Document:

Exhibit 4.B

 

 

 

 

THE UNION LIGHT, HEAT AND
POWER COMPANY,

Issuer

 

TO

 

                                                   ,

Trustee

 

 

 

Mortgage Indenture

 

Dated as of              ,
20   

 

 

THIS INSTRUMENT GRANTS A SECURITY INTEREST

BY A TRANSMITTING UTILITY

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED

PROPERTY PROVISIONS

 

 

 

 

The Union Light, Heat and Power Company

Reconciliation and tie between Trust Indenture Act of
1939

and Mortgage Indenture, dated as of                     ,
200  

 

	
  Trust Indenture Act Section

  	
   

  	
  Mortgage Indenture

  Section

  
	
   

  	
   

  	
   

  	
   

  
	
  §310

  	
  (a)(1)

  	
   

  	
  1009

  
	
   

  	
  (a)(2)

  	
   

  	
  1009

  
	
   

  	
  (a)(3)

  	
   

  	
  1014

  
	
   

  	
  (a)(4)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (b)

  	
   

  	
  1008,
  1010

  
	
  §311

  	
  (a)

  	
   

  	
  1013

  
	
   

  	
  (b)

  	
   

  	
  1013

  
	
   

  	
  (c)

  	
   

  	
  Not
  Applicable

  
	
  §312

  	
  (a)

  	
   

  	
  1101

  
	
   

  	
  (b)

  	
   

  	
  1101

  
	
   

  	
  (c)

  	
   

  	
  1101

  
	
  §313

  	
  (a)

  	
   

  	
  1102

  
	
   

  	
  (b)(1)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (b)(2)

  	
   

  	
  1102

  
	
   

  	
  (c)

  	
   

  	
  1102

  
	
   

  	
  (d)

  	
   

  	
  1102

  
	
  §314

  	
  (a)

  	
   

  	
  1102

  
	
   

  	
  (a)(4)

  	
   

  	
  705

  
	
   

  	
  (b)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (c)(1)

  	
   

  	
  104

  
	
   

  	
  (c)(2)

  	
   

  	
  104

  
	
   

  	
  (c)(3)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (d)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (e)

  	
   

  	
  104

  
	
  §315

  	
  (a)

  	
   

  	
  1001(a)

  
	
   

  	
  (b)

  	
   

  	
  1002

  
	
   

  	
  (c)

  	
   

  	
  1001(b)

  
	
   

  	
  (d)

  	
   

  	
  1001(c)

  
	
   

  	
  (d)(1)

  	
   

  	
  1001(a)(1), 1001(c)(1)

  
	
   

  	
  (d)(2)

  	
   

  	
  1001(c)(2)

  
	
   

  	
  (d)(3)

  	
   

  	
  1001(c)(3)

  
	
   

  	
  (e)

  	
   

  	
  914

  
	
  §316

  	
  (a)

  	
   

  	
  912,
  913

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  902,
  912

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  913

  
	
   

  	
  (a)(2)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (b)

  	
   

  	
  908

  
	
  §317

  	
  (a)(1)

  	
   

  	
  903

  
	
   

  	
  (a)(2)

  	
   

  	
  904

  
	
   

  	
  (b)

  	
   

  	
  703

  
	
  §318

  	
  (a)

  	
   

  	
  109

  

 

i

 

TABLE OF CONTENTS

 

	
  PARTIES

  	
   

  
	
   

  	
   

  
	
  RECITALS OF THE COMPANY

  	
   

  
	
   

  	
   

  
	
  GRANTING CLAUSES

  	
   

  
	
   

  	
   

  
	
  First Granting Clause

  	
   

  
	
  Second Granting Clause

  	
   

  
	
  Third Granting Clause

  	
   

  
	
  Excepted Property

  	
   

  
	
   

  	
   

  
	
  ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS
  OF GENERAL APPLICATION

  	
   

  
	
   

  	
   

  
	
  SECTION 101.

  	
  Definitions

  	
   

  
	
  “Accountant”

  	
   

  
	
  “Act”

  	
   

  
	
  “Affiliate”

  	
   

  
	
  “Authenticating Agent”

  	
   

  
	
  “Authorized Officer”

  	
   

  
	
  “Authorized Purposes”

  	
   

  
	
  “Benefitted Securities”

  	
   

  
	
  “Board of Directors”

  	
   

  
	
  “Board Resolution”

  	
   

  
	
  “Business
  Day”

  	
   

  
	
  “Capitalization”

  	
   

  
	
  “Capitalized Lease Liabilities”

  	
   

  
	
  “Commission”

  	
   

  
	
  “Company”

  	
   

  
	
  “Company
  Order” or “Company Request”

  	
   

  
	
  “Corporate Trust Office”

  	
   

  
	
  “corporation”

  	
   

  
	
  “Cost”

  	
   

  
	
  “Debt”

  	
   

  
	
  “Defaulted Interest”

  	
   

  
	
  “Discount Security”

  	
   

  
	
  “Dollar” or “$”

  	
   

  
	
  “Electric and Gas Utility
  Property”

  	
   

  
	
  “Eligible Obligations”

  	
   

  
	
  “Event
  of Default”

  	
   

  
	
  “Excepted Property”

  	
   

  
	
  “Exchange
  Act”

  	
   

  
	
  “Execution  Date”

  	
   

  
	
  “Expert”

  	
   

  
	
  “Expert’s Certificate”

  	
   

  
	
  “Fair
  Value”

  	
   

  
	
  “Funded
  Cash”

  	
   

  
	
  “Funded
  Property”

  	
   

  
	
  “Governmental Authority”

  	
   

  
			

 

ii

 

	
  “Government Obligations”

  	
   

  
	
  “Holder”

  	
   

  
	
  “Indenture”
  or “Mortgage Indenture”

  	
   

  
	
  “Independent”

  	
   

  
	
  “Independent Expert’s
  Certificate”

  	
   

  
	
  “interest”

  	
   

  
	
  “Interest Payment Date”

  	
   

  
	
  “Investment Securities”

  	
   

  
	
  “Lien”

  	
   

  
	
  “Maturity”

  	
   

  
	
  “Mortgaged Property”

  	
   

  
	
  “Net Tangible Assets”

  	
   

  
	
  “Notice of Default”

  	
   

  
	
  “Officer’s Certificate”

  	
   

  
	
  “Opinion of Counsel”

  	
   

  
	
  “Outstanding”

  	
   

  
	
  “Paying Agent”

  	
   

  
	
  “Periodic Offering”

  	
   

  
	
  “Permitted
  Liens”

  	
   

  
	
  “Permitted Secured Debt”

  	
   

  
	
  “Person”

  	
   

  
	
  “Place
  of Payment”

  	
   

  
	
  “Predecessor Security”

  	
   

  
	
  “Prepaid
  Liens”

  	
   

  
	
  “Property Additions”

  	
   

  
	
  “Purchase Money Lien”

  	
   

  
	
  “Redemption
  Date”

  	
   

  
	
  “Redemption Price”

  	
   

  
	
  “Regular Record Date”

  	
   

  
	
  “Required Currency”

  	
   

  
	
  “Responsible Officer”

  	
   

  
	
  “Retired Securities”

  	
   

  
	
  “Secured
  Debt”

  	
   

  
	
  “Secured Obligations”

  	
   

  
	
  “Securities”
  or “Secured Debt Securities”

  	
   

  
	
  “Securities
  Act”

  	
   

  
	
  “Security Register” and “Security
  Registrar”

  	
   

  
	
  “Special Record Date”

  	
   

  
	
  “Stated Interest Rate”

  	
   

  
	
  “Stated
  Maturity”

  	
   

  
	
  “Successor Company”

  	
   

  
	
  “supplemental indenture” or “indenture supplemental hereto”

  	
   

  
	
  “Tranche”

  	
   

  
	
  “Trustee”

  	
   

  
	
  “Trust Indenture Act”

  	
   

  
	
  “United
  States”

  	
   

  
	
  SECTION 102.

  	
  Funded Property; Funded Cash

  	
   

  
	
  SECTION 103.

  	
  Property Additions; Cost

  	
   

  
	
  SECTION 104.

  	
  Compliance Certificates and
  Opinions

  	
   

  
	
  SECTION 105.

  	
  Form of Documents
  Delivered to Trustee

  	
   

  

 

iii

 

	
  SECTION 106.

  	
  Acts of Holders

  	
   

  
	
  SECTION 107.

  	
  Notices,
  Etc. to Trustee or Company

  	
   

  
	
  SECTION 108.

  	
  Notice to
  Holders of Securities; Waiver

  	
   

  
	
  SECTION 109.

  	
  Conflict
  with Trust Indenture Act

  	
   

  
	
  SECTION 110.

  	
  Effect of
  Headings and Table of Contents

  	
   

  
	
  SECTION 111.

  	
  Successors
  and Assigns

  	
   

  
	
  SECTION 112.

  	
  Separability
  Clause

  	
   

  
	
  SECTION 113.

  	
  Benefits of
  Indenture

  	
   

  
	
  SECTION 114.

  	
  Governing Law

  	
   

  
	
  SECTION 115.

  	
  Legal Holidays

  	
   

  
	
  SECTION 116.

  	
  Investment
  of Cash Held by Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO SECURITY FORMS

  	
   

  
	
   

  	
   

  
	
  SECTION 201.

  	
  Forms Generally

  	
   

  
	
  SECTION 202.

  	
  Form of
  Trustee’s Certificate of Authentication

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE THE
  SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 301.

  	
  Amount
  Unlimited; Issuable in Series

  	
   

  
	
  SECTION 302.

  	
  Denominations

  	
   

  
	
  SECTION 303.

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  
	
  SECTION 304.

  	
  Temporary
  Securities

  	
   

  
	
  SECTION 305.

  	
  Registration,
  Registration of Transfer and Exchange

  	
   

  
	
  SECTION 306.

  	
  Mutilated,
  Destroyed, Lost and Stolen Securities

  	
   

  
	
  SECTION 307.

  	
  Payment of
  Interest; Interest Rights Preserved

  	
   

  
	
  SECTION 308.

  	
  Persons
  Deemed Owners

  	
   

  
	
  SECTION 309.

  	
  Cancellation

  	
   

  
	
  SECTION 310.

  	
  Computation
  of Interest

  	
   

  
	
  SECTION 311.

  	
  Payment to
  Be in Proper Currency

  	
   

  
	
  SECTION 312.

  	
  Extension
  of Interest Payment

  	
   

  
	
  SECTION 313.

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR SECURITIES OF
  THE FIRST AND SECOND SERIES

  	
   

  
	
   

  	
   

  
	
  ARTICLE FIVE REDEMPTION OF
  SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 501.

  	
  Applicability
  of Article

  	
   

  
	
  SECTION 502.

  	
  Election to
  Redeem; Notice to Trustee

  	
   

  
	
  SECTION 503.

  	
  Selection
  of Securities to Be Redeemed

  	
   

  
	
  SECTION 504.

  	
  Notice of
  Redemption

  	
   

  
	
  SECTION 505.

  	
  Securities
  Payable on Redemption Date

  	
   

  
	
  SECTION 506.

  	
  Securities
  Redeemed in Part

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX SINKING FUNDS

  	
   

  
	
   

  	
   

  
	
  SECTION 601.

  	
  Applicability
  of Article

  	
   

  
	
  SECTION 602.

  	
  Satisfaction
  of Sinking Fund Payments with Securities

  	
   

  
	
  SECTION 603.

  	
  Redemption
  of Securities for Sinking Fund

  	
   

  

 

iv

 

	
  ARTICLE SEVEN
  REPRESENTATIONS AND COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 701.

  	
  Payment of
  Securities; Lawful Possession

  	
   

  
	
  SECTION 702.

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  SECTION 703.

  	
  Money for
  Securities Payments to Be Held in Trust

  	
   

  
	
  SECTION 704.

  	
  Corporate
  Existence

  	
   

  
	
  SECTION 705.

  	
  Annual
  Officer’s Certificate as to Compliance

  	
   

  
	
  SECTION 706.

  	
  Waiver of
  Certain Covenants

  	
   

  
	
  SECTION 707.

  	
  Limitation
  on Secured Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT SATISFACTION
  AND DISCHARGE

  	
   

  
	
   

  	
   

  
	
  SECTION 801.

  	
  Satisfaction
  and Discharge of Securities

  	
   

  
	
  SECTION 802.

  	
  Satisfaction
  and Discharge of Indenture

  	
   

  
	
  SECTION 803.

  	
  Application
  of Trust Money

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE EVENTS OF
  DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 901.

  	
  Events of
  Default.

  	
   

  
	
  SECTION 902.

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
   

  
	
  SECTION 903.

  	
  Collection
  of Indebtedness and Suits for Enforcement by Trustee

  	
   

  
	
  SECTION 904.

  	
  Trustee May File
  Proofs of Claim

  	
   

  
	
  SECTION 905.

  	
  Trustee May Enforce
  Claims Without Possession of Securities

  	
   

  
	
  SECTION 906.

  	
  Application
  of Money Collected

  	
   

  
	
  SECTION 907.

  	
  Limitation on
  Suits

  	
   

  
	
  SECTION 908.

  	
  Unconditional
  Right of Holders to Receive Principal, Premium and Interest

  	
   

  
	
  SECTION 909.

  	
  Restoration
  of Rights and Remedies

  	
   

  
	
  SECTION 910.

  	
  Rights and
  Remedies Cumulative

  	
   

  
	
  SECTION 911.

  	
  Delay or
  Omission Not Waiver

  	
   

  
	
  SECTION 912.

  	
  Control by
  Holders of Securities

  	
   

  
	
  SECTION 913.

  	
  Waiver of
  Past Defaults

  	
   

  
	
  SECTION 914.

  	
  Undertaking
  for Costs.

  	
   

  
	
  SECTION 915.

  	
  Waiver of
  Usury, Stay or Extension Laws

  	
   

  
	
  SECTION 916.

  	
  [Reserved]

  	
   

  
	
  SECTION 917.

  	
  Receiver
  and Other Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN THE TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 1001.

  	
  Certain
  Duties and Responsibilities

  	
   

  
	
  SECTION 1002.

  	
  Notice of
  Defaults

  	
   

  
	
  SECTION 1003.

  	
  Certain
  Rights of Trustee

  	
   

  
	
  SECTION 1004.

  	
  Not
  Responsible for Recitals or Issuance of Securities

  	
   

  
	
  SECTION 1005.

  	
  May Hold
  Securities

  	
   

  
	
  SECTION 1006.

  	
  Money Held in
  Trust

  	
   

  
	
  SECTION 1007.

  	
  Compensation
  and Reimbursement

  	
   

  
	
  SECTION 1008.

  	
  Disqualification;
  Conflicting Interests

  	
   

  
	
  SECTION 1009.

  	
  Corporate
  Trustee Required; Eligibility

  	
   

  
	
  SECTION 1010.

  	
  Resignation
  and Removal; Appointment of Successor

  	
   

  
	
  SECTION 1011.

  	
  Acceptance
  of Appointment by Successor

  	
   

  
	
  SECTION 1012.

  	
  Merger,
  Conversion, Consolidation or Succession to Business

  	
   

  

 

v

 

	
  SECTION 1013.

  	
  Preferential
  Collection of Claims Against Company

  	
   

  
	
  SECTION 1014.

  	
  Co-trustee
  and Separate Trustees

  	
   

  
	
  SECTION 1015.

  	
  Appointment
  of Authenticating Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN HOLDERS’
  LISTS AND REPORTS BY TRUSTEE AND COMPANY

  	
   

  
	
   

  	
   

  
	
  SECTION 1101.

  	
  Lists of Holders

  	
   

  
	
  SECTION 1102.

  	
  Reports by
  Trustee and Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE
  CONSOLIDATION, MERGER, CONVEYANCE, OR OTHER TRANSFER

  	
   

  
	
   

  	
   

  
	
  SECTION 1201.

  	
  Company may
  Consolidate, etc., Only on Certain Terms

  	
   

  
	
  SECTION 1202.

  	
  Successor
  Company Substituted

  	
   

  
	
  SECTION 1203.

  	
  Extent of
  Lien Hereof on Property of Successor Company

  	
   

  
	
  SECTION 1204.

  	
  Release of
  Company upon Conveyance or Other Transfer

  	
   

  
	
  SECTION 1205.

  	
  Merger into
  Company; Extent of Lien Hereof

  	
   

  
	
  SECTION 1206.

  	
  Transfer of
  Less than Substantially All

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN
  SUPPLEMENTAL INDENTURES 

  	
   

  
	
   

  	
   

  
	
  SECTION 1301.

  	
  Supplemental
  Indentures Without Consent of Holders

  	
   

  
	
  SECTION 1302.

  	
  Supplemental
  Indentures With Consent of Holders

  	
   

  
	
  SECTION 1303.

  	
  Execution
  of Supplemental Indentures

  	
   

  
	
  SECTION 1304.

  	
  Effect of
  Supplemental Indentures

  	
   

  
	
  SECTION 1305.

  	
  Conformity
  With Trust Indenture Act

  	
   

  
	
  SECTION 1306.

  	
  Reference
  in Securities to Supplemental Indentures

  	
   

  
	
  SECTION 1307.

  	
  Modification
  Without Supplemental Indenture

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOURTEEN
  MEETINGS OF HOLDERS; ACTION WITHOUT MEETING

  	
   

  
	
   

  	
   

  
	
  SECTION 1401.

  	
  Purposes
  for Which Meetings May Be Called

  	
   

  
	
  SECTION 1402.

  	
  Call,
  Notice and Place of Meetings

  	
   

  
	
  SECTION 1403.

  	
  Persons
  Entitled to Vote at Meetings

  	
   

  
	
  SECTION 1404.

  	
  Quorum; Action

  	
   

  
	
  SECTION 1405.

  	
  Attendance
  at Meetings; Determination of Voting Rights; Conduct and Adjournment of
  Meetings

  	
   

  
	
  SECTION 1406.

  	
  Counting
  Votes and Recording Action of Meetings

  	
   

  
	
  SECTION 1407.

  	
  Action
  Without Meeting

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIFTEEN IMMUNITY
  OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS

  	
   

  
	
   

  	
   

  
	
  SECTION 1501.

  	
  Liability
  Solely Corporate

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIXTEEN ISSUANCE
  OF SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 1601.

  	
  General

  	
   

  
	
  SECTION 1602.

  	
  [Reserved]

  	
   

  
	
  SECTION 1603.

  	
  Issuance of
  Securities on the Basis of Property Additions

  	
   

  
	
  SECTION 1604.

  	
  Issuance of
  Securities on the Basis of Retired Securities

  	
   

  

 

vi

 

	
  SECTION 1605.

  	
  Issuance of
  Securities on the Basis of Deposit of Cash

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVENTEEN
  [RESERVED]

  	
   

  
	
   

  	
   

  
	
  ARTICLE EIGHTEEN
  POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY

  	
   

  
	
   

  	
   

  
	
  SECTION 1801.

  	
  Quiet Enjoyment

  	
   

  
	
  SECTION 1802.

  	
  Dispositions
  without Release

  	
   

  
	
  SECTION 1803.

  	
  Release of
  Mortgaged Property

  	
   

  
	
  SECTION 1804.

  	
  Release of
  Property Not Constituting Funded Property

  	
   

  
	
  SECTION 1805.

  	
  Release of
  Minor Properties

  	
   

  
	
  SECTION 1806.

  	
  Withdrawal
  or Other Application of Funded Cash; Purchase Money Obligations

  	
   

  
	
  SECTION 1807.

  	
  Release of
  Property Taken by Eminent Domain, etc.

  	
   

  
	
  SECTION 1808.

  	
  [Reserved]

  	
   

  
	
  SECTION 1809.

  	
  Disclaimer
  or Quitclaim

  	
   

  
	
  SECTION 1810.

  	
  Miscellaneous

  	
   

  
	
  SECTION 1811.

  	
  Reserved

  	
   

  
	
  SECTION 1812.

  	
  Preservation
  of Lien

  	
   

  
	
  SECTION 1813.

  	
  Maintenance
  of Properties

  	
   

  
	
  SECTION 1814.

  	
  Payment of
  Taxes; Discharge of Liens

  	
   

  
	
  SECTION 1815.

  	
  Insurance

  	
   

  
	
  SECTION 1816.

  	
  Recording,
  Filing, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  Testimonium

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A – [RESERVED]

  	
   

  
	
  EXHIBIT B – DESCRIPTION OF REAL
  PROPERTY THAT IS MORTGAGED PROPERTY AS OF THE EXECUTION DATE

  	
   

  

 

vii

 

THIS INSTRUMENT GRANTS A
SECURITY INTEREST BY A TRANSMITTING UTILITY

 

THIS INSTRUMENT CONTAINS
AFTER-ACQUIRED PROPERTY PROVISIONS

 

MORTGAGE INDENTURE,
dated as of                 ,
200   (the “Execution Date”) between The Union Light, Heat and Power
Company, a Delaware corporation (the “Company”), having its principal office at
                                                                            
and                                         ,
as Trustee (the “Trustee”).

 

RECITALS OF THE
COMPANY

 

The Company has
duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of its debt securities (the “Securities”) in an
unlimited aggregate principal amount, to be issued in one or more series as
contemplated herein, and to provide security for the payment of the principal
of and premium and interest, if any, on the Securities;

 

All acts necessary
to make this Indenture a valid agreement of the Company have been
performed.  For all purposes of this
Indenture, except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.

 

GRANTING CLAUSES

 

NOW,
THEREFORE, THIS INDENTURE WITNESSETH, that, in consideration
of the premises and of the purchase of the Securities by the Holders thereof,
and in order to secure the payment of the principal of and premium, if any, and
interest, if any, on all Securities from time to time Outstanding and the
performance of the covenants therein and herein contained, and to declare the
terms and conditions on which such Securities are secured, the Company hereby
grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges, sets
over and confirms to the Trustee, in trust, and grants to the Trustee a
security interest in and lien on, the following (subject, however, to the terms
and conditions set forth in this Indenture):

 

First Granting
Clause

 

All right, title and
interest of the Company, as of the Execution Date, in and to all property, real
and personal (other than Excepted Property), of the kind and nature that are
described in Exhibit B hereto and improvements, extensions and additions
thereto and renewals and replacements thereof;

 

Second Granting
Clause

 

[Reserved]; and

 

 

Third Granting
Clause

 

Any Excepted Property,
which may, from time to time after the Execution Date, by delivery or by an
instrument supplemental to this Indenture, be subjected to the Lien hereof by
the Company, the Trustee being hereby authorized to receive the same at any
time as additional security hereunder; it being understood that any such
subjection to the Lien hereof of any Excepted Property as additional security
may be made subject to such reservations, limitations or conditions respecting
the use and disposition of such property or the proceeds thereof as shall be
set forth in such instrument;

 

Excepted Property

 

Expressly excepting and
excluding, however, from the Lien of this Indenture all right, title and
interest of the Company in and to the following property, whether now owned or
hereafter acquired (herein sometimes called “Excepted Property”):

 

(a)                                  all
cash on hand or in banks or other financial institutions, deposit accounts,
securities accounts, shares of stock, interests in business trusts, general or
limited partnerships or limited liability companies, bonds, notes, other
evidences of indebtedness and other securities, security entitlements, policies
of insurance on lives of officers of the Company and investment property, of
whatsoever kind and nature, not hereafter paid or delivered to, deposited with
or held by the Trustee hereunder or required so to be;

 

(b)                                 all
contracts, leases, operating agreements and other agreements of whatsoever kind
and nature; all contract rights, bills, notes and other instruments and chattel
paper (except to the extent that any of the same constitute securities,
security entitlements or investment property, in which case they are separately
excepted from the Lien of this Indenture under clause (a) above); all
revenues, income and earnings, all accounts, accounts receivable, rights to
payment, payment intangibles and unbilled revenues, transition property, and
all rents, tolls, issues, product and profits, claims, credits, demands and
judgments; all governmental and other licenses, permits, franchises, consents
and allowances; and all patents, patent licenses and other patent rights,
patent applications, trade names, trademarks, copyrights and other intellectual
property; and all claims, credits, choses in action, commercial tort claims and
other intangible property and general intangibles including, but not limited
to, computer software;

 

(c)                                  all
automobiles, buses, trucks, truck cranes, tractors, trailers and similar
vehicles and movable equipment; all rolling stock, rail cars and other railroad
equipment; all vessels, boats, barges, and other marine equipment; all
airplanes, helicopters, aircraft engines and other flight equipment; all parts,
accessories and supplies used in connection with any of the foregoing; and all
personal property of such character that the perfection of a security interest
therein or other Lien

 

2

 

thereon is not
governed by the Uniform Commercial Code as in effect in the jurisdiction in
which the Company is organized;

 

(d)                                 all
merchandise and appliances acquired for the purpose of resale in the ordinary
course and conduct of the business of the Company, and all materials and
supplies held for consumption in operation or held in advance of use thereof
for fixed capital purposes;

 

(e)                                  all
electric energy, gas, steam and other materials and products generated,
manufactured, produced or purchased by the Company for sale, distribution or
use in the ordinary course and conduct of its business;

 

(f)                                    all
property which is the subject of a lease agreement designating the Company as
lessee and all right, title and interest of the Company in and to such property
and in, to and under such lease agreement, whether or not such lease agreement
is intended as security;

 

(g)                                 [reserved];

 

(h)                                 [reserved];

 

(i)                                     all
property, real, personal and mixed, which subsequent to the Execution Date, has
been released from the Lien of this Indenture, 
pursuant to the terms thereof, and any improvements, extensions and
additions to such properties and renewals, replacements and substitutions of or
for any parts thereof;

 

(j)                                     all
property not acquired by the Company for use in its electricity generation,
transmission and distribution, and natural gas distribution business;

 

(k)                                  any
and all easements and rights of way or similar property rights.

 

TO HAVE AND TO
HOLD all such property, real, personal and mixed, unto the Trustee, its
successors in trust and their assigns forever;

 

SUBJECT, HOWEVER,
to Permitted Liens;

 

IN TRUST,
NEVERTHELESS, for the equal and ratable benefit and security of the Holders
from time to time of all Outstanding Securities without any priority of any
such Security over any other such Security;

 

PROVIDED, HOWEVER,
that the right, title and interest of the Trustee in and to the Mortgaged Property
shall cease, terminate and become void in accordance with, and subject to the
conditions set forth in Article Eight hereof, and if the principal of and
premium and interest, if any, on the Securities shall have been paid to the
Holders thereof, or shall have been paid to the Company pursuant to Section 703
hereof or to the appropriate Governmental Authority pursuant to applicable law
after the

 

3

 

Maturity thereof, then and in that case this Indenture shall terminate,
and the Trustee shall execute and deliver to the Company such instruments as
the Company shall require to evidence such termination; otherwise this
Indenture, and the estate and rights hereby granted, shall be and remain in
full force and effect; and

 

IT IS HEREBY
COVENANTED AND AGREED by and between the Company and the Trustee that all the
Securities are to be authenticated and delivered, and that the Mortgaged
Property is to be held, subject to the further covenants, conditions and trusts
hereinafter set forth, and the Company hereby covenants and agrees to and with
the Trustee, for the equal and ratable benefit of all holders of the
Securities, as follows:

 

ARTICLE ONE

 

Definitions And Other Provisions Of General
Application

 

SECTION 101.                                           Definitions.

 

For all purposes
of this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

 

(a)                                  the
terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;

 

(b)                                 all
terms used herein without definition which are defined in the Trust Indenture
Act as in effect on the Execution Date, either directly or by reference
therein, have the meanings assigned to them therein;

 

(c)                                  all
terms used herein without definition which are defined in the Uniform
Commercial Code of New York as in effect on the Execution Date shall have the
meanings assigned to them therein;

 

(d)                                 all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles in the United
States, and, except as otherwise herein expressly provided, the term “generally
accepted accounting principles” with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation or, at the
election of the Company from time to time, at the Execution Date; provided,
however, that in determining generally accepted accounting principles
applicable to the Company, effect shall be given, to the extent required, to
any order, rule or regulation of any administrative agency, regulatory
authority or other governmental body having jurisdiction over the Company;

 

(e)                                  any
reference to an “Article” or a “Section” refers to an Article or a
Section, as the case may be, of this Indenture; and

 

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

 

4

 

“Accountant”
means a person engaged in the accounting profession or otherwise qualified to
pass on accounting matters (including, but not limited to, a Person certified
or licensed as a public accountant, whether or not then engaged in the public
accounting profession), which Person, unless required to be Independent, may be
an employee or Affiliate of the Company.

 

“Act”, when
used with respect to any Holder of a Security, has the meaning specified in Section 106.

 

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

 

“Authenticating
Agent” means any Person or Persons (other than the Company or
an Affiliate of the Company) authorized by the Trustee to act on behalf of the
Trustee to authenticate the Securities of one or more series.

 

“Authorized Officer”
means the Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Treasurer, any Assistant Treasurer, or any other officer,
manager or agent of the Company duly authorized pursuant to a Board Resolution
to act in respect of matters relating to this Indenture.

 

“Authorized
Purposes” means the authentication and delivery of
Securities, the release of property and/or the withdrawal of cash under any of
the provisions of this Indenture.

 

“Benefitted
Securities” shall have the meaning specified in Section 707.

 

“Board of Directors”
means either the board of directors, board of managers or similar governing
body of the Company or any committee thereof duly authorized to act in respect
of matters relating to this Indenture.

 

“Board Resolution”
means a copy of a resolution certified by the Secretary, an Assistant Secretary
or an Authorized Officer of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day”,
when used with respect to a Place of Payment or any other particular location
specified in the Securities or this Indenture, means any day, other than a Saturday
or Sunday, which is not a day on which banking institutions or trust companies
in such Place of Payment or other location are generally authorized or required
by law, regulation or executive order to remain closed, except as may be
otherwise specified as contemplated by Section 301.

 

“Capitalization”
has the meaning specified in Section 707.

 

“Capitalized
Lease Liabilities” has the meaning specified in Section 707.

 

“Commission”
means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or, if at any time after the Execution Date
such Commission

 

5

 

is not existing and performing the duties now assigned to it under the
Trust Indenture Act, then the body, if any, performing such duties at such
time.

 

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

 

“Company Order”
or “Company Request” mean, respectively, a
written order or request, as the case may be, signed in the name of the Company
by an Authorized Officer and delivered to the Trustee.

 

“Corporate
Trust Office” means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the Execution Date is located at                                                                     .

 

“corporation”
means a corporation, association, company, limited liability company,
partnership, limited partnership, joint stock company or business trust, and
references to “corporate” and other derivations of “corporation” herein shall
be deemed to include appropriate derivations of such entities.

 

“Cost” with
respect to Property Additions has the meaning specified in Section 103.

 

“Debt” has the
meaning specified in Section 707.

 

“Defaulted Interest”
has the meaning specified in Section 307.

 

“Discount Security”
means any Security which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 902. 
“Interest” with respect to a Discount Security means interest, if any,
borne by such Security at a Stated Interest Rate.

 

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

 

“Electric
and Gas Utility Property” means any facilities, machinery,
equipment and fixtures for the generation, transmission and distribution of
electric energy and distribution of natural gas, including electricity
generation plants and related equipment, switchyards, towers, substations,
transformers, poles, lines, cable, conduits, ducts, conductors, meters,
regulators, pipelines and related facilities and all other property of the
Company, real or personal, or improvements, extensions, additions, renewals or
replacements of the foregoing, in each case used or useful or to be used in or
in connection with the business of generating, transmitting and distributing
electric energy and distributing of natural gas, of the character described in First
Granting Clause or Second Granting Clause , whether owned by the Company at the
Execution Date or hereafter acquired (other than Excepted Property with respect
to all of the property described in this definition).

 

6

 

“Eligible
Obligations” means:

 

(a)                                  with
respect to Securities denominated in Dollars, Government Obligations or, if
specified pursuant to Section 301 with respect to any Securities, other
Investment Securities; or

 

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

 

“Event of Default”
has the meaning specified in Section 901.

 

“Excepted Property”
has the meaning specified in the granting clauses of this Indenture.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Execution
Date” has the meaning specified in the
first paragraph of this Indenture.

 

“Expert” means
a Person which is an engineer, appraiser or other expert and which, with
respect to any certificate to be signed by such Person and delivered to the
Trustee, is qualified to pass upon the matters set forth in such certificate.  For purposes of this definition, (a) ”engineer”
means a Person engaged in the engineering profession or otherwise qualified to
pass upon engineering matters (including, but not limited to, a Person licensed
as a professional engineer, whether or not then engaged in the engineering
profession) and (b) ”appraiser” means a Person engaged in the business of
appraising property or otherwise qualified to pass upon the Fair Value or fair
market value of property.

 

“Expert’s
Certificate” means a certificate signed by an Authorized
Officer and by an Expert (which Expert (a) shall be selected either by the
Board of Directors or by an Authorized Officer, the execution of such
certificate by such Authorized Officer to be conclusive evidence of such
selection, and (b) except as otherwise required in Sections 1206, 1603,
1707, 1810, may be an employee or Affiliate of the Company) and delivered to
the Trustee.  The amount stated in any
Expert’s Certificate as to the Cost, Fair Value or fair market value of
property shall be conclusive and binding upon the Company, the Trustee and the
Holders of the Securities.

 

“Fair Value”,
with respect to property, means the fair value of such property as may be
determined by reference to (a) the amount which would be likely to be
obtained in an arm’s-length transaction with respect to such property between
an informed and willing buyer and an informed and willing seller, under no
compulsion, respectively, to buy or sell, (b) the amount of investment
with respect to such property which, together with a reasonable return thereon,
would be likely to be recovered through ordinary business operations or
otherwise, (c) the Cost, accumulated depreciation, and replacement cost
with respect to such property and/or (d) any other relevant factors;
provided, however, that (x) the Fair Value of property shall be determined
without deduction for any Liens on such property prior to the Lien of this
Indenture (except as otherwise provided in Section 1803) and (y) the Fair
Value to the Company of Property Additions may be of less value to a Person
which is not the owner or operator of the Mortgaged Property or any portion
thereof than to a Person which is such owner or operator.  Fair Value may be determined, without
physical inspection, by the use of accounting and engineering records and other
data maintained by the Company or otherwise available to the Expert certifying
the same.

 

“Funded Cash”
has the meaning specified in Section 102.

 

7

 

“Funded Property”
has the meaning specified in Section 102.

 

“Governmental
Authority” means the government of the United States or of
any State or Territory thereof or of the District of Columbia or of any county,
municipality or other political subdivision of any thereof, or any department,
agency, authority or other instrumentality of any of the foregoing.

 

“Government
Obligations” means securities which are (a) (i) direct
obligations of the United States where the payment or payments thereunder are
supported by the full faith and credit of the United States or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States where the timely payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by the United States or (b) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act, which may include
the Trustee or any Paying Agent) as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of or other amount with
respect to the Government Obligation evidenced by such depository receipt.

 

“Holder” means
a Person in whose name a Security is registered in the Security Register.

 

“Indenture” or “Mortgage Indenture” means this instrument as originally
executed and as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Indenture and any such supplemental
indenture, respectively.  The term “Indenture”
shall also include the provisions or terms of particular series of Securities
established in any Officer’s Certificate, Board Resolution or Company Order
delivered pursuant to Sections 201, 301, 303 and 1307.

 

“Independent”,
when applied to any Accountant or Expert, means such a Person who (a) is
in fact independent, (b) does not have any direct material financial
interest in the Company or in any other obligor upon the Securities or in any
Affiliate of the Company or of such other obligor, (c) is not connected
with the Company or such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or any person performing similar
functions and (d) is approved by the Trustee in the exercise of reasonable
care.

 

“Independent
Expert’s Certificate” means a certificate signed by an
Independent Expert and delivered to the Trustee.

 

“interest” with
respect to a Discount Security means interest, if any, borne by such Security
at a Stated Interest Rate rather than interest calculated at any imputed rate.

 

“Interest
Payment Date”, when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

 

8

 

“Investment
Securities” means any of the following obligations or
securities on which neither the Company, any other obligor on the Securities
nor any Affiliate of either is the obligor: (a) Government Obligations; (b) interest
bearing deposit accounts (which may be represented by certificates of deposit)
in any national or state bank (which may include the Trustee or any Paying
Agent) or savings and loan association which has outstanding securities rated
by a nationally recognized rating organization in either of the two (2) highest
rating categories (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to
modifiers) for long term securities; (c) bankers’ acceptances drawn on and
accepted by any commercial bank (which may include the Trustee or any Paying
Agent) which has outstanding securities rated by a nationally recognized rating
organization in either of the two (2) highest rating categories (without
regard to modifiers) for short term securities or in any of the three (3) highest
rating categories (without regard to modifiers) for long term securities; (d) direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, any State or Territory of the United States or
the District of Columbia, or any political subdivision of any of the foregoing,
which are rated by a nationally recognized rating organization in either of the
two (2) highest rating categories (without regard to modifiers) for short
term securities or in any of the three (3) highest rating categories
(without regard to modifiers) for long term securities; (e) bonds or other
obligations of any agency or instrumentality of the United States; (f) corporate
debt securities which are rated by a nationally recognized rating organization
in either of the two (2) highest rating categories (without regard to
modifiers) for short term securities or in any of the three (3) highest
rating categories (without regard to modifiers) for long term securities; (g) repurchase
agreements with respect to any of the foregoing obligations or securities with
any banking or financial institution (which may include the Trustee or any
Paying Agent) which has outstanding securities rated by a nationally recognized
rating organization in either of the two (2) highest rating categories
(without regard to modifiers) for short term securities or in any of the three (3) highest
rating categories (without regard to modifiers) for long term securities; (h) securities
issued by any regulated investment company (including any investment company
for which the Trustee or any Paying Agent is the advisor), as defined in Section 851
of the Internal Revenue Code of 1986, as amended, or any successor section of
such Code or successor federal statute, provided that the portfolio of such
investment company is limited to obligations or securities of the character and
investment quality contemplated in clauses (a) through (f) above and
repurchase agreements which are fully collateralized by any of such obligations
or securities; and (i) any other obligations or securities which may
lawfully be purchased by the Trustee in its capacity as such.

 

“Lien” means
any mortgage, deed of trust, pledge, security interest, encumbrance, easement,
lease, reservation, restriction, servitude, charge or similar right and any
other lien of any kind, including, without limitation, any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
defect, irregularity, exception or limitation in record title.

 

“Maturity” when
used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as
provided in such Security or in this Indenture, whether at the Stated Maturity,
by declaration of acceleration, upon call for redemption or otherwise.

 

“Mortgaged Property”
means, as of any particular time, all property which at such time is subject to
the Lien of this Mortgage Indenture.

 

“Net Tangible Assets”
has the meaning specified in Section 707.

 

“Notice of Default”
means a written notice of the kind specified in Section 901(c).

 

9

 

“Officer’s
Certificate” means a certificate signed by an Authorized
Officer of the Company and delivered to the Trustee.

 

“Opinion of Counsel”
means a written opinion of counsel, who may be counsel for the Company, and who
shall be acceptable to the Trustee.

 

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

 

(a)                                  Securities
theretofore canceled or delivered to the Security Registrar for cancellation;

 

(b)                                 Securities
deemed to have been paid for all purposes of this Indenture in accordance with Section 801
(whether or not the Company’s indebtedness in respect thereof shall be
satisfied and discharged for any other purpose); and

 

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

 

provided, however,
that in determining whether or not the Holders of the requisite principal
amount of the Securities Outstanding under this Indenture, or the Outstanding
Securities of any series or Tranche, have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities,

 

(x)  Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor (unless the Company, such Affiliate or such obligor owns all Securities
Outstanding under this Indenture or (except for the purposes of actions to be
taken by Holders of (i) more than one series or more than one Tranche, as
the case may be, voting as a class under Section 1302) all Outstanding
Securities of each such series and each such Tranche, as the case may be,
determined without regard to this clause (x)) shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver or upon any such determination as to the presence of
a quorum, only Securities which the Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded; provided, however, that
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if it is established to the reasonable satisfaction of the Trustee
that the pledgee, and not the Company, or any such other obligor or Affiliate
of either thereof, has the right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor; and provided, further,
that in no event shall any Security which shall have been delivered to evidence
or secure, in whole or in part, the Company’s obligations in respect of other
indebtedness be deemed to be owned by the Company if the principal of such
Security is payable, whether at Stated Maturity or upon mandatory redemption,
at the same time as the principal of such other indebtedness is payable,
whether at Stated Maturity or upon mandatory redemption or

 

10

 

acceleration, but
only to the extent of such portion of the principal amount of such Security as
does not exceed the principal amount of such other indebtedness, and

 

(y)  the principal amount of a Discount Security
that shall be deemed to be Outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 902; and

 

(z)  the principal amount of any Security which is
denominated in a currency other than Dollars or in a composite currency that
shall be deemed to be Outstanding for such purposes shall be the amount of
Dollars which could have been purchased by the principal amount (or, in the
case of a Discount Security, the Dollar equivalent on the date determined as
set forth below of the amount determined as provided in (y) above) of such
currency or composite currency evidenced by such Security, in each such case
certified to the Trustee in an Officer’s Certificate, based (i) on the
average of the mean of the buying and selling spot rates quoted by three banks
which are members of the New York Clearing House Association selected by the
Company in effect at 11:00 A.M. (New York time) in The City of New York on
the fifth Business Day preceding any such determination or (ii) if on such
fifth Business Day it shall not be possible or practicable to obtain such
quotations from such three banks, on such other quotations or alternative
methods of determination which shall be as consistent as practicable with the
method set forth in (i) above;

 

provided, further,
that in the case of any Security the principal of which is payable from time to
time without presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all purposes of this
Indenture shall be the original principal amount thereof less the aggregate
amount of principal thereof theretofore paid.

 

“Paying Agent”
means any Person, including the Company, authorized by the Company to pay the
principal of, and premium, if any, or interest, if any, on any Securities on
behalf of the Company.

 

“Periodic Offering”
means an offering of Securities of a series from time to time any or all of the
specific terms of which Securities, including without limitation the rate or
rates of interest, if any, thereon, the Stated Maturity or Maturities thereof
and the redemption provisions, if any, with respect thereto, are to be
determined by the Company or its agents from time to time subsequent to the
initial request for the authentication and delivery of such Securities by the
Trustee, as contemplated in Section 301 and clause (b) of Section 303.

 

“Permitted Liens”
means, as of any particular time, any of the following:

 

(a)                                  Liens
existing at the Execution Date;

 

(b)                                 as
to property acquired by the Company after the Execution Date, Liens existing or
placed thereon at the time of the acquisition thereof;

 

(c)                                  Liens
for taxes, assessments and other governmental charges or requirements which are
not delinquent or which are being contested in good faith by appropriate
proceedings;

 

11

 

(d)                                 mechanics’,
workmen’s, repairmen’s, materialmen’s, warehousemen’s, and carriers’ Liens,
other Liens incident to construction, Liens or privileges of any employees of
the Company for salary or wages earned, but not yet payable, and other Liens,
including without limitation Liens for worker’s compensation awards, arising in
the ordinary course of business for charges or requirements which are not
delinquent or which are being contested in good faith and by appropriate
proceedings;

 

(e)                                  Liens
in respect of attachments, judgments or awards arising out of judicial or
administrative proceedings (i) in an amount not exceeding the greater of (A) Ten
Million Dollars ($10,000,000) and (B) three percent (3%) of the principal
amount of the Securities then Outstanding or (ii) with respect to which
the Company shall (X) in good faith be prosecuting an appeal or other
proceeding for review and with respect to which the Company shall have secured
a stay of execution pending such appeal or other proceeding or (Y) have the
right to prosecute an appeal or other proceeding for review;

 

(f)                                    easements,
leases, reservations or other rights of others in, on, over and/or across, and
laws, regulations and restrictions affecting, and defects, irregularities,
exceptions and limitations in title to, the Mortgaged Property or any part
thereof; provided, however, that such easements, leases, reservations, rights,
laws, regulations, restrictions, defects, irregularities, exceptions and
limitations do not in the aggregate materially impair the use by the Company of
the Mortgaged Property considered as a whole for the purposes for which it is
held by the Company;

 

(g)                                 defects,
irregularities, exceptions and limitations in title to real property subject to
rights-of-way in favor of the Company or otherwise or used or to be used by the
Company primarily for right-of-way purposes or real property held under lease,
easement, license or similar right; provided, however, that (i) the
Company shall have obtained from the apparent owner or owners of such real
property a sufficient right, by the terms of the instrument granting such
right-of-way, lease, easement, license or similar right, to the use thereof for
the purposes for which the Company acquired the same; (ii) the Company has
power under eminent domain or similar statutes to remove such defects,
irregularities, exceptions or limitations or (iii) such defects,
irregularities, exceptions and limitations may be otherwise remedied without
undue effort or expense; and defects, irregularities, exceptions and
limitations in title to flood lands, flooding rights and/or water rights;

 

(h)                                 Liens
securing indebtedness or other obligations neither created, assumed nor
guaranteed by the Company nor on account of which it customarily pays interest
upon real property or rights in or relating to real property acquired by the
Company for the purpose of the transmission or distribution of electric energy,
gas or water, for the purpose of telephonic, telegraphic, radio, wireless or
other electronic communication or otherwise for the purpose of obtaining rights-of-way;

 

(i)                                     leases
existing at the Execution Date affecting properties owned by the Company at
said date and renewals and extensions thereof; and leases affecting such
properties entered into after such date or affecting properties acquired by the
Company after such date which, in either case, (i) have respective terms
of not more than ten (10) years (including extensions or renewals at the
option of the tenant) or (ii) do not materially impair the use by the
Company of such properties for the respective purposes for which they are held
by the Company;

 

(j)                                     Liens
vested in lessors, licensors, franchisors or permitters for rent or other
amounts to become due or for other obligations or acts to be performed, the
payment of which rent or the performance of which other obligations or acts is
required under leases, subleases, licenses, franchises or

 

12

 

permits, so long as the payment of such rent or other amounts or the
performance of such other obligations or acts is not delinquent or is being
contested in good faith and by appropriate proceedings;

 

(k)                                  controls,
restrictions, obligations, duties and/or other burdens imposed by federal,
state, municipal or other law, or by rules, regulations or orders of Governmental
Authorities, upon the Mortgaged Property or any part thereof or the operation
or use thereof or upon the Company with respect to the Mortgaged Property or
any part thereof or the operation or use thereof or with respect to any
franchise, grant, license, permit or public purpose requirement, or any rights
reserved to or otherwise vested in Governmental Authorities to impose any such
controls, restrictions, obligations, duties and/or other burdens;

 

(l)                                     rights
which Governmental Authorities may have by virtue of franchises, grants,
licenses, permits or contracts, or by virtue of law, to purchase, recapture or
designate a purchaser of or order the sale of the Mortgaged Property or any
part thereof, to terminate franchises, grants, licenses, permits, contracts or
other rights or to regulate the property and business of the Company; and any
and all obligations of the Company correlative to any such rights;

 

(m)                               Liens
required by law or governmental regulations (i) as a condition to the
transaction of any business or the exercise of any privilege or license, (ii) to
enable the Company to maintain self-insurance or to participate in any funds
established to cover any insurance risks, (iii) in connection with workmen’s
compensation, unemployment insurance, social security, any pension or welfare
benefit plan or (iv) to share in the privileges or benefits required for
companies participating in one or more of the arrangements described in clauses
(ii) and (iii) above;

 

(n)                                 Liens
on the Mortgaged Property or any part thereof which are granted by the Company
to secure duties or public or statutory obligations or to secure, or serve in
lieu of, surety, stay or appeal bonds;

 

(o)                                 rights
reserved to or vested in others to take or receive any part of any coal, ore,
gas, oil and other minerals, any timber and/or any electric capacity or energy,
gas, water, steam and any other products, developed, produced, manufactured,
generated, purchased or otherwise acquired by the Company or by others on
property of the Company;

 

(p)                                 (i) 
rights and interests of Persons other than the Company arising out of
contracts, agreements and other instruments to which the Company is a party and
which relate to the common ownership or joint use of property; and (ii) all
Liens on the interests of Persons other than the Company in property owned in
common by such Persons and the Company if and to the extent that the
enforcement of such Liens would not adversely affect the interests of the
Company in such property in any material respect;

 

(q)                                 any
restrictions on assignment and/or requirements of any assignee to qualify as a
permitted assignee and/or public utility or public service corporation;

 

(r)                                    any
Liens which have been bonded for the full amount in dispute or for the payment
of which other adequate security arrangements have been made;

 

(s)                                  any
controls, liens, restrictions, regulations, easements, exceptions or
reservations of any public authority or unit applying particularly to any form
of space satellites (including but not limited

 

13

 

to solar power satellites), space stations and other analogous
facilities whether or not in the earth’s atmosphere;

 

(t)                                    rights
and interests granted pursuant to Section 1802(c);

 

(u)                                 Prepaid
Liens, Purchase Money Liens and all other Liens permitted to exist under Section 707;
and

 

(v)                                 any
Lien of the Trustee granted pursuant to Section 1007.

 

“Permitted
Secured Debt” has the meaning specified in Section 707.

 

“Person” means
any individual, corporation, joint venture, trust or unincorporated
organization or any Governmental Authority.

 

“Place of Payment”,
when used with respect to the Securities of any series, or Tranche thereof,
means the place or places, specified as contemplated by Section 301, at
which, subject to Section 702, principal of and premium, if any, and
interest, if any, on the Securities of such series or Tranche are payable.

 

“Predecessor
Security” of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu
of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Security.

 

“Prepaid Liens”
means any Lien securing indebtedness for the payment of which money in the
necessary amount shall have been irrevocably deposited in trust with the
trustee or other holder of such Lien; provided, however, that if such
indebtedness is to be redeemed or otherwise prepaid prior to the Stated
Maturity thereof, any notice requisite to such redemption or prepayment shall
have been given in accordance with the mortgage or other instrument creating
such Lien or irrevocable instructions to give such notice shall have been given
to such trustee or other holder.

 

“Property
Additions” has the meaning specified in Section 103.

 

“Purchase
Money Lien” means, with respect to any property being
acquired or disposed of by the Company or being released from the Lien of this
Indenture, a Lien on such property which

 

(a)                                  is
taken or retained by the transferor of such property to secure all or part of
the purchase price thereof;

 

(b)                                 is
granted to one or more Persons other than the transferor which, by making
advances or incurring an obligation, give value to enable the grantor of such
Lien to acquire rights in or the use of such property;

 

(c)                                  is
granted to any other Person in connection with the release of such property
from the Lien of this Indenture on the basis of the deposit with the Trustee or
the trustee or other holder of a Lien prior to the Lien of this Indenture of
obligations secured by such Lien on such property (as well as any other property
subject thereto);

 

14

 

(d)                                 is
held by a trustee or agent for the benefit of one or more Persons described in
clause (a), (b) and/or (c) above, provided that such Lien may be
held, in addition, for the benefit of one or more other Persons which shall
have theretofore given, or may thereafter give, value to or for the benefit or
account of the grantor of such Lien for one or more other purposes; or

 

(e)                                  otherwise
constitutes a purchase money mortgage or a purchase money security interest
under applicable law;

 

and, without limiting the generality of the foregoing, for purposes of
this Indenture, the term Purchase Money Lien shall be deemed to include any
Lien described above whether or not such Lien (x) shall permit the issuance or
other incurrence of additional indebtedness secured by such Lien on such
property, (y) shall permit the subjection to such Lien of additional property
and the issuance or other incurrence of additional indebtedness on the basis
thereof and/or (z) shall have been granted prior to the acquisition,
disposition or release of such property, shall attach to or otherwise cover
property other than the property being acquired, disposed of or released and/or
shall secure obligations issued prior and/or subsequent to the issuance of the
obligations delivered in connection with such acquisition, disposition or
release.

 

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

 

“Redemption
Price”, when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture, exclusive of accrued and unpaid interest.

 

“Regular
Record Date” for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

 

“Required
Currency” has the meaning specified in Section 311.

 

“Responsible
Officer”, when used with respect to the Trustee, means any
Vice President, Assistant Vice President, Trust Officer or other officer of the
Trustee who, in the case of each of the foregoing, is assigned by the Trustee
to its corporate trust department responsible for the administration of this
Indenture that is located in the Corporate Trust Office.

 

“Retired
Securities” means any Securities authenticated and delivered
under this Indenture which (a) no longer remain Outstanding by reason of
the applicability of clause (a) or (b) in the definition of “Outstanding”
(other than any Predecessor Security of any Security), (b) have not been
made the basis under any of the provisions of this Indenture of one or more
Authorized Purposes and (c) have not been paid, redeemed, purchased or
otherwise retired by the application thereto of Funded Cash.

 

“Secured Debt”
has the meaning specified in Section 707.

 

“Secured
Obligations” has the meaning specified in Section 707.

 

“Securities”
or “Secured Debt Securities” has the
meaning stated in the first recital of this Indenture and more particularly
means any securities authenticated and delivered under this Indenture.

 

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

 

15

 

“Security
Register” and “Security Registrar” have the respective
meanings specified in Section 305.

 

“Special Record Date”
for the payment of any Defaulted Interest on the Securities of any series means
a date fixed by the Trustee pursuant to Section 307.

 

“Stated
Interest Rate” means a rate (whether fixed or variable) at
which an obligation by its terms is stated to bear simple interest.  Any calculation or other determination to be
made under this Indenture by reference to the Stated Interest Rate on a
Security shall be made without regard to the effective interest cost to the
Company of such Security and without regard to the Stated Interest Rate on, or
the effective cost to the Company of, any other indebtedness the Company’s
obligations in respect of which are evidenced or secured in whole or in part by
such Security.

 

“Stated Maturity”,
when used with respect to any Security or any obligation or any installment of
principal thereof or interest thereon, means the date on which the principal of
such obligation or such installment of principal or interest is stated to be
due and payable (without regard to any provisions for redemption, prepayment,
acceleration, purchase or extension).

 

“Successor Company”
has the meaning set forth in Section 1201.

 

“supplemental
indenture” or “indenture supplemental
hereto” means an instrument supplementing or amending this Indenture
executed and delivered pursuant to Article Thirteen.

 

“Tranche” means
a group of Securities which (a) are of the same series and (b) have
identical terms except as to principal amount and/or date of issuance.

 

“Trustee” means
the Person named as the “Trustee” in the first paragraph of this Indenture
until a successor Trustee shall have been appointed by the Company pursuant to Section 1010
or otherwise have become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and thereafter “Trustee”
shall mean or include each Person who is then a Trustee hereunder, and if at
any time there is more than one such Person, “Trustee” as used with respect to
the Securities of any series shall mean the Trustee with respect to Securities
of that series.

 

“Trust Indenture Act”
means, as of any time, the Trust Indenture Act of 1939 as in effect at such
time.

 

“United States”
means the United States of America, its territories, its possessions and other
areas subject to its jurisdiction.

 

SECTION 102.                                           Funded
Property; Funded Cash.

 

“Funded
Property” means:

 

(a)                                  [reserved];

 

(b)                                 all
Property Additions to the extent that the same shall have been made the basis
of the authentication and delivery of Securities under this Indenture pursuant
to Section 1603;

 

16

 

(c)                                  all
Property Additions to the extent that the same shall have been made the basis
of the release of Funded Property from the Lien of this Indenture pursuant to Section 1803;

 

(d)                                 all
Property Additions to the extent that the same shall have been substituted for
Funded Property retired pursuant to Section 103;

 

(e)                                  all
Property Additions to the extent that the same shall have been made the basis
of the withdrawal of cash held by the Trustee pursuant to Section 1605 or
1806; and

 

(f)                                    all
Property Additions to the extent that the same shall have been used as the
basis of a credit against, or otherwise in satisfaction of, the requirements of
any sinking, improvement, maintenance, replacement or similar fund or analogous
provision established with respect to the Securities of any series, or any
Tranche thereof, as contemplated by Section 301; provided, however, that
any such Property Additions shall cease to be Funded Property when all of the
Securities of such series or Tranche shall cease to be Outstanding.

 

In the event that
in any certificate filed with the Trustee in connection with any of the
Property Additions referred to in clauses (b), (c), (e) and (f) of
this definition of Funded Property, only a part of the Cost or Fair Value of
the Property Additions described in such certificate shall be required for the
purposes of such certificate, then such Property Additions shall be deemed to
be Funded Property only to the extent so required for the purpose of such
certificate.

 

All Funded
Property that shall be abandoned, destroyed, released or otherwise disposed of
shall for the purpose of Section 103 hereof be deemed Funded Property
retired and for other purposes of this Indenture shall thereupon cease to be
Funded Property but as in this Indenture provided may at any time thereafter
again become Funded Property.  Neither
any reduction in the Cost or book value of property recorded in the plant
account of the Company, nor the transfer of any amount appearing in such
account to intangible and/or adjustment accounts, otherwise than in connection
with actual retirements of physical property abandoned, destroyed, released or
disposed of, and otherwise than in connection with the removal of such property
in its entirety from plant account, shall be deemed to constitute a retirement
of Funded Property.

 

The Company may
make allocations, on a pro-rata or other reasonable basis (including, but not
limited to, the designation of specific properties or the designation of all or
a specified portion of the properties reflected in one or more generic accounts
or subaccounts in the Company’s books of account), for the purpose of
determining the extent to which fungible properties, or other properties not
otherwise identified, reflected in the same generic account or subaccount in
the Company’s books of account constitute Funded Property or Funded Property
retired.

 

“Funded
Cash” means:

 

(a)                                  cash,
held by the Trustee hereunder, to the extent that it represents the proceeds of
insurance on Funded Property (except as otherwise provided in Section 1815),
or cash deposited in connection with the release of Funded Property pursuant to
Article Eighteen, or the payment of the principal of, or the proceeds of
the release of, obligations secured by Purchase Money Lien and delivered to the
Trustee pursuant to Article Eighteen, all subject, however, to the
provisions of Section 1815 and Section 1806;

 

(b)                                 any
cash deposited with the Trustee under Section 1605; and

 

17

 

(c)                                  [reserved].

 

SECTION 103.                                           Property
Additions; Cost.

 

(a)                                  “Property Additions” means, as of any particular time, any
item, unit or element of property which at such time is owned by the Company
and is Mortgaged Property.

 

(b)                                 When
any Property Additions are certified to the Trustee as the basis of any
Authorized Purpose (except as otherwise provided in Section 1803 and Section 1806),

 

(i)                                     there
shall be deducted from the Cost or Fair Value to the Company thereof, as the
case may be (as of the date so certified), an amount equal to the Cost (or as
to Property Additions of which the Fair Value to the Company at the time the
same became Funded Property was certified to be an amount less than the Cost as
determined pursuant to this Section, then such Fair Value, as so certified, in
lieu of Cost) of all Funded Property of the Company retired to the date of such
certification (other than the Funded Property, if any, in connection with the
application for the release of which such certificate is filed) and not
theretofore deducted from the Cost or Fair Value to the Company of Property
Additions theretofore certified to the Trustee, and

 

(ii)                                  there
may, at the option of the Company, be added to such Cost or Fair Value, as the
case may be, the sum of

 

(1)                                  the
principal amount of any obligations secured by Purchase Money Lien, not
theretofore so added and which the Company then elects so to add, which shall
theretofore have been delivered to the Trustee or the trustee or other holder
of a Lien prior to the Lien of this Indenture as the basis of the release of
Funded Property retired from the Lien of this Indenture or such prior Lien, as
the case may be;

 

(2)                                  the
amount of any cash, not theretofore so added and which the Company then elects
so to add, which shall theretofore have been delivered to the Trustee or the
trustee or other holder of a Lien prior to the Lien of this Indenture as the
proceeds of insurance on Funded Property retired (to the extent of the portion
thereof deemed to be Funded Cash) or as the basis of the release of Funded
Property retired from the Lien of this Indenture or from such prior Lien, as
the case may be;

 

(3)                                  the
principal amount of any Security or Securities, or portion of such principal
amount, not theretofore so added and which the Company then elects so to add,
(I) which shall theretofore have been delivered to the Trustee as the basis of
the release of Funded Property retired or (II) the right to the authentication
and delivery of which under the provisions of Section 1604 shall at any
time theretofore have been waived under Section 1803(d)(iii) as the
basis of the release of Funded Property retired;

 

(4)                                  the
Cost or Fair Value to the Company (whichever shall be less) of any Property
Additions, not theretofore so added and which the Company then elects so to
add, which shall theretofore have been made the basis of the release of Funded
Property retired (such Fair Value to be the amount shown in the Expert’s
Certificate delivered to the Trustee in connection with such release); and

 

18

 

(5)                                  the
Cost to the Company of any Property Additions not theretofore so added and
which the Company then elects so to add, to the extent that the same shall have
been substituted for Funded Property retired;

 

provided, however, that the aggregate of the amounts added under clause
(ii) above shall in no event exceed the amounts deducted under clause (i) above.

 

(c)                                  Except
as otherwise provided in Section 1803, the term “Cost”
with respect to Property Additions shall mean the sum of (i) any cash
delivered in payment therefor or for the acquisition thereof, (ii) an
amount equivalent to the fair market value in cash (as of the date of delivery)
of any securities or other property delivered in payment therefor or for the
acquisition thereof, (iii) the principal amount of any obligations secured
by prior Lien upon such Property Additions outstanding at the time of the
acquisition thereof, (iv) the principal amount of any other obligations
incurred or assumed in connection with the payment for such Property Additions
or for the acquisition thereof and (v) any other amounts which, in
accordance with generally accepted accounting principles, are properly charged
or chargeable to the plant or other property accounts of the Company with
respect to such Property Additions as part of the cost of construction or
acquisition thereof, including, but not limited to, any allowance for funds
used during construction or any similar or analogous amount; provided, however,
that, notwithstanding any other provision of this Indenture,

 

(i)                                     with
respect to Property Additions owned by a successor corporation immediately
prior to the time it shall have become such by consolidation or merger or
acquired by a successor corporation in or as a result of a consolidation or
merger (excluding, in any case, Property Additions owned by the Company
immediately prior to such time), Cost shall mean the amount or amounts at which
such Property Additions are recorded in the plant or other property accounts of
such successor corporation, or the predecessor corporation from which such
Property Additions are acquired, as the case may be, immediately prior to such
consolidation or merger;

 

(ii)                                  with
respect to Property Additions which shall have been acquired (otherwise than by
construction) by the Company without any consideration consisting of cash,
securities or other property or the incurring or assumption of indebtedness, no
determination of Cost shall be required, and, wherever in this Indenture
provision is made for Cost or Fair Value, Cost with respect to such Property
Additions shall mean an amount equal to the Fair Value to the Company thereof
or, if greater, the aggregate amount reflected in the Company’s books of
account with respect thereto upon the acquisition thereof; and

 

(iii)                               in no event shall the
Cost of Property Additions be required to reflect any depreciation or
amortization in respect of such Property Additions, or any adjustment to the
amount or amounts at which such Property Additions are recorded in plant or
other property accounts due to the non-recoverability of investment or
otherwise.

 

If any Property
Additions are shown by the Expert’s Certificate provided for in Section 1603(b)(ii) to
include property which has been used or operated by others than the Company in
a business similar to that in which it has been or is to be used or operated by
the Company, the Cost thereof need not be reduced by any amount in respect of
any goodwill, going concern value rights and/or intangible property
simultaneously acquired for which no separate or distinct consideration shall
have been paid or apportioned, and in such case the term Property Additions as
defined herein may include such goodwill, going concern value rights and
intangible property.

 

19

 

SECTION 104.                                           Compliance
Certificates and Opinions.

 

Except as otherwise
expressly provided in this Indenture, upon any application or request by the
Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officer’s Certificate
stating that in the opinion of the Authorized Officer executing such Officer’s
Certificate all conditions precedent, if any, provided for in this Indenture
relating to the proposed action (including any covenants compliance with which
constitutes a condition precedent) have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.

 

Every certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture shall include:

 

(a)                                  a
statement that each Person signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;

 

(b)                                 a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

 

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

 

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

 

SECTION 105.                                           Form of
Documents Delivered to Trustee.

 

(a)                                  Any
Officer’s Certificate may be based (without further examination or
investigation), insofar as it relates to or is dependent upon legal matters,
upon an opinion of, or representations by, counsel, and, insofar as it relates
to or is dependent upon matters which are subject to verification by
Accountants, upon a certificate or opinion of, or representations by, an
Accountant, and insofar as it relates to or is dependent upon matters which are
required in this Indenture to be covered by a certificate or opinion of, or
representations by, an Expert, upon the certificate or opinion of, or
representations by, an Expert, unless, in any case, such officer has actual
knowledge that the certificate or opinion or representations with respect to
the matters upon which such Officer’s Certificate may be based as aforesaid are
erroneous.

 

Any Expert’s
Certificate may be based (without further examination or investigation),
insofar as it relates to or is dependent upon legal matters, upon an opinion
of, or representations by, counsel, and insofar as it relates to or is
dependent upon factual matters, information with respect to which is in the
possession of the Company and which are not subject to verification by Experts,
upon a certificate or opinion of, or representations by, an officer or officers
of the Company, unless such expert has actual knowledge that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion may be based as aforesaid are erroneous.

 

20

 

Any certificate of
an Accountant may be based (without further examination or investigation),
insofar as it relates to or is dependent upon legal matters, upon an opinion
of, or representations by, counsel, and in so far as it relates to or is
dependent upon factual matters, information with respect to which is in the
possession of the Company and which are not subject to verification by
Accountants, upon a certificate of, or representations by, an officer or
officers of the Company, unless such Accountant has actual knowledge that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion may be based as aforesaid are erroneous.

 

Any Opinion of
Counsel may be based (without further examination or investigation), insofar as
it relates to or is dependent upon factual matters, information with respect to
which is in the possession of the Company, upon a certificate of, or representations
by, an officer or officers of the Company, and, insofar as it relates to or is
dependent upon matters which are subject to verification by Accountants upon a
certificate or opinion of, or representations by, an Accountant, and, insofar
as it relates to or is dependent upon matters required in this Indenture to be
covered by a certificate or opinion of, or representations by, an Expert, upon
the certificate or opinion of, or representations by, an Expert, unless such
counsel has actual knowledge that the certificate or opinion or representations
with respect to the matters upon which his opinion may be based as aforesaid
are erroneous.  In addition, any Opinion
of Counsel may be based (without further examination or investigation), insofar
as it relates to or is dependent upon matters covered in an Opinion of Counsel
rendered by other counsel, upon such other Opinion of Counsel, unless such
counsel has actual knowledge that the Opinion of Counsel rendered by such other
counsel with respect to the matters upon which his Opinion of Counsel may be
based as aforesaid are erroneous. 
Further, any Opinion of Counsel with respect to the status of title to
or the sufficiency of descriptions of property, and/or the existence of Liens
thereon, and/or the recording or filing of documents, and/or any similar
matters, may be based (without further examination or investigation) upon (i) title
insurance policies or commitments and reports, abstracts of title, lien search
certificates and other similar documents or (ii) certificates of, or
representations by, officers, employees, agents and/or other representatives of
the Company or (iii) any combination of the documents referred to in (i) and
(ii), unless, in any case, such counsel has actual knowledge that the document
or documents with respect to the matters upon which his opinion may be based as
aforesaid are erroneous.  If, in order to
render any Opinion of Counsel provided for herein, the signer thereof shall
deem it necessary that additional facts or matters be stated in any Officer’s
Certificate, certificate of an Accountant or Expert’s Certificate provided for
herein, then such certificate may state all such additional facts or matters as
the signer of such Opinion of Counsel may request.

 

(b)                                 In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.  Where (i) any Person is required to
make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
or (ii) two or more Persons are each required to make, give or execute any
such application, request, consent, certificate, statement, opinion or other
instrument, any such applications, requests, consents, certificates,
statements, opinions or other instruments may, but need not, be consolidated
and form one instrument.

 

(c)                                  Whenever,
subsequent to the receipt by the Trustee of any Board Resolution, Officer’s
Certificate, Expert’s Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new

 

21

 

document or instrument may be substituted therefor in corrected form
with the same force and effect as if originally filed in the corrected form
and, irrespective of the date or dates of the actual execution and/or delivery
thereof, such substitute document or instrument shall be deemed to have been
executed and/or delivered as of the date or dates required with respect to the
document or instrument for which it is substituted.  Anything in this Indenture to the contrary
notwithstanding, if any such corrective document or instrument indicates that
action has been taken by or at the request of the Company which could not have
been taken had the original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or otherwise rendered
ineffective but shall be and remain in full force and effect, except to the
extent that such action was a result of willful misconduct or bad faith.  Without limiting the generality of the foregoing,
any Securities issued under the authority of such defective document or
instrument shall nevertheless be the valid obligations of the Company entitled
to the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.

 

SECTION 106.                                           Acts of Holders.

 

(a)                                  Any
request, demand, authorization, direction, notice, consent, election, waiver or
other action  provided by this Indenture
to be made, given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders duly called and held in accordance with the provisions of Article Fourteen,
or a combination of such instruments and any such record.  Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby
expressly required, to the Company.  Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the “Act” of the
Holders signing such instrument or instruments and so voting at any such
meeting.  Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 1001) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.  The record of any meeting of Holders shall be
proved in the manner provided in Section 1406.

 

(b)                                 The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof or may be
proved in any other manner which the Trustee and the Company deem
sufficient.  Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.

 

(c)                                  The
ownership, principal amount (except as otherwise contemplated in clause (y) of
the first proviso to the definition of Outstanding) and serial numbers of
Securities held by any Person, and the date of holding the same, shall be
proved by the Security Register.

 

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

 

22

 

(e)                                  Until
such time as written instruments shall have been delivered to the Trustee with
respect to the requisite percentage of principal amount of Securities for the
action contemplated by such instruments, any such instrument executed and
delivered by or on behalf of a Holder may be revoked with respect to any or all
of such Securities by written notice by such Holder or any subsequent Holder,
proven in the manner in which such instrument was proven.

 

(f)                                    Securities
of any series, or any Tranche thereof, authenticated and delivered after any
Act of Holders may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any action taken by such Act of
Holders.  If the Company shall so
determine, new Securities of any series, or any Tranche thereof, so modified as
to conform, in the opinion of the Trustee and the Company, to such action may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series or Tranche.

 

(g)                                 If
the Company shall solicit from Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its
option, fix in advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so.  If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of the
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of the record
date.

 

SECTION 107.                                           Notices,
Etc. to Trustee or Company.

 

Except as otherwise
provided herein, any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with, the Trustee by any Holder or by the Company, or the Company by the
Trustee or by any Holder, shall be sufficient for every purpose hereunder
(unless otherwise expressly provided herein) if in writing and delivered
personally to an officer or other responsible employee of the addressee, or
transmitted by facsimile transmission or other direct written electronic means
to such telephone number or other electronic communications address set forth
for such party below or such other address as the parties hereto shall from
time to time designate, or delivered by registered or certified mail or
reputable overnight courier, charges prepaid, to the applicable address set
forth for such party below or to such other address as either party hereto may
from time to time designate:

 

	
   

  	
  If to the
  Trustee, to:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (   )

  	
   

  	
   

  
	
   

  	
  Telecopy: 

  	
  (   )

  	
   

  	
   

  
							

 

23

 

	
   

  	
  If to the
  Company, to:

  
	
   

  	
   

  
	
   

  	
  The Union Light,
  Heat and Power Company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (   )

  	
   

  	
   

  
	
   

  	
  Telecopy: 

  	
  (   )

  	
   

  	
   

  
							

 

Any communication
contemplated herein shall be deemed to have been made, given, furnished and
filed if personally delivered, on the date of delivery, if transmitted by
facsimile transmission or other direct written electronic means, on the date of
transmission, and if transmitted by registered or certified mail or reputable
overnight courier, on the date of receipt.

 

SECTION 108.                                           Notice to
Holders of Securities; Waiver.

 

Except as otherwise
expressly provided herein, where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given, and shall be deemed
given, to Holders if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder as it appears
in the Security Register, not later than the latest date, and not earlier than
the earliest date, if any, prescribed for the giving of such Notice.

 

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

 

Any notice required by
this Indenture may be waived in writing by the Person entitled to receive such
notice, either before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

 

SECTION 109.                                           Conflict
with Trust Indenture Act.

 

If any provision of this
Indenture limits, qualifies or conflicts with another provision hereof which is
required or deemed to be included in this Indenture by, or is otherwise
governed by, any provision of the Trust Indenture Act, such other provision
shall control; and if any provision hereof otherwise conflicts with the Trust
Indenture Act, the Trust Indenture Act shall control unless otherwise provided
as contemplated by Section 301 with respect to any series of Securities.

 

24

 

SECTION 110.                                           Effect of
Headings and Table of Contents.

 

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

 

SECTION 111.                                           Successors
and Assigns.

 

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

 

SECTION 112.                                           Separability
Clause.

 

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

 

SECTION 113.                                           Benefits of
Indenture.

 

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

 

SECTION 114.                                           Governing
Law.

 

This Indenture and the
Securities shall be governed by and construed in accordance with the law of the
State of New York (including without limitation Section 5-1401 of the New
York General Obligations Law or any successor to such statute), except to the
extent that the Trust Indenture Act shall be applicable and except to the
extent that the law of any jurisdiction wherein any portion of the Mortgaged Property
is located shall mandatorily govern the creation of a mortgage lien on or
security interest in, or perfection, priority or enforcement of the Lien of
this Indenture or exercise of remedies with respect to, such portion of the
Mortgaged Property.

 

SECTION 115.                                           Legal
Holidays.

 

In any case where any
Interest Payment Date, Redemption Date or Stated Maturity of any Security shall
not be a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities other than a provision in
Securities of any series, or any Tranche thereof, or in the indenture
supplemental hereto, Board Resolution or Officer’s Certificate which
establishes the terms of the Securities of such series or Tranche, which
specifically states that such provision shall apply in lieu of this Section)
payment of interest or principal and premium, if any, need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date, Redemption Date, or Stated Maturity, and, if such
payment is made or duly provided for on such Business Day, no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be, to such
Business Day.

 

25

 

SECTION 116.                                           Investment
of Cash Held by Trustee.

 

Any cash held by the
Trustee or any Paying Agent under any provision of this Indenture shall, except
as otherwise provided in Section 1806 or in Article Eight, at the
request of the Company evidenced by Company Order, be invested or reinvested in
Investment Securities designated by the Company (such Company Order to contain
a representation to the effect that the securities designated therein
constitute Investment Securities), and any interest on such Investment
Securities shall be promptly paid over to the Company as received free and
clear of any Lien.  Such Investment
Securities shall be held subject to the same provisions hereof as the cash used
to purchase the same, but upon a like request of the Company shall be sold, in
whole or in designated part, and the proceeds of such sale shall be held subject
to the same provisions hereof as the cash used to purchase the Investment
Securities so sold.  If such sale shall
produce a net sum less than the cost of the Investment Securities so sold, the
Company shall pay to the Trustee or any such Paying Agent, as the case may be,
such amount in cash as, together with the net proceeds from such sale, shall
equal the cost of the Investment Securities so sold, and if such sale shall
produce a net sum greater than the cost of the Investment Securities so sold,
the Trustee or any such Paying Agent, as the case may be, shall promptly pay
over to the Company an amount in cash equal to such excess, free and clear of
any Lien.  In no event shall the Trustee
be liable for any loss incurred in connection with the sale of any Investment
Security pursuant to this Section.

 

Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing,
interest on Investment Securities and any gain upon the sale thereof shall be
held as part of the Mortgaged Property until such Event of Default shall have
been cured or waived, whereupon such interest and gain shall be promptly paid
over to the Company free and clear of any Lien.

 

ARTICLE TWO

 

Security Forms

 

SECTION 201.                                           Forms
Generally.

 

The definitive Securities
of each series shall be in substantially the form or forms thereof established
in the indenture supplemental hereto establishing such series or in a Board
Resolution establishing such series, or in an Officer’s Certificate pursuant to
such a supplemental indenture or Board Resolution, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or
as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution thereof.  If the form or forms of Securities of any
series are established in a Board Resolution or in an Officer’s Certificate
pursuant to a Supplemental Indenture or a Board Resolution, such Board
Resolution and Officer’s Certificate, if any, shall be delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 303
for the authentication and delivery of such Securities.

 

Unless otherwise
specified as contemplated by Section 301, the Securities of each series
shall be issuable in registered form without coupons.  The definitive Securities shall be produced
in such manner as shall be determined by the officers executing such
Securities, as evidenced by their execution thereof.

 

26

 

SECTION 202.                                           Form of
Trustee’s Certificate of Authentication.

 

The Trustee’s certificate
of authentication shall be in substantially the form set forth below:

 

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

 

	
   

  	
   

  	
  ,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
					

 

ARTICLE THREE

 

The Securities

 

SECTION 301.                                           Amount
Unlimited; Issuable in Series.

 

The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.

 

The Securities may be
issued in one or more series.  Subject to
the last paragraph of this Section, prior to the authentication and delivery of
Securities of any series there shall be established by specification in a supplemental
indenture or in a Board Resolution or in an Officer’s Certificate pursuant to a
supplemental indenture or a Board Resolution:

 

(a)                                  the
title of the Securities of such series (which shall distinguish the Securities
of such series from Securities of all other series);

 

(b)                                 any
limit upon the aggregate principal amount of the Securities of such series
which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of such series pursuant to Section 304,
305, 306, 506 or 1306 and except for any Securities which, pursuant to Section 303,
are deemed never to have been authenticated and delivered hereunder);

 

(c)                                  the
Person or Persons (without specific identification) to whom any interest on
Securities of such series, or any Tranche thereof, shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest;

 

(d)                                 the
date or dates on which the principal of the Securities of such series or any
Tranche thereof, is payable or any formulary or other method or other means by
which such date or dates shall be determined, by reference to an index or other
fact or event ascertainable outside of this Indenture or otherwise (without
regard to any provisions for redemption, prepayment, acceleration, purchase or

 

27

 

extension); and the right, if any, to extend the
Maturity of the Securities of such series, or any Tranche thereof, and the
duration of any such extension;

 

(e)                                  the
rate or rates at which the Securities of such series, or any Tranche thereof,
shall bear interest, if any (including the rate or rates at which overdue
principal shall bear interest after Maturity if different from the rate or
rates at which such Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or interest shall bear interest,
if any), or any formulary or other method or other means by which such rate or
rates shall be determined by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise, the date or dates from
which such interest shall accrue; the Interest Payment Dates and the Regular
Record Dates, if any, for the interest payable on such Securities on any
Interest Payment Date; and the basis of computation of interest, if other than
as provided in Section 310; and the right, if any, to extend the interest
payment periods and the duration of any such extension;

 

(f)                                    the
place or places at which and/or methods (if other than as provided elsewhere in
this Indenture) by which (i) the principal of and premium, if any, and
interest, if any, on Securities of such series, or any Tranche thereof, shall
be payable, (ii) registration of transfer of Securities of such series, or
any Tranche thereof, may be effected, (iii) exchanges of Securities of
such series, or any Tranche thereof, may be effected and (iv) notices and
demands to or upon the Company in respect of the Securities of such series, or
any Tranche thereof, and this Indenture may be served; the Security Registrar
and any Paying Agent or Agents for such series or Tranche; and, if such is the
case, that the principal of such Securities shall be payable without the
presentment or surrender thereof;

 

(g)                                 the
period or periods within which, or the date or dates on which, the price or
prices at which and the terms and conditions upon which the Securities of such
series, or any Tranche thereof, may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such redemptions; including but
not limited to a restriction on a partial redemption by the Company of the Securities
of any series, or any Tranche thereof, resulting in delisting of such
Securities from any national exchange;

 

(h)                                 the
obligation or obligations, if any, of the Company to redeem or purchase or
repay the Securities of such series, or any Tranche thereof, pursuant to any
sinking fund or other mandatory redemption provisions or at the option of a
Holder thereof and the period or periods within which or the date or dates on
which, the price or prices at which and the terms and conditions upon which such
Securities shall be redeemed or purchased or repaid, in whole or in part,
pursuant to such obligation and applicable exceptions to the requirements of Section 504
in the case of mandatory redemption or redemption or repayment at the option of
the Holder;

 

(i)                                     the
denominations in which Securities of such series, or any Tranche thereof, shall
be issuable if other than denominations of One Thousand Dollars ($1,000) and
any integral multiple thereof;

 

(j)                                     if
the principal of or premium, if any, or interest, if any, on the Securities of
such series, or any Tranche thereof, are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency other than that in which the
Securities are stated to be payable, the period or periods within which, and
the terms and conditions upon which, such election may be made and the manner
in which the amount of such coin or currency payable is to be determined;

 

(k)                                  the
currency or currencies, including composite currencies, in which payment of the
principal of and premium, if any, and interest, if any, on the Securities of
such series, or any Tranche

 

28

 

thereof, shall be payable (if other than Dollars) and
the manner in which the equivalent of the principal amount thereof in Dollars
is to be determined for any purpose, including for the purpose of determining
the principal amount deemed to be Outstanding at any time;

 

(l)                                     if
the principal of or premium, if any, or interest, if any, on the Securities of
such series, or any Tranche thereof, are to be payable, or are to be payable at
the election of the Company or a Holder thereof, in securities or other
property, the type and amount of such securities or other property, or the
formulary or other method or other means by which such amount shall be
determined, and the period or periods within which, and the terms and
conditions upon which, any such election may be made;

 

(m)                               if
the amount payable in respect of principal of or premium, if any, or interest,
if any, on the Securities of such series, or any Tranche thereof, may be
determined with reference to an index or other fact or event ascertainable
outside this Indenture, the manner in which such amounts shall be determined to
the extent not established pursuant to clause (e) of this paragraph;

 

(n)                                 if
other than the entire principal amount thereof, the portion of the principal
amount of Securities of such series, or any Tranche thereof, which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant to Section 902;

 

(o)                                 any
Events of Default, in addition to those specified in Section 901, or any
exceptions to those specified in Section 901, with respect to the
Securities of such series, and any covenants of the Company for the benefit of
the Holders of the Securities of such series, or any Tranche thereof, in
addition to those set forth in Article Seven, or any exceptions to those
set forth in Article Seven;

 

(p)                                 the
terms, if any, pursuant to which the Securities of such series, or any Tranche
thereof, may be converted into or exchanged for shares of capital stock or
other securities of the Company or any other Person;

 

(q)                                 the
obligations or instruments, if any, which shall be considered to be Eligible
Obligations in respect of the Securities of such series, or any Tranche
thereof, denominated in a currency other than Dollars or in a composite
currency, whether Eligible Obligations include Investment Securities with
respect to Securities of such series, and any provisions for satisfaction and
discharge of Securities of any series, in addition to those set forth in Article Eight,
or any exceptions to those set forth in Article Eight;

 

(r)                                    if
the Securities of such series, or any Tranche thereof, are to be issued in
global form, (i) any limitations on the rights of the Holder or Holders of
such Securities to transfer or exchange the same or to obtain the registration
of transfer thereof, (ii) any limitations on the rights of the Holder or
Holders thereof to obtain certificates therefor in definitive form in lieu of
global form and (iii) any other matters incidental to such Securities;

 

(s)                                  if
the Securities of such series, or any Tranche thereof, are to be issuable as
bearer securities, any and all matters incidental thereto which are not specifically
addressed in a supplemental indenture as contemplated by clause (g) of Section 1301;

 

(t)                                    to
the extent not established pursuant to clause (r) of this paragraph, any
limitations on the rights of the Holders of the Securities of such Series, or
any Tranche thereof, to transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be

 

29

 

made for the registration of transfer or exchange of
Securities of such series, or any Tranche thereof, the amount or terms thereof;

 

(u)                                 any
exceptions to Section 115, or variation in the definition of Business Day,
with respect to the Securities of such series, or any Tranche thereof;

 

(v)                                 whether
the Securities of such series are Benefitted Securities under Section 707;

 

(w)                               any
other terms of the Securities of such series, or any Tranche thereof, that the
Company may elect to specify.

 

With respect to
Securities of a series subject to a Periodic Offering, the indenture
supplemental hereto or the Board Resolution which establishes such series, or
the Officer’s Certificate pursuant to such supplemental indenture or Board
Resolution, as the case may be, may provide general terms or parameters for
Securities of such series and provide either that the specific terms of
Securities of such series, or any Tranche thereof, shall be specified in a
Company Order or that such terms shall be determined by the Company or its
agents in accordance with procedures specified in a Company Order as
contemplated in clause (b) of Section 303.

 

Unless otherwise provided
with respect to a series of Securities as contemplated in Section 301(b),
the aggregate principal amount of a series of Securities may be increased and
additional Securities of such series may be issued up to the maximum aggregate
principal amount authorized with respect to such series as increased.

 

SECTION 302.                                           Denominations.

 

Unless otherwise provided
as contemplated by Section 301 with respect to any series of Securities,
or any Tranche thereof, the Securities of each series shall be issuable in
denominations of One Thousand Dollars ($1,000) and any integral multiple
thereof.

 

SECTION 303.                                           Execution,
Authentication, Delivery and Dating.

 

Unless otherwise provided
as contemplated by Section 301 with respect to any series of Securities or
any Tranche thereof, the Securities shall be executed on behalf of the Company
by an Authorized Officer, and may have the corporate seal of the Company
affixed thereto or reproduced thereon attested by any other Authorized Officer
or by the Secretary or an Assistant Secretary of the Company.  The signature of any or all of these officers
on the Securities may be manual or facsimile.

 

Securities bearing the
manual or facsimile signatures of individuals who were at the time of execution
Authorized Officers or the Secretary or an Assistant Secretary of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such Securities.

 

The Trustee shall
authenticate and deliver Securities of a series for original issue, at one time
or from time to time in accordance with the Company Order referred to below,
upon receipt by the Trustee of:

 

30

 

(a)                                  the
instrument or instruments establishing the form or forms and terms of the
Securities of such series, as provided in Sections 201 and 301;

 

(b)                                 a
Company Order requesting the authentication and delivery of such Securities
and, to the extent that the terms of such Securities shall not have been
established in an indenture supplemental hereto or in a Board Resolution, or in
an Officer’s Certificate pursuant to a supplemental indenture or Board
Resolution, all as contemplated by Section 301, either (i) establishing
such terms or (ii) in the case of Securities of a series subject to a
Periodic Offering, specifying procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures may provide, to the extent
acceptable to the Trustee, for authentication and delivery pursuant to oral or
electronic instructions from the Company or any agent or agents thereof, which
oral instructions are to be promptly confirmed electronically or in writing),
in either case in accordance with the instrument or instruments establishing
the terms of the Securities of such series delivered pursuant to clause (a) above.

 

(c)                                  any
opinions, certificates, documents and instruments required by Article Sixteen;

 

(d)                                 Securities
of such series, each executed on behalf of the Company by an Authorized Officer
of the Company;

 

(e)                                  an
Officer’s Certificate (i) which shall comply with the requirements of Section 104
of this Indenture and (ii) which states that no Event of Default under
this Indenture has occurred or is occurring;

 

(f)                                    an
Opinion of Counsel which shall comply with the requirements of Section 104
of this Indenture and that states that:

 

(i)                                     the
form or forms of such Securities have been duly authorized by the Company and
have been established in conformity with the provisions of this Indenture;

 

(ii)                                  the
terms of such Securities have been duly authorized by the Company and have been
established in conformity with the provisions of this Indenture; and

 

(iii)                               when such Securities
shall have been authenticated and delivered by the Trustee and issued and
delivered by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, such Securities will have been duly issued under
this Indenture and will constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to enforcement, to laws relating to
or affecting generally the enforcement of mortgagees’ and other creditors’
rights, including, without limitation, bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and remedies of
creditors and mortgagees’ generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

 

provided, however, that,
with respect to Securities of a series subject to a Periodic Offering, the
Trustee shall be entitled to receive such Opinion of Counsel only once at or
prior to the time of the first authentication and delivery of Securities of
such series and that in lieu of the opinions described in clauses (ii) and
(iii) above such Opinion of Counsel may, alternatively, state,
respectively,

 

31

 

(x)                                   that,
when the terms of such Securities shall have been established pursuant to a
Company Order or Orders, or pursuant to such procedures as may be specified
from time to time by a Company Order or Orders, all as contemplated by and in
accordance with the instrument or instruments delivered pursuant to clause (a) above,
such terms will have been duly authorized by the Company and will have been
established in conformity with the provisions of this Indenture; and

 

(y)                                 that,
such Securities, when (1) executed by the Company, (2) authenticated
and delivered by the Trustee in accordance with this Indenture, (3) issued
and delivered by the Company and (4) paid for, all as contemplated by and
in accordance with the aforesaid Company Order or Orders, as the case may be,
will have been duly issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to the benefits provided
by the Indenture, and enforceable in accordance with their terms, subject, as
to enforcement, to laws relating to or affecting generally the enforcement of
mortgagees’ and other creditors’ rights, including, without limitation,
bankruptcy, insolvency, reorganization, receivership, moratorium and other laws
affecting the rights and remedies of creditors and mortgagees’ generally and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

With respect to
Securities of a series subject to a Periodic Offering, the Trustee may
conclusively rely, as to the authorization by the Company of any of such
Securities, the forms and terms thereof and the legality, validity, binding
effect and enforceability thereof, and compliance of the authentication and
delivery thereof with the terms and conditions of this Indenture, upon the
Opinion of Counsel and other documents delivered pursuant to Sections 201 and
301 and this Section, as applicable, at or prior to the time of the first
authentication of Securities of such series, unless and until such opinion or
other documents have been superseded or revoked or expire by their terms.  In connection with the authentication and delivery
of Securities of a series, pursuant to a Periodic Offering, the Trustee shall
be entitled to assume that the Company’s instructions to authenticate and
deliver such Securities do not violate any applicable law or any applicable
rule, regulation or order of any Governmental Authority having jurisdiction
over the Company.

 

If the forms or terms of
the Securities of any series have been established by or pursuant to a Board
Resolution or an Officer’s Certificate as permitted by Sections 201 or 301, the
Trustee shall not be required to authenticate such Securities if the issuance
of such Securities pursuant to this Indenture will affect the Trustee’s own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.

 

Except as otherwise
specified as contemplated by Section 301 with respect to any series of
Securities, or any Tranche thereof, each Security shall be dated the date of
its authentication.

 

Except as otherwise specified
as contemplated by Section 301 with respect to any series of Securities,
or any Tranche thereof, no Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee or its agent by manual signature of
an authorized officer thereof, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.  Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
to the Company, or any Person acting on its behalf, but shall never

 

32

 

have been issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309 together with a
written statement (which need not comply with Section 104 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits hereof.

 

SECTION 304.                                           Temporary
Securities.

 

Pending the preparation
of definitive Securities of any series, or any Tranche thereof, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other variations as any
officer executing such Securities may determine, as evidenced by such officer’s
execution of such Securities; provided, however, that temporary Securities need
not recite specific redemption, sinking fund, conversion or exchange
provisions.

 

Unless otherwise
specified as contemplated by Section 301 with respect to the Securities of
any series, or any Tranche thereof, after the preparation of definitive
Securities of such series or Tranche, the temporary Securities of such series
or Tranche shall be exchangeable, without charge to the Holder thereof, for
definitive Securities of such series or Tranche upon surrender of such
temporary Securities at the office or agency of the Company maintained pursuant
to Section 702 in a Place of Payment for such Securities.  Upon such surrender of temporary Securities
for such exchange, the Company shall, except as aforesaid, execute and the
Trustee shall authenticate and deliver in exchange therefor definitive
Securities of the same series and Tranche of authorized denominations and of
like tenor and aggregate principal amount.

 

Until exchanged in full
as hereinabove provided, temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities of the same
series and Tranche and of like tenor authenticated and delivered hereunder.

 

SECTION 305.                                           Registration,
Registration of Transfer and Exchange.

 

The Company shall cause
to be kept in each office designated pursuant to Section 702, with respect
to the Securities of each series, a register (all registers kept in accordance
with this Section being collectively referred to as the “Security Register”)
in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities of such series, or any
Tranche thereof, and the registration of transfer thereof.  The Company shall designate one Person to
maintain the Security Register for the Securities of each series on a
consolidated basis, and such Person is referred to herein, with respect to such
series, as the “Security Registrar.” 
Anything herein to the contrary notwithstanding, the Company may
designate one or more of its offices as an office in which a register with
respect to the Securities of one or more series shall be maintained, and the
Company may designate itself the Security Registrar with respect to one or more
of such series.  The Security Register
shall be open for inspection by the Trustee and the Company at all reasonable
times.

 

Except as otherwise
specified as contemplated by Section 301 with respect to the Securities of
any series, or any Tranche thereof, upon surrender for registration of transfer
of any Security of such series or Tranche at the office or agency of the
Company maintained pursuant to Section 702 in a

 

33

 

Place of Payment
for such series or Tranche, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series and Tranche, of
authorized denominations and of like tenor and aggregate principal amount.

 

Except as otherwise specified
as contemplated by Section 301 with respect to the Securities of any
series, or any Tranche thereof, any Security of such series or Tranche may be
exchanged at the option of the Holder for one or more new Securities of the
same series and Tranche, of authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency.  Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities, which the Holder making
the exchange is entitled to receive.

 

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

 

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

 

Unless otherwise
specified as contemplated by Section 301, with respect to Securities of
any series, or any Tranche thereof, no service charge shall be made for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 506 or 1306 not
involving any transfer.

 

The Company shall not be
required to execute or to provide for the registration of transfer of or the
exchange of (a) Securities of any series, or any Tranche thereof, during a
period of 15 days immediately preceding the date notice is to be given
identifying the serial numbers of the Securities of such series or Tranche
called for redemption, (b) any Security during the 15 days before an
interest payment date or (c) any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

 

SECTION 306.                                           Mutilated,
Destroyed, Lost and Stolen Securities.

 

If any mutilated Security
is surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series
and Tranche, and of like tenor and principal amount, bearing a number not
contemporaneously outstanding.

 

If there shall be
delivered to the Company and the Trustee (a) evidence to their
satisfaction of the ownership of and the destruction, loss or theft of any
Security and (b) such security or indemnity as may be reasonably required
by them to save each of them and any agent of any of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and

 

34

 

deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
series and Tranche, and of like tenor and principal amount, bearing a number
not contemporaneously outstanding.

 

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

 

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

 

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

 

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

 

SECTION 307.                                           Payment of
Interest; Interest Rights Preserved.

 

Unless otherwise
specified as contemplated by Section 301 with respect to the Securities of
any series, or any Tranche thereof, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

 

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

 

(a)                                  The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a date (a “Special
Record Date”) for the payment of such Defaulted Interest, which shall be fixed
in the following manner.  The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed

 

35

 

payment.  The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company shall promptly cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities of such series at the address of such Holder as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date.

 

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

 

Subject to the foregoing
provisions of this Section and Section 305, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Security.

 

SECTION 308.                                           Persons
Deemed Owners.

 

Prior to due presentment
of a Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the absolute owner of such Security for the purpose
of receiving payment of principal of and premium, if any, and (subject to
Sections 305 and 307) interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and none of the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.

 

SECTION 309.                                           Cancellation.

 

All Securities
surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person
other than the Security Registrar, be delivered to the Security Registrar and,
if not theretofore canceled, shall be promptly canceled by the Security
Registrar.  The Company may at any time
deliver to the Security Registrar for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever or which the Company shall not have issued and sold, and all
Securities so delivered shall be promptly canceled by the Security
Registrar.  No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture.  All canceled Securities held by the Security
Registrar shall be disposed of in accordance with the customary practices of
the Security Registrar at the time in effect, and the Security Registrar shall
not be required to destroy any such certificates.  The Security Registrar shall promptly deliver
a certificate of disposition to the Trustee and the Company unless, by a
Company Order, similarly delivered, the Company shall direct that canceled
Securities be returned to it.  The
Security Registrar shall promptly deliver evidence of any cancellation of a
Security in accordance with this Section 309 to the Trustee and the
Company.

 

36

 

SECTION 310.                                           Computation
of Interest.

 

Except as otherwise
specified as contemplated by Section 301 for Securities of any series, or
Tranche thereof, interest on the Securities of each series shall be computed on
the basis of a three hundred sixty (360) day year consisting of twelve (12)
thirty (30) day months, and with respect to any period less than a full month,
on the basis of the actual number of days elapsed during such period.  For example, the interest for a period
running from the 15th day of one month to the 15th day of
the next month would be calculated on the basis of one 30-day month.

 

SECTION 311.                                           Payment to
Be in Proper Currency.

 

In the case of any
Security denominated in any currency other than Dollars or in a composite
currency (the “Required Currency”), except as otherwise specified with respect
to such Security as contemplated by Section 301, the obligation of the
Company to make any payment of the principal thereof, or the premium or
interest thereon, shall not be discharged or satisfied by any tender by the
Company, or recovery by the Trustee, in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
Trustee timely holding the full amount of the Required Currency then due and
payable.  If any such tender or recovery
is in a currency other than the Required Currency, the Trustee may take such
actions as it considers appropriate to exchange such currency for the Required
Currency.  The costs and risks of any
such exchange, including without limitation the risks of delay and exchange
rate fluctuation, shall be borne by the Company, the Company shall remain fully
liable for any shortfall or delinquency in the full amount of Required Currency
then due and payable, and in no circumstances shall the Trustee be liable
therefor except in the case of its negligence or willful misconduct.

 

SECTION 312.                                           Extension of
Interest Payment.

 

The Company shall have
the right at any time, to extend interest payment periods on all the Securities
of any series hereunder, if so specified as contemplated by Section 301
with respect to such Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such Securities.

 

SECTION 313.                                           CUSIP
Numbers.

 

The Company in issuing
the Securities may use “CUSIP,” ISIN or other similar numbers (if then
generally in use), and, if so, the Company, the Trustee or the Security
Registrar may use “CUSIP,” ISIN or such other numbers in notices or redemption
as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, in which case none of the Company or, as the case may be, the
Trustee or the Security Registrar, or any agent of any of them, shall have any
liability in respect of any CUSIP, ISIN or other number used on any such
notice, and any such redemption shall not be affected by any defect in or
omission of such numbers.  The Company
shall promptly notify the Trustee and Security Registrar of any change in the
CUSIP, ISIN or other such number.

 

37

 

ARTICLE FOUR

 

Securities of the
First and Second Series

 

There are hereby created
two series of Securities (herein sometimes referred to as “Securities of the
First Series” and “Securities of the Second Series,” respectively).  The form, designation and terms of the
Securities of the First Series and the Securities of the Second Series shall
be established in a supplemental indenture or a Board Resolution, and/or in an
Officer’s Certificate pursuant to a supplemental indenture or a Board
Resolution in accordance with Section 301.

 

ARTICLE FIVE

 

Redemption of
Securities

 

SECTION 501.                                           Applicability
of Article.

 

Securities of any series,
or any Tranche thereof, which are redeemable before their Stated Maturity shall
be redeemable in accordance with their terms and (except as otherwise specified
as contemplated by Section 301 for Securities of such series or Tranche)
in accordance with this Article.

 

SECTION 502.                                           Election to
Redeem; Notice to Trustee.

 

The election of the
Company to redeem any Securities shall be evidenced by a Board Resolution or an
Officer’s Certificate.  The Company
shall, at least 40 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such Redemption Date and of the principal amount of such
Securities to be redeemed.  In the case
of any redemption of Securities which are subject to the prior compliance with
any restriction or condition on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officer’s Certificate evidencing compliance with such
restriction or condition.

 

SECTION 503.                                           Selection of
Securities to Be Redeemed.

 

If less than all the
Securities of any series, or any Tranche thereof, are to be redeemed, the
particular Securities to be redeemed shall be selected by the Trustee from the
Outstanding Securities of such series or Tranche not previously called for
redemption, by such method as shall be provided for such particular series or
Tranche, or in the absence of any such provision, by such method of random
selection as the Trustee shall deem fair and appropriate and which may, in any
case, provide for the selection for redemption of portions (equal to any
authorized denomination for Securities of such series or Tranche) of the
principal amount of Securities of such series or Tranche of a denomination
larger than the minimum authorized denomination for Securities of such series
or Tranche; provided, however, that if, as indicated in an Officer’s
Certificate, the Company shall have offered to purchase all or any principal
amount of the Securities then Outstanding of any series, or any Tranche
thereof, and less than all of such Securities as to which such offer was made
shall have been tendered to the Company for such purchase, the Trustee, if so
directed by Company Order, shall select for redemption all or any principal
amount of such Securities which have not been so tendered.

 

38

 

The Trustee shall promptly
notify the Company and the Security Registrar in writing of the Securities
selected for redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.

 

For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Securities shall relate, in the case of any Securities
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Securities which has been or is to be redeemed.

 

SECTION 504.                                           Notice of
Redemption.

 

Except as otherwise
specified as contemplated by Section 301 for Securities of any series,
notice of redemption shall be given in the manner provided in Section 108
to the Holders of the Securities to be redeemed not less than 30 days prior to
the Redemption Date.

 

Except as otherwise
specified as contemplated by Section 301 for Securities of any series, all
notices of redemption shall state:

 

(a)                                  the
Redemption Date,

 

(b)                                 the
Redemption Price (if known),

 

(c)                                  if
less than all the Securities of any series or Tranche are to be redeemed, the
identification of the particular Securities to be redeemed and the portion of
the principal amount of any Security to be redeemed in part,

 

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

 

(e)                                  the
place or places where such Securities are to be surrendered for payment of the
Redemption Price and accrued interest, if any, unless it shall have been
specified as contemplated by Section 301 with respect to such Securities
that such surrender shall not be required,

 

(f)                                    that
the redemption is for a sinking or other fund, if such is the case,

 

(g)                                 the
CUSIP, ISIN or other similar numbers, if any, assigned to such Securities;
provided, however, that such notice may state that no representation is made as
to the correctness of CUSIP, ISIN or other similar numbers, in which case none
of the Company, the Trustee or any agent of the Company or the Trustee shall
have any liability in respect of the use of any CUSIP, ISIN or other similar
number or numbers on such notices, and the redemption of such Securities shall
not be affected by any defect in or omission of such numbers, and

 

(h)                                 such
other matters as the Company shall deem desirable or appropriate.

 

Unless otherwise
specified with respect to any Securities in accordance with Section 301,
with respect to any notice of redemption of Securities at the election of the
Company, unless, upon the giving of such notice, such Securities shall be
deemed to have been paid in accordance with Section 801, such notice may
state that such redemption shall be conditional upon the receipt by the Paying
Agent or

 

39

 

Agents for such
Securities, on or prior to the date fixed for such redemption, of money
sufficient to pay the principal of and premium, if any, and interest, if any,
on such Securities and that if such money shall not have been so received such
notice shall be of no force or effect and the Company shall not be required to
redeem such Securities.  In the event
that such notice of redemption contains such a condition and such money is not
so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Paying Agent or Agents for the Securities
otherwise to have been redeemed shall promptly return to the Holders thereof
any of such Securities which had been surrendered for payment upon such
redemption.

 

Notice of redemption of
Securities to be redeemed at the election of the Company, and any notice of
non-satisfaction of a condition for redemption as aforesaid, shall be given by
the Company or, at the Company’s request, by the Security Registrar in the name
and at the expense of the Company. 
Notice of any mandatory redemption of Securities shall be given by the
Security Registrar in the name and at the expense of the Company.

 

SECTION 505.                                           Securities
Payable on Redemption Date.

 

Notice of redemption
having been given as aforesaid, and the conditions, if any, set forth in such
notice having been satisfied, the Securities or portions thereof so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless, in
the case of an unconditional notice of redemption, the Company shall default in
the payment of the Redemption Price and accrued interest, if any) such
Securities or portions thereof, if interest-bearing, shall cease to bear
interest.  Upon surrender of any such
Security for redemption in accordance with such notice, such Security or
portion thereof shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that
no such surrender shall be a condition to such payment if so specified as
contemplated by Section 301 with respect to such Security; and provided,
further, that except as otherwise specified as contemplated by Section 301
with respect to such Security, any installment of interest on any Security the
Stated Maturity of which installment is on or prior to the Redemption Date
shall be payable to the Holder of such Security, or one or more Predecessor
Securities, registered as such at the close of business on the related Regular
Record Date according to the terms of such Security and subject to the
provisions of Sections 305 and 307.

 

SECTION 506.                                           Securities
Redeemed in Part.

 

Upon the surrender of any
Security which is to be redeemed only in part at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a new Security
or Securities of the same series and Tranche, of any authorized denomination
requested by such Holder and of like tenor and in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the
Security so surrendered.

 

40

 

ARTICLE SIX

 

Sinking Funds

 

SECTION 601.                                           Applicability
of Article.

 

The provisions of this Article shall
be applicable to any sinking fund for the retirement of the Securities of any
series, or any Tranche thereof, except as otherwise specified as contemplated
by Section 301 for Securities of such series or Tranche.

 

The minimum amount of any
sinking fund payment provided for by the terms of Securities of any series, or
any Tranche thereof, is herein referred to as a “mandatory sinking fund payment”,
and any payment in excess of such minimum amount provided for by the terms of
Securities of any series, or any Tranche thereof, is herein referred to as an “optional
sinking fund payment”.  If provided for
by the terms of Securities of any series, or any Tranche thereof, the cash
amount of any sinking fund payment may be subject to reduction as provided in Section 602.  Each sinking fund payment shall be applied to
the redemption of Securities of the series or Tranche in respect of which it
was made as provided for by the terms of such Securities.

 

SECTION 602.                                           Satisfaction
of Sinking Fund Payments with Securities.

 

The Company (a) may
deliver to the Trustee Outstanding Securities (other than any previously called
for redemption) of a series or Tranche in respect of which a mandatory sinking
fund payment is to be made and (b) may apply as a credit Securities of
such series or Tranche which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of such mandatory
sinking fund payment with respect to the Securities of such series; provided,
however, that no Securities shall be applied in satisfaction of a mandatory
sinking fund payment if such Securities shall have been previously so
applied.  Securities so applied shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.

 

SECTION 603.                                           Redemption
of Securities for Sinking Fund.

 

Not less than 40 days
prior to each sinking fund payment date for the Securities of any series, or
any Tranche thereof, the Company shall deliver to the Trustee an Officer’s
Certificate specifying:

 

(a)                                  the
amount of the next succeeding mandatory sinking fund payment for such series or
Tranche;

 

(b)                                 the
amount, if any, of the optional sinking fund payment to be made together with
such mandatory sinking fund payment;

 

(c)                                  the
aggregate sinking fund payment; and

 

(d)                                 the
portion, if any, of such aggregate sinking fund payment which is to be
satisfied by the payment of cash;

 

41

 

(e)                                  the
portion, if any, of such aggregate sinking fund payment which is to be
satisfied by delivering and crediting Securities of such series or Tranche
pursuant to Section 602 and stating the basis for such credit and that
such Securities have not previously been so credited, and the Company shall
also deliver to the Trustee any Securities to be so delivered.

 

If the Company shall not
deliver such Officer’s Certificate and, to the extent applicable, all such
Securities, the next succeeding sinking fund payment for such series or Tranche
shall be made entirely in cash in the amount of the mandatory sinking fund
payment.  Not less than 30 days before
each such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in Section 503
and cause notice of the redemption thereof to be given in the name of and at
the expense of the Company in the manner provided in Section 504.  Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 505 and 506.

 

ARTICLE SEVEN

 

Representations
and Covenants

 

SECTION 701.                                           Payment of
Securities; Lawful Possession.

 

(a)                                  The
Company shall pay the principal of and premium, if any, and interest, if any,
on the Securities of each series in accordance with the terms of such
Securities and this Indenture.

 

(b)                                 At
the Execution Date, the Company is lawfully possessed of the Mortgaged Property
and has sufficient right and authority to mortgage and pledge the Mortgaged
Property, as provided in and by this Indenture.

 

SECTION 702.                                           Maintenance
of Office or Agency.

 

The Company shall
maintain in each Place of Payment for the Securities of each series, or any
Tranche thereof, an office or agency where payment of such Securities shall be
made, where the registration of transfer or exchange of such Securities may be
effected and where notices and demands to or upon the Company in respect of
such Securities and this Indenture may be served.  The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of each such
office or agency and prompt notice to the Holders of any such change in the
manner specified in Section 108.  If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, then
payment of such Securities shall be made, registration of transfer or exchange
thereof may be effected and notices and demands in respect of such Securities
and this Indenture may be served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent for all such purposes
in any such event.

 

The Company may also from
time to time designate one or more other offices or agencies with respect to
the Securities of one or more series, or any Tranche thereof, for any or all of
the foregoing purposes and may from time to time rescind such designations;
provided, however, that, unless otherwise specified as contemplated by Section 301
with respect to the Securities of such series or Tranche, no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency for such purposes in each Place of Payment for
such Securities in accordance with the requirements set forth above.  The Company shall give prompt written notice
to the Trustee, and prompt

 

42

 

notice to the
Holders in the manner specified in Section 108, of any such designation or
rescission and of any change in the location of any such other office or
agency.

 

Anything herein to the
contrary notwithstanding, any office or agency required by this Section may
be maintained at an office of the Company or an Affiliate of the Company, in
which event the Company or such Affiliate shall perform all functions to be
performed at such office or agency.

 

SECTION 703.                                           Money for
Securities Payments to Be Held in Trust.

 

If the Company shall at
any time act as its own Paying Agent with respect to the Securities of any
series, or any Tranche thereof, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any, on any of such
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided.  The
Company shall promptly notify the Trustee of any failure by the Company (or any
other obligor on such Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such Securities.

 

Whenever the Company
shall have one or more Paying Agents for the Securities of any series, or any
Tranche thereof, it shall, on or before each due date of the principal of and
premium, if any, and interest, if any, on such Securities, deposit with such
Paying Agents sums sufficient (without duplication) to pay the principal and
premium or interest so becoming due, such sums to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall promptly notify the
Trustee of any failure by it so to act.

 

The Company shall cause
each Paying Agent for the Securities of any series, or any Tranche thereof,
other than the Company or the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent shall:

 

(a)                                  hold
all sums held by it for the payment of the principal of and premium, if any, or
interest, if any, on such Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;

 

(b)                                 give
the Trustee notice of any failure by the Company (or any other obligor upon
such Securities) to make any payment of principal of or premium, if any, or
interest, if any, on such Securities; and

 

(c)                                  at
any time during the continuance of any such failure, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent and furnish to the Trustee such information as it possesses
regarding the names and addresses of the Persons entitled to such sums.

 

The Company may at any
time pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to be
held by the Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent and, if so stated in a Company Order
delivered to the Trustee, in accordance with the provisions of Article Seven;
and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.

 

43

 

Any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such principal and
premium, if any, or interest, if any, has become due and payable shall to the
extent permitted by law be paid to the Company on Company Request, or, if then
held by the Company, shall be discharged from such trust; and, upon such
payment or discharge, the Holder of such Security shall, as an unsecured
general creditor and not as the Holder of an Outstanding Security, look only to
the Company for payment of the amount so due and payable and remaining unpaid
unless the applicable law provides otherwise, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such payment to
the Company, may at the expense of the Company cause to be mailed, on one
occasion only, notice to such Holder that such money remains unclaimed and
that, after a date specified therein, which shall not be less than thirty (30)
days from the date of such mailing, any unclaimed balance of such money then
remaining will be paid to the Company.

 

SECTION 704.                                           Corporate
Existence.

 

Subject to the rights of
the Company under Article Twelve, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its legal
existence as a corporation.

 

SECTION 705.                                           Annual
Officer’s Certificate as to Compliance.

 

Not later than May 15
in each year, commencing May 15, 2004, the Company shall deliver to the
Trustee an Officer’s Certificate which need not comply with the requirements of
Section 104, executed by the principal executive officer, the principal
financial officer or the principal accounting officer of the Company, as to
such officer’s knowledge of the Company’s compliance with all conditions and
covenants under this Indenture, such compliance to be determined without regard
to any period of grace or requirement of notice under this Indenture, and
making any other statements as may be required by the provisions of Section 314(a)(4) of
the Trust Indenture Act.

 

SECTION 706.                                           Waiver of
Certain Covenants.

 

The Company may omit in
any particular instance to comply with any term, provision or condition set
forth in (a) Section 702 or any additional covenant or restriction
specified with respect to the Securities of any series, or any Tranche thereof,
as contemplated by Section 301, if before the time for such compliance the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches with respect to which compliance with Section 702
or such additional covenant or restriction is to be omitted, considered as one
class, shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition
and (b) Section 704, 705 or Article Eleven if before the time
for such compliance the Holders of a majority in principal amount of Securities
Outstanding under this Indenture shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition; but, in the case of (a) or (b), no such waiver
shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

 

44

 

SECTION 707.                                           Limitation on
Secured Debt.

 

(a)                                  Except
as otherwise specified as contemplated by Section 301 for Securities of
any series, so long as any Securities of any series are Outstanding, the
Company shall not issue any Secured Debt (other than Permitted Secured Debt),
without the consent of the Holders of a majority in principal amount of all the
Outstanding Securities of all series and Tranches with respect to which this
covenant is specified as contemplated by Section 301 (the “Benefitted
Securities”), considered as one class, except as expressly contemplated in
subsections (b) and (c) of this Section.

 

(b)                                 The
provisions of subsection (a) shall not prohibit the creation or
existence of any Secured Debt if either:

 

(i)                                     the
Company shall make effective provision whereby the Benefitted Securities shall
be secured at least equally and ratably with such Secured Debt; or

 

(ii)                                  the
Company shall deliver to the Trustee bonds, notes or other evidences of
indebtedness secured by the Lien which secures such Secured Debt (hereinafter called
“Secured Obligations”) (i) in an aggregate principal amount equal to the
aggregate principal amount of each series then Outstanding, (ii) maturing
(or being subject to mandatory redemption) on the Stated Maturities of such
series and (iii) containing, in addition to any mandatory redemption
provisions applicable to all Secured Obligations outstanding under such Lien
and any mandatory redemption provisions contained therein pursuant to clause (ii) above,
mandatory redemption provisions correlative to the provisions, if any, for the
mandatory redemption (pursuant to a sinking fund or otherwise) of the
Securities of such series or for the redemption thereof at the option of the
Holder, as well as a provision for mandatory redemption upon an acceleration of
the maturity of all Outstanding Securities of such series following an Event of
Default (such mandatory redemption to be rescinded upon the rescission of such
acceleration); it being expressly understood that such Secured Obligations (x)
may, but need not, bear interest, (y) may, but need not, contain provisions for
the redemption thereof at the option of the issuer, any such redemption to be
made at a redemption price or prices not less than the principal amount thereof
and (z) shall be held by the Trustee for the benefit of the Holders of all
Securities of such series from time to time Outstanding subject to such terms
and conditions relating to surrender to the Company, transfer restrictions,
voting, application of payments of principal and interest and other matters as
shall be set forth in an indenture supplemental hereto specifically providing
for the delivery to the Trustee of such Secured Obligations.

 

(c)                                  If
the Company shall elect either of the alternatives described in subsection (b),
the Company shall deliver to the Trustee:

 

(i)                                     an
indenture supplemental to this Indenture (i) together with evidence of
appropriate inter-creditor arrangements, whereby this Indenture shall be
secured by the Lien referred to in subsection (b) equally and ratably
with all other indebtedness secured by such Lien or (ii) providing for the
delivery to the Trustee of Secured Obligations;

 

(ii)                                  an
Officer’s Certificate (i) stating that, to the knowledge of the signer,
(x) no Event of Default has occurred and is continuing and (y) no event has
occurred and is continuing which entitles the secured party under such Lien to
accelerate the maturity of

 

45

 

the indebtedness outstanding thereunder and (y) stating the aggregate
principal amount of indebtedness issuable, and then proposed to be issued,
under and secured by such Lien;

 

(iii)                               an Opinion of Counsel (i) if
the Outstanding Securities under this Indenture are to be secured by such Lien,
to the effect that all Securities then Outstanding are entitled to the benefit
of such Lien equally and ratably with all other indebtedness outstanding
secured by such Lien or (ii) if Secured Obligations are to be delivered to
the Trustee, to the effect that such Secured Obligations have been duly issued
under such Lien and constitute valid obligations, entitled to the benefit of
such Lien equally and ratably with all other indebtedness then outstanding
secured by such Lien.

 

(d)                                 For
purposes of this Section, except as otherwise expressly provided or unless the
context otherwise requires:

 

(i)                                     “Debt”, with respect to any Person, means (A) indebtedness
of such Person for borrowed money evidenced by a bond, debenture, note or other
written instrument or agreement by which such Person is obligated to repay such
borrowed money, (B) any guaranty by such Person of any such indebtedness
of another Person, and (C) any Capitalized Lease Liabilities of the
Company.  “Debt” does not include, among
other things, (w) indebtedness of such person under any installment sale or
conditional sale agreement or any other agreement relating to indebtedness for
the deferred purchase price of property or services, (x) any trade obligation
(including obligations under power or other commodity purchase agreements and
any hedges or derivatives associated therewith), or other obligations of such
Person in the ordinary course of business, (y) obligations of such Person under
any lease agreement that are not Capitalized Lease Liabilities, or (z) any
Liens securing indebtedness, neither assumed nor guaranteed by the Company nor
on which it customarily pays interest, existing upon real estate or rights in
or relating to real estate acquired by the Company for substation, transmission
line, transportation line, distribution line or right of way purposes.

 

(ii)                                  “Permitted Secured Debt” means, as of any particular time,
any of the following:

 

(A)                              Secured
Debt Securities previously issued and outstanding;

 

(B)                                Secured
Debt which matures less than one year from the date of the issuance or
incurrence thereof and is not extendible at the option of the issuer; and any
refundings, refinancings and/or replacements of any such Secured Debt by or
with similar Secured Debt which matures less than one year from the date of
such refunding, refinancing and/or replacement and is not extendible at the
option of the issuer;

 

(C)                                Secured
Debt secured by Purchase Money Liens or any other Liens existing or placed upon
property at the time of, or within one hundred eighty (180) days after, the
acquisition thereof by the Company, and any refundings, refinancings and/or
replacements of any such Secured Debt; provided, however, that no such Purchase
Money Lien or other Lien shall extend to or cover any property of the Company
other than (i) the property so acquired and improvements, extensions and
additions to such property and renewals, replacements and substitutions of or
for such property or any part or parts thereof 

 

46

 

and (ii) with respect to Purchase Money Liens,
other property subsequently acquired by the Company;

 

(D)                               Secured
Debt relating to governmental obligations the interest on which is not included
in gross income for purpose of federal income taxation pursuant to Section 103
of the Internal Revenue Code of 1986, as amended (or any successor provision of
law), for the purpose of financing or refinancing, in whole or in part, costs
of acquisition or construction of property to be used by the Company, to the
extent that the Lien which secures such Secured Debt is required either by
applicable law or by the issuer of such governmental obligations or is
otherwise necessary in order to establish or maintain such exclusion from gross
income; and any refundings, refinancings and/or replacements of any such Secured
Debt by or with similar Secured Debt;

 

(E)                                 Secured
Debt (i) which is related to the construction or acquisition of property
not previously owned by the Company or (ii) which is related to the
financing of a project involving the development or expansion of property of
the Company and (iii) in either case, the obligee in respect of which has
no recourse to the Company or any property of the Company other than the
property constructed or acquired with the proceeds of such transaction or the
project financed with the proceeds of such transaction (or the proceeds of such
property or such project); and any refundings, refinancings and/or replacements
of any Secured Debt by or with Secured Debt described in clause (iii) above;
and

 

(F)                                 in
addition to the Permitted Secured Debt described in clauses (A) through (E) above,
Secured Debt not otherwise so permitted in this Section 707 in an
aggregate principal amount not exceeding the greater of 10% of the Company’s
Net Tangible Assets or 10% of Capitalization.

 

“Capitalization”
means the total of all the following items appearing on, or included in, the
Company’s unconsolidated balance sheet; (i) liabilities for indebtedness
maturing more than 12 months from the date of determination, and (ii) common
stock, common stock expense, accumulated other comprehensive income or loss,
preferred stock, preference stock, premium on common stock and retained
earnings (however the foregoing may be designated), less, to the extent not
otherwise deducted, the cost of shares of the Company’s capital stock held in
the Company’s treasury, if any. 
Capitalization shall be determined in accordance with generally accepted
accounting principles and practices applicable to the type of business in which
the Company is engaged, and may be determined as of the date not more than 60
days prior to the happening of the event for which the determination is being
made.

 

“Capitalized Lease Liabilities”
means the amount, if any, shown as liabilities on the Company’s unconsolidated
balance sheet for capitalized leases of electric transmission and distribution
property not owned by the Company, which amount shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged.

 

“Net Tangible Assets”
means the amount shown as total assets on the Company’s unconsolidated balance
sheet, less (i) intangible assets including, but

 

47

 

without
limitation, such items as goodwill, trademarks, trade names, patents,
unamortized debt discount and expense and other regulatory assets carried as an
asset on the Company’s unconsolidated balance sheet, (ii) appropriate
adjustments, if any, on account of minority interests.  Net Tangible Assets shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged.

 

(iii)                               “Secured
Debt” means Debt created, issued, incurred or assumed by the Company
which is secured by a Lien upon any property (other than Excepted Property) of
the Company, real, personal or mixed, of whatever kind or nature and wherever
located.  For purposes of this Section,
any Capitalized Lease Liabilities of the Company will be deemed to be Debt
secured by a Lien on the Company’s property.

 

ARTICLE EIGHT

 

Satisfaction and
Discharge

 

SECTION 801.                                           Satisfaction
and Discharge of Securities.

 

Any Security or
Securities, or any portion of the principal amount thereof, shall be deemed to
have been paid and no longer Outstanding for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be deemed
to have been satisfied and discharged, if: (1) there has been delivered to
the Mortgage Trustee an opinion of counsel to the effect that there has been
published by the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that holders of the
Secured Debt Securities will not recognize gain or loss for federal income tax
purposes as a result of the deposit, defeasance, and discharge and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if the deposit, defeasance and discharge
did not occur; and (2) there shall have been irrevocably deposited with
the Trustee or any Paying Agent (other than the Company), in trust:

 

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

 

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

 

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

 

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

 

48

 

(x)                                   if
such deposit shall have been made prior to the Maturity of such Securities, a
Company Order stating that the money and Eligible Obligations deposited in
accordance with this Section shall be held in trust, as provided in Section 803;

 

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

 

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

 

Upon the deposit of money
or Eligible Obligations, or both, in accordance with this Section, together
with the documents required by clauses (x), (y) and (z) above, the Trustee
shall, upon receipt of a Company Request, acknowledge in writing that the
Security or Securities or portions thereof with respect to which such deposit
was made are deemed to have been paid for all purposes of this Indenture and
that the entire indebtedness of the Company in respect thereof has been
satisfied and discharged as contemplated in this Section.  In the event that all of the conditions set
forth in the preceding paragraph shall have been satisfied in respect of any
Securities or portions thereof except that, for any reason, the Officer’s
Certificate specified in clause (z) shall not have been delivered, such
Securities or portions thereof shall nevertheless be deemed to have been paid
for all purposes of this Indenture, and the Holders of such Securities or
portions thereof shall nevertheless be no longer entitled to the benefits
provided by this Indenture or of any of the covenants of the Company under Article Seven
(except the covenants contained in Sections 702 and 703) or any other covenants
made in respect of such Securities or portions thereof as contemplated by Section 301
or Section 1301(b), but the indebtedness of the Company in respect of such
Securities or portions thereof shall not be deemed to have been satisfied and
discharged prior to Maturity for any other purpose and the Holders of such
Securities or portions thereof shall continue to be entitled to look to the
Company for payment of the indebtedness represented thereby; and, upon Company
Request, the Trustee shall acknowledge in writing that such Securities or portions
thereof are deemed to have been paid for all purposes of this Indenture.

 

If payment at Stated
Maturity of less than all of the Securities of any series, or any Tranche
thereof, is to be provided for in the manner and with the effect provided in this
Section, the Trustee shall select such Securities, or portions of principal
amount thereof, in the manner specified by Section 503 for selection for
redemption of less than all the Securities of a series or Tranche.

 

In the event that
Securities which shall be deemed to have been paid for purposes of this
Indenture, and, if such is the case, in respect of which the Company’s
indebtedness shall have been satisfied and discharged, all as provided in this
Section, do not mature and are not to be redeemed within the sixty (60) day
period commencing with the date of the deposit of moneys or Eligible
Obligations, as aforesaid, the Company shall, as promptly as practicable, give
a notice, in the same manner as a notice of redemption with respect to such
Securities, to the Holders of such Securities to the effect that such deposit
has been made and the effect thereof.

 

49

 

Notwithstanding that any
Securities shall be deemed to have been paid for purposes of this Indenture, as
aforesaid, the obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 504, 702, 703, 1007 and 1015 and this Article shall
survive.

 

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

 

Anything herein to the
contrary notwithstanding, (a) if, at any time after a Security would be
deemed to have been paid for purposes of this Indenture, and, if such is the
case, the Company’s indebtedness in respect thereof would be deemed to have
been satisfied and discharged, pursuant to this Section (without regard to
the provisions of this paragraph), the Trustee or any Paying Agent, as the case
may be, (i) shall be required to return the money or Eligible Obligations,
or combination thereof, deposited with it as aforesaid to the Company or its
representative under any applicable Federal or State bankruptcy, insolvency or
other similar law, or (ii) is unable to apply any money in accordance with
this Article with respect to any Securities by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction and discharge of the
Company’s indebtedness in respect thereof shall retroactively be deemed not to
have been effected, and such Security shall be deemed to remain Outstanding and
(b) any satisfaction and discharge of the Company’s indebtedness in
respect of any Security shall be subject to the provisions of the last
paragraph of Section 703.

 

SECTION 802.                                           Satisfaction
and Discharge of Indenture.

 

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

 

(a)                      no
Securities remain Outstanding hereunder; and

 

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

 

provided, however, that
if, in accordance with the last paragraph of Section 801, any Security,
previously deemed to have been paid for purposes of this Indenture, shall be
deemed retroactively not to have been so paid, this Indenture shall thereupon
be deemed retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the Company shall
execute and deliver such instruments as the Trustee shall reasonably request to
evidence and acknowledge the same.

 

Notwithstanding the
satisfaction and discharge of this Indenture as aforesaid, the obligations of
the Company and the Trustee under Sections 304, 305, 306, 504, 702, 703, 1007
and 1015 and this Article shall survive.

 

Upon satisfaction and
discharge of this Indenture as provided in this Section, the Trustee shall
assign, transfer and turn over to the Company, subject to the lien provided by Section 1007,
any and

 

50

 

all money,
securities and other property then held by the Trustee for the benefit of the
Holders of the Securities (other than money and Eligible Obligations held by
the Trustee pursuant to Section 803) and shall execute and deliver to the
Company such instruments as, in the judgment of the Company, shall be
necessary, desirable or appropriate to effect or evidence the satisfaction and
discharge of this Indenture.

 

SECTION 803.                                           Application
of Trust Money.

 

Neither the Eligible
Obligations nor the money deposited pursuant to Section 801, nor the
principal or interest payments on any such Eligible Obligations, shall be
withdrawn or used for any purpose other than, and shall be held in trust for,
the payment of the principal of and premium, if any, and interest, if any, on
the Securities or portions of principal amount thereof in respect of which such
deposit was made, all subject, however, to the provisions of Section 703;
provided, however, that so long as there shall not have occurred and be
continuing an Event of Default, any cash received from such principal or
interest payments on such Eligible Obligations, if not then needed for such
purpose, shall, to the extent practicable and upon Company Request and delivery
to the Trustee of the documents referred to in clause (y) in the first
paragraph of Section 801, be invested in Eligible Obligations of the type
described in clause (b) in the first paragraph of Section 801
maturing at such times and in such amounts as shall be sufficient, together
with any other moneys and the proceeds of any other Eligible Obligations then
held by the Trustee, to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or portions thereof
on and prior to the Maturity thereof, and interest earned from such
reinvestment shall be paid over to the Company as received, free and clear of
any trust, lien or pledge under this Indenture (except the lien provided by Section 1007);
and provided, further, that, so long as there shall not have occurred and be
continuing an Event of Default, any moneys held in accordance with this Section on
the Maturity of all such Securities in excess of the amount required to pay the
principal of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of any trust, lien
or pledge under this Indenture (except the lien provided by Section 1007);
and provided, further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this Section shall
be held until such Event of Default shall have been waived or cured.

 

ARTICLE NINE

 

Events of Default;
Remedies

 

SECTION 901.                                           Events of
Default.

 

“Event of Default”,
wherever used herein with respect to Securities, means any one of the following
events:

 

(a)                      failure
to pay any interest on any Security when it becomes due and payable and
continuance of such default for a period of 30 days; provided, however, that no
such default shall constitute an “Event of Default” if the Company has made a
valid extension of the interest payment period with respect to the Securities
of such series, of which such Security is a part, if so provided as
contemplated by Section 301; or

 

(b)                     failure
to pay the principal of or premium, if any, on any Security when it becomes due
and payable; provided, however, that no such default shall constitute an “Event
of Default” if the Company has made a valid extension of the Maturity of the

 

51

 

Securities of the series, of which such Security is a part, if so
provided as contemplated by Section 301; or

 

(c)                      failure
to perform or breach of, any covenant or warranty of the Company in this
Indenture (other than a covenant or warranty a default in the performance of
which or breach of which is elsewhere in this Section specifically
addressed) and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee, or to the Company and the Trustee by the Holders of at least 33%
in aggregate principal amount of the Outstanding Securities, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder, unless the Trustee, or the
Trustee and the Holders of a principal amount of Securities not less than the
principal amount of Securities the Holders of which gave such notice, as the
case may be, shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and the Holders
of such principal amount of Securities, as the case may be, shall be deemed to
have agreed to an extension of such period if corrective action is initiated by
the Company within such period and is being diligently pursued; or

 

(d)                     the
entry by a court having jurisdiction in the premises of (1) a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (2) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition by one or more
Persons other than the Company seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any applicable Federal or
State bankruptcy, insolvency or similar law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
for the Company or for any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any such decree or order for
relief or any such other decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or

 

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

 

(f)                        [reserved].

 

52

 

SECTION 902.                                           Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of Default
shall have occurred and be continuing, then in every such case the Trustee or
the Holders of not less than 33% in principal amount of the Outstanding
Securities may declare the principal amount (or, if any of the Securities of
such series are Discount Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof as contemplated by Section 301)
of all of the Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon
receipt by the Company of notice of such declaration such principal amount (or
specified amount) together with premium, if any, and accrued and unpaid
interest shall become immediately due and payable.

 

At any time after such a
declaration of acceleration of the maturity of the Securities then Outstanding
shall have been made, but before any sale of any of the Mortgaged Property has
been made and before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as provided in this Article, the Event or
Events of Default giving rise to such declaration of acceleration shall,
without further act, be deemed to have been cured, and such declaration and its
consequences shall, without further act, be deemed to have been rescinded and
annulled, if

 

(a)                                  the
Company shall have paid or deposited with the Trustee a sum sufficient to pay

 

(i)                                     all
overdue interest, if any, on all Securities then Outstanding;

 

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

 

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

 

(iv)                              all
amounts due to the Trustee under Section 1007;

 

and

 

(b)                                 all
Events of Default, other than the non-payment of the principal of Securities of
such series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section 913.

 

No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereon.

 

SECTION 903.                                           Collection
of Indebtedness and Suits for Enforcement by Trustee.

 

If an Event of Default
described in clause (a) or (b) of Section 901 shall have
occurred, the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of the Securities with respect to which such Event of
Default shall have occurred, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, if any, and, to the
extent permitted by law, interest on premium, if any, and on any overdue
principal and interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
any amounts due to the Trustee under Section 1007.

 

53

 

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

 

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

 

SECTION 904.                                           Trustee May File
Proofs of Claim.

 

In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,

 

(a)                      to
file and prove a claim for the whole amount of principal, premium, if any, and
interest, if any, owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for amounts due to the
Trustee under Section 1007) and of the Holders allowed in such judicial
proceeding, and

 

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

 

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee shall consent
to the making of such payments directly to the Holders, to pay to the Trustee
any amounts due it under Section 1007.

 

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

 

SECTION 905.                                           Trustee May Enforce
Claims Without Possession of Securities.

 

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

 

54

 

and counsel, be
for the ratable benefit of the Holders in respect of which such judgment has
been recovered.

 

SECTION 906.                                           Application
of Money Collected.

 

Any money or other
property collected or received by the Trustee pursuant to this Article, or otherwise
distributable in respect of the Company’s obligations under this Indenture,
shall be applied in the following order, to the extent permitted by law, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal or premium, if any, or interest, if any, upon
presentation of the Securities in respect of which or for the benefit of which
such money shall have been collected and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:

 

First:  To the payment of all amounts due the Trustee
(including any predecessor trustee) under Section 1007;

 

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

 

Third:  To the payment of the remainder, if any, to
the Company or to whomsoever may be lawfully entitled to receive the same or as
a court of competent jurisdiction may direct.

 

SECTION 907.                                           Limitation
on Suits.

 

No Holder shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

 

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

 

(b)                     the
Holders of a majority in aggregate principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

 

(c)                      such
Holder or Holders shall have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;

 

(d)                     the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such proceeding; and

 

(e)                      no
direction inconsistent with such written request shall have been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding Securities;

 

55

 

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

 

SECTION 908.                                           Unconditional
Right of Holders to Receive Principal, Premium and Interest.

 

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

 

SECTION 909.                                           Restoration
of Rights and Remedies.

 

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

 

SECTION 910.                                           Rights and
Remedies Cumulative.

 

Except as otherwise
provided in the last paragraph of Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

 

SECTION 911.                                           Delay or
Omission Not Waiver.

 

No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver
of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.

 

SECTION 912.                                           Control by
Holders of Securities.

 

If an Event of Default
shall have occurred and be continuing, the Holders of a majority in principal
amount of the Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to such Securities; provided, however, that

 

56

 

(a)                      such
direction shall not be in conflict with any rule of law or with this
Indenture, and could not involve the Trustee in personal liability in
circumstances where indemnity would not, in the Trustee’s sole discretion, be
adequate, and

 

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

 

SECTION 913.                                           Waiver of
Past Defaults.

 

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

 

(a)                      in
the payment of the principal of or premium, if any, or interest, if any, on any
Outstanding Security, or

 

(b)                     in
respect of a covenant or provision hereof which under Section 1302 cannot
be modified or amended without the consent of the Holder of each Outstanding Security
of any series or Tranche affected.

 

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

 

SECTION 914.                                           Undertaking
for Costs.

 

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

 

SECTION 915.                                           Waiver of
Usury, Stay or Extension Laws.

 

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

 

57

 

SECTION 916.                                           [Reserved].

 

SECTION 917.                                           Receiver and
Other Remedies.

 

If an Event of Default
shall have occurred and, during the continuance thereof, the Trustee shall have
commenced judicial proceedings to enforce any right under this Indenture, the
Trustee shall, to the extent permitted by law, be entitled, as against the
Company, to the appointment of a receiver of the Mortgaged Property and subject
to the rights, if any, of others to receive collections from former, present or
future customers of the rents, issues, profits, revenues and other income
thereof, and whether or not any receiver is appointed, the Trustee shall be
entitled to retain possession and control of, and to collect and receive the
income from cash, securities and other personal property held by the Trustee
hereunder and to all other remedies available to mortgagees and secured parties
under the Uniform Commercial Code or any other applicable law.

 

ARTICLE TEN

 

The Trustee

 

SECTION 1001.                                    Certain Duties and
Responsibilities.

 

(a)                                  The
Trustee shall have and be subject to all the duties and responsibilities
specified with respect to an indenture trustee in the Trust Indenture Act and
no implied covenants or obligations shall be read into this Indenture against
the Trustee.  For purposes of Sections
315(a) and 315(c) of the Trust Indenture Act, the term “default” is
hereby defined as an Event of Default which has occurred and is continuing.

 

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

 

(c)                                  Notwithstanding
anything contained in this Indenture to the contrary, the duties and responsibilities
of the Trustee under this Indenture shall be subject to the protections,
exculpations and limitations on liability afforded to an indenture trustee
under the provisions of the Trust Indenture Act.  For the purposes of Sections 315(b) and
315(d)(2) of the Trust Indenture Act, the term “responsible officer” is
hereby defined as a Responsible Officer and the chairman or vice chairman of
the board of directors, the chairman or vice chairman of the executive
committee of the board of directors, the president, any vice president, the
secretary, any assistant secretary, the treasurer any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller and any assistant controller of the Trustee, or any other
officer of the Trustee customarily performing functions similar to those
performed by a Responsible Officer or any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.

 

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

 

58

 

SECTION 1002.                                    Notice of Defaults.

 

The Trustee shall give
notice of any default hereunder known to the Trustee in the manner and to the
extent required to do so by the Trust Indenture Act, unless such default shall
have been cured or waived; provided, however, that in the case of any default
of the character specified in Section 901(c), no such notice to Holders
shall be given until at least 60 days after the occurrence thereof.  For the purpose of this Section, the term “default”
means any event which is, or after notice or lapse of time, or both, would
become, an Event of Default.

 

SECTION 1003.                                    Certain Rights of
Trustee.

 

Subject to the provisions
of Section 1001 and to the applicable provisions of the Trust Indenture
Act:

 

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

 

(b)                                 any
request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order, or as otherwise expressly
provided herein, and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;

 

(c)                                  whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, conclusively rely
upon an Officer’s Certificate;

 

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

 

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

 

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

 

(g)                                 the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for

 

59

 

any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;

 

(h)                                 the
Trustee shall not be charged with knowledge of any default (as defined in Section 1002)
or Event of Default unless either (1) a Responsible Officer of the Trustee
shall have actual knowledge of such default or Event of Default or (2) written
notice of such default or Event of Default shall have been given to the Trustee
by the Company or any other obligor on such Securities, or by any Holder of
such Securities;

 

(i)                                     the
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder;
and

 

(j)                                     the
Trustee shall not be liable for any action taken, suffered or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.

 

SECTION 1004.                                    Not Responsible for
Recitals or Issuance of Securities.

 

The recitals contained herein
and in the Securities (except the Trustee’s certificates of authentication)
shall be taken as the statements of the Company, and neither the Trustee nor
any Authenticating Agent assumes responsibility for their correctness.  The Trustee makes no representations as to
the value or condition of the Mortgaged Property, the title of the Company to
the Mortgaged Property, the security afforded by the Lien of this Indenture,
the validity or genuineness of any securities deposited with the Trustee
hereunder, or the validity or sufficiency of this Indenture or of the
Securities.  Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof or any money paid to the Company
hereunder.

 

SECTION 1005.                                    May Hold
Securities.

 

Each of the Trustee, any
Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 1008 and 1013, may
otherwise deal with the Company with the same rights it would have if it were
not the Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.

 

SECTION 1006.                                    Money Held in
Trust.

 

Money held by the Trustee
in trust hereunder need not be segregated from other funds, except to the
extent required by law.  The Trustee
shall be under no liability for interest on or investment of any money received
by it hereunder except as expressly provided herein or otherwise agreed with,
and for the sole benefit of, the Company.

 

60

 

SECTION 1007.                                    Compensation and
Reimbursement.

 

The Company shall

 

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

 

(b)                     except
as otherwise expressly provided herein, reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its agents and counsel), except to the extent that any such expense,
disbursement or advance may be attributable to the Trustee’s negligence,
willful misconduct or bad faith; and

 

(c)                      indemnify
the Trustee for, and hold it harmless from and against, any loss, liability or
expense reasonably incurred by it arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder or the
performance of its duties hereunder, including the reasonable costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder except to
the extent any such loss, liability or expense may be attributable to its
negligence, willful misconduct or bad faith.

 

As security for the
performance of the obligations of the Company under this Section, the Trustee
shall have a lien prior to the Securities upon the Mortgaged Property and all
property and funds held or collected by the Trustee as such, other than
property and funds held in trust under Section 803 (except moneys payable
to the Company as provided in Section 803).

 

In addition and without
prejudice to the rights provided to the Trustee under any of the provisions of
this Indenture, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 901(d) or Section 901(e),
the expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of administration
under any applicable Federal and State bankruptcy, insolvency or other similar
law.

 

The Company’s obligations
under this Section 1007 and the Lien referred to in this Section 1007
shall survive the resignation or removal of the Trustee, the discharge of the
Company’s obligations under Article Eight of this Indenture and/or the
termination of this Indenture.

 

“Trustee”
for purposes of this Section 1007 shall include any predecessor Trustee;
provided, however, that the negligence, willful misconduct or bad faith of any
Trustee hereunder shall not affect the rights of any other Trustee hereunder.

 

SECTION 1008.                                    Disqualification;
Conflicting Interests.

 

If the Trustee shall have
or acquire any conflicting interest within the meaning of the Trust Indenture
Act, it shall either eliminate such conflicting interest or resign to the
extent, in the manner and with the effect, and subject to the conditions,
provided in the Trust Indenture Act and this Indenture.  For purposes of Section 310(b)(1) of
the Trust Indenture Act and to the extent permitted thereby, the

 

61

 

Trustee, in its
capacity as trustee in respect of the Securities of any series, shall not be
deemed to have a conflicting interest arising from its capacity as trustee in
respect of the Securities of any other series issued under this Indenture.  Nothing herein shall prevent the Trustee from
filing with the Commission the application referred to in the second to last
paragraph of Section 310(b) of the Trust Indenture Act.

 

SECTION 1009.                                    Corporate Trustee
Required; Eligibility.

 

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

 

(a)                                  a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal,
State or District of Columbia authority, or

 

(b)                                 if
and to the extent permitted by the Commission by rule, regulation or order upon
application, a corporation or other Person organized and doing business under
the laws of a foreign government, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 or the Dollar equivalent of the applicable foreign currency and
subject to supervision or examination by authority of such foreign government
or a political subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees,

 

and, in either case,
qualified and eligible under this Article and the Trust Indenture Act. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section and the Trust
Indenture Act, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

 

SECTION 1010.                                    Resignation and
Removal; Appointment of Successor.

 

(a)                                  No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 1011.

 

(b)                                 The
Trustee may resign at any time by giving written notice thereof to the
Company.  If the instrument of acceptance
by a successor Trustee required by Section 1011 shall not have been
delivered to the resigning or removed Trustee within 30 days after the giving
of such notice of resignation, the resigning or removed Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee.

 

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

 

(d)                                 If
at any time:

 

(i)                                     the
Trustee shall fail to comply with Section 1008 after written request
therefor by the Company or by any Holder who has been a bona fide Holder for at
least six months, or

 

62

 

(ii)                                  the
Trustee shall cease to be eligible under Section 1009 or Section 310(a) of
the Trust Indenture Act and shall fail to resign after written request therefor
by the Company or by any such Holder, or

 

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

 

then, in any such case,
(x) the Company by Board Resolutions may remove the Trustee with respect
to all Securities or (y) subject to Section 914, any Holder who has
been a bona fide Holder for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the appointment
of a successor Trustee or Trustees.

 

(e)                                  If
the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause (other than as
contemplated by clause (y) in subsection (d) or this Section), the
Company, by Board Resolutions, shall promptly appoint a successor Trustee or
Trustees and shall comply with the applicable requirements of Section 1011.  If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 1011,
become the successor Trustee and to that extent supersede the successor Trustee
appointed by the Company.  If no
successor Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 1011, any
Holder who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

 

(f)                                    So
long as no event which is, or after notice or lapse of time, or both, would
become, an Event of Default shall have occurred and be continuing, and except
with respect to a Trustee appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities pursuant to subsection (e) of
this Section, if the Company shall have delivered to the Trustee (i) Board
Resolutions appointing a successor Trustee, effective as of a date specified
therein, and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in accordance with Section 1011,
the Trustee shall be deemed to have resigned as contemplated in subsection (b) of
this Section, the successor Trustee shall be deemed to have been appointed by
the Company pursuant to subsection (e) of this Section and such
appointment shall be deemed to have been accepted as contemplated in Section 1011,
all as of such date, and all other provisions of this Section and Section 1011
shall be applicable to such resignation, appointment and acceptance except to
the extent inconsistent with this subsection (f).

 

(g)                                 The
Company shall give notice of each resignation and each removal of the Trustee
and each appointment of a successor Trustee to all Holders of Securities in the
manner provided in Section 108. 
Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.

 

63

 

SECTION 1011.                                    Acceptance of
Appointment by Successor.

 

(a)                                  In
case of the appointment hereunder of a successor Trustee, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of all sums owed to it, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its Lien provided for in Section 1007.

 

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

 

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

 

SECTION 1012.                                    Merger, Conversion,
Consolidation or Succession to Business.

 

Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.  In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.

 

SECTION 1013.                                    Preferential
Collection of Claims Against Company.

 

If the Trustee shall be
or become a creditor of the Company or any other obligor upon the Securities
(other than by reason of a relationship described in Section 311(b) of
the Trust Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the collection of
claims against the Company or such other obligor.  For purposes of Section 311(b) of
the Trust Indenture Act (a) the term “cash transaction” shall have the
meaning provided in Rule 11b-4 under the Trust Indenture Act, and (b) the
term “self-liquidating paper” shall have the meaning provided in Rule 11b-6
under the Trust Indenture Act.

 

SECTION 1014.                                    Co-trustee and
Separate Trustees.

 

At any time or times, for
the purpose of meeting the legal requirements of any applicable jurisdiction,
the Company and the Trustee shall have power to appoint, and, upon the written
request of the Trustee or of the Holders of at least 33% in principal amount of
the Securities then Outstanding, the Company shall for such purpose join with
the Trustee in the execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Trustee
either to act as co-trustee, jointly with the Trustee, or to act as separate
trustee, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons, in the capacity

 

64

 

aforesaid, any
property, title, right or power deemed necessary or desirable, subject to the
other provisions of this Section.  If the
Company does not join in such appointment within 15 days after the receipt by
it of a request so to do, or if an Event of Default shall have occurred and be
continuing, the Trustee alone shall have power to make such appointment.

 

Should any written
instrument or instruments from the Company be required by any co-trustee or
separate trustee to more fully confirm to such co-trustee or separate trustee
such property, title, right or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the Company.

 

Every co-trustee or
separate trustee shall, to the extent permitted by law, but to such extent
only, be appointed subject to the following conditions:

 

(a)                      the
Securities shall be authenticated and delivered, and all rights, powers, duties
and obligations hereunder in respect of the custody of securities, cash and
other personal property held by, or required to be deposited or pledged with,
the Trustee hereunder, shall be exercised solely, by the Trustee;

 

(b)                     the
rights, powers, duties and obligations hereby conferred or imposed upon the
Trustee in respect of any property covered by such appointment shall be
conferred or imposed upon and exercised or performed either by the Trustee or
by the Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate trustee,
except to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.

 

(c)                      the
Trustee at any time, by an instrument in writing executed by it, with the
concurrence of the Company, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and, if an Event
of Default shall have occurred and be continuing, the Trustee shall have power
to accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Company. 
Upon the written request of the Trustee, the Company shall join with the
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to effectuate such resignation or removal.  A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided in this
Section;

 

(d)                     no
co-trustee or separate trustee hereunder shall be personally liable by reason
of any act or omission of the Trustee, or any other such trustee hereunder, and
the Trustee shall not be personally liable by reason of any act or omission of
any such co-trustee or separate trustee; and

 

(e)                      any
Act of Holders delivered to the Trustee shall be deemed to have been delivered
to each such co-trustee and separate trustee.

 

65

 

SECTION 1015.                                    Appointment of
Authenticating Agent.

 

The Trustee may appoint
an Authenticating Agent or Agents with respect to the Securities of one or more
series, or any Tranche thereof, which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series or Tranche issued upon
original issuance, exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder.  Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the Trustee’s
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent.  Each Authenticating
Agent shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the United States of
America, any State or territory thereof or the District of Columbia or the
Commonwealth of Puerto Rico, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority.  If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent report
of condition so published.  If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

 

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

 

An Authenticating Agent
may resign at any time by giving written notice thereof to the Trustee and the
Company.  The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and the Company.  Upon receiving such a notice of resignation
or upon such a termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company.  Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

 

The Company agrees to pay
to each Authenticating Agent from time to time reasonable compensation for its
services under this Section.

 

The provisions of
Sections 308, 1004 and 1005 shall be applicable to each Authenticating Agent.

 

If an appointment with
respect to the Securities of one or more series, or any Tranche thereof, shall
be made pursuant to this Section, the Securities of such series or Tranche may
have

 

66

 

endorsed thereon,
in addition to the Trustee’s certificate of authentication, an alternate
certificate of authentication substantially in the following form:

 

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

 

	
   

  	
   

  	
  ,

  
	
   

  	
  As Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  As Authenticating
  Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  	
   

  

 

If all of the Securities
of a series may not be originally issued at one time, and if the Trustee does
not have an office capable of authenticating Securities upon original issuance
located in a Place of Payment where the Company wishes to have Securities of
such series authenticated upon original issuance, the Trustee, if so requested
by the Company in writing (which writing need not comply with Section 102
and need not be accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such procedures as
shall be acceptable to the Trustee, an Authenticating Agent having an office in
a Place of Payment designated by the Company with respect to such series of
Securities.

 

ARTICLE ELEVEN

 

Holders’ Lists and
Reports by Trustee and Company

 

SECTION 1101.                                    Lists of Holders.

 

Semiannually, not later
than June 30 and December 31, in each year, commencing with the
period due no later than June 30, 2004, and at such other times as the
Trustee may request in writing, the Company shall furnish or cause to be
furnished to the Trustee information as to the names and addresses of the
Holders, and the Trustee shall preserve such information and similar
information received by it in any other capacity and afford to the Holders
access to information so preserved by it, all to such extent, if any, and in
such manner as shall be required by the Trust Indenture Act; provided, however,
that no such list need be furnished so long as the Trustee shall be the
Security Registrar.

 

SECTION 1102.                                    Reports by Trustee
and Company.

 

Within 60 days of January 1
of each year, commencing with the year 2004, the Trustee shall transmit to the
Holders, the Commission and each securities exchange upon which any Securities
are listed, a report, dated as of the such January 1, with respect to any
events and other matters described in Section 313(a) of the Trust
Indenture Act, which may have occurred within the previous 12 months (but if no
event has occurred within such period no report need be transmitted), in such
manner and to the extent required by the Trust Indenture Act.  The Trustee shall transmit to the Holders,
the Commission and each securities exchange upon which any Securities are
listed, and the Company shall file with the Trustee

 

67

 

(within 30 days
after filing with the Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and furnished to the Trustee)
and transmit to the Holders, such other information, reports and other
documents, if any, at such times and in such manner, as shall be required by
the Trust Indenture Act. The Company shall notify the Trustee of the listing of
any Securities on any securities exchange and of any delisting thereof.

 

Delivery of such reports,
information and documents to the Trustee is for informational purposes only,
and the Trustee’s receipt of such shall not constitute notice or constructive
notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s
Certificates).

 

ARTICLE TWELVE

 

Consolidation,
Merger, Conveyance, or Other Transfer

 

SECTION 1201.                                    Company may
Consolidate, etc., Only on Certain Terms.

 

The Company shall not
consolidate with or merge into any other corporation, or convey or otherwise
transfer, or lease, as, or substantially as, an entirety the Company’s Electric
and Gas Utility Property to any Person, unless:

 

(a)                                  the
corporation formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or other transfer, or which leases, as,
or substantially as, an entirety such Electric and Gas Utility Property shall
be a corporation organized and existing under the laws of the United States,
any State or Territory thereof or the District of Columbia (such corporation
being hereinafter sometimes called the “Successor Company”)
and shall execute and deliver to the Trustee an indenture supplemental hereto,
in form recordable and reasonably satisfactory to the Trustee, which:

 

(i)                                     in
the case of a consolidation, merger, conveyance or other transfer, or in the
case of a lease if the term thereof extends beyond the last Stated Maturity of
the Securities then Outstanding, contains an express assumption by the
Successor Company of the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all the Securities then Outstanding
and the performance and observance of every covenant and condition of this
Indenture to be performed or observed by the Company, and

 

(ii)                                  in
the case of a consolidation, merger, conveyance or other transfer, contains a
grant, conveyance, transfer and mortgage by the Successor Company, of the same
tenor of the Granting Clauses herein,

 

(A)                              confirming
the Lien of this Indenture on the Mortgaged Property (as constituted
immediately prior to the time such transaction became effective) and subjecting
to the Lien of this Indenture all property, real, personal and mixed,
thereafter acquired by the Successor Company which shall constitute an
improvement, extension or addition to the Mortgaged Property (as so constituted)
or a renewal, replacement or substitution of or for any part thereof, and,

 

68

 

(B)                                at
the election of the Successor Company, subjecting to the Lien of this Indenture
such property, real, personal or mixed, in addition to the property described
in subclause (A) above, then owned or thereafter acquired by the Successor
Company as the Successor Company shall, in its sole discretion, specify or
describe therein,

 

and the Lien confirmed or created by such grant,
conveyance, transfer and mortgage shall have force, effect and standing similar
to those which the Lien of this Indenture would have had if the Company had not
been a party to such consolidation, merger, conveyance or other transfer and
had itself, after the time such transaction became effective, purchased,
constructed or otherwise acquired the property subject to such grant,
conveyance, transfer and mortgage;

 

(b)                                 in
the case of a lease, such lease shall be made expressly subject to termination
at any time during the continuance of an Event of Default, by (i) the
Company or the Trustee and (ii) the purchaser of the property so leased at
any sale thereof hereunder, whether such sale be made under the power of sale
hereby conferred or pursuant to judicial proceedings;

 

(c)                                  the
Company shall have delivered to the Trustee an Officer’s Certificate and an
Opinion of Counsel each of which shall state that such consolidation, merger,
conveyance or other transfer or lease, and such supplemental indenture, comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with; and

 

(d)                                 immediately
after giving effect to such transaction (and treating any Debt that becomes an
obligation of the Successor Company as a result of such transaction as having
been incurred by the Successor Company at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing.

 

As used in this Article and
in Section 1810(d), the terms “improvement”, “extension” and “addition”
shall be limited to (a) with respect to real property subject to the Lien
of this Indenture, any item of personal property which has been so affixed or
attached to such real property as to be regarded a part of such real property
under applicable law and (b) with respect to personal property subject to
the Lien of this Indenture, any improvement, extension or addition to such
personal property which (i) is made to maintain, renew, repair or improve
the function of such personal property and (ii) is physically installed in
or affixed to such personal property.

 

SECTION 1202.                                    Successor Company
Substituted.

 

Upon any consolidation or
merger or any conveyance or other transfer of, as, or substantially as, an
entirety the Company’s Electric and Gas Utility Property in accordance with Section 1201,
the Successor Company shall succeed to, and be substituted for, and may
exercise every power and right of, the Company under this Indenture with the
same effect as if such Successor Company had been named as the “Company”
herein.  Without limiting the generality
of the foregoing:

 

(a)                                  all
property of the Successor Company then subject to the Lien of this Indenture,
of the character described in Section 103, shall constitute Property
Additions;

 

(b)                                 the
Successor Company may execute and deliver to the Trustee, and thereupon the
Trustee shall, subject to the provisions of Article Sixteen, authenticate
and deliver, Securities upon any basis provided in Article Sixteen; and

 

69

 

(c)                                  the
Successor Company may, subject to the applicable provisions of this Indenture,
cause Property Additions to be applied to any other Authorized Purpose.

 

All Securities so
executed by the Successor Company, and authenticated and delivered by the
Trustee, shall in all respects be entitled to the benefit of the Lien of this
Indenture equally and ratably with all Securities executed, authenticated and
delivered prior to the time such consolidation, merger, conveyance or other
transfer became effective.

 

SECTION 1203.                                    Extent of Lien
Hereof on Property of Successor Company.

 

Unless, in the case of a
consolidation, merger, conveyance or other transfer contemplated by Section 1201,
the indenture supplemental hereto contemplated in Section 1201 or in Article Thirteen
expressly provides otherwise, neither this Indenture nor such supplemental
indenture shall become or be, or be required to become or be, a Lien upon any
of the properties:

 

(a)                                  owned
by the Successor Company or any other party to such transaction (other than the
Company) immediately prior to the time of effectiveness of such transaction or

 

(b)                                 acquired
by the Successor Company at or after the time of effectiveness of such
transaction,

 

except, in either case,
properties acquired from the Company in or as a result of such transaction and
improvements, extensions and additions to such properties and renewals,
replacements and substitutions of or for any part or parts thereof.

 

SECTION 1204.                                    Release of Company
upon Conveyance or Other Transfer.

 

In the case of a
conveyance or other transfer to any Person or Persons as contemplated in Section 1201,
upon the satisfaction of all the conditions specified in Section 1201 the
Company (such term being used in this Section without giving effect to
such transaction) shall be released and discharged from all obligations and
covenants under this Indenture and on and under all Securities then Outstanding
(unless the Company shall have delivered to the Trustee an instrument in which
it shall waive such release and discharge) and, upon request by the Company,
the Trustee shall acknowledge in writing that the Company has been so released
and discharged.

 

SECTION 1205.                                    Merger into
Company; Extent of Lien Hereof.

 

(a)                                  Nothing
in this Indenture shall be deemed to prevent or restrict any consolidation or
merger after the consummation of which the Company would be the surviving or
resulting corporation or any conveyance or other transfer, or lease, of any
part of the Company’s Electric and Gas Utility Property which does not
constitute the entirety or substantially the entirety of its Electric and Gas
Utility Property.

 

(b)                                 Unless,
in the case of a consolidation or merger described in subsection (a) of
this Section, an indenture supplemental hereto shall otherwise provide, this
Indenture shall not become or be, or be required to become or be, a Lien upon
any of the properties acquired by the Company in or as a result of such
transaction or any improvements, extensions or additions to such properties or
any renewals, replacements or substitutions of or for any part or parts
thereof.

 

70

 

SECTION 1206.                                    Transfer of Less
than Substantially All.

 

A conveyance, transfer or
lease by the Company of Electric and Gas Utility Property shall not be deemed
to constitute the conveyance, transfer or lease as, or substantially as, an
entirety of its Electric and Gas Utility Property for purposes of this
Indenture if the Fair Value of the Electric and Gas Utility Property retained
by the Company exceeds 143% of the aggregate principal amount of all
Outstanding Securities and any other outstanding debt securities of the Company
that rank equally with, or senior to the Indenture Securities with respect to such
Electric and Gas Utility Property.  Such
Fair Value shall be established by the delivery to the Trustee of an
Independent Expert’s Certificate stating the Independent Expert’s opinion of
such Fair Value as of a date not more than 90 days before or after such
conveyance, transfer or lease.  This Article is
not intended to limit the Company’s conveyances, transfers or leases of less
than the entirety or substantially the entirety of its Electric and Gas Utility
Property.

 

ARTICLE THIRTEEN

 

Supplemental Indentures

 

SECTION 1301.                                    Supplemental
Indentures Without Consent of Holders.

 

Without the consent of
any Holders, the Company and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, for any of the following purposes:

 

(a)                      to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company herein and in the Securities
all as provided in Article Twelve; or

 

(b)                     to
add one or more covenants of the Company or other provisions for the benefit of
the Holders of all or any series of Securities, or any Tranche, thereof or to
surrender any right or power herein conferred upon the Company (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series); or

 

(c)                      to
add any additional Events of Default with respect to all or any series of
Securities Outstanding hereunder (and if such additional Events of Default are
to be for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the
benefit of such series); or

 

(d)                     to
change or eliminate any provision of this Indenture or to add any new provision
to this Indenture; provided, however, that if such change, elimination or
addition shall adversely affect the interests of the Holders of Securities of
any series or Tranche Outstanding on the date of such supplemental indenture in
any material respect, such change, elimination or addition shall become
effective with respect to such series or Tranche only pursuant to the
provisions of Section 1302 hereof or when no Security of such series or
Tranche remains Outstanding; or

 

(e)                      to
provide additional collateral security for the Securities of any series; or

 

71

 

(f)                        to
establish the form or terms of Securities of any series or Tranche as
contemplated by Sections 201 and 301; or

 

(g)                     to
provide for the authentication and delivery of bearer securities and coupons
appertaining thereto representing interest, if any, thereon and for the
procedures for the registration, exchange and replacement thereof and for the
giving of notice to, and the solicitation of the vote or consent of, the
holders thereof, and for any and all other matters incidental thereto; or

 

(h)                     to
evidence and provide for the acceptance of appointment hereunder by a separate or
successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 1011(b); or

 

(i)                         to
provide for the procedures required to permit the Company to utilize, at its
option, a non-certificated system of registration for all, or any series or
Tranche of, the Securities; or

 

(j)                         to
change any place or places where (1) the principal of and premium, if any,
and interest, if any, on all or any series of Securities, or any Tranche
thereof, shall be payable, (2) all or any series of Securities, or any
Tranche thereof, may be surrendered for registration of transfer, (3) all
or any series of Securities, or any Tranche thereof, may be surrendered for
exchange and (4) notices and demands to or upon the Company in respect of
all or any series of Securities, or any Tranche thereof, and this Indenture may
be served;

 

(k)                      to
amend and restate this Indenture, as originally executed and delivered and as
it may have been subsequently amended, in its entirety, but with such
additions, deletions and other changes as shall not adversely affect the
interests of the Holders of the Securities of any series or Tranche in any
material respect; or

 

(l)                         to
cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein, or to make any other
changes to the provisions hereof or to add other provisions with respect to
matters or questions arising under this Indenture, provided that such other
changes or additions shall not materially adversely affect the interests of the
Holders of Securities of any series or Tranche in any material respect; or

 

(m)                   to
permit an entity acquiring a substantial portion of the Electric and Gas
Utility Property to assume a prorata share of the outstanding Debt Securities
based upon the net book value of the Electric and Gas Utility Property acquired
by that entity and to release the Company and its properties from any
obligations or liens under the Indenture with respect to those assumed Debt
Securities, provided that the assumed Debt Securities will be secured by a lien
on the acquired Electric and Gas Utility Property to substantially the same
extent and upon substantially the same terms as provided in the Indenture
except for the substitution of the acquiring entity for the Company.

 

72

 

Without limiting the
generality of the foregoing, if the Trust Indenture Act as in effect at the
Execution Date or at any time thereafter shall be amended and

 

(x)                                   if
any such amendment shall require one or more changes to any provisions hereof
or the inclusion herein of any additional provisions, or shall by operation of
law be deemed to effect such changes or incorporate such provisions by
reference or otherwise, this Indenture shall be deemed to have been amended so
as to conform to such amendment to the Trust Indenture Act, and the Company and
the Trustee may, without the consent of any Holders, enter into an indenture
supplemental hereto to evidence such amendment hereof; or

 

(y)                                 if
any such amendment shall permit one or more changes to, or the elimination of,
any provisions hereof which, at the Execution Date or at any time thereafter,
are required by the Trust Indenture Act to be contained herein or are contained
herein to reflect any provision of the Trust Indenture Act as in effect at such
date, this Indenture shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee may, without the
consent of any Holders, enter into an indenture supplemental hereto to this
Indenture to effect such changes or elimination or evidence such amendment.

 

SECTION 1302.                                    Supplemental
Indentures With Consent of Holders.

 

Subject to the provisions
of Section 1301, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all series then
Outstanding under this Indenture, considered as one class, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture; provided,
however, that if there shall be Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security of each series or Tranche so directly affected,

 

(a)                      change
the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security (other than pursuant to the terms thereof), or reduce
the principal amount thereof or the rate of interest thereon (or the amount of
any installment of interest thereon) or change the method of calculating such
rate or reduce any premium payable upon the redemption thereof, or reduce the
amount of the principal of a Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section 902,
or change the coin or currency (or other property), in which any Security or
any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such

 

73

 

payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or

 

(b)                     permit
the creation of any Lien ranking prior to the Lien of this Indenture with
respect to more than 10% of the Mortgaged Property or terminate the Lien of
this Indenture on more than 10% of the Mortgaged Property or deprive such
Holder of the benefit of the security of the Lien of this Indenture, or

 

(c)                      reduce
the percentage in principal amount of the Outstanding Securities of any series
or any Tranche thereof, the consent of the Holders of which is required for any
such supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with any provision of this Indenture or of any
default hereunder and its consequences, or reduce the requirements of Section 1404
for quorum or voting, or

 

(d)                     modify
any of the provisions of this Section, Section 706 or Section 913
with respect to the Securities of any series, or any Tranche thereof, except to
increase the percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause
shall not be deemed to require the consent of any Holder with respect to
changes in the references to “the Trustee” and concomitant changes in this
Section, or the deletion of this proviso, in accordance with the requirements
of Sections 1011(b), 1014 and 1301(h).

 

A supplemental indenture
which (x) changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of the
Holders of, or which is to remain in effect only so long as there shall be
Outstanding, Securities of one or more particular series, or one or more
Tranches thereof, or (y) modifies the rights of the Holders of Securities of
such series or Tranches with respect to such covenant or other provision, shall
be deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.

 

It shall not be necessary
for any Act of Holders under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.

 

Anything in this
Indenture to the contrary notwithstanding, if the Officer’s Certificate,
supplemental indenture or Board Resolution, as the case may be, establishing
the Securities of any series or Tranche shall provide that the Company may make
certain specified additions, changes or eliminations to or from the Indenture
which shall be specified in such Officer’s Certificate, supplemental indenture
or Board Resolution establishing such series or Tranche, (a) the Holders
of Securities of such series or Tranche shall be deemed to have consented to a
supplemental indenture containing such additions, changes or eliminations to or
from the Indenture which shall be specified in such Officer’s Certificate,
supplemental indenture or Board Resolution establishing such series or Tranche,
(b) no Act of such Holders shall be required to evidence such consent and (c) such
consent may be counted in the determination of whether or not the Holders of
the requisite principal amount of Securities shall have consented to such
supplemental indenture.

 

74

 

SECTION 1303.                                    Execution of
Supplemental Indentures.

 

In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 1001) shall be fully protected in relying upon, an
Opinion of Counsel and an Officer’s Certificate stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture and
containing the statements required by Section 104.  The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture which adversely affects the
Trustee’s own rights, duties, immunities or liabilities under this Indenture or
otherwise.

 

SECTION 1304.                                    Effect of
Supplemental Indentures.

 

Upon the execution of any
supplemental indenture under this Article this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.  Any supplemental indenture permitted by this Article may
restate this Indenture in its entirety, and, upon the execution and delivery
thereof, any such restatement shall supersede this Indenture as theretofore in
effect for all purposes.

 

SECTION 1305.                                    Conformity With
Trust Indenture Act.

 

Every supplemental
indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

 

SECTION 1306.                                    Reference in
Securities to Supplemental Indentures.

 

Securities of any series,
or any Tranche thereof, authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture.  If the Company shall so determine, new
Securities of any series, or any Tranche thereof, so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company, and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series or Tranche.

 

SECTION 1307.                                    Modification
Without Supplemental Indenture.

 

To the extent, if any,
that the terms of any particular series of Securities shall have been
established in or pursuant to a Board Resolution or an Officer’s Certificate
pursuant to a supplemental indenture or Board Resolution as contemplated by Section 301,
and not in an indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a supplemental
Board Resolution or Officer’s Certificate pursuant to a Board Resolution or a
supplemental indenture and complying with the requirements of Section 104,
as the case may be, delivered to, and accepted by, the Trustee in writing;
provided, however, that such supplemental Board Resolution or Officer’s
Certificate shall not be accepted by the Trustee or otherwise be effective
unless all conditions set forth in this Indenture which would be required to be
satisfied if such additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied.  Upon the written acceptance thereof by the
Trustee, any such supplemental Board Resolution or Officer’s Certificate shall
be deemed to be effective and constitute part of the Indenture and a
supplemental

 

75

 

indenture
hereunder, including for purposes of Section 1816.  Such acceptance shall be conveyed by a
written instrument signed by a Responsible Officer of the Trustee.

 

ARTICLE FOURTEEN

 

Meetings of
Holders; Action Without Meeting

 

SECTION 1401.                                    Purposes for Which
Meetings May Be Called.

 

A meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches thereof,
may be called at any time and from time to time pursuant to this Article to
make, give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series or Tranches.

 

SECTION 1402.                                    Call, Notice and
Place of Meetings.

 

(a)                                  The
Trustee may at any time call a meeting of Holders of Securities of one or more,
or all, series, or any Tranche or Tranches thereof, for any purpose specified
in Section 1401, to be held at such time and at such place in the Borough
of Manhattan, The City of New York, as the Trustee shall determine, or, with
the approval of the Company, at any other place.  Notice of every such meeting, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given, in the manner provided in Section 108,
not less than 21 nor more than 180 days prior to the date fixed for the
meeting.

 

(b)                                 If
the Trustee shall have been requested to call a meeting of the Holders of
Securities of one or more, or all, series, or any Tranche or Tranches thereof,
by the Company or by the Holders of 33% in aggregate principal amount of all of
such series and Tranches, considered as one class, for any purpose specified in
Section 1401, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be held as provided
herein, then the Company or the Holders of Securities of such series and
Tranches in the amount above specified, as the case may be, may determine the
time and the place in the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved by the Company, for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.

 

(c)                                  Any
meeting of Holders of Securities of one or more, or all, series, or any Tranche
or Tranches thereof, shall be valid without notice if the Holders of all
Outstanding Securities of such series or Tranches are present in person or by
proxy and if representatives of the Company and the Trustee are present, or if
notice is waived in writing before or after the meeting by the Holders of all
Outstanding Securities of such series, or any Tranche or Tranches thereof or by
such of them as are not present at the meeting in person or by proxy, and by
the Company and the Trustee.

 

SECTION 1403.                                    Persons Entitled to
Vote at Meetings.

 

To be entitled to vote at
any meeting of Holders of Securities of one or more, or all, series, or any
Tranche or Tranches thereof, a Person shall be (a) a Holder of one or more
Outstanding Securities of such series or Tranches, or (b) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one
or more Outstanding Securities of such series or Tranches by such Holder or

 

76

 

Holders.  The only Persons who shall be entitled to
attend any meeting of Holders of Securities of any series or Tranche shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

 

SECTION 1404.                                    Quorum; Action.

 

The Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities of
the series and Tranches with respect to which a meeting shall have been called
as hereinbefore provided, considered as one class, shall constitute a quorum
for a meeting of Holders of Securities of such series and Tranches; provided,
however, that if any action is to be taken at such meeting which this Indenture
expressly provides may be taken by the Holders of a specified percentage, which
is less than a majority, in principal amount of the Outstanding Securities of
such series and Tranches, considered as one class, the Persons entitled to vote
such specified percentage in principal amount of the Outstanding Securities of
such series and Tranches, considered as one class, shall constitute a
quorum.  In the absence of a quorum
within one hour of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities of such series and Tranches,
be dissolved.  In any other case the
meeting may be adjourned for such period as may be determined by the chairman
of the meeting prior to the adjournment of such meeting.  In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for such period
as may be determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting.  Notice of the
reconvening of any meeting adjourned for more than 30 days shall be given as
provided in Section 1402(a) not less than ten days prior to the date
on which the meeting is scheduled to be reconvened.  Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series and Tranches which
shall constitute a quorum.

 

Except as limited by Section 1302,
any resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of the series and Tranches with respect to which such
meeting shall have been called, considered as one class; provided, however,
that, except as so limited, any resolution with respect to any action which
this Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of such series and Tranches, considered as one class,
may be adopted at a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of such series and Tranches, considered as one class.

 

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

 

SECTION 1405.                                    Attendance at
Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings.

 

(a)                                  Attendance
at meetings of Holders of Securities may be in person or by proxy; and, to the
extent permitted by law, any such proxy shall remain in effect and be binding
upon any future Holder of the Securities with respect to which it was given
unless and until specifically revoked by the Holder or future Holder of such
Securities before being voted.

 

77

 

(b)                                 Notwithstanding
any other provisions of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Holders of Securities
in regard to proof of the holding of such Securities and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate.  Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 106 and the
appointment of any proxy shall be proved in the manner specified in Section 106.  Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 106 or other proof.

 

(c)                                  The
Trustee shall, by an instrument in writing, appoint a temporary chairman of the
meeting, unless the meeting shall have been called by the Company or by Holders
as provided in Section 1402(b), in which case the Company or the Holders
of Securities of the series and Tranches calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities of
all series and Tranches represented in person or by proxy at the meeting,
considered as one class.

 

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

 

(e)                                  Any
meeting duly called pursuant to Section 1402 at which a quorum is present
may be adjourned from time to time by Persons entitled to vote a majority in
aggregate principal amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class; and, except as
provided in Section 1404, the meeting may be held as so adjourned without
further notice.

 

SECTION 1406.                                    Counting Votes and
Recording Action of Meetings.

 

The vote upon any
resolution submitted to any meeting of Holders shall be by written ballots on
which shall be subscribed the signatures of the Holders or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities, of the series and Tranches with respect to which the
meeting shall have been called, held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports of all votes cast at the
meeting.  A record, in duplicate, of the
proceedings of each meeting of Holders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in Section 1402
and, if applicable, Section 1404. 
Each copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy shall be
delivered to the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the
meeting.  Any record so signed and
verified shall be conclusive evidence of the matters therein stated.

 

78

 

SECTION 1407.                                    Action Without
Meeting.

 

In lieu of a vote of
Holders at a meeting as hereinbefore contemplated in this Article, any request,
demand, authorization, direction, notice, consent, waiver or other action may
be made, given or taken by Holders by one or more written instruments as
provided in Section 106.

 

ARTICLE FIFTEEN

 

Immunity of
Incorporators, Shareholders, Officers and Directors

 

SECTION 1501.                                    Liability Solely
Corporate.

 

No recourse shall be had
for the payment of the principal of or premium, if any, or interest, if any, on
any Securities or any part thereof, or for any claim based thereon or otherwise
in respect thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement under this Indenture, against any
incorporator, shareholder, member, limited partner, officer, manager or
director, as such, past, present or future of the Company or of any predecessor
or successor of the Company (either directly or through the Company or a
predecessor or successor of the Company), whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Securities are solely corporate obligations,
and that no personal liability whatsoever shall attach to, or be incurred by,
any incorporator, shareholder, member, limited partner, officer, manager or
director, past, present or future, of the Company or of any predecessor or
successor of the Company, either directly or indirectly through the Company or
any predecessor or successor of the Company, because of the indebtedness hereby
authorized or under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or to be
implied herefrom or therefrom, and that any such personal liability is hereby
expressly waived and released as a condition of, and as part of the consideration
for, the execution of this Indenture and the issuance of the Securities.

 

ARTICLE SIXTEEN

 

Issuance of
Securities

 

SECTION 1601.                                    General.

 

The Trustee shall
authenticate and deliver Securities, for original issue, at one time or from
time to time in accordance with the Company Order referred to below, only
pursuant to Section 1602, 1603, 1604 or 1605.

 

SECTION 1602.                                    [Reserved].

 

SECTION 1603.                                    Issuance of
Securities on the Basis of Property Additions.

 

(a)                                  Securities
of any one or more series may be authenticated and delivered on the basis of
Property Additions which do not constitute Funded Property in a principal
amount not exceeding 70% of the balance of the Cost or the Fair Value to the
Company of such Property Additions (whichever shall be less) after making any
deductions and any additions pursuant to Section 103(b).

 

79

 

(b)                                 Securities
of any series shall be authenticated and delivered by the Trustee on the basis
of Property Additions upon receipt by the Trustee of:

 

(i)                                     the
documents with respect to the Securities of such series specified in Section 303;

 

(ii)                                  an
Expert’s Certificate dated as of a date not more than ninety (90) days prior to
the date of the Company Order referring to it,

 

(1)                                  describing
the property designated by the Company, in its discretion, to be made the basis
of the authentication and delivery of such Securities (such description of
property to be made by reference, at the election of the Company, either to
specified items, units and/or elements of property or portions thereof, on a
percentage or Dollar basis, or to properties reflected in specified accounts or
subaccounts in the Company’s books of account or portions thereof, on a Dollar
basis), and stating the Cost of such property;

 

(2)                                  stating
that all such property constitutes Property Additions;

 

(3)                                  stating
that such Property Additions are desirable for use in the conduct of the
business, or one of the businesses, of the Company;

 

(4)                                  stating
that such Property Additions, to the extent of the Cost or Fair Value to the
Company thereof (whichever is less) to be made the basis of the authentication
and delivery of such Securities, do not constitute Funded Property;

 

(5)                                  stating,
except as to Property Additions acquired, made or constructed wholly through
the delivery of securities or other property, that the amount of cash forming
all or part of the Cost thereof was equal to or more than an amount to be
stated therein;

 

(6)                                  briefly
describing, with respect to any Property Additions acquired, made or
constructed in whole or in part through the delivery of securities or other
property, the securities or other property so delivered and stating the date of
such delivery;

 

(7)                                  stating
what part, if any, of such Property Additions includes property which within
six months prior to the date of acquisition thereof by the Company had been
used or operated by others than the Company in a business similar to that in
which it has been or is to be used or operated by the Company and stating
whether or not, in the judgment of the signers, the Fair Value of such Property
Additions to the Company, as of the date of such certificate, is less than
Twenty-five Thousand Dollars ($25,000) and whether or not such Fair Value is
less than one percent (1%) of the aggregate principal amount of Securities then
Outstanding;

 

(8)                                  stating,
in the judgment of the signers, the Fair Value to the Company, as of the date
of such certificate, of such Property Additions, except any thereof with
respect to the Fair Value to the Company of which a statement is to be made in
an Independent Expert’s Certificate pursuant to clause (iii) below;

 

80

 

(9)                                  stating
the amount required to be deducted under Section 103(b)(i) and the
amounts elected to be added under Section 103(b)(ii) in respect of
Funded Property retired by the Company;

 

(10)                            if
any property included in such Property Additions is subject to a Lien of the
character described (I) in clause (f) of the definition of Permitted
Liens, stating that such Lien does not, in the judgment of the signers,
materially impair the use by the Company of the Mortgaged Property considered
as a whole for the purposes for which it is held by the Company, or (II) in
clause (i)(ii) of the definition of Permitted Liens, stating that such
Lien does not, in the judgment of the signers, materially impair the use by the
Company of such property for the purposes for which it is held by the Company
or (III) in clause (p)(ii) of the definition of Permitted Liens, stating
that the enforcement of such Lien would not, in the judgment of the signers,
adversely affect the interests of the Company in such property in any material
respect;

 

(11)                            stating
the lower of the Cost or the Fair Value to the Company of such Property
Additions, after the deductions therefrom and additions thereto specified in
such Expert’s Certificate pursuant to clause (9) above;

 

(12)                            stating
the aggregate principal amount of the Securities to be authenticated and
delivered on the basis of such Property Additions (such amount not to exceed
70% of the amount stated pursuant to clause (11) above);

 

(iii)                               in case any Property
Additions are shown by the Expert’s Certificate provided for in clause (ii) above
to include property which, within six months prior to the date of acquisition
thereof by the Company, had been used or operated by others than the Company in
a business similar to that in which it has been or is to be used or operated by
the Company and such certificate does not show the Fair Value thereof to the
Company, as of the date of such certificate, to be less than Twenty-five
Thousand Dollars ($25,000) or less than one percent (1%) of the aggregate
principal amount of Securities then Outstanding, an Independent Expert’s Certificate
stating, in the judgment of the signer, the Fair Value to the Company, as of
the date of such Independent Expert’s Certificate, of (X) such Property
Additions which have been so used or operated and (at the option of the
Company) as to any other Property Additions included in the Expert’s
Certificate provided for in clause (ii) above and (Y) in case such
Independent Expert’s Certificate is being delivered in connection with the
authentication and delivery of Securities, any property so used or operated
which has been subjected to the Lien of this Indenture since the commencement
of the then current calendar year as the basis for the authentication and
delivery of Securities and as to which an Independent Expert’s Certificate has
not previously been furnished to the Trustee;

 

(iv)                              in
case any Property Additions are shown by the Expert’s Certificate provided for
in clause (ii) above to have been acquired, made or constructed in whole
or in part through the delivery of securities or other property, an Expert’s
Certificate stating, in the judgment of the signers, the fair market value in
cash of such securities or other property at the time of delivery thereof in
payment for or for the acquisition of such Property Additions;

 

(v)                                 an
Opinion of Counsel to the effect that:

 

81

 

(1)                                  this
Indenture constitutes, or, upon the delivery of, and/or the filing and/or
recording in the proper places and manner of, the instruments of conveyance,
assignment or transfer, if any, specified in said opinion, will constitute, a
Lien on all the Property Additions to be made the basis of the authentication
and delivery of such Securities, subject to no Lien thereon prior to the Lien
of this Indenture except Permitted Liens listed in clauses (c) through (s)
and (u) of the definition of Permitted Liens;

 

(2)                                  [reserved];
and

 

(3)                                  the
Company has corporate authority to operate such Property Additions; and

 

(vi)                              copies
of the instruments of conveyance, assignment and transfer, if any, specified in
the Opinion of Counsel provided for in clause (v) above.

 

SECTION 1604.                                    Issuance of
Securities on the Basis of Retired Securities.

 

(a)                                  Subject
to the provisions of subsection (c) of this Section, Securities of
any one or more series may be authenticated and delivered on the basis of, and
in an aggregate principal amount not exceeding the aggregate principal amount
of, Retired Securities.

 

(b)                                 Securities
of any series shall be authenticated and delivered by the Trustee on the basis
of Retired Securities upon receipt by the Trustee of:

 

(i)                                     the
documents with respect to the Securities of such series specified in Section 303;
and

 

(ii)                                  an
Officer’s Certificate stating that Retired Securities, specified by series, in
an aggregate principal amount not less than the aggregate principal amount of
Securities to be authenticated and delivered, have theretofore been
authenticated and delivered and, as of the date of such Officer’s Certificate,
constitute Retired Securities and are the basis for the authentication and
delivery of such Securities.

 

(c)                                  [reserved].

 

SECTION 1605.                                    Issuance of
Securities on the Basis of Deposit of Cash.

 

(a)                                  Securities
of any one or more series may be authenticated and delivered on the basis of,
and in an aggregate principal not exceeding the amount of, any cash deposited
with the Trustee for such purpose.

 

(b)                                 Securities
of any series shall be authenticated and delivered by the Trustee on the basis
of the deposit of cash when the Trustee shall have received, in addition to
such deposit, the documents with respect to the Securities of such series specified
in Section 303.

 

(c)                                  All
cash deposited with the Trustee under the provisions of this Section, and all
cash required by Section 1702(a) to be applied in accordance with the
provisions of this Section, shall be held by the Trustee as a part of the
Mortgaged Property and may be withdrawn from time to time by the Company, upon
application of the Company to the Trustee, in an amount equal to the aggregate
principal amount of Securities to the authentication and delivery of which the
Company shall be entitled under any

 

82

 

of the provisions of this Indenture by virtue of
compliance with all applicable provisions of this Indenture (except as
hereinafter in this subsection (c) otherwise provided).

 

Upon any such application
for withdrawal, the Company shall comply with all applicable provisions of this
Article relating to the authentication and delivery of Securities except
that the Company shall not in any event be required to deliver the documents
specified in Section 303.

 

Any withdrawal of cash
under this subsection (c) shall operate as a waiver by the Company of
its right to the authentication and delivery of the Securities on which it is
based and such Securities may not thereafter be authenticated and delivered
hereunder.  Any Property Additions which
have been made the basis of any such right to the authentication and delivery
of Securities so waived shall be deemed to have been made the basis of the
withdrawal of such cash; any Retired Securities which have been made the basis
of any such right to the authentication and delivery of Securities so waived
shall be deemed to have been made the basis of the withdrawal of such cash.

 

(d)                                 If
at any time the Company shall so direct, any sums deposited with the Trustee
under the provisions of this Section may be used or applied to the
purchase, payment or redemption of Securities in the manner and subject to the
conditions provided in clauses (d) and (e) of Section 1806.

 

ARTICLE SEVENTEEN

 

[Reserved]

 

 

ARTICLE EIGHTEEN

 

Possession, Use
and Release of Mortgaged Property

 

SECTION 1801.                                    Quiet Enjoyment.

 

Unless one or more Events
of Default shall have occurred and be continuing, the Company shall be
permitted to possess, use and enjoy the Mortgaged Property (except, to the
extent not herein otherwise provided, such cash and securities as are expressly
required to be deposited with the Trustee).

 

SECTION 1802.                                    Dispositions
without Release.

 

Unless an Event of
Default shall have occurred and be continuing, the Company may at any time and
from time to time, without any release or consent by, or report to, the
Trustee:

 

(a)                                  sell
or otherwise dispose of, free from the Lien of this Indenture, any machinery,
equipment, apparatus, towers, transformers, poles, lines, cables, conduits,
ducts, conductors, meters, regulators, holders, tanks, retorts, purifiers,
odorizers, scrubbers, compressors, valves, pumps, mains, pipes, service pipes,
fittings, connections, services, tools, implements, or any other fixtures or
personalty, then subject to the Lien hereof, which shall have become old,
inadequate, obsolete, worn out, unfit, unadapted, unserviceable, undesirable or
unnecessary for use in the operations of the Company upon

 

83

 

replacing the same by, or substituting for the same,
similar or analogous property, or other property performing a similar or
analogous function or otherwise obviating the need therefor, having a Fair
Value to the Company at least equal to that of the property sold or otherwise
disposed of and subject to the Lien hereof, subject to no Liens prior hereto
except Permitted Liens and any other Liens to which the property sold or
otherwise disposed of was subject;

 

(b)                                 cancel
or make changes or alterations in or substitutions for any and all easements,
servitudes, rights-of-way and similar rights and/or interests; and

 

(c)                                  grant,
free from the Lien of this Indenture, easements, ground leases or rights-of-way
in, upon, over and/or across the property or rights-of-way of the Company for
the purpose of roads, pipe lines, transmission lines, distribution lines,
communication lines, railways, removal or transportation of coal, lignite, gas,
oil or other minerals or timber, and other like purposes, or for the joint or common
use of real property, rights-of-way, facilities and/or equipment; provided,
however, that such grant shall not materially impair the use of the property or
rights-of-way for the purposes for which such property or rights-of-way are
held by the Company.

 

SECTION 1803.                                    Release of
Mortgaged Property.

 

Unless an Event of
Default shall have occurred and be continuing, the Company may obtain the
release of any part of the Mortgaged Property, or any interest therein, other
than Funded Cash held by the Trustee, and the Trustee shall release all its
right, title and interest in and to the same from the Lien hereof, upon receipt
by the Trustee of:

 

(a)                                  a
Company Order requesting the release of such property and transmitting
therewith a form of instrument or instruments to effect such release;

 

(b)                                 an
Officer’s Certificate stating that, to the knowledge of the signer, no Event of
Default has occurred and is continuing;

 

(c)                                  an
Expert’s Certificate made and dated not more than ninety (90) days prior to the
date of such Company Order:

 

(i)                                     describing
the property to be released;

 

(ii)                                  stating
the Fair Value, in the judgment of the signers, of the property to be released;

 

(iii)                               stating the Cost of the
property to be released (or, if the Fair Value to the Company of such property
at the time the same became Funded Property was certified to be an amount less
than the Cost thereof, then such Fair Value, as so certified, in lieu of Cost);
and

 

(iv)                              stating
that, in the judgment of the signers, such release will not impair the security
under this Indenture in contravention of the provisions hereof;

 

(d)                                 an
amount in cash to be held by the Trustee as part of the Mortgaged Property,
equal to the amount, if any, by which the amount referred to in clause (c)(iii) above
exceeds the aggregate of the following items:

 

84

 

(i)                                     an
amount equal to the aggregate principal amount of any obligations secured by
Purchase Money Lien delivered to the Trustee, to be held as part of the
Mortgaged Property, subject to the limitations hereafter in this Section set
forth;

 

(ii)                                  an
amount equal to the Cost or Fair Value to the Company (whichever is less),
after making any deductions and any additions pursuant to Section 103, of
any Property Additions not constituting Funded Property described in an Expert’s
Certificate, dated not more than ninety (90) days prior to the date of the
Company Order requesting such release and complying with clause (ii) and,
to the extent applicable, clause (iii) in Section 1603(b), delivered
to the Trustee; provided, however, that the deductions and additions
contemplated by Section 103 shall not be required to be made if such
Property Additions were acquired, made or constructed on or after the ninetieth
(90th) day preceding the date of such Company Order;

 

(iii)                               the aggregate principal
amount of Securities to the authentication and delivery of which the Company
shall be entitled under the provisions of Section 1604, by virtue of
compliance with all applicable provisions of Section 1604 (except as
hereinafter in this Section otherwise provided); provided, however, that
such release shall operate as a waiver by the Company of the right to the
authentication and delivery of such Securities and, to such extent, no such
Securities may thereafter be authenticated and delivered hereunder; and any
Securities which could have been the basis of such right to the authentication
and delivery of Securities so waived shall be deemed to have been made the
basis of such release of property;

 

(iv)                              any
amount in cash and/or an amount equal to the aggregate principal amount of any
obligations secured by Purchase Money Lien that, in either case, is evidenced
to the Trustee by a certificate of the trustee or other holder of a Lien prior
to the Lien of this Indenture to have been received by such trustee or other
holder in accordance with the provisions of such Lien in consideration for the
release of such property or any part thereof from such Lien, all subject to the
limitations hereafter in this Section set forth;

 

(v)                                 the
aggregate principal amount of any Outstanding Securities delivered to the
Trustee; and

 

(vi)                              any
taxes and expenses incidental to any sale, exchange, dedication or other
disposition of the property to be released;

 

provided, however, that
no obligations secured by Purchase Money Lien upon any property being released
from the Lien hereof shall be used as a credit in connection with such release
unless all obligations secured by such Purchase Money Lien shall be delivered
to the Trustee or to the trustee or other holder of a Lien prior to the Lien of
this Indenture;

 

(e)                                  if
the release is on the basis of Property Additions or on the basis of the right
to the authentication and delivery of Securities under Section 1604, all
documents contemplated below in this Section; and

 

85

 

(f)                                    if
the release is on the basis of the delivery to the Trustee or to the trustee or
other holder of a prior Lien of obligations secured by Purchase Money Lien, all
documents contemplated below in this Section, to the extent required.

 

If and to the extent that
the release of property is, in whole or in part, based upon Property Additions
(as permitted under the provisions of clause (d)(ii) in the first
paragraph of this Section), the Company shall, subject to the provisions of
said clause (d)(ii) and except as hereafter in this paragraph provided,
comply with all applicable provisions of this Indenture as if such Property
Additions were to be made the basis of the authentication and delivery of
Securities equal in principal amount to 70% of the Cost (or, as to property of
which the Fair Value to the Company at the time the same became Funded Property
was certified to be an amount less than the Cost thereof, such Fair Value, as
so certified, in lieu of Cost) of that portion of the property to be released
which is to be released on the basis of such Property Additions, as shown by
the Expert’s Certificate required by clause (c) in the first paragraph of
this Section; provided, however, that the Cost of any Property Additions
received or to be received by the Company in whole or in part as consideration
in exchange for the property to be released shall for all purposes of this
Indenture be deemed to be the amount stated in the Expert’s Certificate
provided for in clause (c) in the first paragraph of this Section to
be the Fair Value of the property to be released (x) plus the amount of any
cash and the fair market value of any other consideration, further to be stated
in such Expert’s Certificate, paid and/or delivered or to be paid and/or
delivered by, and the amount of any obligations assumed or to be assumed by,
the Company in connection with such exchange as additional consideration for
such Property Additions and/or (y) less the amount of any cash and the fair
market value of any other consideration, which shall also be stated in such
Expert’s Certificate, received or to be received by the Company in connection
with such exchange in addition to such Property Additions.  If and to the extent that the release of
property is in whole or in part based upon the right to the authentication and
delivery of Securities under Section 1604 (as permitted under the
provisions of clause (d)(iii) in the first paragraph of this Section), the
Company shall, except as hereafter in this paragraph provided, comply with all
applicable provisions of Section 1604 relating to such authentication and
delivery.  Notwithstanding the foregoing
provisions of this paragraph, in no event shall the Company be required to
deliver the documents specified in Section 303.

 

If the release of
property is, in whole or in part, based upon the delivery to the Trustee or the
trustee or other holder of a Lien prior to the Lien of this Indenture of
obligations secured by Purchase Money Lien, the Company shall deliver to the
Trustee:

 

(x)                                   an
Officer’s Certificate (i) stating that no event has occurred and is
continuing which entitles the holder of such Purchase Money Lien to accelerate
the maturity of the obligations, if any, outstanding thereunder and (ii) reciting
the aggregate principal amount of obligations, if any, then outstanding
thereunder in addition to the obligations then being delivered in connection
with the release of such property and the terms and conditions, if any, on
which additional obligations secured by such Purchase Money Lien are permitted
to be issued; and

 

(y)                                 an
Opinion of Counsel stating that, in the opinion of the signer, (i) such
obligations are valid obligations, entitled to the benefit of such Purchase
Money Lien equally and ratably with all other obligations, if any, then
outstanding thereunder, (ii) that such Purchase Money Lien constitutes,
or, upon the delivery of, and/or the filing and/or recording in the proper
places and manner of, the instruments of conveyance, assignment or transfer, if
any, specified in such opinion, will constitute, a Lien upon the property to be
released, subject to no Lien prior thereto except Liens generally of the
character of Permitted Liens and such Liens, if any, as shall have existed
thereon immediately prior to such release as Liens prior to the Lien of this
Indenture, (iii) if any obligations in addition to the

 

86

 

obligations being delivered in connection with such
release of property are then outstanding, or are permitted to be issued, under
such Purchase Money Lien, (A) that such Purchase Money Lien constitutes,
or, upon the delivery of, and/or the filing and/or recording in the proper
places and manner of, the instruments of conveyance, assignment or transfer, if
any, specified in such opinion, will constitute, a Lien upon all other
property, if any, purporting to be subject thereto, subject to no Lien prior
thereto except Liens generally of the character of Permitted Liens and (B) that
the terms of such Purchase Money Lien, as then in effect, do not permit the
issuance of obligations thereunder except on the basis of property generally of
the character of Property Additions, the retirement or deposit of outstanding
obligations, the deposit of prior Lien obligations or the deposit of cash.

 

If the Opinion of Counsel
provided to the Trustee pursuant to clause (y) above is conditioned upon the
filing and/or recording of any instruments of conveyance, assignment or
transfer, the Company shall promptly cause such instruments to be filed and/or
recorded in the proper places and manner and shall deliver to the Trustee
evidence of such filing and/or recording promptly upon receipt of such evidence
by the Company.

 

If (a) any property
to be released from the Lien of this Indenture under any provision of this Article (other
than Section 1807) is subject to a Lien prior to the Lien hereof and is to
be sold, exchanged, dedicated or otherwise disposed of subject to such prior
Lien and (b) after such release, such prior Lien will not be a Lien on any
property subject to the Lien hereof, then the Fair Value of such property to be
released shall be deemed, for all purposes of this Indenture, to be the value
thereof unencumbered by such prior Lien less the principal amount of the
indebtedness secured by such prior Lien.

 

Any Outstanding
Securities delivered to the Trustee pursuant to clause (d) in the first
paragraph of this Section shall, upon receipt of a Company Order, forthwith
be canceled by the Trustee.  Any cash
and/or obligations deposited with the Trustee pursuant to the provisions of
this Section 1803, and the proceeds of any such obligations, shall be held
as part of the Mortgaged Property and shall be withdrawn, released, used or
applied in the manner, to the extent and for the purposes, and subject to the
conditions, provided in Section 1806.

 

Anything in this
Indenture to the contrary notwithstanding, if property to be released
constitutes Funded Property in part only, the Company shall obtain the release
of the part of such property which constitutes Funded Property under this Section 1803
and obtain the release of the part of such property which does not constitute
Funded Property under Section 1804. 
In such event, (a) the application of Property Additions in the
release under this Section 1803 as contemplated in clause (d)(ii) in
the first paragraph thereof shall be taken into account in clause (v) or
clause (vi), whichever may be applicable, of the Expert’s Certificate
described in clause (c) in Section 1804 and (b) the Trustee
shall, at the election of the Company, execute and deliver a separate
instrument of release with respect to the property released under each of such
Sections or a consolidated instrument of release with respect to the property
released under both of such Sections considered as a whole.

 

SECTION 1804.                                    Release of Property
Not Constituting Funded Property.

 

Unless an Event of
Default shall have occurred and be continuing, the Company may obtain the
release of any part of the Mortgaged Property, or any interest therein, which
does not constitute Funded Property, and the Trustee shall release all its
right, title and interest in and to the same from the Lien hereof, upon receipt
by the Trustee of:

 

87

 

(a)                                  a
Company Order requesting the release of such property and transmitting
therewith a form of instrument or instruments to effect such release;

 

(b)                                 an
Officer’s Certificate describing the property to be released and stating that,
to the knowledge of the signer, no Event of Default has occurred and is
continuing;

 

(c)                                  an
Expert’s Certificate, made and dated not more than ninety (90) days prior to
the date of such Company Order:

 

(i)                                     describing
the property to be released;

 

(ii)                                  stating
the Fair Value, in the judgment of the signers, of the property to be released;

 

(iii)                               stating the Cost of the
property to be released;

 

(iv)                              stating
that the property to be released does not constitute Funded Property;

 

(v)                                 if
true, stating either (A) that the aggregate amount of the Cost or Fair
Value to the Company (whichever is less) of all Property Additions which do not
constitute Funded Property (excluding the property to be released), after
making deductions therefrom and additions thereto of the character contemplated
by Section 103, is not less than zero (0) or (B) that the Cost or
Fair Value (whichever is less) of the property to be released does not exceed
the aggregate Cost or Fair Value to the Company (whichever is less) of Property
Additions acquired, made or constructed on or after the ninetieth (90th) day
prior to the date of the Company Order requesting such release;

 

(vi)                              if
neither of the statements contemplated in subclause (v) above can be
made, stating the amount by which zero (0) exceeds the amount referred to in
subclause (v)(A) above (showing in reasonable detail the calculation
thereof); and

 

(vii)                           stating that, in the
judgment of the signers, such release will not impair the security under this
Indenture in contravention of the provisions hereof; and

 

(d)                                 if
the Expert’s Certificate required by clause (c) above contains neither of
the statements contemplated in subclause (c)(v) above, an amount in cash,
to be held by the Trustee as part of the Mortgaged Property, equal to the
amount, if any, by which the lower of (i) the Cost or Fair Value
(whichever shall be less) of the property to be released and (ii) the
amount shown in subclause (c)(vi) above exceeds the aggregate of items of
the character described in subclauses (iii) and (v) of clause (d) in
the first paragraph of Section 1803 that the Company then elects to use as
a credit under this Section 1804 (subject, however, to the same
limitations and conditions with respect to such items as are set forth in Section 1803).

 

Any Outstanding
Securities delivered to the Trustee pursuant to clause (d) above and its
reference to clause (d) of the first paragraph of Section 1803 shall
forthwith be canceled by the Trustee.

 

88

 

SECTION 1805.                                    Release of Minor
Properties.

 

Notwithstanding the
provisions of Sections 1803 and 1804, unless an Event of Default shall have
occurred and be continuing, the Company may obtain the release from the Lien
hereof of any part of the Mortgaged Property, or any interest therein, and the
Trustee shall whenever from time to time requested by the Company in a Company
Order transmitting therewith a form of instrument or instruments to effect such
release, and without requiring compliance with any of the provisions of Section 1803
or 1804, release from the Lien hereof all the right, title and interest of the
Trustee in and to the same provided that the aggregate Fair Value of the
property to be so released on any date in a given calendar year, together with
all other property theretofore released pursuant to this Section 1805 in
such calendar year, shall not exceed the greater of (a) Ten Million
Dollars ($10,000,000) and (b) three percent (3%) of the aggregate
principal amount of Securities then Outstanding.  Prior to the granting of any such release,
there shall be delivered to the Trustee (x) an Officer’s Certificate stating
that, to the knowledge of the signer, no Event of Default has occurred and is
continuing and (y) an Expert’s Certificate stating, in the judgment of the
signers, the Fair Value of the property to be released, the aggregate Fair
Value of all other property theretofore released pursuant to this Section in
such calendar year and, as to Funded Property, the Cost thereof (or, if the
Fair Value to the Company of such property at the time the same became Funded
Property was certified to be an amount less than the Cost thereof, then such
Fair Value, as so certified, in lieu of Cost), and that, in the judgment of the
signers, the release thereof will not impair the security under this Indenture
in contravention of the provisions hereof. 
On or before December 31st of each calendar year, the Company shall
deposit with the Trustee an amount in cash equal to the aggregate Cost of the
properties constituting Funded Property so released during such year (or, if
the Fair Value to the Company of any particular property at the time the same
became Funded Property was certified to be an amount less than the Cost
thereof, then such Fair Value, as so certified, in lieu of Cost); provided,
however, that no such deposit shall be required to be made hereunder to the
extent that cash or other consideration shall, as indicated in an Officer’s
Certificate delivered to the Trustee, have been deposited with the trustee or
other holder of a Lien prior to the Lien of this Indenture in accordance with
the provisions thereof; and provided, further, that the amount of cash so
required to be deposited may be reduced, at the election of the Company, by the
items specified in clause (d) in the first paragraph of Section 1803,
subject to all of the limitations and conditions specified in such Section, to
the same extent as if such property were being released pursuant to Section 1803.  Any cash deposited with the Trustee under
this Section may thereafter be withdrawn, used or applied in the manner,
to the extent and for the purposes, and subject to the conditions, provided in Section 1806.

 

SECTION 1806.                                    Withdrawal or Other
Application of Funded Cash; Purchase Money Obligations.

 

Subject to the provisions
of Section 1605 and Section 1702(a) and except as hereafter in
this Section provided, unless an Event of Default shall have occurred and
be continuing, any Funded Cash held by the Trustee, and any other cash which is
required to be withdrawn, used or applied as provided in this Section,

 

(a)                                  may
be withdrawn from time to time by the Company to the extent of an amount equal
to the Cost or the Fair Value to the Company (whichever is less) of Property
Additions not constituting Funded Property, after making any deductions and
additions pursuant to Section 103, described in an Expert’s Certificate,
dated not more than ninety (90) days prior to the date of the Company Order
requesting such withdrawal and complying with clause (ii) and, to the
extent applicable, clause (iii) in Section 1603(b), delivered to the
Trustee; provided, however, that the deductions and additions contemplated by Section 103
shall not be required to be made if such Property Additions were

 

89

 

acquired, made or constructed on or after the
ninetieth (90th) day preceding the date of such Company Order;

 

(b)                                 may
be withdrawn from time to time by the Company in an amount equal to the
aggregate principal amount of Securities to the authentication and delivery of
which the Company shall be entitled under the provisions of Section 1604
hereof, by virtue of compliance with all applicable provisions of Section 1604
(except as hereinafter in this Section otherwise provided); provided,
however, that such withdrawal of cash shall operate as a waiver by the Company
of the right to the authentication and delivery of such Securities and, to such
extent, no such Securities may thereafter be authenticated and delivered
hereunder; and any such Securities which were the basis of such right to the
authentication and delivery of Securities so waived shall be deemed to have
been made the basis of such withdrawal of cash;

 

(c)                                  may
be withdrawn from time to time by the Company in an amount equal to the
aggregate principal amount of any Outstanding Securities delivered to the
Trustee;

 

(d)                                 may,
upon the request of the Company, be used by the Trustee for the purchase of
Securities in the manner, at the time or times, in the amount or amounts, at
the price or prices and otherwise as directed or approved by the Company, all
subject to the limitations hereafter in this Section set forth; or

 

(e)                                  may,
upon the request of the Company, be applied by the Trustee to the payment (or
provision therefor pursuant to Article Eight) at Stated Maturity of any
Securities or to the redemption (or similar provision therefor) of any
Securities which are, by their terms, redeemable, in each case of such series
as may be designated by the Company, any such redemption to be in the manner
and as provided in Article Five, all subject to the limitations hereafter
in this Section set forth.

 

Such moneys shall, from
time to time, be paid or used or applied by the Trustee, as aforesaid, upon the
request of the Company in a Company Order, and upon receipt by the Trustee of
an Officer’s Certificate stating that, to the knowledge of the signer, no Event
of Default has occurred and is continuing. 
If and to the extent that the withdrawal of cash is based upon Property
Additions (as permitted under the provisions of clause (a) above), the
Company shall, subject to the provisions of said clause (a) and except as
hereafter in this paragraph provided, comply with all applicable provisions of
this Indenture as if such Property Additions were made the basis for the
authentication and delivery of Securities equal in principal amount to the cash
so to be withdrawn.  If and to the extent
that the withdrawal of cash is based upon the right to the authentication and
delivery of Securities (as permitted under the provisions of clause (b) above),
the Company shall, except as hereafter in this paragraph provided, comply with
all applicable provisions of Section 1604 relating to such authentication
and delivery.  Notwithstanding the
foregoing provisions of this paragraph, in no event shall the Company be
required to deliver the documents specified in Section 303.

 

Notwithstanding the
generality of clauses (d) and (e) above, no cash to be applied
pursuant to such clauses shall be applied to the payment of an amount in excess
of the principal amount of any Securities to be purchased, paid or redeemed
except to the extent that the aggregate principal amount of all Securities
theretofore, and of all Securities then to be, purchased, paid or redeemed
pursuant to such clauses is not less than the aggregate cost for principal of,
premium, if any, and accrued interest, if any, on and brokerage commissions, if
any, with respect to, such Securities.

 

Any Outstanding
Securities delivered to the Trustee pursuant to clause (c) in the first
paragraph of this Section shall, upon request by the Company, forthwith be
canceled by the Trustee.

 

90

 

Any obligations secured
by Purchase Money Lien delivered to the Trustee in consideration of the release
of property from the Lien of this Indenture, together with any evidence of such
Purchase Money Lien held by the Trustee, shall be released from the Lien of
this Indenture and delivered to or upon the order of the Company upon payment
by the Company to the Trustee of an amount in cash equal to the aggregate
principal amount of such obligations less the aggregate amount theretofore paid
to the Trustee (by the Company, the obligor or otherwise) in respect of the principal
of such obligations.

 

The principal of and
interest on any such obligations secured by Purchase Money Lien held by the
Trustee shall be paid to the Trustee as and when the same become payable.  The interest received by the Trustee on any such
obligations shall be deemed not to constitute Funded Cash and shall be remitted
to the Company; provided, however, that if an Event of Default shall have
occurred and be continuing, such proceeds shall be held as part of the
Mortgaged Property until such Event of Default shall have been cured or waived.

 

The Trustee shall have
and may exercise all the rights and powers of any owner of such obligations and
of all substitutions therefor and, without limiting the generality of the
foregoing, may collect and receive all insurance moneys payable to it under any
of the provisions thereof and apply the same in accordance with the provisions
thereof, may consent to extensions thereof at a higher or lower rate of
interest, may join in any plan or plans of voluntary or involuntary
reorganization or readjustment or rearrangement and may accept and hold
hereunder new obligations, stocks or other securities issued in exchange
therefor under any such plan.  Any
discretionary action which the Trustee may be entitled to take in connection
with any such obligations or substitutions therefor shall be taken, so long as
no Event of Default shall have occurred and be continuing, in accordance with a
Company Order, and, during the continuance of an Event of Default, in its own
discretion.

 

Anything herein to the
contrary notwithstanding, the Company may irrevocably waive all right to the
withdrawal pursuant to this Section of, and any other rights with respect
to, any obligations secured by Purchase Money Lien held by the Trustee, and the
proceeds of any such obligations, by delivery to the Trustee of a Company
Order:

 

(x)                                   specifying
such obligations and stating that the Company thereby waives all rights to the
withdrawal thereof and of the proceeds thereof pursuant to this Section, and
any other rights with respect thereto; and

 

(y)                                 directing
that the principal of such obligations be applied as provided in clause (e) in
the first paragraph of this Section, specifying the Securities to be paid or
redeemed or for the payment or redemption of which payment is to be made.

 

Following any such
waiver, the interest on any such obligations shall be applied to the payment of
interest, if any, on the Securities to be paid or redeemed or for the payment
or redemption of which provision is to be made, as specified in the aforesaid
Company Order, as and when such interest shall become due from time to time,
and any excess funds remaining from time to time after such application shall
be applied to the payment of interest on any other Securities as and when the
same shall become due.  Pending any such
application, the interest on such obligations shall be invested in Investment
Securities as shall be selected by the Company and specified in written
instructions delivered to the Trustee. 
The principal of any such obligations shall be applied solely to the
payment of principal of the Securities to be paid or redeemed or for the
payment or redemption of which provision is to be made, as specified in the
aforesaid Company Order.  Pending such
application, the principal of such obligations

 

91

 

shall be invested
in Eligible Obligations as shall be selected by the Company and specified in
written instructions delivered to the Trustee. 
The obligation of the Company to pay the principal of such Securities
when the same shall become due at maturity, shall be offset and reduced by the
amount of the proceeds of such obligations then held, and to be applied, by the
Trustee in accordance with this paragraph.

 

SECTION 1807.                                    Release of Property
Taken by Eminent Domain, etc.

 

Should any of the
Mortgaged Property, or any interest therein, be taken by exercise of the power
of eminent domain or be sold to an entity possessing the power of eminent
domain under a threat to exercise the same, and should the Company elect not to
obtain the release of such property pursuant to other provisions of this
Article, the Trustee shall, upon request of the Company evidenced by a Company
Order transmitting therewith a form of instrument or instruments to effect such
release, release from the Lien hereof all its right, title and interest in and
to the property so taken or sold (or with respect to an interest in property,
subordinate the Lien hereof to such interest), upon receiving (a) an Opinion
of Counsel to the effect that such property has been taken by exercise of the
power of eminent domain or has been sold to an entity possessing the power of
eminent domain under threat of an exercise of such power, (b) an Officer’s
Certificate stating the amount of net proceeds received or to be received for
such property so taken or sold, and the amount so stated shall be deemed to be
the Fair Value of such property for the purpose of any notice to the Holders of
Securities, (c) if any portion of such property constitutes Funded
Property, an Expert’s Certificate stating the Cost thereof (or, if the Fair
Value to the Company of such portion of such property at the time the same
became Funded Property was certified to be an amount less than the Cost thereof,
then such Fair Value, as so certified, in lieu of Cost) and (d) if any
portion of such property constitutes Funded Property, a deposit by the Company
of an amount in cash equal to the Cost or Fair Value stated in the Expert’s
Certificate delivered pursuant to clause (c) above; provided, however,
that the amount required to be so deposited shall not exceed the portion of the
net proceeds received or to be received for such property so taken or sold
which is allocable on a pro-rata or other reasonable basis to the portion of
such property constituting Funded Property; and provided, further, that no such
deposit shall be required to be made hereunder if the proceeds of such taking
or sale shall, as indicated in an Officer’s Certificate delivered to the Trustee,
have been deposited with the trustee or other holder of a Lien prior to the
Lien of this Indenture.  Any cash
deposited with the Trustee under this Section may thereafter be withdrawn,
used or applied in the manner, to the extent and for the purposes, and subject
to the conditions, provided in Section 1806.

 

SECTION 1808.                                    [Reserved].

 

SECTION 1809.                                    Disclaimer or
Quitclaim.

 

In case the Company has
sold, exchanged, dedicated or otherwise disposed of, or has agreed or intends
to sell, exchange, dedicate or otherwise dispose of, or a Governmental
Authority has ordered the Company to divest itself of, any Excepted Property or
any other property not subject to the Lien hereof, or the Company desires to
disclaim or quitclaim title to property to which the Company does not purport
to have title, the Trustee shall, from time to time, disclaim or quitclaim such
property upon receipt by the Trustee of the following:

 

(a)                                  a
Company Order requesting such disclaimer or quitclaim and transmitting
therewith a form of instrument to effect such disclaimer or quitclaim;

 

92

 

(b)                                 an
Officer’s Certificate describing the property to be disclaimed or quitclaimed;
and

 

(c)                                  an
Opinion of Counsel stating the signer’s opinion that such property is not
subject to the Lien hereof or required to be subject thereto by any of the
provisions hereof and complying with the requirements of Section 104 of
this Indenture.

 

SECTION 1810.                                    Miscellaneous.

 

(a)                                  The
Expert’s Certificate as to the Fair Value of property to be released from the
Lien of this Indenture in accordance with any provision of this Article, and as
to the nonimpairment, by reason of such release, of the security under this
Indenture in contravention of the provisions hereof, shall be made by an
Independent Expert if the Fair Value of such property and of all other property
released since the commencement of the then current calendar year, as set forth
in the certificates required by this Indenture, is ten percent (10%) or more of
the aggregate principal amount of the Securities at the time Outstanding; but
such Expert’s Certificate shall not be required to be made by an Independent
Expert in the case of any release of property if the Fair Value thereof, as set
forth in the certificates required by this Indenture, is less than Twenty-five
Thousand Dollars ($25,000) or less than one percent (1%) of the aggregate
principal amount of the Securities at the time Outstanding.  To the extent that the Fair Value of any
property to be released from the Lien of this Indenture shall be stated in an
Independent Expert’s Certificate, such Fair Value shall not be required to be
stated in any other Expert’s Certificate delivered in connection with such
release.

 

(b)                                 No
release of property from the Lien of this Indenture effected in accordance with
the provisions, and in compliance with the conditions, set forth in this Article and
in Sections 104 and 105 shall be deemed to impair the security of this
Indenture in contravention of any provision hereof.

 

(c)                                  If
the Mortgaged Property shall be in the possession of a receiver or trustee,
lawfully appointed, the powers hereinbefore conferred upon the Company with
respect to the release of any part of the Mortgaged Property or any interest
therein or the withdrawal of cash may be exercised, with the approval of the
Trustee, by such receiver or trustee, notwithstanding that an Event of Default
may have occurred and be continuing, and any request, certificate, appointment
or approval made or signed by such receiver or trustee for such purposes shall
be as effective as if made by the Company or any of its officers or appointees
in the manner herein provided; and if the Trustee shall be in possession of the
Mortgaged Property under any provision of this Indenture, then such powers may
be exercised by the Trustee in its discretion notwithstanding that an Event of
Default may have occurred and be continuing.

 

(d)                                 If
the Company shall retain any interest in any property released from the Lien of
this Indenture as provided in Section 1803, 1804 or 1805, this Indenture
shall not become or be, or be required to become or be, a Lien upon such
property or such interest therein or any improvements, extensions or additions
to such property or renewals, replacements or substitutions of or for such
property or any part or parts thereof unless the Company shall execute and
deliver to the Trustee an indenture supplemental hereto, in recordable form,
containing a grant, conveyance, transfer and mortgage thereof.  As used in this subsection, the terms “improvements”,
“extensions” and “additions” shall be limited as set forth in Section 1201.

 

(e)                                  Notwithstanding
the occurrence and continuance of an Event of Default, the Trustee, in its
discretion, may release from the Lien hereof any part of the Mortgaged Property
or permit the withdrawal of cash, upon compliance with the other conditions
specified in this Article in respect thereof.

 

93

 

(f)                                    No
purchaser or grantee of property purporting to have been released hereunder
shall be bound to ascertain the authority of the Trustee to execute the
instrument or instruments of release, or to inquire as to any facts required by
the provisions hereof for the exercise of such authority; nor shall any
purchaser or grantee of any property or rights permitted by this Article to
be sold, granted, exchanged, dedicated or otherwise disposed of, be under
obligation to ascertain or inquire into the authority of the Company to make
any such sale, grant, exchange, dedication or other disposition.

 

SECTION 1811.                                    [Reserved]

 

SECTION 1812.                                    Preservation of
Lien.

 

The Company shall
maintain and preserve the Lien of this Indenture so long as any Securities
shall remain Outstanding, subject, however, to the provisions of Article Thirteen
and Article Eighteen.

 

SECTION 1813.                                    Maintenance of
Properties.

 

The Company shall cause
(or, with respect to property owned in common with others, make reasonable
effort to cause) the Mortgaged Property, considered as a whole, to be maintained
and kept in good condition, repair and working order and shall cause (or, with
respect to property owned in common with others, make reasonable effort to
cause) to be made such repairs, renewals, replacements, betterments and
improvements thereof, as, in the judgment of the Company, may be necessary in
order that the operation of the Mortgaged Property, considered as a whole, may
be conducted in accordance with common industry practice; provided, however,
that nothing in this Section shall prevent the Company from discontinuing,
or causing the discontinuance of, the operation and maintenance of any portion
of the Mortgaged Property if such discontinuance is in the judgment of the
Company desirable in the conduct of its business; and provided, further, that
nothing in this Section shall prevent the Company from selling,
transferring or otherwise disposing of, or causing the sale, transfer or other
disposition of, any portion of the Mortgaged Property in compliance with the
other Articles of this Indenture.

 

SECTION 1814.                                    Payment of Taxes;
Discharge of Liens.

 

The Company shall pay all
taxes and assessments and other governmental charges lawfully levied or
assessed upon the Mortgaged Property, or upon any part thereof, or upon the
interest of the Trustee in the Mortgaged Property, before the same shall become
delinquent, and shall observe and conform in all material respects to all valid
requirements of any Governmental Authority relative to the Mortgaged Property
and all covenants, terms and conditions upon or under which any of the
Mortgaged Property is held; and the Company shall not suffer any Lien to be
created upon the Mortgaged Property, or any part thereof, prior to the Lien
hereof, other than Permitted Liens; provided, however, that nothing in this Section contained
shall require the Company (i) to observe or conform to any requirement of
Governmental Authority or to cause to be paid or discharged, or to make
provision for, any such Lien, or to pay any such tax, assessment or
governmental charge so long as the validity thereof shall be contested in good
faith and by appropriate legal proceedings or (ii) to pay, discharge or
make provisions for any tax, assessment or other governmental charge, the
validity of which shall not be so contested if adequate security for the
payment of such tax, assessment or other governmental charge and for any
penalties or interest which may reasonably be anticipated from failure to pay
the same shall be given to the Trustee; and provided, further, that nothing in
this Section shall prohibit the issuance or other incurrence of

 

94

 

additional
indebtedness, or the refunding of outstanding indebtedness, secured by any Lien
prior to the Lien hereof which is permitted under this Section to continue
to exist.

 

SECTION 1815.                                    Insurance.

 

(a)                                  The
Company shall (i) keep or cause to be kept all the property subject to the
Lien of this Indenture insured against loss by fire, to the extent that
property of similar character is usually so insured by companies similarly
situated and operating like properties, to a reasonable amount, by reputable
insurance companies, the proceeds of such insurance (except as to any loss of
Excepted Property and except as to any particular loss less than the greater of
(A) Ten Million Dollars ($10,000,000) and (B) three percent (3%) of
the principal amount of Securities Outstanding on the date of such particular
loss to be made payable, subject to applicable law, to the Trustee as the
interest of the Trustee may appear, to the trustee or other holder of any other
Lien prior hereto upon property subject to the Lien hereof, if the terms
thereof require such payment or (ii) in lieu of or supplementing such
insurance in whole or in part, adopt some other method or plan of protection
against loss by fire at least equal in protection to the method or plan of
protection against loss by fire of companies similarly situated and operating
properties subject to similar fire hazards or properties on which an equal
primary fire insurance rate has been set by reputable insurance companies; and
if the Company shall adopt such other method or plan of protection, it shall,
subject to applicable law (and except as to any loss of Excepted Property and
except as to any particular loss less than the greater of (X) Ten Million
Dollars ($10,000,000) and (Y) three percent (3%) of the principal amount
of Securities Outstanding on the date of such particular loss pay to the
Trustee on account of any loss covered by such method or plan an amount in cash
equal to the amount of such loss less any amounts otherwise paid to the Trustee
in respect of such loss or paid to the trustee or other holder of any other
Lien prior hereto upon property subject to the Lien hereof in respect of such
loss if the terms thereof require such payment. 
Any cash so required to be paid by the Company pursuant to any such
method or plan shall for the purposes of this Indenture be deemed to be
proceeds of insurance.  In case of the
adoption of such other method or plan of protection, the Company shall furnish
to the Trustee a certificate of an actuary or other qualified person appointed
by the Company with respect to the adequacy of such method or plan.

 

Anything herein to the
contrary notwithstanding, the Company may have fire insurance policies with (i) a
deductible provision in a dollar amount per occurrence not exceeding the
greater of (A) Ten Million Dollars ($10,000,000) and (B) three
percent (3%) of the principal amount of the Securities Outstanding on the date
such policy goes into effect, and/or (ii) co-insurance or self insurance
provisions with a dollar amount per occurrence not exceeding thirty percent
(30%) of the loss proceeds otherwise payable; provided, however, that the
dollar amount described in clause (i) above may be exceeded to the extent
such dollar amount per occurrence is below the deductible amount in effect as
to fire insurance (X) on property of similar character insured by companies
similarly situated and operating like property or (Y) on property as to which
an equal primary fire insurance rate has been set by reputable insurance
companies.

 

(b)                                 All
moneys paid to the Trustee by the Company in accordance with this Section or
received by the Trustee as proceeds of any insurance, in either case on account
of a loss on or with respect to Funded Property, shall, subject to the
requirements of any Lien prior hereto upon property subject to the Lien hereof,
be held by the Trustee and, subject as aforesaid, shall be paid by it to the
Company to reimburse the Company for an equal amount expended or committed for
expenditure in the rebuilding, renewal and/or replacement of or substitution
for the property destroyed or damaged, upon receipt by the Trustee of:

 

95

 

(i)                                     a
Company Request requesting such payment,

 

(ii)                                  an
Expert’s Certificate:

 

(A)                              describing
the property so damaged or destroyed;

 

(B)                                stating
the Cost of such property (or, if the Fair Value to the Company of such
property at the time the same became Funded Property was certified to be an
amount less than the Cost thereof, then such Fair Value, as so certified, in
lieu of Cost) or, if such damage or destruction shall have affected only a
portion of such property, stating the allocable portion of such Cost or Fair
Value;

 

(C)                                stating
the amounts so expended or committed for expenditure in the rebuilding,
renewal, replacement of and/or substitution for such property; and

 

(D)                               stating
the Fair Value to the Company of such property as rebuilt or renewed or as to
be rebuilt or renewed and/or of the replacement or substituted property, and if

 

(a)                                  within
six months prior to the date of acquisition thereof by the Company, such
property has been used or operated, by a person or persons other than the Company,
in a business similar to that in which it has been or is to be used or operated
by the Company, and

 

(b)                                 the
Fair Value to the Company of such property as set forth in such Expert’s
Certificate is not less than Twenty-five Thousand Dollars ($25,000) and not
less than one percent (1%) of the aggregate principal amount of the Securities
at the time Outstanding,

 

the Expert making the
statement required by this clause (D) shall be an Independent Expert, and

 

(iii)                               an Opinion of Counsel
stating that, in the opinion of the signer, the property so rebuilt or renewed
or to be rebuilt or renewed, and/or the replacement property, is or will be
subject to the Lien hereof.

 

Any such moneys not so
applied within thirty-six (36) months after its receipt by the Trustee, or in
respect of which notice in writing of intention to apply the same to the work
of rebuilding, renewal, replacement or substitution then in progress and
uncompleted shall not have been given to the Trustee by the Company within such
thirty-six (36) months, or which the Company shall at any time notify the
Trustee is not to be so applied, shall thereafter be withdrawn, used or applied
in the manner, to the extent and for the purposes, and subject to the
conditions, provided in Section 1806; provided, however, that if the
amount of such moneys shall exceed the amount stated pursuant to clause (B) in
the Expert’s Certificate referred to above, the amount of such excess shall not
be deemed to be Funded Cash, shall not be subject to Section 1806 and
shall be remitted to or upon the order of the Company upon the withdrawal, use
or application of the balance of such moneys pursuant to Section 1806.

 

Anything in this
Indenture to the contrary notwithstanding, if property on or with respect to
which a loss occurs constitutes Funded Property in part only, the Company may,
at its election, obtain the reimbursement of insurance proceeds attributable to
the part of such property which constitutes

 

96

 

Funded Property under
this subsection (b) and obtain the reimbursement of insurance
proceeds attributable to the part of such property which does not constitute
Funded Property under subsection (c) of this Section 1815.

 

(c)                                  All
moneys paid to the Trustee by the Company in accordance with this Section or
received by the Trustee as proceeds of any insurance, in either case on account
of a loss on or with respect to property which does not constitute Funded
Property, shall, subject to the requirements of any Lien prior hereto upon
property subject to the Lien hereof, be held by the Trustee and, subject as
aforesaid, shall be paid by it to the Company upon receipt by the Trustee of:

 

(i)                                     a
Company Request requesting such payment;

 

(ii)                                  an
Expert’s Certificate stating:

 

(A)                              that
such moneys were paid to or received by the Trustee on account of a loss on or
with respect to property which does not constitute Funded Property; and

 

(B)                                if
true, either (I) that the aggregate amount of the Cost or Fair Value to the
Company (whichever is less) of all Property Additions which do not constitute
Funded Property (excluding, to the extent of such loss, the property on or with
respect to which such loss was incurred), after making deductions therefrom and
additions thereto of the character contemplated by Section 103, is not
less than zero (0) or (II) that the amount of such loss does not exceed the
aggregate Cost or Fair Value to the Company (whichever is less) of Property
Additions acquired, made or constructed on or after the ninetieth (90th) day
prior to the date of the Company Request requesting such payment; or

 

(C)                                if
neither of the statements contemplated in subclause (B) above can be made,
the amount by which zero (0) exceeds the amount referred to in subclause (B)(I)
above (showing in reasonable detail the calculation thereof); and

 

(iii)                               if the Expert’s
Certificate required by clause (ii) above contains neither of the
statements contemplated in clause (ii)(B) above, an amount in cash, to be
held by the Trustee as part of the Mortgaged Property, equal to the amount
shown in clause (ii)(C) above.

 

To the extent that the
Company shall be entitled to withdraw proceeds of insurance pursuant to this
subsection (c), such proceeds shall be deemed not to constitute Funded
Cash.

 

(d)                                 Whenever
under the provisions of this Section the Company is required to deliver
moneys to the Trustee and at the same time shall have satisfied the conditions
set forth herein for payment of moneys by the Trustee to the Company, there
shall be paid to or retained by the Trustee or paid to the Company, as the case
may be, only the net amount.

 

SECTION 1816.                                    Recording, Filing,
etc.

 

The Company shall cause
this Indenture and all indentures and instruments supplemental hereto (or
notices, memoranda or financing statements as may be recorded or filed to place
third parties on notice thereof) to be promptly recorded and filed and
re-recorded and re-filed in such manner and in

 

97

 

such places, as
may be required by law in order fully to preserve and protect the security of
the Holders of the Securities and all rights of the Trustee, and shall furnish
to the Trustee:

 

(a)                                  promptly
after the execution and delivery of this Indenture and of each supplemental
indenture, an Opinion of Counsel either stating that in the opinion of such
counsel this Indenture or such supplemental indenture (or any other instrument,
resolution, certificate, notice, memorandum or financing statement in
connection therewith) has been properly recorded and filed, so as to make
effective the Lien intended to be created hereby or thereby, and reciting the
details of such action, or stating that in the opinion of such counsel no such
action is necessary to make such Lien effective.  The Company shall be deemed to be in
compliance with this subsection (a) if (i) the Opinion of
Counsel herein required to be delivered to the Trustee shall state that this
Indenture or such supplemental indenture (or any other instrument, resolution,
certificate notice, memorandum or financing statement in connection therewith)
has been received for record or filing in each jurisdiction in which it is
required to be recorded or filed and that, in the opinion of such counsel (if
such is the case), such receipt for record or filing makes effective the Lien
intended to be created by this Indenture or such supplemental indenture, and (ii) such
opinion is delivered to the Trustee within such time, following the Execution
Date or such supplemental indenture, as shall be practicable having due regard
to the number and distance of the jurisdictions in which this Indenture or such
supplemental indenture (or such other instrument, resolution, certificate,
notice, memorandum or financing statement in connection therewith) is required
to be recorded or filed; and

 

(b)                                 on
or before December 1 of each year, beginning December 1, 2004, an
Opinion of Counsel stating either (i) that in the opinion of such counsel
such action has been taken, since the date of the most recent Opinion of
Counsel furnished pursuant to this subsection (b) or the first
Opinion of Counsel furnished pursuant to subsection (a) of this
Section, with respect to the recording, filing, re-recording, and re-filing of
this Indenture and of each indenture supplemental to this Indenture (or any
other instrument, resolution, certificate, notice, memorandum or financing
statement in connection therewith), as is necessary to maintain the
effectiveness of the Lien hereof, and reciting such action, or (ii) that
in the opinion of such counsel no such action is necessary to maintain the
effectiveness of such Lien.

 

The Company shall execute
and deliver such supplemental indenture or indentures and such further
instruments and do such further acts as may be necessary or proper to carry out
the purposes of this Indenture and to make subject to the Lien hereof any
property hereafter acquired, made or constructed and intended to be subject to
the Lien hereof, and to transfer to any new trustee or trustees or co-trustee
or co-trustees, the estate, powers, instruments or funds held in trust
hereunder.

 

 

This instrument may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

 

98

 

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

 

 

	
   

  	
  The Union Light,
  Heat and Power Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Vice President
  and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  Executed by The
  Union Light, Heat and Power Company in the presence of:

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

99

 

	
   

  	
   

  	
  ,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Title]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  And:

  	
   

  	
   

  
	
   

  	
   

  	
  [Title]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed by the

  	
   

  	
  ,

  	
   

  	
   

  	
   

  
	
  as Trustee, in
  the presence of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

100

 

	
  STATE OF

  	
  )

  
	
   

  	
  )   SS.:

  
	
  COUNTY OF

  	
  )

  

 

On this       
day of [          ], 200  ,
before me, a Notary Public within and for said County, personally appeared [                                          ],
to me personally known to be Vice President and Treasurer of The Union Light,
Heat and Power Company, the corporation which executed the within instrument,
and who, being by me duly sworn, did say that she resides at [Address]; that she
is the Vice President and Treasurer of The Union Light, Heat and Power Company,
the corporation named in the foregoing instrument; that the seal affixed to
said instrument is the corporate seal of said corporation; that said instrument
was signed and sealed on behalf of said corporation by authority of its Board
of Directors; and said [                                          ]
acknowledged to me said instrument to be the free act and deed of said
corporation, and that said corporation executed the same.

 

	
   

  	
   

  	
   

  
	
   

  	
  [                                                         ]

  
	
   

  	
  Notary Public,
  State of [        ]

  
	
   

  	
  Commission
  Expires [        ]

  

 

 

101

 

	
  STATE OF

  	
  )

  
	
   

  	
  )   ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this
[     ] day of
[         ], 200  ,
before me, a notary public, the undersigned officer, personally appeared
[               ]
and
[               ],
who each acknowledged himself/herself to be a
[               ]
and a
[               ],
respectively, of                                 ,
a                       
banking corporation and that he/she, as such officer, respectively, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained, by signing the name of the corporation by himself/herself as such
officer.

 

In
witness whereof, I hereunto set my hand and official seal.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  [                                                         ]

  
	
   

  	
  Notary Public,
  State of [        ]

  
	
   

  	
  Commission
  Expires [

  

 

 

102

 

Exhibit A

 

 

[RESERVED]

 

 

 

Exhibit B

 

 

Description of Real Property that is Mortgaged
Property as of the Execution Date

 

 

B-1Exhibit 10.1

AMENDMENT
NO. 2 TO THE

DRS TECHNOLOGIES, INC.

AMENDED AND RESTATED 1996 OMNIBUS PLAN

DRS Technologies, Inc.,
a Delaware corporation, having heretofore adopted the DRS Technologies, Inc.
Amended and Restated 1996 Omnibus Plan (the “Plan”), and having reserved the
right under Section 21 thereof to amend the Plan, does hereby amend the
Plan, effective July 6, 2005, as set forth below:

Section 10(e) is
hereby amended in its entirety to read as follows:

Reasonably promptly after
the Issue Date with respect to shares of Restricted Stock, unless otherwise
determined by the Committee, DRS, in its sole discretion, may either (i) issue
a stock certificate, registered in the name of the Participant to whom such
shares were granted, evidencing such shares; provided, however that DRS shall
not cause such a stock certificate to be issued unless it has received a stock
power duly endorsed in blank with respect to such shares; and provided further
that unless determined otherwise by the Committee such stock certificates shall
be held by the Company or its representative or (ii) establish and
maintain, or cause a representative to establish and maintain, an account to
record the shares of Restricted Stock granted to such Participant and
transactions and events affecting such stock.

The Participant agrees
that the following legend shall be (i) inscribed on any certificate issued
or (ii) notated on any account established, for Restricted Stock prior to
the lapse of any outstanding restrictions:

THE TRANSFERABILITY OF
THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE
RESTRICTIONS, TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND
RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE DRS TECHNOLOGIES, INC. 1996
AMENDED AND RESTATED 1996 OMNIBUS PLAN, AND AN AGREEMENT ENTERED INTO BETWEEN
THE REGISTERED OWNER OF SUCH SHARES AND DRS. A COPY OF THE PLAN AND AGREEMENT
IS ON FILE IN THE OFFICE OF THE SECRETARY OF DRS, 5 SYLVAN WAY, PARSIPPANY, NEW
JERSEY 07054.

Such legend shall not be
removed until such shares vest pursuant to the terms hereof. Reasonably
promptly after the Vesting Date with respect to shares of Restricted Stock,
unless otherwise determined by the Committee, DRS, in its sole discretion, may
either issue to the Participant or the Participant’s personal representative or
deposit in such Participant’s or the Participant’s personal representative’s
brokerage account via electronic transfer, a stock certificate representing one
share of Company Stock, with respect to each whole share of Restricted Stock.

Section 10(j) is
hereby added to the Plan to read as follows:

The Company shall
establish and maintain an account for the participant to record Restricted
Stock Units and transactions and events affecting such units. Restricted Stock
Units and other 

 43
 

items reflected in the
account will represent only bookkeeping entries by the Company to evidence
unfunded obligations of the Company.

Section 10(k) is
hereby added to the Plan to read as follows:

Consent to Electronic
Delivery. In lieu of issuing documents in paper format, to the fullest extent
permitted by law, the Committee may, in its discretion provide for electronic
delivery of any documents that DRS may be required to deliver (including, but
not limited to, prospectuses, prospectus supplements, grant or award
notifications and agreements, account statements, annual and quarterly reports,
and all other forms or communications) in connection with the grant of awards
and any other prior or future incentive award or program made or offered by DRS
or its predecessors or successors. Electronic delivery of a document to
Participant may be via a Company e-mail system or by reference to a location on
a Company intranet site to which Participant has access.

This Amendment is
effective as of the date first set forth above. Except as amended hereunder,
all other terms and conditions of the Plan shall remain in full force and
effect.

 44

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