  February 1,
      2033

                	
                  $50,000,000

                
	
                  Series
      LL

                	
                  February 1,
      2033

                	
                  $50,000,000

                
	
                  Series
      MM-2

                	
                  March 1,
      2010

                	
                  $50,000,000

                
	
                  Series
      NN-2

                	
                  April 15,
      2013

                	
                  $75,000,000

                
	
                  Series
      OO

                	
                  October 1,
      2037

                	
                  $51,000,000

                
	
                  Series
      PP

                	
                  October 1,
      2037

                	
                  $51,000,000

                
	
                  Series
      QQ

                	
                  November 1,
      2038

                	
                  $75,000,000

                
	
                  Series
      RR

                	
                  June 1,
      2035

                	
                  $50,000,000

                


        

      

      


      ; and

       

      Whereas, it is
provided in Article III of the Mortgage that bonds of any series may from time
to time be issued by the Company under the Mortgage in a principal amount equal
to 75% of expenditures made for the acquisition of any permanent property as
defined in the Mortgage or upon the deposit of cash with the Trustee equal to
the aggregate principal amount of bonds whose authentication and delivery is
then applied for; and

       

      Whereas, the
Company has duly determined to create an additional series of its bonds to be
issued under the Mortgage as supplemented designated “The Peoples Gas Light and
Coke Company First and Refunding Mortgage 7.00% Bonds, Series SS” (herein
sometimes referred to as “bonds of Series SS”) and to
issue an aggregate of $45,000,000 principal amount of said bonds all of which
bonds shall be fully registered without coupons; and

       

      Whereas, the
Company desires to reserve the right to amend the Mortgage without any consent
or other action by holders of the bonds of Series SS or any subsequent series,
to provide that the Mortgage, the rights and obligations of the Company and the
rights of the bondholders may be modified with the consent of the holders of not
less than 60% in aggregate principal amount of the bonds adversely affected;
provided, however, that
no modification shall (1) extend the maturity of any of the bonds of Series SS
or reduce the rate or extend the time of payment of interest thereon, or reduce
the amount of principal thereof (or with respect to the bonds of Series SS
change the amount or time of any prepayment or payment of principal or of any
payment of interest or reduce the rate of interest or change the method of
computation of interest or of the Make-Whole Amount), or reduce the Make-Whole
Amount, if any, payable on redemption thereof or change the coin or currency in
which any bond or interest thereon or Make-Whole Amount, if any, is payable
without the consent of the holder of each bond so affected, (2) permit the
creation of any lien, not otherwise permitted, prior to or on a parity with the
lien of the Mortgage, without the consent of the holders of all bonds then
outstanding, or (3) reduce the above percentage of the aggregate principal
amount of bonds the holders of which are required to approve any such
modification without the consent of the holders of all bonds then outstanding;
and

       

      Whereas, the form
of registered bond of Series SS and the form of the Trustee’s Certificate to
appear on all bonds of Series SS shall be substantially as follows:

       


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      (Form of Series SS
Registered Bond Without Coupons)

       

      THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF
ANY OTHER STATE.  NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.

      


      ICC Identification
No. 6204

      CUSIP:  711123
A@8

      


      No.
R_______                                                                                                                  $________

       

      The
Peoples Gas Light and Coke Company

       

      First
and Refunding Mortgage 7.00% Bonds,

       

      Series
SS

       

      Due
November 1, 2013

       

      The Peoples Gas
Light and Coke Company, an Illinois corporation (hereinafter called the “Company”), for value
received, hereby promises to pay to __________________________, or registered
assigns on November 1, 2013, unless this Bond shall have been called for
redemption and payment of the redemption price shall have been duly made or
provided for in accordance with the hereinafter described Mortgage, the
principal sum of __________ Dollars ($__________), and to pay interest on the
balance of said principal sum from time to time remaining unpaid until payment
of said principal amount has been made or duly provided for, at the rate of
Seven Per Cent (7.00%) per annum (calculated on the basis of a year of 360 days
consisting of twelve 30-day months), payable at or before 9:00 a.m., Chicago
time, on May 1 and November 1 of each year, commencing May 1, 2009 until payment
in full of such principal sum on November 1, 2013.  With respect to
the initial interest period ending on May 1, 2009, interest shall accrue from
November 3, 2008.  Interest shall also accrue on any overdue
principal, premium, if any, and (to the extent that such interest shall be
legally enforceable) on any overdue installment of interest until paid at the
Overdue Rate.  Overdue Rate shall mean the rate of interest that is
the greater of (i) 1% per annum above the rate of interest stated as the
coupon rate of the bonds of Series SS or (ii) 1% over the rate of
interest publicly announced by Citibank N.A. in New York, New York as its “base”
or “prime” rate.  The interest so payable on any interest payment date
will, subject to certain exceptions provided in the Mortgage, be paid to the
person who is the registered owner of this Bond at the close of business on the
applicable record date next preceding such interest payment date (April 15
or October 15, as the case may be).  Subject to Section 9 of
that certain Bond Purchase Agreement dated as of November 3, 2008 (the
“Bond Purchase Agreement”) between the Company and the institutional investors
named in Schedule A thereto, principal of, Make-Whole Amount (as
hereinafter defined), if any, and interest on this Bond shall be payable in
lawful money of the United States of America at the principal corporate office
or agency of the Company in Chicago, Illinois.

       


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      This Bond is one of
the First and Refunding Mortgage 7.00% Bonds, Series SS, due November 1,
2013 (the “bonds of
Series SS”) of the Company, all issued and to be issued in a single
series, from time to time, under and in accordance with and, irrespective of the
time of issue or of such series in which issued or the designation thereof,
equally secured by an Indenture, dated the second day of January, 1926, executed
by Chicago By-Product Coke Company, a Delaware corporation, to Illinois
Merchants Trust Company, as trustee, and recorded on January 19, 1926, as
Document No. 9154395 in Book 22219 of Records, at page 283, in the
Recorder’s Office of Cook County, Illinois, which Indenture was assumed by the
Company as a successor corporation, as defined therein, by an indenture, dated
the first day of March, 1928, executed by the Company to said trustee, and
recorded on April 7, 1928, as Document No. 9980547 in Book 25701 of
Records, at page 599, in the Recorder’s Office of Cook County, Illinois, and has
heretofore been, and from time to time hereafter may be, amended and
supplemented by indentures supplemental thereto, including the Supplemental
Indenture dated as of November 1, 2008 relating to the hereinafter described
bonds of Series SS (the “Supplemental
Indenture”).  Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings ascribed thereto in the Supplemental
Indenture.  The word “Mortgage”, as used in this Bond, shall mean said
Indenture, as amended and supplemented from time to time by indentures
supplemental thereto, including the Supplemental Indenture.  The word
“Company”, as used in this Bond, shall be construed to include any successor
corporation, as defined in the Mortgage.  The word “Trustee”, as used
in this Bond, shall be construed to mean and include U.S. Bank National
Association (successor to Illinois Merchants Trust Company), as trustee under
the Mortgage, and any successor trustee thereunder.  Reference is
hereby made to the Mortgage and all indentures supplemental thereto for a
description of the property mortgaged and pledged (except that certain parcels
described in the Mortgage and in said supplemental indentures have been released
from the lien of the Mortgage pursuant to the terms thereof), the nature and
extent of the security and the terms and conditions governing the issuance and
security of the bonds issued or to be issued under the Mortgage.  As
provided in the Mortgage, the bonds may be for various principal sums, are
issuable in series, may bear interest at different rates and may otherwise vary
as provided therein.  This Bond is one of the series of such First and
Refunding Mortgage Bonds designated as “The Peoples Gas Light and Coke Company
First and Refunding Mortgage 7.00% Bonds, Series SS”, hereinafter called the
“Series SS Bonds”.

       

      The bonds of Series
SS shall be deliverable in the form of registered Bonds without coupon in the
denomination of $100,000 and any integral multiple thereof.

       

      As more fully
described in the Supplemental Indenture, the Company reserves the right, without
any consent or other action by holders of the Series SS Bonds or the bonds of
any subsequent series, to amend the Mortgage to provide that the Mortgage, the
rights and obligations of the Company and the rights of the bondholders may be
modified with the consent of the holders of not less than 60% in aggregate
principal amount of the bonds adversely affected; provided, however, that no
modification shall (1) extend the maturity of any of the Series SS Bonds or
reduce the rate or extend the time of payment of interest thereon, or reduce the
amount of principal thereof (or with respect to the Series SS Bonds change the
amount or time of any prepayment or payment of principal or of any payment of
interest or reduce the rate of interest or change the method of computation of
interest or of the Make-Whole Amount), or reduce the Make-Whole Amount, if any,
payable on redemption thereof or change the coin or

       


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      currency in which
any bond or interest thereon or Make-Whole Amount, if any, is payable without
the consent of the holder of each bond so affected or, (2) permit the creation
of any lien, not otherwise permitted, prior to or on a parity with the lien of
the Mortgage, without the consent of the holders of all bonds then outstanding,
or (3) reduce the above percentage of the principal amount of bonds the holders
of which are required to approve any such modification without the consent of
the holders of all bonds then outstanding.

       

      The Series SS Bonds
are subject to optional redemption by the Company, in whole but not in part, at
any time, at a redemption price of 100% of the principal amount thereof, plus
accrued interest, if any, to the redemption date, upon the occurrence of certain
events described in the Supplemental Indenture (relating to unreasonable burdens
or excessive liabilities imposed upon the Company; changes in the economic
availability of raw materials, operating supplies, fuel or other energy sources
or supplies or technological or other changes rendering its property uneconomic;
or court order or decree preventing operations at its property or rendering the
continuation of its operations economically unfeasible).

       

      All of the
outstanding Series SS Bonds may be redeemed at any time by the Company, by the
payment of the principal amount thereof and accrued interest thereon to the date
of redemption, without the payment of any premium, in the event of the
acquisition by any federal, state or municipal authority of any substantial
portion (which shall be not less than one-third as determined by book values) of
the income-producing properties of the Company which are subject to the lien of
the Mortgage.

       

      All of the
outstanding bonds under the Mortgage shall be redeemed by the Company by the
payment of the respective applicable redemption price or prices and accrued
interest thereon to the date of redemption, without the payment of any premium,
in the event of the acquisition by any federal, state or municipal authority of
all or substantially all of the income-producing properties of the Company which
are subject to the lien of the Mortgage.

       

      The Company may, at
its option, upon notice as provided in the Supplemental Indenture, prepay at any
time all or from time to time, any part of the bonds of Series SS at 100%
of the principal amount so prepaid, and the Make-Whole Amount, determined in
accordance with Section 5(d)(i) of the Supplemental Indenture with respect
to such principal amount together with accrued and unpaid interest
thereon.  Reference is made to the Supplemental Indenture for the
terms and conditions of such prepayment and the definition of Make-Whole
Amount.

       

      Notice of any
redemption of the Series SS Bonds shall be given by mailing by first class mail,
postage prepaid, at least thirty (30) days and not more than sixty (60) days
prior, to the redemption date, to the holders of all such bonds to be redeemed
at their last addresses that shall appear upon the registry book, all as more
fully provided in the Mortgage.  Notice of redemption having been duly
given, the bonds called for redemption shall become due and payable upon the
redemption date and, if the redemption price shall have been deposited with the
Trustee, interest thereon shall cease to accrue on and after the redemption
date, and whenever the redemption price thereof shall have been deposited with
the Trustee and notice of redemption shall have been duly given or provision
therefore made, such bonds shall no longer be entitled to any lien or benefit of
the Mortgage.

       


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      In case of certain
events of default specified in the Mortgage, the principal of all bonds issued
and outstanding thereunder may be declared or may become due and payable in the
manner and with the effect provided in the Mortgage.

       

      No recourse shall
be had for the payment of the principal of, Make-Whole Amount, if any, or
interest on this Bond, or for any claim based hereon, or otherwise in respect
hereof or of the Mortgage, to or against any incorporator, stockholder, director
or officer, past, present or future, of the Company, either directly or through
the Company, under any constitution or statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability of
incorporators, stockholders, directors and officers being released by the holder
hereof by the acceptance of this Bond, and being likewise waived and released by
the terms of the Mortgage.

       

      This Bond is
transferable by the registered holder hereof in person or by a duly authorized
attorney at the office or agency of the Company in the City of Chicago, State of
Illinois, upon surrender and cancellation of this Bond, and thereupon a new
registered bond or bonds, without coupons, of the same series and for the same
aggregate principal amount will be issued to the transferee in exchange
herefor.  In the manner provided in the Mortgage, registered Bonds
without coupons of this series may, at the option of the registered owner and
upon surrender at said office or agency of the Company, be exchanged for
registered Bonds without coupons of this series of the same aggregate principal
amount of other authorized denominations.

       

      The Company and the
Trustee and any paying agent may deem and treat the person in whose name this
Bond is registered as the absolute owner hereof for the purpose of receiving
payment and for all other purposes and neither the Company nor the Trustee nor
any paying agent shall be affected by any notice to the contrary.

       

      This Bond shall not
be entitled to any security or benefit under the Mortgage, and shall not become
valid or obligatory for any purpose, until this Bond shall have been
authenticated by the execution of the certificate, hereon endorsed, by the
Trustee or its successor in trust under the Mortgage.

       

      This Bond shall be
construed and enforced in accordance with, and the rights of the Company and the
holder of this Bond shall be governed by, the law of the State of Illinois,
excluding choice-of-law principles of such State that would permit the
application of the laws of a jurisdiction other than such State.

       

      In Witness Whereof,
the Company has caused this Bond to be executed in its name by its President,
Executive Vice President, Chief Financial Officer, Treasurer or a Vice President
manually or in facsimile, and has caused its corporate seal manually or in
facsimile to be hereto affixed, attested by the manual or facsimile signature of
its Secretary or of an Assistant Secretary.

       

      
        
          
            
              
                
                  
                    
                      
                        	
                                Dated:_______________________                                                     

                              	 
    	
                                The
      Peoples Gas Light and Coke Company

                              
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	
                                By:_______________________                                                               

                              


                      

                    

                  

                

              

            

          

        

      

      


       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
         

        
          
            
              
                
                  	 
    	 
    	
                          Its:______________________                                             

                        
	 
    	 
    	 
    
	 
    	 
    	 
    
	
                          Attest:

                        	 
    	 
    
	 
      __________________________________________	 
    	 
    
	 
      __________________________________________	 
    	 
    
	 
    	 
    	 
    
	 
    


                

              

            

          



      

      (Form
of Trustee’s Certificate)

       

      This bond is one of
the bonds of the series designated, referred to and described in the
within-mentioned Mortgage.

       

       

      U.S.
Bank National Association

       

       

      By:_____________________________

                              Authorized
Officer


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      Assignment

       

      For value received,
the undersigned hereby sell(s) and transfer(s) unto:

       

      Please Insert
Identifying Number of Assignee: 
__________________________________________________

       

      ______________________________________________________________________________________________________________________

       

      ______________________________________________________________________________________________________________________
(Please print or
typewrite name and address, including zip code of assignee)

       

      the within Bond and
all rights thereunder, hereby irrevocably constituting and appointing
_______________ Attorney to transfer said Note on the books of the Trustee with
full power of substitution in the premises.

       

      
        
          	
                  Dated:_________                           

                	 
    	_________________________________________________
	 
    	 
    	
                  Notice: The
      signature to this Assignment must correspond with the name as written upon
      the face of the within instrument in every particular, without alteration
      or enlargement, or any changes
whatever.

                


        

      

      


      and

       

      Whereas, all acts
and things necessary to make the bonds of Series SS, when authenticated by the
Trustee and issued as in the Mortgage and in this Supplemental Indenture
provided, the valid, binding and legal obligations of the Company, entitled in
all respects to the security of the Mortgage, have been done and performed and
the creation, execution and delivery of this Supplemental Indenture have in all
respects been duly authorized by a resolution adopted by the Board of Directors
of the Company; and

       

      Whereas, the
Company has requested the Trustee, pursuant to the provisions of
Article XVI of the Mortgage, to enter into this Supplemental Indenture for
the purpose of supplementing the Mortgage as herein provided;

       

      Now, Therefore, it
is hereby covenanted, declared and agreed by and between the Company and the
Trustee, and its successor or successors in trust, as follows:

       

      Description
of Certain Property Subject to the Lien of the Mortgage

       

      The Company hereby
mortgages and conveys unto the Trustee, its successor or successors in trust,
the property described in Schedule A hereto attached and expressly made a
part hereof pursuant to the terms set forth in said
Schedule A.


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      


       

      ARTICLE
I

      FIRST
AND REFUNDING MORTGAGE 7.00% BONDS, SERIES SS

       

          Section 1.   Designation,
Maturity and Interest Rate of Bonds.  A new series of
bonds of the Company shall be issued under and secured by the Mortgage as
supplemented, which shall be designated as the Company’s “First and Refunding
Mortgage 7.00% Bonds, Series SS.”  The aggregate principal amount of
bonds of Series SS which may be executed by the Company and authenticated by the
Trustee shall be limited to $45,000,000 (exclusive of bonds authenticated and
delivered upon transfers pursuant to Section 3 of Article I hereof and Sections
2, 5, 11 and 12 of Article I of the Original Mortgage and delivered pursuant to
Section 3 of Article VI of the Original Mortgage as the same may relate to fully
registered bonds).  Bonds of Series SS all shall be registered bonds
without coupons, and shall be due and payable November 1, 2013.  All
bonds of Series SS shall bear interest from the date thereof (provided, however,
that with respect to the initial interest period ending on May 1, 2009, interest
shall accrue from November 3, 2008), payable at or before 9:00 a.m. Chicago
time on May 1 and November 1 in each year, commencing May 1, 2009, until the
principal thereof shall have become due and payable, at the rate of 7.00% per
annum and on any overdue principal and (to the extent that payment of such
interest is enforceable under the applicable law) on any overdue installment of
interest at the Overdue Rate, and shall be payable both as to principal and
interest, and as to Make-Whole Amount, if any, in coin or currency of the United
States of America which at the time of payment is legal tender for the payment
of public and private debts, at the office or agency of the Trustee in the City
of St. Paul, Minnesota.

       

      Subject to Section
9 of the Bond Purchase Agreement, so long as there is no existing default in the
payment of interest on the bonds of Series SS, the interest payable on any
interest payment date shall be to the person in whose name any bond of Series SS
is registered at the close of business on any record date with respect to any
interest payment date, and such person shall be entitled to receive the interest
payable on such interest payment date notwithstanding any transfer or exchange
of such bond of Series SS subsequent to the record date and on or prior to such
interest payment date, except as and to the extent the Company shall default in
the payment of the interest due on such interest payment date, in which case
such defaulted interest shall be paid to the person in whose name such bond of
Series SS is registered at the close of business on a subsequent record date,
which shall not be less than five (5) days prior to the date of payment of such
defaulted interest established by notice given by mail by or on behalf of the
Company to the person in whose name such bond of Series SS is then registered
and to the Trustee not less than ten (10) days preceding such subsequent record
date.

       

      The term “record
date” as used herein with respect to any interest payment date (May 1 or
November 1, as the case may be) shall mean the 15th day of
April or the 15th day of
October, as the case may be, next preceding such interest payment
day.

       

      As used in this
Section 1, the term “default in the payment of interest” means failure to pay
interest on the applicable interest payment date disregarding any period of
grace permitted by Article X of the Mortgage.

       

      Section 2.   Issuance of
Bonds.  Bonds of Series SS
may be issued only as registered bonds without coupons (hereinafter sometimes
referred to as “registered
bonds”), and they shall

       


      
        
           


        

        
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      be substantially in
the form hereinbefore recited.  They shall be issuable in
denominations which shall be multiples of $100,000 and any integral multiple
thereof and the execution by the Company of any bond of Series SS shall evidence
conclusively the due authorization of the denomination of such
bond.  Each registered bond of Series SS shall be dated as of the date
of the interest payment date on which interest was paid on other bonds of said
Series next preceding the date of issue of such registered bond, except that (i)
so long as  there is no existing default in the payment of interest
upon the bonds of Series SS, any bond of Series SS issued after the close of
business on any record date with respect to any interest payment date and prior
to such interest payment date shall be dated as of such interest payment date,
and (ii) any bond of Series SS issued on an interest payment date on which
interest on other bonds of Series SS was paid shall be dated as of the date of
issue and (iii) any bond of Series SS issued before the initial interest payment
date shall be dated November 1, 2008, the date of commencement of the first
interest period for the bonds of Series SS, unless (i) above is
applicable.

       

      The registered
owner of any bond of Series SS dated as of an interest payment date as provided
in (i) above shall, if the Company shall default in the payment of interest due
on such interest payment date and such default shall be continuing, be entitled
to exchange such bond for a bond or bonds of Series SS of the same aggregate
principal amount dated as of the interest payment date next preceding the
interest payment date first mentioned in this sentence, or, if the Company shall
default in the payment of interest on the first interest payment date for bonds
of Series SS, such owner shall be entitled to exchange such bond for a bond or
bonds of Series SS of the same aggregate principal amount dated as of November
1, 2008.  If the Trustee shall have knowledge at any time that any
registered owner of a bond of Series SS shall be entitled by the provision of
the next preceding sentence to exchange such bond, the Trustee shall within
thirty (30) days mail to such owner at the address of such owner appearing upon
the registry book, a notice informing such owner that such owner has such right
of exchange.

       

          Section
3.   Exchanges of Bonds.  In the manner
prescribed in the Mortgage, the holder of a registered bond or bonds of Series
SS may, at the office or agency of the Trustee in the City of St. Paul, State of
Minnesota, surrender such bond or bonds in exchange for a like aggregate
principal amount of one or more registered bonds of Series SS of any authorized
denomination or denominations.

       

      No charge will be
made by the Company to the registered owner of a bond of Series SS for the
transfer thereof or for the exchange thereof for bonds of Series SS of other
authorized denominations, except, in the case of transfer, a charge sufficient
to reimburse the Company for any stamp or other tax or governmental charge
required to be paid by the Company or the Trustee.

       

      Section 4.   Execution and
Authentication of Bonds.  All bonds of Series
SS shall be executed on behalf of the Company by the manual signature of its
President or the Executive Vice President or the Chief Financial Officer or the
Treasurer or a Vice President and shall have affixed thereon the manual seal of
the Company attested by the manual signature of its Secretary or one of its
Assistant Secretaries and be authenticated by the execution by the Trustee of
the certificate endorsed on said bonds, and said bonds shall be issued from time
to time, as the Board of Directors of the Company may determine, but in
accordance with the terms, provisions,

       


      
        
           


        

        
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      conditions and
restrictions set forth in the Mortgage and in this Supplemental
Indenture.  The definitive bonds of Series SS may be issued in
typewritten or printed form.

       

      Section
5.   Redemption of Bonds by
Company.

       

      (a)           The
bonds of Series SS are subject to optional redemption by the Company, in whole
but not in part, at any time, at a redemption price of 100% of the principal
amount thereof plus accrued interest, if any, to the redemption date, if any of
the following shall have occurred and if within one hundred and eighty (180)
days following said occurrence the Company files written notice with the Trustee
and directs that the bonds of Series SS are to be redeemed:

       

      (i)           if,
in the reasonable judgment of the Company’s Board of Directors, unreasonable
burdens or excessive liabilities shall have been imposed upon the Company with
respect to its property or the operation thereof, including, without limitation,
federal, state or other ad
valorem property, income or other taxes, other than ad valorem taxes presently
levied upon privately owned property used for the same general purposes as its
property; or

       

      (ii)           if
changes in the economic availability of raw materials, operating supplies, fuel
or other energy sources or supplies, or facilities necessary for the operation
of the Company’s property or such technological or other changes shall have
occurred which, in the reasonable judgment of the Company’s Board of Directors,
render its property uneconomic for such purposes; or

       

      (iii)           any
court or administrative body shall enter an order or decree preventing
operations at the Company’s business for six consecutive months; or

       

      (iv)           any
court or administrative agency shall issue an order, decree or regulation the
compliance with which would, in the reasonable opinion of the Board of Directors
of the Company, render the continuation of its operations economically
unfeasible.

       

      (b)           All
of the outstanding bonds of Series SS may be redeemed at any time by the
Company, by the payment of the principal amount thereof and accrued interest
thereon to the date of redemption, without the payment of any premium, in the
event of the acquisition by any federal, state or municipal authority of any
substantial portion (which shall be not less than one-third as determined by
book values) of the income-producing properties of the Company which are subject
to the lien of the Mortgage.

       

      (c)           In
the event of the acquisition at any time by any federal, state or municipal
authority of all or substantially all of the income-producing properties of the
Company which are subject to the lien of the Mortgage, the Company shall be
deemed to have elected to redeem and to have requested the Trustee to redeem all
the bonds of all series at the respective applicable redemption price or prices
(together with accrued interest to the date of redemption), without the payment
of any premium, on a date determined by the Trustee in its discretion to be the
earliest practicable redemption date after receipt by the Trustee of all cash
which the Trustee is entitled to receive in respect

       


      
        
          
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      of such acquisition
by such federal, state or municipal authority.  If the cash so
received by the Trustee and all other cash then held by the Trustee as such,
except funds held in trust for the benefit of the holders of particular bonds
and coupons, is not sufficient to effect the redemption of all the bonds of all
series as aforesaid and to pay all amounts owing to the Trustee under the
Mortgage as supplemented (including fees and expenses to be incurred by the
Trustee in connection with such redemption), the Company covenants and agrees
that, within five (5) days after receipt by the Trustee of all cash which the
Trustee is entitled to receive as aforesaid in respect of such acquisition, the
Company will deposit with the Trustee for that purpose cash in an amount
sufficient to make up such deficiency.

       

      Upon receipt by the
Trustee of moneys sufficient for said purposes, notice of such redemption shall
be given by the Trustee for and on behalf and in the name of the
Company.  To the extent that such cash received, held and deposited as
aforesaid shall be required for the purpose of redeeming bonds pursuant to this
Section 5(c), the Company shall be deemed to have directed the Trustee to apply
the same for the purpose, and the balance, if any, after payment of all said
amounts owing to the Trustee, shall be paid to or upon the order of the
Company.

       

      (d)           (i)
The Company may, at its option, upon notice as provided below, prepay at any
time all, or from time to time any part of, the bonds of Series SS, in an
amount not less than 10% of the aggregate principal amount of the bonds of
Series SS then outstanding in the case of a partial prepayment, at 100% of
the principal amount so prepaid, together with interest accrued and unpaid
thereon to the date of such prepayment, and the Make-Whole Amount determined for
the prepayment date with respect to such principal amount.  The
Company will give each holder of bonds of Series SS written notice of each
optional prepayment under this Section 5(d)(i) not less than 30 days and
not more than 60 days prior to the date fixed for such
prepayment.  Each such notice shall specify such date (which shall be
a Business Day), the aggregate principal amount of the bonds of Series SS
to be prepaid on such date, the principal amount of each bond of Series SS
held by such holder to be prepaid (determined in accordance with
Section 5(d)(ii)), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
due in connection with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of such
computation.  Two Business Days prior to such prepayment, the Company
shall deliver to each holder of bonds of Series SS a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.

       

      (ii)           In
the case of each partial prepayment of the bonds of Series SS pursuant to
Section 5(d)(i), the principal amount of the bonds of Series SS to be
prepaid shall be allocated among all of the bonds of Series SS at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.

       


      
        
          
             

          

           


        

        
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      (iii)           In
the case of each prepayment of bonds of Series SS pursuant to
Section 5(d)(i), the principal amount of each bond of Series SS to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any.  From and after such date, unless the Company shall fail to pay
such principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue.  Any bond of Series SS paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no bond of Series SS shall be issued in lieu of any prepaid principal
amount of any bond of Series SS.

       

      (iv)           The
Company will not and will not permit any Affiliate to purchase, redeem, prepay
or otherwise acquire, directly or indirectly, any of the outstanding bonds of
Series SS except (1) upon the payment or prepayment of the bonds of
Series SS in accordance with the terms of this Supplemental Indenture and
the bonds of Series SS or (2) pursuant to an offer to purchase made by
the Company or an Affiliate pro rata to the holders of all bonds of
Series SS at the time outstanding upon the same terms and
conditions.  Any such offer shall provide each holder with sufficient
information to enable it to make an informed decision with respect to such
offer, and shall remain open for at least 15 Business Days.  If the
holders of more than 10% of the principal amount of the bonds of Series SS
then outstanding accept such offer, the Company shall promptly notify the
remaining holders of such fact and the expiration date for the acceptance by
holders of bonds of Series SS of such offer shall be extended by the number
of days necessary to give each such remaining holder at least 5 Business Days
from its receipt of such notice to accept such offer.  The Company
will promptly cancel all bonds of Series SS acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of bonds of Series SS
pursuant to any provision of this Supplemental Indenture and no bonds of
Series SS may be issued in substitution or exchange for any such bonds of
Series SS.

       

      Section 6.   Notice of
Redemption.  If
bonds of Series SS are to be redeemed as provided in Section 5(a),(b) or (c) of
this Article I, notice of redemption shall be mailed by or on behalf of the
Company, postage prepaid, at least thirty (30) days and not more than sixty (60)
days prior to such date of redemption, to the registered owners of all bonds of
Series SS to be so redeemed, at their respective addresses appearing upon the
registry book and in the manner provided in Section 13 of the Bond Purchase
Agreement.  Any notice which is mailed as herein provided shall be
conclusively presumed to have been properly and sufficiently given on the date
of such mailing, whether or not the holder receives the notice.  In
any case, failure to give due notice by mail, or any defect in the notice, to
the registered owners of any bonds of Series SS designated for redemption as a
whole or in part, shall not affect the validity of the proceedings for the
redemption of any other bond of Series SS.  In case of any redemption
of bonds of Series SS by the Trustee pursuant to the provisions of the Mortgage
or any indenture supplemental thereto, notice of redemption shall be given in a
similar manner by the Trustee.

       

      Except as provided
above, the provisions of Article VI of the Mortgage shall in all respects apply
to any such redemption.

       


      
        
          
             

          

           


        

        
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      Section 7.   Form of
Bonds.   Bonds of Series SS
will be substantially in the form recited above.  Bonds of Series SS
shall bear a private placement legend.

       

      Section 8.   Definitions.  In this
Supplemental Indenture, the following terms shall have the meanings specified in
this Section 8, unless the context otherwise requires:

       

      “Affiliate” shall have the
meaning assigned thereto in the Bond Purchase Agreement.

       

      “Business Day” means any day
which is not a Sunday or a legal holiday or a day (including Saturday) on which
banking institutions in Chicago, Illinois, in New York, New York, and in the
city where the principal office of the Trustee is located are not required or
authorized to remain closed and other than a day on which the New York Stock
Exchange is not closed.

       

      “Bond Purchase Agreement”
means that certain Bond Purchase Agreement dated as of November 3, 2008
between the Company and the Institutional Investors named on Schedule A
thereto, under and pursuant to which the bonds of Series SS were issued, as
the same may from time to time be amended or supplemented.

       

      “Code” means the Internal
Revenue Code of 1986, as amended, and all regulations promulgated
thereunder.

       

      “Institutional Investor” shall
have the meaning assigned thereto in the Bond Purchase Agreement.

       

      “Make-Whole Amount” means,
with respect to any bond of Series SS, an amount equal to the excess, if
any, of the Discounted Value of the Remaining Scheduled Payments with respect to
the Called Principal of such bond over the amount of such Called Principal;
provided that the Make-Whole Amount may in no event be less than
zero.  For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:

       

      “Called Principal” means, with
respect to any bonds of Series SS, the principal of such bond of
Series SS that is to be prepaid pursuant to
Section 5(d)(i).

       

      “Discounted Value” means, with
respect to the Called Principal of any bond of Series SS, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such
Called Principal from their respective scheduled due dates to the Settlement
Date with respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on the same periodic basis
as that on which interest on the bond of Series SS is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

       

      “Reinvestment Yield” means,
with respect to the Called Principal of any bond of Series SS, 0.50% (50
basis points) over the yield to maturity implied by (i) the yields reported as
of 10:00 a.m. (New York City time) on the second

       


      
        
          
             

          

           


        

        
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      Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as “Page PX1” (or such other display as may replace Page PX1)
on Bloomberg Financial Markets for the most recently issued actively traded on
the run U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or
(ii) if such yields are not reported as of such time or the yields reported
as of such time are not ascertainable (including by way of interpolation), the
Treasury Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (or any comparable successor publication) for U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date.  In the case
of each determination under clause (i) or clause (ii), as the case may
be, of the preceding paragraph, such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the applicable U.S. Treasury
security with the maturity closest to and greater than such Remaining Average
Life and (2) the applicable U.S. Treasury security with the maturity
closest to and less than such Remaining Average Life.  The
Reinvestment Yield shall be rounded to the number of decimal places as appears
in the interest rate of the applicable bond of Series SS.

       

      “Remaining Average Life”
means, with respect to any Called Principal, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (a) such Called
Principal into (b) the sum of the products obtained by multiplying
(i) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (ii) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

       

      “Remaining Scheduled Payments”
means, with respect to the Called Principal of any bond of Series SS, all
payments of such Called Principal and interest thereon that would be due after
the Settlement Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date; provided that if
such Settlement Date is not a date on which interest payments are due to be made
under the terms of the bonds of Series SS, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 5(d).

       

      “Settlement Date” means, with
respect to the Called Principal of any bond of Series SS, the date on which
such Called Principal is to be prepaid pursuant to
Section 5(d).

       


      
        
          
             

          

           


        

        
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      “Overdue Rate” means that rate
of interest that is the greater of (i) 1% per annum above the rate of
interest stated in clause (a) of the first paragraph of the bonds of
Series SS or (ii) 1% over the rate of interest publicly announced by
Citibank N.A. in New York, New York as its “base” or “prime” rate.

       

          “Maturity Date” means November
1, 2013.

       

          “Securities Act” means the
Securities Act of 1933, as amended.

       

          “Senior Financial Officer”
shall have the meaning assigned thereto in the Bond Purchase
Agreement.

       

      Section 9.   Date of Payments.  In any
case where the date of maturity of interest of the bonds of Series SS or the
date fixed for redemption of any bonds of Series SS shall be in the location of
the designated corporate trust office of the Trustee on a day other than a
Business Day, then payment of interest or principal (and Make-Whole Amount, if
any) need not be made on such date but may be made on the next succeeding
Business Day with the same force and effect as if made on the date fixed for
redemption, and no interest shall accrue for the period after such date; provided that if the maturity
date of the bonds of Series SS is a day other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next succeeding
Business Day and shall include the additional day elapsed in the computation of
interest payable on such next succeeding Business Day.

       

      Section 10.   Reservation of Right to Amend
Mortgage.  The
Company reserves the right, without any consent or other action by holders of
the bonds of Series SS or any subsequent series of bonds, to amend the Mortgage
by inserting the following language as Section 4 of Article XVI immediately
following current Section 3 of Article XVI of the Mortgage:

       

      Section
4.  Anything in Section 1 of this Article to the contrary
notwithstanding, with the consent of the holders of not less than sixty per
centum (60%) in aggregate principal amount of the bonds at the time outstanding
or their attorneys-in-fact duly authorized, or, if the rights of the holders of
one or more, but not all, series then outstanding are affected, the consent of
the holders of not less than sixty per centum (60%) in aggregate principal
amount of the bonds at the time outstanding of all affected series, taken
together, and not any other series, the Company, when authorized by resolution
of its Board of Directors, and the Trustee, from time to time and at any time,
subject to the restrictions in this Mortgage contained, may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or modifying the rights and
obligations of the Company and the rights of the holders of any of the bonds and
coupons; provided,
however, that no such supplemental indenture shall (1) extend the
maturity of any of the bonds or reduce the rate or extend the time of payment of
interest thereon, or reduce the amount of the principal thereof  (or
with respect to the bonds of Series SS change the amount or time of any
prepayment or payment of principal or of any payment of interest or reduce the
rate of interest or change the method of computation of interest or of the
Make-Whole Amount), or reduce the Make-Whole Amount, if any, or any premium
payable on the

       


      
        
          
             

          

           


        

        
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      redemption thereof
or change the coin or currency in which any bond or interest thereon, or
Make-Whole Amount, if any is payable, without the consent of the holder of each
bond so affected,  or (2) permit the creation of any lien, not
otherwise permitted, prior to or on a parity with the lien of the Mortgage,
without the consent of the holders of all the bonds then outstanding, or (3)
reduce the aforesaid percentage of the aggregate principal amount of bonds the
holders of which are required to approve any such supplemental indenture,
without the consent of the holders of all the bonds then
outstanding.  For the purposes of this Section 4, bonds shall be
deemed to be affected by a supplemental indenture if such supplemental indenture
adversely affects or diminishes the rights of holders thereof against the
Company or against its property.

       

      Upon the written
request of the Company, accompanied by a resolution of its Board of Directors
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of bondholders as aforesaid
(the instrument or instruments evidencing such consent to be dated within one
year of such request), the Trustee shall join with the Company in the execution
of such supplemental indenture unless such supplemental indenture affects the
Trustee’s own rights, duties or immunities under this Mortgage or otherwise, in
which case the Trustee may in its discretion but shall not be obligated to enter
into such supplemental indenture.  The Trustee shall be entitled to
receive and, subject to Section 7 of Article XV hereof, may rely upon, an
opinion of counsel as conclusive evidence that any such supplemental indenture
is authorized or permitted by the provisions of this Section 4.

       

      It shall not be
necessary for the consent of the bondholders under this Section 4 to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof; provided that the Company
shall or shall cause the Trustee to deliver an execution copy of such
Supplemental Indenture to each of the bond holders.

       

      The Company and the
Trustee, if they so elect, and either before or after such 60% or greater
consent has been obtained, may require the holder of any bond consenting to the
execution of any such supplemental indenture to submit its bond to the Trustee
or to such bank, banker or trust company as may be designated by the Trustee for
the purpose, for the notation thereon of the fact that the holder of such bond
has consented to the execution of such supplemental indenture, and in such case
such notation, in form satisfactory to the Trustee, shall be made upon all bonds
so submitted, and such bonds bearing such notation shall forthwith be returned
to the persons entitled thereto; provided, with respect to the
bonds of Series SS, that if the holder of any bond is an Institutional Investor
which certifies in writing that it has at a minimum net worth of at least
$50,000,000, such holder may not surrender its bond for such notation but shall
be deemed to have consented to the execution of such Supplemental
Indenture.  All subsequent holders of bonds bearing such notation
shall be deemed to have consented to the execution of such supplemental
indenture, and consent, once given or deemed to be given, may not be
withdrawn.

       

      Prior to the
execution by the Company and the Trustee of any supplemental indenture pursuant
to the provisions of this Section 4, the Company shall publish a
notice,

       


      
        
          
             

          

           


        

        
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      setting forth in
general terms the substance of such supplemental indenture, at least once in one
daily newspaper of general circulation in each city in which the principal of
any of the bonds shall be payable, or, if all bonds outstanding of any series
shall be registered bonds without coupons or coupon bonds registered as to
principal, such notice with respect to such series shall be mailed first class,
postage prepaid, and registered to each registered holder of bonds of such
series at the last address of such holder appearing on the registry books and at
the last address of such holder as provided in Section 13 of the Bond Purchase
Agreement, such publication or mailing, as the case may be, to be made not less
than thirty (30) days prior to such execution.  Any failure of the
Company to give such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental
indenture.

       

      Section 11.   Private Placement of
Bonds.    Bonds
of Series SS shall initially be offered and sold in reliance on the exemption
contained under Section 4(2) of the Securities Act to an institution which is an
“accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

       

      Section 12.   Private Placement
Legend.  Each
Bond of Series SS shall bear a legend in substantially the following
form:

       

      THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF
ANY OTHER STATE.  NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.

       

      ARTICLE
II

      COVENANTS
OF THE COMPANY

       

      Section 1.   Covenants of Company under
Indenture.  The
Company covenants and agrees, so long as any of the bonds of Series SS are
outstanding or until provision shall have been made for the redemption or
payment thereof by the deposit with the Trustee of money necessary to effect
such redemption or payment, as follows:

       

      (a)           The
Company, during or at the close of the calendar year 2008, and during or at the
close of each calendar year thereafter, shall charge against the income for such
calendar year and place to the credit of a “depreciation reserve account” to be
kept on its books, the greater of the following two amounts: (i) the amount of
$1,550,000, or (ii) an amount equal to 2-1/2% of the sum of

       

      (i)           the
aggregate principal amount of all bonds which, at the time such credit is placed
to said “depreciation reserve account”, shall be outstanding and shall have been
outstanding under the Mortgage as supplemented for a period of not less than six
(6) months, or which at such time shall have been outstanding under the Mortgage
supplemented for less than six (6) months, if such bonds shall have been issued,
or the proceeds thereof shall have been used, directly or indirectly, for or on
account of the pledge, acquisition, exchange, cancellation,

       


      
        
          
             

          

           


        

        
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      payment,
refundment, redemption or discharge at, before or after maturity of the bonds of
any series theretofore issued under the Mortgage or of any “underlying bonds” or
“specified obligations” as defined in Section 4 of Article III of the Mortgage;
and

       

      (ii)           the
aggregate principal of all indebtedness of the Company secured by a mortgage
lien upon the properties or assets of the Company, which is a lien superior to
the lien of the Mortgage, except (A) any such mortgage indebtedness the
evidences of which shall then be pledged with the Trustee under the provisions
of the Mortgage or pledged with the trustee under any mortgage constituting a
lien superior to the lien of the Mortgage on any part of the properties or
assets of the Company, and (B) any such mortgage indebtedness for the payment or
redemption of which the necessary moneys shall have been deposited with the
Trustee under the Mortgage securing the same; provided, however, that (1)
the amount required by this subparagraph (a) to be placed to the credit of such
“depreciation reserve account” in or for any calendar year shall be deemed to
include and not to be in addition to amounts which, by the provisions of the
Mortgage, the Company is required to add to any depreciation reserve account for
such year, (2) nothing in this subparagraph (a) shall prevent the Company from
crediting to such “depreciation reserve account”, during or at the close of any
calendar year, an amount greater than the amount required by this subparagraph
(a) for such year, and (3) the Company may, from time to time, during each such
calendar year, charge against such “depreciation reserve account” the cost of
depreciable property retired by it during such year, including the cost, if any,
of dismantling such retired property, less any salvage credits applicable
thereto.

       

      (b)           The
Company after it shall have issued bonds of Series SS in the aggregate principal
amount of $45,000,000, shall not request the Trustee

       

      (i)           to
authenticate bonds of any series under the Mortgage

       

      (A)           pursuant
to Section 2 of Article III of the Mortgage for or on account of the acquisition
and cancellation, or of the payment, cancellation, redemption or other discharge
at, before or after maturity, affected prior to January 1, 1951, of any
bonds of any series theretofore issued under the Mortgage, or

       

      (B)           pursuant
to Section 4 of Article III of the Mortgage, for or on account of the pledge,
acquisition, exchange, cancellation, payment, refundment, redemption or
discharge effected prior to January 1, 1951, of “underlying bonds” or
“specified obligations” mentioned in said Section 4, or

       

      (C)           pursuant
to Section 5 of Article III of the Mortgage, for or in respect of expenditures
made prior to January 1, 1951, for or on account of “permanent property”,
or

       


      
        
          
             

          

           


        

        
          19

          
            

          

        

        
           


        

      


      (ii)           to
pay to the Company any cash pursuant to Section 6 of said Article III for or on
account of any transactions mentioned in clause (A) or clause (B) of subdivision
(i) of this subparagraph (b) or for or in respect of any expenditures mentioned
in clause (C) of subdivision (i) of this subparagraph (b).

       

      Neither shall the
Company request the Trustee to authenticate bonds of any series under the
provisions of Section 4 of Article III of the Mortgage or to pay the Company any
moneys under Section 6 of said Article III or under Article IX of the Mortgage
for or on account of the payment, discharge and cancellation effected on or
after January 1, 1944, at, before or after maturity of any of the Refunding
Mortgage Five Per Cent Gold Bonds of the Company, dated September 1, 1897,
due September 1, 1947.

       

      (c)           The
Company shall not request the Trustee to authenticate bonds of any series under
the Mortgage or to pay to the Company any cash deposited with or received by the
Trustee under the Mortgage (except cash deposited with or received by the
Trustee as and for a sinking fund for any series of bonds which have been or may
hereafter be issued under the Mortgage), unless the Company as a part of such
request, and in addition to all other documents required by the Mortgage to be
delivered to the Trustee in connection with such request, shall deliver to the
Trustee a certificate or certificates, signed by the President or the Executive
Vice President or the Chief Financial Officer or a Vice President and by the
Treasurer or an Assistant Treasurer of the Company:

       

      (i)           showing,
in case such request is for the authentication of bonds pursuant to Section 5 of
Article III of the Mortgage or for the payment of cash pursuant to Section 6 of
said Article III for or in respect of expenditures made by the Company on or
after January 1, 1951, for or on account of “permanent
property”:

       

      (A)           the
total amount of expenditures (reduced to the extent required, if any, by the
provisions of clause (G) of this subdivision (i)) made on or after January 1,
1951, for or on account of “permanent property”;

       

      (B)           the
original cost of all properties, subject to the lien of the Mortgage at any time
on or after January 1, 1951, replaced or retired on or after
January 1, 1951, less, if any such property shall have been released from
the lien of the Mortgage pursuant to any applicable provision of the Mortgage
and to obtain such release cash shall have been deposited with the Trustee, the
amount of such cash;

       

      (C)           an
amount equal to the sum of (1) 133-1/3% of the aggregate principal amount of
bonds which have been authenticated after January 1, 1951, pursuant to
Section 5 of Article III of the Mortgage for or on account of such expenditures
made on or after January 1, 1951, plus (2) 133-1/3% of the aggregate
amount of deposited cash withdrawn after January 1, 1951, pursuant to the
provisions of Section 6 of Article III of the Mortgage for or in respect of such
expenditures made on or after 

       


      
        
          
             

          

           


        

        
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      January 1,
1951, plus (3) 133-1/3% of the aggregate amount of excess of the nature
described in subdivision (2) of Section 4 of Article III of the Mortgage
eliminated or compensated, as in said subdivision (2) provided, for or in
respect of expenditures of the Company for or on account of “permanent property”
during said period commencing January 1, 1951;

       

      (D)           an
amount equal to 100% of the aggregate amount of moneys withdrawn by the Company
pursuant to the provisions of Article IX of the Mortgage on or after
January 1, 1951, for or in respect of expenditures made for or on account
of “permanent property”;

       

      (E)           an
amount equal to the excess, if any, of the amount shown pursuant to clause (A)
above over the sum of the amounts shown pursuant to clauses (B), (C) and (D)
above;

       

      (F)           that,
for a period of twelve (12) consecutive calendar months (to be selected by the
Company) ending within ninety (90) days next preceding such request, the “net
earnings of the Company” shall have been at least twice the amount of the annual
interest requirement of all “mortgage and prior lien debt of the
Company”;

       

      (G)           that
the amount of the expenditure, if any, included in the expenditures set forth in
clause (A) above in respect of any particular “permanent property”, which at the
time of its acquisition was subject to the lien of any mortgage existing or
placed thereon at the time of its acquisition, does not exceed an amount equal
to the excess, if any, of the value (determined as provided in the first
paragraph of Section 8 of Article III of the Mortgage) of such particular
“permanent property” at the time of acquisition of such property over 133-1/3%
of the principal amount of all indebtedness secured by all such mortgages
existing or placed on such particular property at the time of the acquisition
thereof, and that the amount of the expenditure, if any, included in the
expenditures set forth in clause (A) above in respect of any particular
“permanent property”, which at the time of its acquisition was not subject to
any such lien, does not exceed an amount equal to the value (determined as
provided in the first paragraph of Section 8 of Article III of tile Mortgage) of
such particular “permanent property” at the time of acquisition of such
property;

       

      (ii)           showing,
in case such request is for the authentication of bonds pursuant to Section 4 of
Article III of the Mortgage or for the payment of cash pursuant to Section 6 of
said Article III for or on account of the pledge, acquisition, exchange,
cancellation, payment, refundment, redemption or discharge effected on or after
January 1, 1951, at, before or after maturity of any “specified
obligations” mentioned in said Section 4, that at the time such “specified
obligations” became “specified obligations” or at some later date the Company,
pursuant to the provisions of Section 5 of Article III of the Mortgage,


       


      
        
          
             

          

           


        

        
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      as limited by the
provisions of this Section 1, shall have obtained, or shall have had the right
to obtain, the authentication and delivery of bonds in any principal amount for
or in respect of expenditures made on or after January 1, 1951, for or on
account of “permanent property”;

       

      (iii)           showing,
in case such request shall be for the payment of moneys pursuant to Article IX
of the Mortgage for or in respect of expenditures made for or on account of
“permanent property”, that none of such expenditures were made (1) prior to
January 1, 1951, or (2) for or on account of “permanent property” acquired
more than six months prior to the date when the Trustee received the moneys so
to be paid (or in case of moneys representing the proceeds of obligations,
referred to in said Article IX, the date when the Trustee received such
obligations); and

       

      (iv)           showing,
in case such request is for the application of any moneys pursuant to Article IX
of the Mortgage to the payment, redemption or purchase of any “specified
obligations”, that such “specified obligations”, if pledged under the Mortgage,
would permit the Company to obtain the authentication of bonds in a principal
amount equal to the principal amount of such “specified obligations” pursuant to
the provisions of Section 4 of Article III of the Mortgage as limited by this
provisions of this Section 1.

       

      (d)           In
connection with any request for the authentication of bonds pursuant to Section
5 of Article III of the Mortgage or the payment of cash pursuant to Section 6 of
said Article III of the Mortgage, for or in respect of expenditures made by the
Company on or after January 1, 1951, the Company shall not obtain the
authentication of bonds of any series under the Mortgage or the payment of any
cash in excess of 75% of the amount shown in the certificate delivered as a part
of such request pursuant to clause (E) of subdivision (i) of subparagraph (c) of
this Section 1; and the Company shall not obtain the authentication of any bonds
or the payment of any cash deposited with or received by the Trustee under the
Mortgage otherwise than in accordance with the provisions of the Mortgage as
supplemented.

       

      (e)           Wherever
used in this Supplemental Indenture

       

      (i)           “mortgage
and prior lien debt of the Company”, as of the date of any request to the
Trustee for the authentication of bonds or the payment of cash, shall
mean:

       

      (A)           all
the bonds then outstanding under the Mortgage, less the amount of any of such
bonds which shall then be held by or be delivered to the Trustee for
cancellation under any of the provisions of the Mortgage, and less the amount of
any such bonds for the payment or redemption of which the necessary moneys shall
have been deposited under the Mortgage
with the Trustee to effect such payment or redemption;

       

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

         

      

      (B)           the
bonds then requested to be authenticated under the Mortgage; and

       

      (C)           all
mortgage indebtedness secured by a lien superior to the lien of the Mortgage on
any part of the properties and assets of the Company, except any such mortgage
indebtedness the evidences of which shall then be pledged with the Trustee under
the provisions of the Mortgage or pledged with the Trustee under any mortgage
constituting a lien superior to the lien of the Mortgage on any part of the
properties and assets of the Company, and except any such mortgage indebtedness
for the payment or redemption of which the necessary moneys shall have been
deposited with the trustee under the mortgage securing the same to effect such
payment or redemption;

       

      (ii)           “net
earnings of the Company” for any twelve (12) months’ period shall mean the
amount remaining after deducting from the sum of

       

      (A)           the
gross operating revenues of the Company for such period derived from its
property subject to the lien of the Mortgage, including but not limited to
revenues derived from electrical energy, gas or steam purchased by the Company
and resold by it, and the net income derived by the Company from its
merchandising and jobbing operations; and

       

      (B)           other
income of the Company for such period derived from interest on bank balances and
from current working capital invested in unpledged obligations of the United
States of America or of any state or of any municipality or subdivision thereof,
and other currently earned income of the Company derived from the ownership of
securities, in the treasury of the Company and unpledged, of operating electric,
gas or steam companies (including natural or mixed gas production, storage,
transportation or distribution companies) or from unpledged advances to such
companies any of the securities of which are so owned, the sum of the
following:

       

      (C)           operating
expenses of the Company for such period, including maintenance and repairs,
rentals, taxes (except taxes based upon net income), insurance and the cost of
electrical energy, gas or steam purchased for resale, but excepting expenses in
connection with operations, the net income only of which is included in clause
(A) of subdivision (ii) of this subparagraph (e), and excepting all reserves or
charges for amortization of debt discount and expense; and

       

      (D)           an
amount, if such period shall end with the close of a calendar year, equal to the
amount which the Company is required by subparagraph (a) of this Section 1 to
place, during or at the close of such calendar year, to the credit of the
“depreciation reserve account”, 

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      mentioned in said
subparagraph (a) (all determined without deduction for any charge made to the
“depreciation reserve account” permitted by clause (3) of the proviso of
subparagraph (a) of this Section (1), or, if such period shall include parts of
two (2) calendar years, then an amount which shall be determined by (1)
prorating, on a monthly basis over the portion of the earlier year thus
included, the amount which the Company shall have been so required to credit to
the “depreciation reserve account” during or at the close of such earlier year,
and (2) prorating, on a monthly basis over the portion of the later of said two
(2) years thus included, the amount which the Company would be required to
credit to such “depreciation reserve account” if such credit were placed to such
account at the close of such period;

       

      provided, however, that the
amount of other income of the Company, referred to in clause (B) of subdivision
(ii) of this subparagraph (e), shall not exceed 10% of said net earnings; and
income in the form of dividends received by the Company upon stock of any class
owned by it shall be considered as currently earned under the provisions of said
clause (B) to the extent that during such period the earnings of the paying
company shall be sufficient for the payment of dividends upon all stock of such
class during such period; and income in the form of interest received by the
Company upon evidences of indebtedness of any class owned by it shall be
considered as currently earned under the provisions of said clause (B) to the
extent that during such period the earnings of the paying company shall be
available for the payment of the interest accruing during such period upon all
indebtedness of such class, after deducting from such earnings all interest
charges accruing during such period upon obligations secured by prior liens;
and, in case any property owned by the Company at the date of the request to the
Trustee for the authentication of bonds or payment or withdrawal of cash shall
not have been owned by it during any part of any such period, or shall have been
owned by it during a part only of such period, then and in every such case the
net earnings (or net losses) of such property (ascertained in like manner as
above provided) during said period, or during such part thereof as shall have
preceded the acquisition of such property by the Company, shall be considered
and treated as net earnings (or net losses) of the Company for such period, and
shall be included in (or, if a net loss, deducted in determining) such net
earnings of the Company;

       

      (iii)           “permanent
property” shall mean any and all plants, equipment, additions, improvements,
betterments, facilities, or other property of any kind (and includes
“extensions” and “purchased property” as those terms are used in the Mortgage)
acquired through construction, purchase, consolidation, exchange or otherwise,
as and for a part of the permanent or fixed investment for the business of the
Company and used or useful in connection with the generation and conversion of
electrical energy or in the manufacture of gas or steam or in the distribution or
transmission of electrical energy or gas or steam in the territory in which the
Company is now operating its present properties, or in territory contiguous
thereto, or in territory capable of economic interconnection therewith, but
“permanent property” shall not include cash, accounts or bills receivable,


       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      securities,
supplies, fuel or other assets ordinarily classed as quick assets, or leasehold
estates;

       

      (iv)           “original
cost” of property shall mean the original cost of such property to the Company
if ascertainable from its records or, if such original cost is not
ascertainable, the value of such property at the time of its acquisition, such
value to be determined by an engineer or firm of engineers to be selected by the
Company and to be acceptable to the Trustee, and the Trustee under such
circumstances shall be furnished with a certificate of such value signed by such
engineer or firm of engineers.

       

      (f)           In
connection with any request to the Trustee for the authentication of bonds,
pursuant to the provisions of Section 5 of Article III of the Mortgage or the
payment of cash pursuant to the provisions of Section 6 of said Article III or
the provisions of Article IX of the Mortgage or the elimination or compensation
of any excess of the nature described in subdivision (2) of Section 4 of said
Article III, for or on account of expenditures for “permanent property”, the
Company shall furnish to the Trustee, in addition to the certificates and other
documents required to be delivered by the provisions of the Mortgage and the
provisions of other subparagraphs of this Section 1, the
following:

       

      (i)           An
opinion of counsel (who may be counsel for the Company), selected by the Company
and satisfactory to the Trustee, stating that the Company has acquired good
title to the property for or on account of the expenditures for which additional
bonds are requested to be authenticated and that such property is subject to the
Mortgage as a direct lien thereon, subject only to the lien of any mortgages or
easements existing or placed on any of such property at the time of its
acquisition, liens for taxes and assessments not due or, if due, in the course
of contest, judgments in the course of appeal or otherwise in contest and
secured by sufficient bond, liens arising out of proceedings in court in the
course of contest and undetermined liens and charges (if any) incidental to
current construction; and

       

      (ii)           A
certificate signed by the President or the Executive Vice President or the Chief
Financial Officer or a Vice President and also by the Treasurer or an Assistant
Treasurer of the Company certifying that the property for or on account of the
expenditures for which bonds are requested to be authenticated or cash is
requested to be paid is “permanent property”.

       

      (g)           The
Company shall not hereafter issue any bonds under any “underlying mortgage” as
defined in Section 4 of Article III of the Mortgage, or under any mortgage which
could become such an “underlying mortgage” upon compliance with clause (b) of
the proviso of subdivision (2) of said Section 4.

       

      (h)           The
Company shall not request the Trustee to authenticate any bonds under the
provisions of Section 2 or Section 3 or Section 4 of Article III of the Mortgage
and shall not apply for the payment of cash under Section 6 of said Article or
under 

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

         

      

      Article IX of the
Mortgage (i) for or on account of bonds of Series J deposited by the Company
with the Trustee in lieu of cash under the provisions of the sinking fund
provided for in the supplemental indenture, dated as of May 1, 1961, or for
or on account of bonds of Series J redeemed through the operation of said
sinking fund, or (ii) for or on account of bonds of Series K redeemed through
the operation of the sinking fund provided for in the supplemental indenture
dated as of July 15, 1966, or (iii) for or on account of bonds of Series L
redeemed through the operation of the sinking fund provided for in the
supplemental indenture dated as of August 15, 1967, or (iv) for or on
account of bonds of Series M redeemed through the operation of the sinking fund
provided for in the supplemental indenture dated as of September 15, 1970,
or (v) for or on account of bonds of Series N redeemed through the operation of
the sinking fund provided for in the supplemental indenture dated as of
April 1, 1972, or (vi) for or on account of bonds of Series O redeemed
through the operation of the sinking fund provided for in the supplemental
indenture dated as of July 15, 1973, or (vii) for or on account of bonds of
Series T redeemed through the operation of the sinking fund provided for in the
supplemental indenture dated as of August 15, 1980, or (viii) on account of
any cancelled or uncancelled underlying bonds (or any uncancelled underlying
bonds deposited as collateral under Section 4 of Article III of the Mortgage)
which shall have been deposited under the provisions of the supplemental
indenture, dated as of August 1, 1941, in lieu of cash.

       

      (i)           In
the event of the acquisition at any time by any federal, state or municipal
authority of all or substantially all of the income-producing properties of the
Company which are subject to the lien of the Mortgage, the Company shall be
deemed to have elected to redeem and to have requested the Trustee to redeem all
the bonds of all series at the respective applicable redemption price or prices
(together with accrued interest to the date of redemption), without the payment
of any premium, on a date determined by the Trustee in its discretion to be the
earliest practicable redemption date after receipt by the Trustee of all cash
which the Trustee is entitled to receive in respect of such acquisition by such
federal, state or municipal authority.  If the cash so received by the
Trustee and all other cash then held by the Trustee as such, except funds held
in trust for the benefit of the holders of particular bonds and coupons, is not
sufficient to effect the redemption of all the bonds of all series as aforesaid
and to pay all amounts owing to the Trustee under the Mortgage as supplemented
(including fees and expenses to be incurred by the Trustee in connection with
such redemption), the Company covenants and agrees that, within five (5) days
after receipt by the Trustee of all cash which the Trustee is entitled to
receive as aforesaid in respect of such acquisition, the Company will deposit
with the Trustee for that purpose cash in an amount sufficient to make up such
deficiency.

       

      Upon receipt by the
Trustee of moneys sufficient for said purposes, notice of such redemption shall
be given by the Trustee for and on behalf and in the name of the
Company.  To the extent that such cash received, held and deposited as
aforesaid shall be required for the purpose of redeeming bonds pursuant to this
subparagraph (i), the Company shall be
deemed to have directed the Trustee to apply the same for the purpose, and the
balance, if any, after payment of all said amounts owing to the Trustee, shall
be paid to or upon the order of the Company.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      (j)           The
Company shall promptly classify as “property replaced or retired”, for the
purposes of clause (B) of subdivision (i) of subparagraph (c) of this Section 1
during any period all property which has been replaced or has permanently ceased
to be used or useful in the business of the Company, but the Company shall not,
in making such classification, be bound by determinations, rulings or orders
made by regulatory authorities for rate-making or other purposes.

       

      (k)           The
Company shall not consolidate with or merge into any other corporation or
transfer or lease all or substantially all the mortgaged property as an entirety
to any other corporation, unless the corporation resulting from such
consolidation or the corporation into which the Company shall have been merged
or the corporation to which such transfer or lease shall have been made shall,
by an instrument executed and delivered to the Trustee, assume the due and
punctual payment of the principal of and premium, if any, and interest on all
the bonds of all series according to their tenor at the time outstanding under
the Mortgage and the due and punctual performance and observance of all the
covenants and conditions of the Mortgage and all indentures supplemental thereto
to be performed or observed by the Company.

       

      Section 2.   After-Acquired Property Subject to
Mortgage.  The
Company covenants and agrees that any and all property hereafter acquired by the
Company and any and all improvements, extensions, betterments or additions to
property of the Company, which by the Original Mortgage or any indenture
supplemental thereto are to become subject to the Mortgage, immediately upon the
acquisition thereof by the Company or upon such improvements, extension,
betterments, or addition being made, as the case may be, and without any further
conveyance, mortgage, assignment or act on the part of the Company or the
Trustee, or either of them shall become and be subject to the lien of the
Mortgage fully and completely as though owned by the Company at the date of the
execution of the Original Mortgage and at the date of the Indenture dated the
first day of March, 1928, mentioned in the second paragraph of the recitals of
this Supplemental Indenture and at the dates of the supplemental indentures
dated May 20, 1936, March 10, 1950, as of June 1, 1951, as of
August 15, 1967, as of September 15, 1970, as of March 1, 2000,
as of February 1, 2003, as of February 1, 2003, as of
February 15, 2003, as of April 15, 2003, as of October 1, 2003,
as of October 1, 2003, as of November 1, 2003, and as of
January 1, 2005 respectively, mentioned in the fourth paragraph of the
recitals of this Supplemental Indenture, and at the date of this Supplemental
Indenture, and specifically described in the granting clauses of the Original
Mortgage or said Indenture or said supplemental indentures, but the provisions
of this Section 2 shall not limit the generality of the provisions of Sections
12 and 13 of Article IV of the Original Mortgage.

       

      Section 3.   Documents to Furnish Upon
Acquisition of Land.  The Company
covenants and agrees that in the furtherance of, but without limiting the
generality of, the provisions of Sections 12 and 13 of Article IV of the
Mortgage or of Section 2 of this Article II, the Company will furnish to the
Trustee on November 1, 1944, and thereafter within sixty (60) days after
and as often as the Company shall have acquired, subsequent to September 3,
1944, any additional land
or lands or interest or interests in land, or any new plant or plants, not
included in any certificate theretofore furnished pursuant to this Section 3,
the aggregate cost of which shall equal or exceed $500,000, and at such other
times as thirty six (36) months shall 

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

         

      

      have elapsed since
the date of furnishing the last preceding certificate to the Trustee pursuant to
this Section 3, the following:

       

      (a)           a
certificate, signed by the President or the Executive Vice President or the
Chief Financial Officer or a Vice President and by the Treasurer or an Assistant
Treasurer of the Company and dated as of a date not more than sixty (60) days
preceding the date as of which such certificate is required to be filed pursuant
to this Section 3, briefly describing any additional land or interest in land
and any new plant which the Company may have acquired since the date of the most
recent Certificate furnished to the Trustee pursuant to this Section, or, in the
case of the first such certificate, since the date of the execution and delivery
of the Indenture dated the first day of March, 1928 mentioned in the second
paragraph of the recitals of this Supplemental Indenture, which is required by
the provisions of the Mortgage and this Supplemental Indenture, to be subjected
to the lien of the Mortgage;

       

      (b)           the
mortgages, deeds, covenants, assignments, transfers and instruments of further
assurance, if any, specified in the opinion of counsel referred to in the
following subparagraph (c); and

       

      (c)           an
opinion of counsel, who may be counsel for the Company, specifying the
mortgages, deeds, covenants, assignments, transfers and instruments of further
assurance which will be sufficient to subject to the direct lien of the Mortgage
(so far as permitted by law) all the Company’s right, title and interest in and
to the land and interest in land and any plant described in said certificate, or
stating that no such mortgage, deed, conveyance, assignment, transfer or
instrument of further assurance is necessary for such purpose, and that, upon
the recordation or filing or registering, in the manner stated in such opinion,
of the instruments so specified, if any, and upon the recordation and filing and
registering of the Mortgage or any supplemental indenture in the manner stated
in such opinion, or without any such recordation or filing or registering if
such opinion shall so state, the Mortgage will (so far as permitted by law)
constitute a valid lien upon all the Company’s right, title and interest in and
to such land, interest in land or plant as against all creditors and subsequent
purchasers, subject only to the lien of any mortgages or easements existing or
placed on such property at the time of its acquisition by the Company, liens for
taxes and assessments not due, or, if due, in the course of appeal or otherwise
in contest, liens arising out of proceedings in court in the course of contest
and undetermined liens and charges (if any) incidental to current
construction.

       

      For the purposes of
this Section 3, any certificate heretofore or hereafter delivered to the Trustee
pursuant to Section 3 of Article III of Division B of the supplemental indenture
dated as of June 1, 1951, or pursuant to Section 3 of Article III of the
Supplemental Indenture dated as of July 1, 1954, or pursuant to Section 3 of
Article III of any of the supplemental indentures dated, as of May 1, 1961, as
of July 15, 1966, as of August 15, 1967, as of September 15, 1970, as of April
1, 1972, or as of July 15, 1973, or pursuant to Section 3 of Article II of any
of the Supplemental Indentures dated as of October 1, 1973, as of October 1,
1974, as of December 1, 1974, or as of
April 1, 1975, or pursuant to Section 3 of Article III of the Supplemental
Indenture dated as of August 15, 1980, or pursuant to Section 3 of Article II of
any of the supplemental indentures dated as of June 1, 1984, as of
June 1, 1984, as of October 1, 1984, as of March 1, 

       

      
        
          
          

        

        
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      1985, as of
March 1, 1985, as of March 1, 1985, as of March 1, 1985, as of
May 1, 1990, as of April 1, 1993, as of December 1, 1993, as of
June 1, 1995, as of March 1, 2000, as of March 1, 2000, as of March 1,
2000, as of March 1, 2000, as of February 1 2003, as of February 1,
2003, as of February 15, 2003, as of April 15, 2003, as of
October 1, 2003, as of October 1, 2003, as of November 1, 2003,
or as of January 1, 2005 shall be deemed to have been delivered in
compliance with this Section 3.

       

      Section 4.   Discharge of Prior
Liens.  The
Company covenants and agrees that, upon cancellation and discharge of any “prior
lien”, the Company shall cause all cash or obligations then held by the trustee
or other holder of such prior lien, which were received by such trustee or other
holder by reason of the release of, or which represent the proceeds of the
taking by eminent domain or any disposition of, or the proceeds of insurance on,
any of the properties at any time subject to the lien of the Mortgage (including
all proceeds of or substitutions for any thereof), to be paid to or deposited
and pledged with the Trustee, subject to any lien or charge prior to the lien of
the Mortgage, such cash to be held and paid over or applied by the Trustee, and
such obligations to be held and disposed of, as provided in Article IX of the
Mortgage; provided,
however, that in lieu of taking or delivering to the Trustee all or any
part of such cash or obligations, the Company may deliver to the Trustee a
certificate of the trustee or such other holder of such prior lien, stating that
a specified amount thereof has been deposited with such trustee or other holder
pursuant to the requirements of such other prior lien, in which case there shall
also be delivered to the Trustee an opinion of counsel, who may be counsel for
the Company, stating that such deposit is required by such other prior
lien.  The term “prior lien” as used in this Section 4 shall mean and
include any “underlying mortgage” and shall also mean and include any other lien
(except liens for taxes and assessments not due, or, if due, in the course of
appeal or otherwise in contest, liens arising out of proceedings in court in
course of contest and undetermined liens and charges, if any, incidental to
current construction) prior to the lien of the Mortgage upon property acquired
by the Company after the execution and delivery of the Indenture, dated the
first day of March, 1928, referred to in the second paragraph of the recitals of
this Supplemental Indenture, existing on said property or placed thereon to
secure unpaid portions of the purchase price, at the time of such
acquisition.

       

      ARTICLE
III

      MISCELLANEOUS

       

      Section 1.   Trustee’s
Acceptance.  The
Trustee hereby accepts the trusts hereunder and agrees to perform the same upon
the terms and subject to the applicable provisions of the Mortgage and the
indentures supplemental thereto now in effect.

       

      Section 2.   Execution of Supplemental
Indenture.  This
Supplemental Indenture is executed by the parties hereto pursuant to the
provisions of Article XVI of the Mortgage, and so long as any of the bonds of
Series SS are or shall be outstanding the terms and conditions of this
Supplemental Indenture shall be deemed to be a part of the terms and conditions
of the Mortgage for any and all purposes.  The provisions of this
Supplemental Indenture shall be inapplicable and shall terminate and become void
and of no effect upon the payment or redemption of all of the bonds of Series
SS in accordance with the provisions of the Mortgage and of the bonds of Series
SS.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      Section 3.   Assignment.  All
covenants, conditions and provisions contained in this Supplemental Indenture by
or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not, legally or equitably under or by reason of this Supplemental
Indenture.

       

      Section 4.   Effective Time of Supplemental
Indenture.  Although
this Supplemental Indenture is dated as of November 1, 2008, it shall be
effective only from the actual time of its execution and delivery by the Company
and the Trustee on the date indicated by their respective acknowledgments hereto
annexed.

       

      Section 5.   Governing Law.  This
Supplemental Indenture shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of
Illinois, excluding choice-of-law principles of such State that would permit the
application of the laws of a jurisdiction other than such State.

       

      Section 6.   Counterparts.  This
Supplemental Indenture may be simultaneously executed in any number of
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument entered into by the
parties hereto pursuant to the provisions of Article XVI of the
Mortgage.

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      


      In Witness Whereof,
The Peoples Gas Light and Coke Company has caused this instrument to be executed
in its corporate name by its Chairman, President, the Executive Vice President,
the Chief Financial Officer, Treasurer or a Vice President, and its corporate
seal to be hereunto affixed and attested by its Secretary or an Assistant
Secretary, and U.S. Bank National Association, as Trustee under the Mortgage,
has caused this instrument to be executed in its corporate name by one of its
Vice Presidents and its corporate seal to be hereto affixed and attested by one
of its Assistant Vice Presidents, all as of the day and year first above
written.

       

      
        	 
    	 
    	
                The
      Peoples Gas Light and Coke Company

              
	 
    	 
    	 
    
	
                (SEAL)

              	 
    	 
    
	 
    	 
    	
                By: ________________________                                                              

              
	 
    	 
    	
                Bradley A.
      Johnson

              
	
                Attest:

              	 
    	
                Its:  Treasurer

              
	 
    	 
    	 
    
	____________________________________	 
    	 
    
	
                Barth J.
      Wolf

              	 
    	 
    
	
                Its:  Secretary

              	 
    	 
    
	 
    	 
    	
                U.S.
      Bank National Association

              
	
                (SEAL)

              	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	
                By  ________________________                                                              

              
	 
    	 
    	
                Richard
      Prokosch

              
	
                Attest:

              	 
    	
                Its:   Vice
      President

              
	 
    	 
    	 
    
	____________________________________ 
      	 
    	 
    
	
                Raymond
      Haverstock

              	 
    	 
    
	
                Its:  Vice
      President

              	 
    	 
    


      

      


      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      


      State
of
______               )

      )  SS

      County
of
______            )

       

      I,
__________________, a Notary Public in and for said County and State aforesaid,
Do Hereby Certify that Bradley A. Johnson, the Treasurer of The Peoples Gas
Light and Coke Company, an Illinois corporation, and Barth J. Wolf, the
Secretary of said corporation, who are both personally known to me to be the
same persons whose names are subscribed to the foregoing instrument as such
Treasurer and Secretary, respectively, and who are both personally known to me
to be the Treasurer and Secretary, respectively, of said corporation, appeared
before me this day in person and severally acknowledged that they signed, sealed
and delivered said instrument as their free and voluntary act as such Treasurer
and Secretary, respectively, of said corporation, and as the free and voluntary
act of said corporation, for the uses and purposes therein set
forth.

       

      Given under my hand
and notarial seal the _____ day of November, 2008.

       

      


      ___________________________

      Notary
Public

       

      My commission
expires on the ____ day of ___________ 20___.

       


      
        
          
             

          

           


        

        
          32

          
            

          

        

        
           


        

      


      State
of
______               )

      )  SS

      County
of
______            )

       

      I, _______________,
a Notary Public in and for said County and State aforesaid, Do Hereby Certify
that Richard Prokosch, a Vice President of U.S. Bank National Association, a
corporation organized under the laws of the United States of America, and
Raymond Haverstock, a Vice President of said corporation, who are both
personally known to me to be the same persons whose names are subscribed to the
foregoing instrument as such Vice President and Vice President, respectively,
and who are both personally known to me to be Vice President and Vice President,
respectively, of said corporation, appeared before me this day in person and
severally acknowledged that they signed, sealed and delivered said instrument as
their free and voluntary act as Vice President and Vice President, respectively,
of said corporation, and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.

       

      Given under my hand
and notarial seal the _____ day of November, 2008.

       

      


      __________________________

      Notary
Public

       

      My commission
expires on the ____ day of ___________ 20___.

       


      
        
          
             

          

           


        

        
          33

          
            

          

        

        
           


        

      


      Schedule
A

       

      The Company hereby
mortgages and conveys unto the Trustee, its successor or successors in trust,
the property described below.

       

      To Have And To Hold
all of said property hereby conveyed and mortgaged or intended to be conveyed
and mortgaged, together with the rents, issues and profits thereof, unto the
Trustee, and its successor or successors in trust and their assigns in trust,
under the and subject to all of the terms, conditions and provisions of the
Mortgage (as the Mortgage is defined herein) and of this Supplemental Indenture
as fully and in all respects as if said property had originally been described
in said Mortgage.

       

      Subject, however,
to the reservations, exceptions, limitations and restrictions contained in the
several deeds, leases, servitudes, contracts or other instruments through which
the Company acquired and/or claimed title to and/or enjoys the use of the
mortgaged property, and subject also to any mortgages or easements existing or
placed on any of said property at the time of its acquisition, liens, for taxes
and assessments not due or, if due, in the course of contests, judgments in the
course of appeal or otherwise in contest and secured by sufficient bond, liens
arising out of proceedings in court in the course of contests and undetermined
liens or charges (if any) incidental to construction, and subject also to such
servitude, easements, rights and privileges in, over, on or through said
property as may have been granted by the Company to other persons prior to the
date of this Supplemental Indenture.

       

      But In Trust,
Nevertheless, for the equal and proportionate benefit and security of the
holders of all bonds and interest coupons now or hereafter issued under the
Mortgage and for the enforcement of and payment of said bonds and coupons when
payable and the performance of and compliance with the covenants and conditions
of the Mortgage without any preference, distinction or priority as to lien or
otherwise of any bond or bonds over others by reason of difference in time of
the actual issue, sale or negotiation thereof; but so that each and every bond
now or hereafter issued under the Mortgage shall have the same lien so that the
interest and principal of any and all of such bonds shall, subject to the terms
of the Mortgage, be equally and proportionately secured thereby, as if they had
been made, executed, delivered, sold and negotiated simultaneously with the
execution thereof.

       

      Upon Condition
that, until the happening of an event of default as provided in the Mortgage,
the Company shall be suffered and permitted to possess, use and enjoy the
property, rights, privileges and franchises conveyed herein and to receive and
use the rents, issues, income, revenues, earnings and profits
thereof.

       

      (continued on next
page)


      
        
          
            MILW_

          

           


        

        
           


          
            

          

        

        
           


        

      


      Description
of Certain Property

      Subject
to the Lien of the Mortgage

       

      All rights of way,
easements, franchises, licenses, permits, privileges, leases, leaseholds and
other authority granted to the Company for the purpose of constructing,
installing, operating, using, maintaining, renewing, replacing or relocating gas
mains, pipelines, services and other facilities on, over or in private property
owned by others and situated in the County of Cook in the State of Illinois,
including, without limiting the generality of the foregoing, those certain
easements granted to the Company by the grantors hereinafter named and filed for
record and recorded as hereinafter set forth, to wit:

      


       


      
        
          
            2