EXHIBIT 4.3
THIS INSTRUMENT PREPARED BY AND
AFTER RECORDING SHOULD BE MAILED TO:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Counsel
The Peoples Gas Light and
Coke Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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THE PEOPLES GAS LIGHT AND COKE COMPANY
TO
U.S. BANK NATIONAL ASSOCIATION
TRUSTEE
SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 1, 2003
FIRST AND REFUNDING MORTGAGE MULTI-MODAL BONDS, SERIES LL
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EXHIBIT 4.3
TABLE OF CONTENTS
Page
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Parties ..................................................................................... 1
Recitals
Status of Mortgage ................................................................. 1
First and Refunding Mortgage Bonds
issued and outstanding ....................................................... 2
Basis for issuance of $50,000,000
Series LL Bonds .............................................................. 2
Reservation of right to amend the Mortgage ......................................... 2
Form of Series LL registered bond without
coupons ...................................................................... 2
Supplemental Indenture authorized by
Directors .................................................................... 11
ARTICLE I
FIRST AND REFUNDING MORTGAGE MULTI-MODAL BONDS,
SERIES LL
Sec. 1: Designation, amount limited to
$50,000,000, maturity and
interest rate ........................................................... 13
Place and medium of interest and
principal payments ...................................................... 13
Sec. 2: Form of bonds ...................................................................... 14
Denominations of registered bonds
without coupons ......................................................... 14
Date of bonds ................................................................ 14
Sec. 3: Interdenominational exchanges of
registered bonds ........................................................ 14
Sec. 4: Execution, authentication and issue of
Series LL Bonds ......................................................... 15
Sec. 5: Redemption of Series LL Bonds
by Company .............................................................. 15
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Sec. 6: Notice of Redemption ............................................................... 18
Sec. 7: Legend on Series LL Bonds .......................................................... 18
Sec. 8: Determination of Interest Rate Modes and
Interest Rates; Adjustment of Interest Rate Modes ............................ 18
Sec. 9: Definitions ........................................................................ 25
Sec. 10: Payments, notices and actions due on
Saturdays, Sundays and holidays
to take place on next succeeding
Business Day ................................................................. 30
Sec. 11: Reservation of right to amend
the Mortgage ............................................................ 30
ARTICLE II
COVENANTS OF THE COMPANY
Sec. 1: Company each year shall charge against income and place
to credit of Depreciation Reserve Account the greater of
$1,550,000 or 2.5% of the sum of the aggregate principal
amount of all indebtedness of the Company secured by the
Mortgage and liens superior to the Mortgage. ....................................... 32
Company after issuing any Series LL Bonds shall not request the Trustee
to:
Authenticate any bonds under Mortgage pursuant to Sections 2,
4 or 5 of Article III or pay cash to the Company pursuant to
Section 6 of Article III on account of transactions effected prior
to January 1, 1951 ........................................................... 33
Authenticate any series of bonds or pay any moneys to Company
on account of payment of any Refunding Mortgage 5% bonds on
or after January 1, 1944. ................................................... 33
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Company shall not request the Trustee to
authenticate bonds of any series or to
pay to the Company any cash deposited
with or received by the Trustee, unless it
delivers to the Trustee a certificate signed
by the President or an Executive
or other Vice President or Chief Financial Officer
and Treasurer or Assistant Treasurer containing
specified information ........................................................ 33
Company shall not obtain authentication of
bonds or payment of cash in excess of
75% of amount shown on such certificate ...................................... 36
Explanation of terms--
Mortgage and Prior Lien Debt of Company ...................................... 36
Net Earnings ................................................................. 37
Permanent Property ........................................................... 38
Original Cost ................................................................ 39
Company to furnish Trustee in connection
with authentication of bonds pursuant
to Section 5 of Article III or payment
of cash pursuant to Section 6 of
Article III or of Article IX of the Mortgage:
Opinion of counsel that
Company has acquired good title to
property ..................................................................... 39
Certificate of President or any
Executive or other Vice President
or Chief Financial Officer and also by
the Treasurer or an Assistant Treasurer certifying
that the property involved is
"permanent property" ......................................................... 39
Company shall not hereafter issue any bonds
under any underlying mortgage ................................................ 39
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Company not to request Trustee to authenticate
bonds or to pay to it cash on account
of bonds purchased or redeemed through
operation of, or bonds deposited in,
the sinking funds provided for in
supplemental indentures ...................................................... 40
In event of acquisition of substantially
all properties subject to lien of
Mortgage by federal, state or municipal
authority, Company shall be deemed to
have requested Trustee to redeem all
bonds of all series under Mortgage ........................................... 40
Classifying of "property replaced or retired" ...................................... 41
If Company consolidates or merges with
another corporation, successor must
assume payment of principal and
interest on all bonds outstanding
under Mortgage ............................................................... 41
Sec. 2: After-acquired property shall be
subject to lien of Mortgage ............................................. 41
Sec. 3: Company to furnish certificates,
mortgages, deeds, opinions of
counsel to Trustee within sixty
(60) days after acquiring land,
plants or interests in lands or
plants the aggregate cost of
which shall equal or
exceed $500,000 ......................................................... 42
Sec. 4: Company covenants that upon cancellation
of any "prior lien" it shall cause
all cash or obligations held by
trustee of such "prior lien" to be
paid over to Trustee .................................................... 43
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ARTICLE III
MISCELLANEOUS
Sec. 1: Trustee's Acceptance ............................................................... 44
Sec. 2: Supplemental Indenture executed
pursuant to Article XVI of Mortgage ..................................... 44
Sec. 3: All covenants and conditions by or
on behalf of Company to bind its
successors and assigns .................................................. 44
Sec. 4: Supplemental Indenture to become
effective only from time of its
actual execution and delivery
by the Company and Trustee .............................................. 45
Execution in counterparts ................................................................... 46
Attestation clause .......................................................................... 46
Signatures .................................................................................. 46
Acknowledgment by Company ................................................................... 47
Acknowledgment by Trustee ................................................................... 48
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This
Supplemental Indenture, dated as of February 1, 2003, made and entered
into by and between THE PEOPLES GAS LIGHT AND COKE COMPANY, a corporation
organized and existing under the laws of the State of Illinois (hereinafter
called the "Company") and U.S. Bank National Association (hereinafter called the
"Trustee"), a corporation organized and existing under laws of the United States
of America and successor to Illinois Merchants Trust Company, as trustee under
the indenture of Chicago By-Product Coke Company to said Illinois Merchants
Trust Company, as trustee, dated January 2, 1926,
WITNESSETH:
WHEREAS, Chicago By-Product Coke Company, a corporation organized and
existing under the laws of the State of Delaware, heretofore gave its mortgage
in the form of an indenture (hereinafter called the "Original Mortgage") to
Illinois Merchants Trust Company, as trustee, under date of the second day of
January, 1926; and
WHEREAS, the Company executed and delivered to said Illinois Merchants
Trust Company, as trustee under the Original Mortgage, an indenture bearing date
the first day of March, 1928, whereby, among other things, the Company assumed
and agreed to pay the principal and interest of all bonds issued or to be issued
under the Original Mortgage and secured thereby, and to perform and fulfill all
of the terms, covenants, and conditions of the Original Mortgage binding upon
said Chicago By-Product Coke Company, and in and by said indenture the Company
subjected to the lien of the Original Mortgage, subject to the existing liens
permitted by Section 2 of Article XIV of the Original Mortgage but with
statements required by said Section 2 with regard to such existing liens, all of
the property then owned by the Company or thereafter acquired by it (excepting
such of its property as the Company was by said Section 2 of Article XIV of the
Original Mortgage expressly authorized to reserve from the lien of the Original
Mortgage); and
WHEREAS, by virtue of all the things done as in the next preceding
paragraph recited, the Company has become the successor corporation under the
Original Mortgage, subject to all the terms, conditions and restrictions
thereof; and
WHEREAS, thereafter the Company has made, executed and delivered other
indentures supplemental to the Original Mortgage, of which the indentures
supplemental to the Original Mortgage delivered to U.S. Bank National
Association, as Trustee, successor to Illinois Merchants Trust Company, as
Trustee under the Original Mortgage, dated, respectively, May 20, 1936, March
10, 1950, as of June 1, 1951, as of August 15, 1967, as of September 15, 1970,
as of March 1, 1985, as of April 1, 1993, as of December 1, 1993, as of December
1, 1993, as of June 1, 1995, as of March 1, 2000, as of March 1, 2000, as of
March 1, 2000, as of March 1, 2000, and as of February 1, 2003 are wholly or
partially in full force and effect (said Original Mortgage, and said Indenture
dated March 1, 1928, as so supplemented and amended, being collectively called
the "Mortgage", and said Mortgage, as supplemented by this
Supplemental
Indenture, being collectively called the "Mortgage as supplemented"); and
1
WHEREAS, all bonds which have heretofore been issued and outstanding under
the Mortgage have been retired and cancelled, except that as of February 1,
2003, there were bonds of the following series outstanding in the aggregate
principal amounts indicated below:
Aggregate
Bonds Due Date Principal Amount
--------------- ------------------- ----------------
Series X March 1, 2015 $ 50,000,000
Series CC May 1, 2003 $ 75,000,000
Series DD December 1, 2023 $ 75,000,000
Series EE December 1, 2023 $ 27,000,000
Series FF June 1, 2025 $ 50,000,000
Series GG March 1, 2030 $ 50,000,000
Series HH March 1, 2030 $ 50,000,000
Series II March 1, 2030 $ 37,500,000
Series JJ March 1, 2030 $ 37,500,000
Series KK February 1, 2033 $ 50,000,000
; and
WHEREAS, it is provided in Article III of the Mortgage that bonds of any
series may from time to time be issued by the Company under the Mortgage in a
principal amount equal to 75% of expenditures made for the acquisition of any
permanent property as defined in the mortgage or upon the deposit of cash with
the Trustee equal to the aggregate principal amount of bonds whose
authentication and delivery is then applied for; and
WHEREAS, the Company has duly determined to create an additional series of
its bonds to be issued under the Mortgage as supplemented designated "The
Peoples Gas Light and Coke Company First and Refunding Mortgage Multi-Modal
Bonds, Series LL" (herein sometimes referred to as "bonds of Series LL") and to
issue an aggregate of $50,000,000 principal amount of said bonds all of which
bonds shall be fully registered without coupons; and
WHEREAS, the Company desires to reserve the right to amend the Mortgage
without any consent or other action by holders of the bonds of Series LL or any
subsequent series, to provide that the Mortgage, the rights and obligations of
the Company and the rights of the bondholders may be modified with the consent
of the holders of not less than 60% in aggregate principal amount of the bonds
adversely affected; provided, however, that no modification shall (1) extend the
time, or reduce the amount, of any payment on any bond, without the consent of
the holder of each bond so affected, (2) permit the creation of any lien, not
otherwise permitted, prior to or on a parity with the lien of the Mortgage,
without the consent of the holders of all bonds then outstanding, or (3) reduce
the above percentage of the aggregate principal amount of bonds the holders of
which are required to approve any such modification without the
2
consent of the holders of all bonds then outstanding; and
WHEREAS, the form of registered bond of Series LL and the form of the
Trustee's Certificate to appear on all bonds of Series LL shall be substantially
as follows:
(Form of Series LL Registered Bond Without Coupons)
No. R _________________ $______________
THE PEOPLES GAS LIGHT AND COKE COMPANY
FIRST AND REFUNDING MORTGAGE MULTI-MODAL BOND,
SERIES LL
DUE February 1, 2033
THE PEOPLES GAS LIGHT AND COKE COMPANY, an Illinois corporation (hereinafter
called the "Company"), for value received, hereby promises to pay to. . . . . .
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . ., or registered assigns on February 1, 2033, unless this Bond
shall have been called for redemption and payment of the redemption price shall
have been duly made or provided for in accordance with the hereinafter described
Mortgage, the principal sum of . . . . . . . . . . . . . . Dollars
($__________), and to pay interest on the balance of said principal sum from
time to time remaining unpaid until payment of said principal amount has been
made or duly provided for, at the rates and on the dates determined as described
herein and in the
Supplemental Indenture (as hereinafter defined), unless this
Bond is authenticated on a date to which interest has been paid, in which event
this Bond shall bear interest from such date, or unless no interest has been
paid on this Bond, in which event this Bond shall bear interest from February 1,
2003, as described in the
Supplemental Indenture payable at or before 9:00 a.m.,
Chicago time, on the dates determined as described herein and in the
Supplemental Indenture, until payment in full of such principal sum. Interest
shall also accrue on any overdue principal, premium, if any, and (to the extent
that such interest shall be legally enforceable) on any overdue installment of
interest until paid at the same rate of interest borne by this Bond for the
applicable period that such principal, premium, if any, or interest, as the case
may be, is overdue. The interest so payable on any Interest Payment Date (as
hereinafter defined) will, subject to certain exceptions provided in the
Mortgage, be paid to the person who is the registered owner of this Bond at the
close of business on the applicable Record Date (as hereinafter defined) next
preceding such Interest Payment Date. Principal of, premium, if any, and
interest on this Bond shall be payable in lawful money of the United States of
America at the principal corporate office or agency of the Company in Chicago,
Illinois.
This Bond is one of the First and Refunding Mortgage Bonds of the Company,
3
all issued and to be issued in series, from time to time, under and in
accordance with and, irrespective of the time of issue or of the series in which
issued or the designation thereof, equally secured by an Indenture, dated the
second day of January, 1926, executed by Chicago By-Product Coke Company, a
Delaware corporation, to Illinois Merchants Trust Company, as trustee, and
recorded on January 19, 1926, as Document No. 9154395 in Book 22219 of Records,
at page 283, in the Recorder's Office of Cook County, Illinois, which Indenture
was assumed by the Company as a successor corporation, as defined therein, by an
indenture, dated the first day of March, 1928, executed by the Company to said
trustee, and recorded on April 7, 1928, as Document No. 9980547 in Book 25701 of
Records, at page 599, in the Recorder's Office of Cook County, Illinois, and has
heretofore been, and from time to time hereafter may be, amended and
supplemented by indentures supplemental thereto, including the Supplemental
Indenture dated as of February 1, 2003 relating to the hereinafter described
Series LL Bonds (the "Supplemental Indenture"). Unless otherwise defined herein,
all capitalized terms used herein shall have the meanings ascribed thereto in
the Supplemental Indenture. The word "Mortgage", as used in this Bond, shall
mean said Indenture, as amended and supplemented from time to time by indentures
supplemental thereto, including the Supplemental Indenture. The word "Company",
as used in this Bond, shall be construed to include any successor corporation,
as defined in the Mortgage. The word "Trustee", as used in this Bond, shall be
construed to mean and include U.S. Bank National Association (successor to
Illinois Merchants Trust Company), as trustee under the Mortgage, and any
successor trustee thereunder. Reference is hereby made to the Mortgage and all
indentures supplemental thereto for a description of the property mortgaged and
pledged (except that certain parcels described in the Mortgage and in said
supplemental indentures have been released from the lien of the Mortgage
pursuant to the terms thereof), the nature and extent of the security and the
terms and conditions governing the issuance and security of the bonds issued or
to be issued under the Mortgage. As provided in the Mortgage, the bonds may be
for various principal sums, are issuable in series, may bear interest at
different rates and may otherwise vary as provided therein. This Bond is one of
the series of such First and Refunding Mortgage Bonds designated as "The Peoples
Gas Light and Coke Company First and Refunding Mortgage Multi-Modal Bonds,
Series LL", hereinafter called the "Series LL Bonds".
The Series LL Bonds shall initially bear interest at the Term Rate of 3.05%
per annum (computed on the basis of a 360 day year of twelve 30 day months) to
and including January 31, 2008. During the initial Term Rate Period, interest on
the Series LL Bonds will be due and payable on each Interest Payment Date
commencing August 1, 2003. Thereafter, in the manner provided and subject to the
provisions of the Supplemental Indenture, the term of the Series LL Bonds will
be divided into consecutive Interest Rate Modes during each of which the Series
LL Bonds shall bear interest at either a Daily Rate, a Weekly Rate, a Quarterly
Rate, a Semiannual Rate, a Term Rate, a Flexible Rate or an Auction Rate, each
of which shall be determined in the manner provided in the Supplemental
Indenture. In no event shall the interest rate on any Series LL Bond be greater
than the Maximum Rate or greater than the Maximum Auction Rate (each as
hereinafter defined) during an Auction Rate Mode.
4
Interest shall be computed (1) during a Semiannual Rate Mode or in the case
of a Term Rate Period, on the basis of a 360-day year consisting of twelve
30-day months, and (2) during any other Interest Rate Mode, on the basis of a
365 or 366-day year, as appropriate, and the actual number of days elapsed.
As provided in the Supplemental Indenture, the Company may from time to
time elect to exercise its option to designate an Interest Rate Mode of a type
other than the then current Interest Rate Mode. The Company shall evidence such
election by notifying the Illinois Development Finance Authority, the Revenue
Bond Trustee and the Remarketing Agent of such election not later than the time
specified in the Supplemental Indenture for the respective Interest Rate Mode
selected. Such notice shall (i) specify the effective date of the adjustment to
the Interest Rate Mode so designated, and (ii) with respect to certain
adjustments to the Interest Rate Mode described in the Supplemental Indenture,
be accompanied by an opinion of Bond Counsel to the effect that such adjustment
in the Interest Rate Mode is authorized or permitted by the Revenue Bond
Indenture and that such adjustment will not adversely affect the exclusion of
the interest on the Revenue Bonds from federal gross income. Upon any such
designation of an Interest Rate Mode by the Company, such Interest Rate Mode
shall continue as so designated until such time as the Company shall elect to
again designate an Interest Rate Mode except as provided in the Supplemental
Indenture and except that the final interest rate period shall terminate on the
day immediately preceding February 1, 2033.
The term "Interest Payment Date" means (i) during a Daily Rate Mode or
Weekly Rate Mode, the first Business Day of each calendar month, (ii) during a
Quarterly Rate Mode, the first Business Day of the third calendar month
following the effective date of such Quarterly Rate Mode, and the first Business
Day of each third month thereafter, (iii) during a Semiannual Rate Mode or Term
Rate Period, the first day of the sixth calendar month following the effective
date of such Semiannual Rate Mode or Term Rate Period, as applicable, and the
first day of each successive sixth calendar month thereafter, (iv) with respect
to any Flexible Segment, the Business Day next succeeding the last day thereof
and (v) with respect to each particular Interest Rate Mode, the day next
succeeding the last day thereof.
The term "Record Date" means with respect to any Interest Payment Date
during a Daily Rate, Weekly Rate or Quarterly Rate Mode, or with respect to a
Flexible Segment, the Business Day next preceding such Interest Payment Date
and, with respect to any Interest Payment Date during a Semiannual Rate Mode or
a Term Rate Period, the fifteenth day of the calendar month next preceding such
Interest Payment Date.
The term "Maximum Auction Rate" means the lesser of (i) the product of 1.75
multiplied by the Auction Rate (as defined in Exhibit A to the Revenue Bond
Indenture) in effect on such date of determination or (ii) the Maximum Rate.
The term "Maximum Rate" means the lesser of 14% per annum or the maximum
rate permitted by law.
5
The Series LL Bonds shall be deliverable in the form of registered Bonds
without coupons in the denominations of $5,000 and any integral multiple thereof
during any Semiannual Rate Mode or Term Rate Mode; in the denominations of
$100,000 and any integral multiple thereof during any Daily, Weekly or Quarterly
Rate Mode; in the denominations of $100,000 and any integral multiple of $5,000
in excess of $100,000 during any Flexible Rate Mode; and in the denominations of
$25,000 and any integral multiple thereof during any Auction Rate Mode.
The Company has appointed a Remarketing Agent pursuant to the terms of the
Revenue Bond Indenture. The Company may remove or replace the Remarketing Agent.
The determination of each Daily Rate, Weekly Rate, Quarterly Rate, Semiannual
Rate and Term Rate and each Flexible Segment and Flexible Rate by the
Remarketing Agent shall be conclusive and binding upon the Trustee, the Company
and the owners of the Series LL Bonds. The Revenue Bond Trustee shall provide
the Trustee with notice of each Daily Rate, Weekly Rate, Quarterly Rate,
Semiannual Rate and Term Rate and each Flexible Segment and Flexible Rate as
provided in the Supplemental Indenture.
As more fully described in the Supplemental Indenture, the Company reserves
the right, without any consent or other action by holders of the Series LL Bonds
or the bonds of any subsequent series, to amend the Mortgage to provide that the
Mortgage, the rights and obligations of the Company and the rights of the
bondholders may be modified with the consent of the holders of not less than 60%
in aggregate principal amount of the bonds adversely affected; provided,
however, that no modification shall (1) extend the time, or reduce the amount,
of any payment on any bond, without the consent of the holder of each bond so
affected, (2) permit the creation of any lien, not otherwise permitted, prior to
or on a parity with the lien of the Mortgage, without the consent of the holders
of all bonds then outstanding, or (3) reduce the above percentage of the
principal amount of bonds the holders of which are required to approve any such
modification without the consent of the holders of all bonds then outstanding.
On any Business Day during an Auction Rate Mode, a Daily Rate Mode, a
Weekly Rate Mode or a Quarterly Rate Mode, and on the day next succeeding the
last day of each such Interest Rate Mode, the Series LL Bonds shall be subject
to optional redemption by the Company, in whole or in part, at 100% of the
principal amount thereof, plus accrued interest, if any, to the redemption date.
On the day next succeeding the last day of any Flexible Segment with
respect to any Series LL Bond (or portion of the principal amount thereof, in
the event Revenue Bonds of different Flexible Segments shall apply to the same
Series LL Bond), such bond (or portion thereof, as the case may be) shall be
subject to optional redemption by the Company, in whole or in part, at 100% of
the principal amount thereof.
On the day next succeeding the last day of any Semiannual Rate Period, the
Series LL Bonds shall be subject to optional redemption by the Company, in whole
or in part, at 100% of the principal amount thereof.
6
During any Term Rate Period, and on the day next succeeding the last day of
such Term Rate Period, the Bonds shall be subject to optional redemption by the
Company, during the periods specified below, in whole at any time or in part
from time to time on any Interest Payment Date, at the redemption prices
(expressed as percentages of principal amount) hereinafter indicated plus
accrued interest, if any, to the redemption date:
LENGTH OF TERM RATE PERIOD
(EXPRESSED IN YEARS) REDEMPTION PRICES
-------------------- -----------------
Greater than 17 after 10 years at 102%, declining by
1% annually to 100%
Less than or equal to 17 and greater after 5 years at 102%, declining by
than 10 1% annually to 100%
Less than or equal to 10 and greater after 5 years at 101-1/2%, declining
than 8 annually by 1% to 100-1/2% and
then by 1/2 of 1% to 100%
Less than or equal to 8 and greater after 3 years at 101-1/2%, declining
than 6 annually by 1% to 100-1/2 and then by 1/2 of 1% to 100%
Less than or equal to 6 and greater after 2 years at 101%, declining by
than 4 1/2 of 1% annually to 100%
Less than or equal to 4 and greater after 2 years at 100-1/2%, declining
than 3 by 1/2 of 1% annually to 100%
Less than or equal to 3 only on the day next succeeding the last day of the
period at 100%
Notwithstanding the foregoing, the Series LL Bonds shall not be redeemable
pursuant to the immediately preceding paragraph during the initial Term Rate
Period ending February 1, 2008.
With respect to any Term Rate Period (other than the initial Term Rate
period), the Company may specify in the notice required by the Supplemental
Indenture redemption prices and periods other than those set forth above;
provided, however, that such notice shall be accompanied by an opinion of Bond
Counsel stating that such changes in redemption prices and periods (i) are
authorized or permitted by the Revenue Bond Indenture and (ii) will not
adversely affect the exclusion of the interest on the Revenue Bonds from federal
gross income.
The Series LL Bonds are subject to optional redemption by the Company, in
whole but not in part, at any time, at a redemption price of 100% of the
principal amount thereof, plus accrued interest, if any, to the redemption date,
upon the occurrence of certain events described in the Supplemental Indenture
(relating to unreasonable burdens
7
or excessive liabilities imposed upon the Company; changes in the economic
availability of raw materials, operating supplies, fuel or other energy sources
or supplies or technological or other changes rendering the Project uneconomic;
court order or decree preventing operations at the Project or rendering the
continuation of the Project's operations economically unfeasible).
All of the outstanding Series LL Bonds may be redeemed at any time by the
Company, by the payment of the principal amount thereof and accrued interest
thereon to the date of redemption, without the payment of any premium, in the
event of the acquisition by any federal, state or municipal authority of any
substantial portion (which shall be not less than one-third as determined by
book values) of the income-producing properties of the Company which are subject
to the lien of the Mortgage.
All of the outstanding bonds under the Mortgage shall be redeemed by the
Company by the payment of the respective applicable redemption price or prices
and accrued interest thereon to the date of redemption, without the payment of
any premium, in the event of the acquisition by any federal, state or municipal
authority of all or substantially all of the income-producing properties of the
Company which are subject to the lien of the Mortgage.
All of the outstanding Series LL Bonds shall be redeemed by the Company not
more than sixty (60) days after the Trustee receives written notice from the
Revenue Bond Trustee stating that the principal on the Revenue Bonds has been
declared to be immediately due and payable as a result of an event of default
under the Revenue Bond Indenture (as defined in the Supplemental Indenture). The
redemption price for any such redemption shall be 100% of the principal amount
of the Series LL Bonds to be redeemed, plus interest thereon accrued to the date
fixed for redemption.
Series LL Bonds are also subject to mandatory redemption at any time, in
whole (or in part as hereinafter provided), at 100% of the principal amount
thereof, plus accrued interest, if any, to the redemption date, in the event
that it is finally determined by the Internal Revenue Service or by a court of
competent jurisdiction that, as a result of the failure by the Company to
observe any covenant, agreement or representation in that certain Loan Agreement
dated as of February 1, 2003 between the Company and the Illinois Finance
Development Authority, the interest payable on the Revenue Bonds is includable
for federal income tax purposes in the gross income of any owner thereof, other
than an owner who is a "substantial user" of the Project or a "related person"
of such substantial user, as provided in Section 147(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the applicable regulations
thereunder. Any such determination will not be considered final for this purpose
unless the Company has been given written notice and, if it so desires, has been
afforded the opportunity to contest the same, either directly or in the name of
any owner of a Revenue Bond, and until the conclusion of any appellate review,
if sought. The Series LL Bonds shall be redeemed in whole after such
determination unless redemption of a portion of the Revenue Bonds outstanding
would have the result that interest payable on the Revenue Bonds remaining
outstanding after such redemption would not be includable for federal income tax
8
purposes in the gross income of any owner of the Revenue Bonds (other than an
owner who is a "substantial user" of the Project or a "related person" of such
substantial user within the meaning of Section 147(a) of the Code), and in such
event the Series LL Bonds shall be redeemed in such amount as to accomplish that
result.
Notice of any redemption of the Series LL Bonds shall be given by mailing
by first-class mail, postage prepaid, at least thirty (30) days and not more
than sixty (60) days prior to the redemption date, to the holders of all such
bonds to be redeemed at their last addresses that shall appear upon the registry
book, all as more fully provided in the Mortgage. Notice of redemption having
been duly given, the bonds called for redemption shall become due and payable
upon the redemption date and, if the redemption price shall have been deposited
with the Trustee, interest thereon shall cease to accrue on and after the
redemption date, and whenever the redemption price thereof shall have been
deposited with the Trustee and notice of redemption shall have been duly given
or provision therefore made, such bonds shall no longer be entitled to any lien
or benefit of the Mortgage.
In case of certain events of default specified in the Mortgage, the
principal of all bonds issued and outstanding thereunder may be declared or may
become due and payable in the manner and with the effect provided in the
Mortgage.
No recourse shall be had for the payment of the principal of or interest on
this Bond, or for any claim based hereon, or otherwise in respect hereof or of
the Mortgage, to or against any incorporator, stockholder, director or officer,
past, present or future, of the Company, either directly or through the Company,
under any constitution or statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability of incorporators,
stockholders, directors and officers being released by the holder hereof by the
acceptance of this Bond, and being likewise waived and released by the terms of
the Mortgage.
This Bond is transferable by the registered holder hereof in person or by a
duly authorized attorney at the office or agency of the Company in the City of
Chicago, State of Illinois, upon surrender and cancellation of this Bond, and
thereupon a new registered bond or bonds, without coupons, of the same series
and for the same aggregate principal amount will be issued to the transferee in
exchange herefor. In the manner provided in the Mortgage, registered Bonds
without coupons of this series may, at the option of the registered owner and
upon surrender at said office or agency of the Company, be exchanged for
registered Bonds without coupons of this series of the same aggregate principal
amount of other authorized denominations. Notwithstanding the foregoing, this
Bond may not be sold, transferred, pledged or hypothecated except as required to
effect assignment to the Revenue Bond Trustee and to any successor trustee.
The Company and the Trustee and any paying agent may deem and treat the
person in whose name this Bond is registered as the absolute owner hereof for
the purpose of receiving payment and for all other purposes and neither the
Company nor the Trustee nor any paying agent shall be affected by any notice to
the contrary.
9
This Bond shall not be entitled to any security or benefit under the
Mortgage, and shall not become valid or obligatory for any purpose, until this
Bond shall have been authenticated by the execution of the certificate, hereon
endorsed, by the Trustee or its successor in trust under the Mortgage.
IN WITNESS WHEREOF, the Company has caused this Bond to be executed in its
name by its President, Executive Vice President, Chief Financial Officer,
Treasurer or a Vice President manually or in facsimile, and has caused its
corporate seal manually or in facsimile to be hereto affixed, attested by the
manual or facsimile signature of its Secretary or of an Assistant Secretary.
Dated:
--------------------
THE PEOPLES GAS LIGHT AND COKE COMPANY
By
----------------------
President
Attest:
--------------------
Secretary
(Form of Trustee's Certificate)
This bond is one of the bonds of the series designated, referred to and
described in the within-mentioned Mortgage.
U.S. BANK NATIONAL ASSOCIATION
By
--------------------
Authorized Officer.
10
ASSIGNMENT
For value received, the undersigned hereby sell(s) and transfer(s) unto:
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE:________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Please print or typewrite name and address, including zip code of assignee)
the within Bond and all rights thereunder, hereby irrevocably constituting and
appointing ________________ Attorney to transfer said Note on the books of the
Trustee with full power of substitution in the premises.
Dated:
----------------- ------------------------
Notice: The signature to
this Assignment must correspond
with the name as written upon the
face of the within instrument in
every particular, without
alteration or enlargement, or any
changes whatever.
and
WHEREAS, all acts and things necessary to make the bonds of Series LL, when
authenticated by the Trustee and issued as in the Mortgage and in this
Supplemental Indenture provided, the valid, binding and legal obligations of the
Company, entitled in all respects to the security of the Mortgage, have been
done and performed and the creation, execution and delivery of this Supplemental
Indenture have in all respects been duly authorized by a resolution adopted by
the Board of Directors of the Company; and
WHEREAS, the Company has requested the Trustee, pursuant to the provisions
of Article XVI of the Mortgage, to enter into this Supplemental Indenture for
the purpose of supplementing the Mortgage as herein provided;
NOW, THEREFORE, in consideration of the premises and of the sum of One
Dollar ($1.00) duly paid by the Trustee to the Company and for other good and
valuable considerations, the receipt whereof is hereby acknowledged, the parties
hereto agree as follows:
11
DESCRIPTION OF CERTAIN PROPERTY SUBJECT TO THE LIEN OF THE
MORTGAGE
The Company hereby mortgages and conveys unto the Trustee, its successor or
successors in trust, the property described in Schedule A hereto attached and
expressly made a part hereof.
TO HAVE AND TO HOLD all of said property hereby conveyed and mortgaged or
intended to be conveyed and mortgaged, together with the rents, issues and
profits thereof, unto the Trustee, and its successor or successors in trust and
their assigns in trust, under the and subject to all of the terms, conditions
and provisions of the Mortgage (as the Mortgage is defined herein) and of this
Supplemental Indenture as fully and in all respects as if said property had
originally been described in said Mortgage.
Subject, however, to the reservations, exceptions, limitations and
restrictions contained in the several deeds, leases, servitudes, contracts or
other instruments through which the Company acquired and/or claimed title to
and/or enjoys the use of the mortgaged property, and subject also to any
mortgages or easements existing or placed on any of said property at the time of
its acquisition, liens, for taxes and assessments not due or, if due, in the
course of contests, judgments in the course of appeal or otherwise in contest
and secured by sufficient bond, liens arising out of proceedings in court in the
course of contests and undetermined liens or charges (if any) incidental to
construction, and subject also to such servitude, easements, rights and
privileges in, over, on or through said property as may have been granted by the
Company to other persons prior to the date of this Supplemental Indenture.
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the holders of all bonds and interest coupons now or hereafter
issued under the Mortgage and for the enforcement of and payment of said bonds
and coupons when payable and the performance of and compliance with the
covenants and conditions of the Mortgage without any preference, distinction or
priority as to lien or otherwise of any bond or bonds over others by reason of
difference in time of the actual issue, sale or negotiation thereof; but so that
each and every bond now or hereafter issued under the Mortgage shall have the
same lien so that the interest and principal of any and all of such bonds shall,
subject to the terms of the Mortgage, be equally and proportionately secured
thereby, as if they had been made, executed, delivered, sold and negotiated
simultaneously with the execution thereof.
UPON CONDITION that, until the happening of an event of default as provided
in the Mortgage, the Company shall be suffered and permitted to possess, use and
enjoy the property, rights, privileges and franchises conveyed herein and to
receive and use the rents, issues, income, revenues, earnings and profits
thereof.
IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the Company and
the Trustee, and its successor or successors in trust, as follows:
12
ARTICLE I
FIRST AND REFUNDING MORTGAGE MULTI-MODAL BONDS,
SERIES LL
SECTION 1. A new series of bonds of the Company shall be issued under and
secured by the Mortgage as supplemented, which shall be designated as the
Company's "First and Refunding Mortgage Multi-Modal Bonds, Series LL". The
aggregate principal amount of bonds of Series LL which may be executed by the
Company and authenticated by the Trustee shall be limited to $50,000,000
(exclusive of bonds authenticated and delivered upon interdenominational or
other exchanges and transfers pursuant to Section 3 of Article I hereof and
Sections 2, 5, 11 and 12 of Article I of the Original Mortgage and delivered
pursuant to Section 3 of Article VI of the Original Mortgage as the same may
relate to fully registered bonds). Bonds of Series LL all shall be registered
bonds without coupons, and shall be due and payable February 1, 2033. All bonds
of Series LL shall bear interest from the date thereof, payable at or before
9:00 o'clock a.m. Chicago time on each Interest Payment Date until the principal
thereof shall have become due and payable, at the rates determined as provided
in Section 8 of this Article I, and on any overdue principal and (to the extent
that payment of such interest is enforceable under the applicable law) on any
overdue installment of interest at the same rate per annum, and shall be payable
both as to principal and interest, and as to premium, if any, in coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts, at the office or agency of
the Company in the City of Chicago, Illinois.
So long as there is no existing default in the payment of interest on the
bonds of Series LL, the interest payable on any Interest Payment Date shall be
to the person in whose name any bond of Series LL is registered at the close of
business on any Record Date with respect to any Interest Payment Date, and such
person shall be entitled to receive the interest payable on such Interest
Payment Date notwithstanding any transfer or exchange of such bond of Series LL
subsequent to the Record Date and on or prior to such Interest Payment Date,
except as and to the extent the Company shall default in the payment of the
interest due on such Interest Payment Date, in which case such defaulted
interest shall be paid to the person in whose name such bond of Series LL is
registered at the close of business on a subsequent Record Date, which shall not
be less than five (5) days prior to the date of payment of such defaulted
interest established by notice given by mail by or on behalf of the Company to
the person in whose name such bond of Series LL is then registered and to the
Trustee not less than ten (10) days preceding such subsequent record date.
As used in this Section I, the term "default in the payment of interest"
means failure to pay interest on the applicable Interest Payment Date
disregarding any period of grace permitted by Article X of the Mortgage.
13
SECTION 2. Bonds of Series LL may be issued only as registered bonds
without coupons (hereinafter sometimes referred to as "registered bonds"), and
they shall be substantially in the form hereinbefore recited. They shall be
issuable in denominations which shall be multiples of $5,000 and any integral
multiple thereof during any Semiannual Rate Mode or Term Rate Mode; in the
denominations of $100,000 and any integral multiple thereof during any Daily,
Weekly or Quarterly Rate Mode; in the denominations of $100,000 and any integral
multiple of $5,000 in excess of $100,00 during any Flexible Rate Mode; and in
the denominations of $25,000 and any integral multiple thereof during any
Auction Rate Mode and the execution by the Company of any bond of Series LL
shall evidence conclusively the due authorization of the denomination of such
bond. Each registered bond of Series LL shall be dated as of the date of the
Interest Payment Date on which interest was paid on other bonds of said Series
next preceding the date of issue of such registered bond, except that (i) so
long as there is no existing default in the payment of interest upon the bonds
of Series LL, any bond of Series LL issued after the close of business on any
Record Date with respect to any Interest Payment Date and prior to such Interest
Payment Date, shall be dated as of such Interest Payment Date, and (ii) any bond
of Series LL issued on an Interest Payment Date on which interest on other bonds
of Series LL was paid shall be dated as of the date of issue and (iii) any bond
of Series LL issued before the initial Interest Payment Date, shall be dated
February 1, 2003, the date of commencement of the first interest period for the
bonds of Series LL, unless (i) above is applicable.
The registered owner of any bond of Series LL dated as of an Interest
Payment Date as provided in (i) above shall, if the Company shall default in the
payment of interest due on such Interest Payment Date and such default shall be
continuing, be entitled to exchange such bond for a bond or bonds of Series LL
of the same aggregate principal amount dated as of the Interest Payment Date
next preceding the Interest Payment Date first mentioned in this sentence, or,
if the Company shall default in the payment of interest on the first Interest
Payment Date for bonds of Series LL, such owner shall be entitled to exchange
such bond for a bond or bonds of Series LL of the same aggregate principal
amount dated as of February 1, 2003. If the Trustee shall have knowledge at any
time that any registered owner of a bond of Series LL shall be entitled by the
provision of the next preceding sentence to exchange such bond, the Trustee
shall within thirty (30) days mail to such owner at the address of such owner
appearing upon the registry book, a notice informing such owner that such owner
has such right of exchange.
SECTION 3. In the manner prescribed in the Mortgage, the holder of a
registered bond or bonds of Series LL may, at the office or agency of the
Company in the City of Chicago, State of Illinois, surrender such bond or bonds
in exchange for a like aggregate principal amount of one or more registered
bonds of Series LL of any authorized denomination or denominations.
No charge will be made by the Company to the registered owner of a bond of
Series LL for the transfer thereof or for the exchange thereof for bonds of
Series LL of other authorized denominations, except, in the case of transfer, a
charge sufficient to
14
reimburse the Company for any stamp or other tax or governmental charge required
to be paid by the Company or the Trustee.
SECTION 4. All bonds of Series LL shall be executed on behalf of the
Company by the manual or facsimile signature of its President or the Executive
Vice President or the Chief Financial Officer or the Treasurer or a Vice
President and shall have affixed thereon the manual or facsimile seal of the
Company attested by the manual or facsimile signature of its Secretary or one of
its Assistant Secretaries and be authenticated by the execution by the Trustee
of the certificate endorsed on said bonds, and said bonds shall be issued from
time to time, as the Board of Directors of the Company may determine, but in
accordance with the terms, provisions, conditions and restrictions set forth in
the Mortgage and in this Supplemental Indenture. The definitive bonds of Series
LL may be issued in typewritten or printed form or otherwise as provided in the
Mortgage.
SECTION 5. (a) The bonds of Series LL are subject to optional redemption
by the Company, in whole but not in part, at any time, at a redemption price of
100% of the principal amount thereof plus accrued interest, if any, to the
redemption date, if any of the following shall have occurred and if within one
hundred and eighty (180) days following said occurrence the Company files
written notice with the Illinois Development Finance Authority and the Revenue
Bond Trustee and directs that the Revenue Bonds are to be redeemed:
(i) if, in the Company's reasonable judgment, unreasonable
burdens or excessive liabilities shall, have been imposed upon the
Illinois Finance Development Authority or the Company with respect to
the Project or the operation thereof, including, without limitation,
federal, state or other ad valorem property, income or other taxes,
other than ad valorem taxes presently levied upon privately owned
property used for the same general purposes as the Project; or
(ii) if changes in the economic availability of raw materials,
operating supplies, fuel or other energy sources or supplies, or
facilities necessary for the operation of the Project or such
technological or other changes shall have occurred which, in the
Company's reasonable judgment, render the Project uneconomic for such
purposes; or
(iii) any court or administrative body shall enter an order or
decree preventing operations at the Project for six consecutive
months; or
(iv) any court or administrative agency shall issue an order,
decree or regulation the compliance with which would, in the opinion
of the Company, render the continuation of the Project's operations
economically unfeasible.
(b) On any Business Day during an Auction Rate Mode, a Daily Rate
Mode, a Weekly Rate Mode or a Quarterly Rate Mode, and on the day next
succeeding the last
15
day of each such Interest Rate Mode, the bonds of Series LL shall be subject to
optional redemption by the Company, in whole or in part, at 100% of the
principal amount thereof, plus accrued interest, if any, to the redemption date.
On the day next succeeding the last day of any Flexible Segment with
respect to any bond of Series LL, such bond of Series LL shall be subject to
optional redemption by the Company, in whole or in part, at 100% of the
principal amount thereof.
On the day next succeeding the last day of any Semiannual Rate Period, the
Bonds shall be subject to optional redemption by the Company, in whole or in
part, at 100% of the principal amount thereof.
During any Term Rate Period, and on the day next succeeding the last day of
each Term Rate Period, the bonds of Series LL shall be subject to optional
redemption by the Company, during the periods specified below, in whole at any
time or in part from time to time on any Interest Payment Date, at the
redemption prices (expressed as percentages of principal amount) hereinafter
indicated plus accrued interest, if any, to the redemption date:
LENGTH OF TERM RATE PERIOD
(EXPRESSED IN YEARS) REDEMPTION PRICES
-------------------- -----------------
greater than 17 after 10 years at 102%, declining
by 1% annually to 100%
less than or equal to 17 and greater after 5 years at 102%, declining
than 10 by 1% annually to 100%
less than or equal to 10 and greater after 5 years at 101-1/2%, declining
than 8 annually by 1% to 100-1/2% and then
by 1/2 of 1% to 100%
less than or equal to 8 and greater after 3 years at 101-1/2%, declining
than 6 annually by 1% to 100-1/2% and then
by 1/2 of 1% to 100%
less than or equal to 6 and greater after 2 years at 101%, declining
than 4 by 1/2 of 1% annually to 100%
less than or equal to 4 and greater after 2 years at 100-1/2%, declining
than 3 by 1/2 of 1% annually to 100%
less than or equal to 3 only on the day next succeeding the last day of the
period at 100%
Notwithstanding the foregoing, the bonds of Series LL shall not be
redeemable pursuant to the immediately preceding paragraph during the initial
Term Rate Period ending February 1, 2008.
With respect to any Term Rate Period (other than the initial Term Rate
Period), the Company may specify in the notice required by Section 8(e)(ii) of
this Article I redemption prices and periods other than those set forth above;
provided, however, that
16
such notice shall be accompanied by an opinion of Bond Counsel stating that such
changes in redemption prices and periods (i) are authorized or permitted by the
Act and the Revenue Bond Indenture and (ii) will not adversely affect the
exclusion of the interest on the Revenue Bonds from federal gross income.
(c) All of the outstanding bonds of Series LL may be redeemed at any time
by the Company, by the payment of the principal amount thereof and accrued
interest thereon to the date of redemption, without the payment of any premium,
in the event of the acquisition by any federal, state or municipal authority of
any substantial portion (which shall be not less than one-third as determined by
book values) of the income-producing properties of the Company which are subject
to the lien of the Mortgage.
(d) When interest on the bonds of Series LL is payable at an Auction Rate,
the bonds of Series LL may be redeemed in whole or in part, at the option of the
Company, on the date next succeeding the last day of any Auction Period.
(e) The bonds of Series LL are subject to mandatory redemption at any time,
in whole (or in part, as hereinafter provided), at 100% of the principal amount
thereof, plus accrued interest, if any, to the redemption date, in the event
that it is finally determined by the Internal Revenue Service or by a court of
competent jurisdiction that, as a result of the failure by the Company to
observe any covenant, agreement or representation in the Agreement, the interest
payable on the Revenue Bonds is includable for federal income tax purposes in
the gross income of any owner thereof, other than an owner who is a "substantial
user" of the Project or a "related person" of such substantial user, as provided
in Section 147(a) of the Code, and the applicable regulations thereunder. For
purposes of this paragraph (e), the "owner" of a Revenue Bond includes a
"Beneficial Owner" as defined in the Revenue Bond Indenture. Any such
determination will not be considered final for this purpose unless the Company
has been given written notice and, if it so desires, has been afforded the
opportunity to contest the same, either directly or in the name of any owner of
a Revenue Bond, and until the conclusion of any appellate review, if sought. The
bonds of Series LL shall be redeemed in whole after such determination unless
redemption of a portion of the Revenue Bonds outstanding would have the result
that interest payable on the Revenue Bonds remaining outstanding after such
redemption would not be includable for federal income tax purposes in the gross
income of any owner of the Revenue Bonds (other than an owner who is a
"substantial user" of the Project or a "related person" of such substantial user
within the meaning of Section 147(a) of the Code) and in such event the bonds of
Series LL shall be redeemed (in the principal amount of $5,000 or any integral
multiple thereof) in such amount as to accomplish that result. Any redemption
pursuant to this subparagraph (e) shall be on any date within one hundred and
eighty (180) days from the time of such final determination.
(f) All of the outstanding bonds of Series LL shall be redeemed by the
Company not more than sixty (60) days after the Trustee receives written notice
from the Revenue Bond Trustee stating that the principal on the Revenue Bonds
has been declared to be immediately due and payable as a result of an event of
default under the Revenue Bond
17
Indenture. The redemption price for any such redemption shall be 100% of the
principal amount of the bonds of Series LL to be redeemed, plus interest thereon
accrued to the date fixed for redemption.
SECTION 6. If bonds of Series LL are to be redeemed as provided in Section
5 of this Article I, notice of redemption shall be mailed by or on behalf of the
Company, postage prepaid, at least thirty (30) days and not more than sixty (60)
days prior to such date of redemption, to the registered owners of all bonds of
Series LL to be so redeemed, at their respective addresses appearing upon the
registry book. Any notice which is mailed as herein provided shall be
conclusively presumed to have been properly and sufficiently given on the date
of such mailing, whether or not the holder receives the notice. In any case,
failure to give due notice by mail, or any defect in the notice, to the
registered owners of any bonds of Series LL designated for redemption as a whole
or in part, shall not affect the validity of the proceedings for the redemption
of any other bond of Series LL. In case of any redemption of bonds of Series LL
by the Trustee pursuant to the provisions of the Mortgage or any indenture
supplemental thereto, notice of redemption shall be given in a similar manner by
the Trustee.
Except as provided above, the provisions of Article VI of the Mortgage
shall in all respects apply to any such redemption.
SECTION 7. Bonds of Series LL shall bear the following legend: "This Bond
may not be sold, transferred, pledged or hypothecated except as required to
effect assignment to the Revenue Bond Trustee and to any successor trustee."
SECTION 8. The bonds of Series LL shall initially bear interest at the
Term Rate at 3.05% per annum (computed on the basis of a 360 day year of twelve
30 day months) to and including January 31, 2008. During the initial Term Rate
Period, interest the bonds of Series LL shall be due and payable on each
Interest Payment Date commencing August 1, 2003. Thereafter, in the manner
hereinafter provided, the bonds of Series LL shall bear interest at the Daily
Rate, the Weekly Rate, the Quarterly Rate, the Flexible Rate, the Semiannual
Rate, the Term Rate or the Auction Rate, but in no event shall the bonds of
Series LL be in more than one Interest Rate Mode at any one time; provided that,
anything herein to the contrary notwithstanding, the bonds of Series LL shall at
all times bear interest at the rate or rates from time to time born by the
Revenue Bonds.
(a)(i) For each Daily Rate Period, the bonds of Series LL shall bear
interest at the applicable Daily Rate, which in each case shall be determined by
the Remarketing Agent not later than 10:00 a.m., New York City time, on the
commencement of such Daily Rate Period. The Daily Rate for each Daily Rate
Period shall be the lowest rate which, in the judgment of the Remarketing Agent,
would enable the Remarketing Agent to sell the Revenue Bonds on the effective
date of such Daily Rate at a price equal to 100% of the principal amount
thereof; provided, however, that with respect to any day which is not a Business
Day and any other day for which the Remarketing Agent shall not have determined
a Daily Rate, the Daily Rate for such day shall be the same as the
18
Daily Rate for the immediately preceding day. In no event shall the Daily Rate
exceed the Maximum Rate. The Revenue Bond Trustee shall provide the Trustee with
written notice on a monthly basis of each Daily Rate, as determined.
(ii) At any time, the Company, by written direction to the Illinois
Development Finance Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Revenue Bonds shall bear interest at a Daily Rate.
Such direction shall (A) specify the effective date of such adjustment to a
Daily Rate Mode which shall be (1) a day not earlier than the 25th day following
the fifth Business Day after the date of receipt by the Revenue Bond Trustee of
such direction, (2) in the case of an adjustment from a Semiannual Rate Mode or
a Term Rate Period, the day immediately following the last day of the then
current Semiannual Rate Mode or Term Rate Period, as applicable, and (3) in the
case of an adjustment from a Flexible Rate Mode, the day immediately following
the last day of the then current Flexible Rate Mode as determined in accordance
with Section 8(f)(iii) hereof; and (B) in the case of an adjustment from a Term
Rate Period, be accompanied by an opinion of Bond Counsel stating that such
adjustment (1) is authorized or permitted by the Revenue Bond Indenture and (2)
will not adversely affect the exclusion of the interest on the Revenue Bonds
from federal gross income. During each Daily Rate Mode commencing on a date so
specified or determined (provided that the opinion of Bond Counsel described in
clause (B) above, if required, is reaffirmed as of such date) and ending on the
day immediately preceding the effective date of the next succeeding Interest
Rate Mode, the interest rate borne by the bonds of Series LL shall be a Daily
Rate determined as provided above.
(b)(i) For each Weekly Rate Period, the bonds of Series LL shall bear
interest at the applicable Weekly Rate, which, in each case, shall be determined
by the Remarketing Agent no later than 4:00 p.m., New York City time, on the
Business Day immediately preceding the commencement of the initial Weekly Rate
Period of a Weekly Rate Mode and thereafter no later than 10:00 a.m., New York
City time, on the first day of each succeeding Weekly Rate Period to which it
relates. The Weekly Rate for each Weekly Rate Period shall be the lowest rate
which, in the judgement of the Remarketing Agent, would enable the Remarketing
Agent to sell the Revenue Bonds on the effective date of such Weekly Rate at a
price equal to 100% of the principal amount thereof; provided, however, that if
the Remarketing Agent shall not have determined a Weekly Rate for any Weekly
Rate Period, the Weekly Rate for such Weekly Rate Period shall be the same as
the Weekly Rate for the immediately preceding Weekly Rate Period. In no event
shall the Weekly Rate exceed the Maximum Rate. The Revenue Bond Trustee shall
provide the Trustee with written notice on a monthly basis of each Weekly Rate,
as determined.
(ii) At any time, the Company, by written direction to the Illinois
Finance Development Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Revenue Bonds shall bear interest at a Weekly Rate.
Such direction shall (A) specify the effective date of such adjustment to a
Weekly Rate Mode which shall be (1) a day not earlier than the 25th day
following the fifth Business Day after the date of receipt by the Trustee of
such direction, (2) in the case of an adjustment from a
19
Semiannual Rate Mode or a Term Rate Period, the day immediately following the
last day of the then current Semiannual Rate Mode or Term Rate Period, as
applicable, and (3) in the case of an adjustment from a Flexible Rate Mode, the
day immediately following the last day of the then current Flexible Rate Mode as
determined in accordance with Section 8(f) hereof; and (B) in the case of an
adjustment from a Term Rate Period, be accompanied by an opinion of Bond Counsel
stating that such adjustment (1) is authorized or permitted by the Revenue Bond
Indenture and (2) will not adversely affect the exclusion of the interest on the
Revenue Bonds from federal gross income. During each Weekly Rate Mode commencing
on a date so specified or determined (provided that the opinion of Bond Counsel
described in clause (B) above, if required, is reaffirmed as of such date) and
ending on the day immediately preceding the effective date of the next
succeeding Interest Rate Mode, the interest rate borne by the bonds of Series LL
shall be a Weekly Rate determined as provided above.
(c)(i) For each Quarterly Rate Period, the bonds of Series LL shall bear
interest at the applicable Quarterly Rate, which in each case shall be
determined by the Remarketing Agent no later than 12:00 noon, New York City
time, on the Business Day immediately preceding the commencement of the
Quarterly Rate Period to which it relates. The Quarterly Rate for each Quarterly
Rate Period shall be the lowest rate which, in the judgement of the Remarketing
Agent, would enable the Remarketing Agent to sell the Revenue Bonds on the
effective date of such Quarterly Rate at a price equal to 100% of the principal
amount thereof; provided, however, that if, for any reason, a Quarterly Rate for
any Quarterly Rate Period shall not be determined or be effective, the Interest
Rate Mode for the bonds of Series LL shall automatically convert to a Weekly
Rate Mode. If a Weekly Rate for the first day of such Weekly Rate Mode is not
determined as provided in Section 8(b)(i) hereof, the Weekly Rate for the first
day of such Weekly Rate Mode shall be 100% of the BMA Municipal Index. In no
event shall any Quarterly Rate be greater than the Maximum Rate. The Revenue
Bond Trustee shall provide the Trustee with prompt written notice of each
Quarterly Rate, as determined.
(ii) At any time, the Company, by written direction to the Illinois
Development Finance Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Revenue Bonds shall bear interest at a Quarterly Rate.
Such direction shall (A) specify the effective date of such adjustment to a
Quarterly Rate Mode which shall be (1) a day not earlier than the 25th day
following the fifth Business Day after the date of receipt by the Revenue Bond
Trustee of such direction, (2) in the case of an adjustment from a Semiannual
Rate Mode or a Term Rate Period, the day immediately following the last day of
the then current Semiannual Rate Mode or Term Rate Period, as applicable, and
(3) in the case of an adjustment from a Flexible Rate Mode, the day immediately
following the last day of the then current Flexible Rate Mode as determined in
accordance with Section 8(f)(iii) hereof; and (B) in the case of an adjustment
from a Term Rate Period, be accompanied by an opinion of Bond Counsel stating
that such adjustment (1) is authorized or permitted by the Revenue Bond
Indenture and (2) will not adversely affect the exclusion of the interest on the
Revenue Bonds from federal gross income. During each Quarterly Rate Mode
commencing on a date so specified or
20
determined (provided that the opinion of Bond Counsel described in clause (B)
above, if required, is reaffirmed as of such date) and ending on the day
immediately preceding the effective date of the next succeeding Interest Rate
Mode, the interest rate borne by the bonds of Series LL shall be a Quarterly
Rate determined as provided above.
(d)(i) For each Semiannual Rate Period, the bonds of Series LL shall bear
interest at the applicable Semiannual Rate determined by the Remarketing Agent
on a Business Day selected by it, but not more than 15 days prior to the first
day of such Semiannual Rate Period. The Semiannual Rate for each Semiannual Rate
Period shall be the rate determined by the Remarketing Agent on such date, and
filed on such date with the Revenue Bond Trustee and the Company, by written
notice or by telephone promptly confirmed by telecopy or other writing, as being
the lowest rate which would enable the Remarketing Agent to sell the Revenue
Bonds on the effective date of such Semiannual Rate at a price equal to 100% of
the principal amount thereof; provided, however, that if, for any reason, a
Semiannual Rate for any Semiannual Rate Period shall not be determined or
effective, the Interest Rate Mode for the bonds of Series LL shall automatically
convert to a Weekly Rate Mode. If a Weekly Rate for the first day of such Weekly
Rate Mode is not determined as provided in Section 8(b)(i) hereof, the Weekly
Rate for the first day of such Weekly Rate Mode shall be 100% of the BMA
Municipal Index. In no event shall any Semiannual Rate be greater than the
Maximum Rate. The Revenue Bond Trustee shall provide the Trustee with prompt
written notice of each Semiannual Rate, as determined.
(ii) At any time, the Company, by written direction to the Illinois
Development Finance Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Revenue Bonds shall bear interest at a Semiannual
Rate. Such direction shall (A) specify the effective date of such adjustment to
a Semiannual Rate Mode (which shall be (1) a day not earlier than the 25th day
following the fifth Business Day after the date of receipt by the Revenue Bond
Trustee of such direction, (2) in the case of an adjustment from a Flexible Rate
Mode, the day immediately following the last day of the then current Flexible
Rate Mode as determined in accordance with Section 8(f)(iii) hereof and (3) in
the case of an adjustment from a Term Rate Period, the day immediately following
the last day of the then current Term Rate Period and (B) in the case of an
adjustment from a Term Rate Period, be accompanied by an opinion of Bond Counsel
stating that such adjustment (1) is authorized or permitted by the Revenue Bond
Indenture and (2) will not adversely affect the exclusion of the interest on the
Revenue Bonds from federal gross income.
(e)(i) For each Term Rate Period, the bonds of Series LL shall bear
interest at the Term Rate determined by the Remarketing Agent on a Business Day
selected by it, but not more than 15 days prior to the first day of such Term
Rate Period. The Term Rate shall be the rate determined by the Remarketing Agent
on such date, and filed on such date with the Revenue Bond Trustee and the
Company, by written notice or by telephone promptly confirmed by telecopy or
other writing, as being the lowest rate which would enable the Remarketing Agent
to sell the Revenue Bonds on the effective date of such Term Rate at a price
equal to 100% of the principal amount thereof;
21
provided, however, that if, for any reason, a Term Rate for any Term Rate Period
shall not be determined or effective, the Interest Rate Mode for the bonds of
Series LL shall automatically convert to a Weekly Rate Mode. If a Weekly Rate
for the first day of such Weekly Rate Mode is not determined as provided in
Section 8(b)(i) hereof, the Weekly Rate for the first day of such Weekly Rate
Mode shall be 100% of the BMA Municipal Index. The Revenue Bond Trustee shall
provide promptly the Trustee with written notice of each Term Rate, as
determined. In no event shall any Term Rate be greater than the Maximum Rate.
(ii) At any time, the Company, by written direction to the Illinois
Development Finance Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Revenue Bonds shall bear, or continue to bear,
interest at a Term Rate, and if it shall so elect, shall determine the duration
of the Term Rate Period during which the bonds of Series LL shall bear interest
at such Term Rate. As a part of such election, the Company also may determine
that the initial Term Rate Period shall be followed by successive Term Rate
Periods and, if the Company so elects, shall specify the duration of each such
successive Term Rate Period as provided in this subparagraph (ii). Such
direction shall (A) specify the effective date of each Term Rate Period (which
shall be (1) a day not earlier than the 25th day following the fifth Business
Day after the date of receipt by the Revenue Bond Trustee of such direction, (2)
in the case of an adjustment from a Flexible Rate Mode, the day immediately
following the last day of the then current Flexible Rate Mode as determined in
accordance with Section 8(f)(iii) of this Article I and (3) in the case of an
adjustment from a Semiannual Rate Mode or a Term Rate Period, the day
immediately following the last day of the then current Semiannual Rate Mode or
Term Rate Period, as appropriate); (B) specify the last day of such Term Rate
Period or, if successive Term Rate Periods shall have been designated, the last
day of each such Term Rate Period (which shall be for each Term Rate Period
either the day immediately preceding the Maturity Date or the day immediately
preceding the first day of the twelfth (or any integral multiple of 12)
succeeding calendar month after the effective date thereof); and (C) unless the
adjustment is from a Term Rate Period of equal duration, be accompanied by an
opinion of Bond Counsel stating that such adjustment (1) is authorized or
permitted by the Revenue Bond Indenture and (2) will not adversely affect the
exclusion of the interest on the Revenue Bonds from federal gross income. If the
Company shall designate successive Term Rate Periods, but shall not, with
respect to the second or any subsequent Term Rate Period, specify any of the
information described in clause (A) above, the Company, by written direction to
the Illinois Development Finance Authority, the Revenue Bond Trustee and the
Remarketing Agent, given not later than the fifth Business Day preceding the
25th day prior to the first day of such successive Term Rate Period, may specify
any of such information not previously specified with respect to such Term Rate
Period which information shall be accompanied by an opinion of Bond Counsel as
described above, if required. During the Term Rate Period commencing and ending
on the dates so determined and during each successive Term Rate Period, if any,
the interest rate borne by the bonds of Series LL shall be a Term Rate (provided
that the opinion of Bond Counsel described in clause (C) above, if required, is
reaffirmed as of such date of commencement). If, by the fifth Business Day
preceding the 24th day prior to the last
22
day of any Term Rate Period, the Revenue Bond Trustee shall not have received
notice of the Company's election that, during the next succeeding Interest Rate
Mode, the bonds of Series LL shall bear interest at a Daily Rate, a Weekly Rate,
a Quarterly Rate, a Flexible Rate, a Semiannual Rate or a Term Rate, the next
succeeding Interest Rate Mode shall be a Term Rate Period of the same duration
as the immediately preceding Term Rate Period; provided, however, that if the
last day of any successive Term Rate Period would end after the day prior to the
Maturity Date, the next succeeding Interest Rate Mode shall be a Term Rate
Period ending on the day prior to the Maturity Date.
(f)(i) During each Flexible Rate Mode, each bond of Series LL (or portion
of the principal amount thereof, in the event Revenue Bonds of different
Flexible Segments shall apply to the same bond of Series LL) shall bear interest
during each Flexible Segment for a related Revenue Bond at the Flexible Rate for
such Revenue Bond as described herein. Different Flexible Segments may apply to
different Revenue Bonds at any time and from time to time. Revenue Bonds of
different Flexible Segments may relate to the same bond of Series LL at any time
and from time to time. The Flexible Segment for each Revenue Bond shall be a
period of at least one day and not more than 270 days ending on a day that
immediately precedes a Business Day, determined by the Remarketing Agent to be
the period which, together with all such other Flexible Segments for all Revenue
Bonds then outstanding, will result in the lowest overall interest expense on
the Revenue Bonds over the next succeeding 270 days. The Flexible Rate for each
Flexible Segment for each Revenue Bond shall be determined by the Remarketing
Agent no later than the first day of such Flexible Segment (and in time to
enable the Remarketing Agent to give to the Revenue Bond Trustee the notice
required by Section 404(c) of the Revenue Bond Indenture) to be the lowest
interest rate which would enable the Remarketing Agent to sell the Revenue Bonds
on the effective date of such rate at a price equal to 100% of the principal
amount thereof. If a Flexible Segment or a Flexible Rate for a Flexible Segment
is not determined or effective, the Flexible Segment for such Revenue Bond shall
be a Flexible Segment of one day, and the interest rate for such Flexible
Segment of one day shall be 100% of the BMA Municipal Index. In no event shall
the Flexible Rate for any Flexible Segment exceed the Maximum Rate. The Revenue
Bond Trustee shall provide the Trustee with facsimile or telephonic notice of
each Flexible Segment and Flexible Rate.
(ii) At any time, the Company, by written direction to the Illinois
Development Finance Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Revenue Bonds shall bear interest at Flexible Rates.
Such direction shall (A) specify the effective date of the Flexible Rate Mode
during which the bonds of Series LL shall bear interest at Flexible Rates which
shall be (1) a Business Day not earlier than the 25th day following the fifth
Business Day after the date of receipt by the Trustee of such direction, and (2)
in the case of an adjustment from a Semiannual Rate Mode or a Term Rate Period,
the day immediately following the last day of the then current Semiannual Rate
Mode or Term Rate Period, as applicable; and (B) in the case of an adjustment
from a Term Rate Period, be accompanied by an opinion of Bond Counsel stating
that such adjustment (1) is authorized or permitted by the Revenue Bond
Indenture and (2) will not adversely affect the exclusion of the interest on the
Revenue Bonds from federal
23
gross income. During each Flexible Rate Mode commencing on the date so specified
(provided that the opinion of Bond Counsel described in clause (B) above, if
required, is reaffirmed as of such date) and ending on the day immediately
preceding the effective date of the next succeeding Interest Rate Mode, each
bond of Series LL shall bear interest at a Flexible Rate during each Flexible
Segment for such bond of Series LL.
(iii) As a condition precedent to the election during a Flexible Rate
Mode to adjust to a different Interest Rate Mode for the Revenue Bonds pursuant
to Section 8(a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii) or (g)(ii) of this
Article I, the Remarketing Agent shall determine Flexible Segments of such
duration that, as soon as possible, all Flexible Segments shall end on the same
date, not less than the 24th day following the fifth Business Day after the
receipt by the Revenue Bond Trustee of the direction of the Company effecting
such election. The date on which all Flexible Segments so determined shall end
shall be the last day of the then current Flexible Rate Mode and the day next
succeeding such date shall be the effective date of the Daily Rate Mode, the
Weekly Rate Mode, the Quarterly Rate Mode, the Semiannual Rate Mode or the Term
Rate Period elected by the Company.
(g)(i) The Auction Rate for an Auction Period commencing on the effective
date of a change to the Auction Rate shall be determined by the Market Agent
before the effective date, and shall be the lowest rate which, in the judgment
of the Market Agent, is necessary to enable the bonds of Series LL to be
remarketed at the principal amount thereof, plus accrued interest, if any, on
the effective date. The bonds of Series LL shall bear interest at Auction Rates
established for 35-day Auction Periods unless the Company changes the length of
the Auction Period pursuant to Section 203(f)(i) of the Revenue Bond Indenture.
Thereafter, the Auction Rate to be applicable to the Auction Rate Securities
during each Auction Period shall be determined by the Auction Agent and notice
thereof shall be given pursuant to Section 203(f)(i) of the Revenue Bond
Indenture. Such determination, and subsequent Auction Rates determined in
accordance with the Auction Procedures, shall be conclusive and binding upon the
Trustee, the Company and the owners of the bonds of Series LL to which such rate
will be applicable. In no event shall the Auction Rate exceed the Maximum
Auction Rate.
(ii) At any time, the Company, by written notice to the Illinois
Development Finance Authority, the Revenue Bond Trustee and the Remarketing
Agent, may elect that the Bonds shall bear interest at an Auction Rate. Such
direction shall (A) specify the effective date of such adjustment to an Auction
Rate Mode (which shall be (1) a day not earlier than the 25th day following the
fifth Business Day after the date of receipt by the Revenue Bond Trustee of such
direction, (2) in the case of an adjustment from a Semiannual Rate Mode or a
Term Rate Mode, the day immediately following the last day of the then current
Semiannual Rate Period or Term Rate Period, as applicable, and (3) in the case
of an adjustment from a Flexible Rate Mode, the day immediately following the
last day of the then current Flexible Rate Mode as determined in accordance with
Section 8(f)(iii); and (B) in the case of an adjustment from a Term Rate Period,
be accompanied by an opinion of Bond Counsel stating that such adjustment (1) is
authorized or permitted by the Revenue Bond Indenture and (2) will not adversely
24
affect the exclusion of the interest on the Revenue Bonds from federal gross
income. During each Auction Rate Mode commencing on the date so specified or
determined (provided that the opinion of Bond Counsel described in clause (B)
above, if required, is reaffirmed as of such date) and ending on the day
immediately preceding the effective date of the next succeeding Interest Rate
Mode, each bond of Series LL shall bear interest at an Auction Rate as provided
above.
(h) The determination of each Daily Rate, Weekly Rate, Quarterly Rate,
Semiannual Rate and Term Rate and each Flexible Segment and Flexible Rate by the
Remarketing Agent, and the determination of each Auction Rate by the Auction
Agent, shall be conclusive and binding upon the Trustee, the Company and the
owners of the bonds of Series LL.
(i) Notwithstanding anything herein to the contrary, the Company may
rescind any election by it to adjust to or continue an Interest Rate Mode
pursuant to Section 8(a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii) or (f)(ii) of
this Article I prior to the effective date of such adjustment or continuation by
written notice thereof to the Illinois Development Finance Authority, the
Revenue Bond Trustee and the Remarketing Agent prior to such effective date. If
the Revenue Bond Trustee receives notice of such rescission prior to the time
the Revenue Bond Trustee has given notice to the owners of the Revenue Bonds
pursuant to Section 203(a)(iii), (b)(iii), (c)(iii), (d)(iii), (e)(iii) or
(f)(iii) of the Revenue Bond Indenture, then such notice of adjustment or
continuation shall be of no force and effect. If the Revenue Bond Trustee
receives notice of such rescission after the Revenue Bond Trustee has given
notice to the owners of the Revenue Bonds pursuant to Section 203(a)(iii),
(b)(iii), (c)(iii), (d)(iii), (e)(iii) or (f)(iii) of the Revenue Bond
Indenture, then the Interest Rate Mode for the bonds of Series LL shall
automatically adjust to a Weekly Rate Mode. In the event that an attempted
adjustment from one Interest Rate Mode to another Interest Rate Mode as herein
provided does not become effective, the Interest Rate Mode for the bonds of
Series LL shall automatically adjust to a Weekly Rate Mode. If a Weekly Rate for
the first week of any such Weekly Rate Mode is not determined as provided in
Section 8(b)(i) of this Article I, the Weekly Rate for the first week of such
Weekly Rate Mode shall be 100% of the BMA Municipal Index. No opinion of Bond
Counsel shall be required in connection with any automatic adjustment to a
Weekly Rate Mode as in this Section 8(i) provided.
SECTION 9. In this Supplemental Indenture, the following terms shall have
the meanings specified in this Section 9, unless the context otherwise requires:
"Agreement" or "Loan Agreement" means the Loan Agreement executed
by and between the Illinois Development Finance Authority and the
Company dated as of February 1, 2003 with respect to the Revenue
Bonds, as from time to time amended and supplemented.
"Auction Agent" means the auction agent appointed by the Company
in accordance with Sections 1.10 and 1.11 of Exhibit A of the Revenue
Bond Indenture and any permitted successor thereto.
25
"Auction Period" means each period of time during which the bonds
of Series LL bear interest at an Auction Rate.
"Auction Procedure" means the procedures for conducting auctions
for the Auction Rate Securities during an Auction Period set forth in
of Exhibit A of the Revenue Bond Indenture.
"Auction Rate" means the rate of interest to be borne by the
Auction Rate Securities during each Auction Period, not greater than
the Maximum Auction Rate, established in accordance with Section 8(g)
of this Article I and Section 203(f) of the Revenue Bond Indenture.
"Auction Rate Index" shall have the meaning specified in Section
1.07 of Exhibit A to the Revenue Bond Indenture.
"Auction Rate Mode" means each period during which the bonds of
Series LL bear interest at an Auction Rate.
"Auction Rate Securities" means the bonds of Series LL during any
Auction Period.
"Bond Counsel" means an attorney at law or a firm of attorneys
(who is of nationally recognized standing in matters pertaining to the
tax-exempt nature of interest on bonds issued by states and their
political subdivisions) duly admitted to the practice of law before
the highest court of any state of the United States of America.
"BMA Municipal Index" means the Bond Market Association Municipal
Index, as of the most recent date for which such index was published,
or such other weekly, high grade index comprised of seven-day,
tax-exempt variable rate demand notes produced by Municipal Market
Data, Inc., or its successors or as otherwise designated by the The
Bond Market association; provided, however, that if such index is no
longer produced by Municipal Market Data, Inc. or its successor, then
the "BMA Municipal Index" shall mean such other reasonably comparable
index selected by the Company.
"Business Day" means any day which is not a Sunday or a legal
holiday or a day (including Saturday) on which banking institutions in
Chicago, Illinois, in New York, New York, and in the city where the
Principal Office of the Revenue Bond Trustee is located are not
required or authorized to remain closed and other than a day on which
the New York Stock Exchange is not closed.
"Code" means the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
26
"Daily Rate" means the variable interest rate on the bonds of
Series LL established in accordance with Section 8(a) of this
Article I.
"Daily Rate Mode" means each period of time during which the
bonds of Series LL bear interest at a Daily Rate.
"Daily Rate Period" means each period during a Daily Rate Mode
from and commencing on a Business Day to and including the day
immediately preceding the first Business Day thereafter, provided that
the first Daily Rate Period in any Daily Rate Mode shall commence on
the effective date of such Daily Rate Mode.
"Flexible Rate" shall mean, with respect to any Revenue Bond, the
non-variable interest rate associated with such Revenue Bond
established in accordance with Section 8(f) of this Article I and
Section 203(f) of the Revenue Bond Indenture.
"Flexible Rate Mode" means each period, comprised of Flexible
Segments, during which Revenue Bonds and bonds of Series LL bear
interest at Flexible Rates.
"Flexible Segment" shall mean, with respect to each Revenue Bond
bearing interest at a Flexible Rate, the period established in
accordance with Section 8(f) of this Article I and Section 203(f) of
the Revenue Bond Indenture.
"Interest Payment Date" means (i) during a Daily Rate Mode or
Weekly Rate Mode, the first Business Day of each calendar month, (ii)
during a Quarterly Rate Mode, the first Business Day of the third
calendar month following the effective date of such Quarterly Rate
Mode, and the first Business Day of each third month thereafter, (iii)
during a Semiannual Rate Mode or Term Rate Period, the first day of
the sixth calendar month following the effective date of such
Semiannual Rate Mode or Term Rate Period, as applicable, and the first
day of each successive sixth calendar month thereafter, (iv) with
respect to any Flexible Segment, the Business Day next succeeding the
last day thereof and (v) with respect to each Interest Rate Mode, the
day next succeeding the last day thereof.
"Interest Rate Mode" means any Daily Rate Mode, Weekly Rate Mode,
Quarterly Rate Mode, Flexible Rate Mode, Semiannual Rate Mode or Term
Rate Period.
"Market Agent" means such Broker-Dealer as shall be designated by
the Company pursuant to Section 411 of the Revenue Bond Indenture on
or before the date on which the Auction Rate becomes effective, and
any
27
permitted successor thereto.
"Maturity Date" means February 1, 2033.
"Maximum Auction Rate" means on any day of determination of the
Auction Rate the lesser of (i) the product of 1.75 multiplied by the
Auction Rate Index in effect on such date of determination or (ii) the
Maximum Rate.
"Maximum Rate" means the lesser of 14% per annum or the maximum
rate permitted by law.
"Project" has the meaning set forth in the Revenue Bond
Indenture.
"Quarterly Rate" means the variable interest rate on the bonds of
Series LL established in accordance with Section 8(c) of this Article
I.
"Quarterly Rate Mode" means each period of time during which the
bonds of Series LL bear interest at a Quarterly Rate.
"Quarterly Rate Period" means each period during a Quarterly Rate
Mode from and commencing on the first Business Day of a calendar month
to but not including the first Business Day of the third succeeding
calendar month, provided that the first Quarterly Rate Period in any
Quarterly Rate Mode shall be the period commencing on the effective
date of such Quarterly Rate Mode to but not including the first
Business Day of the third succeeding calendar month thereafter..
"Record Date" as used herein means with respect to any Interest
Payment Date during a Variable Rate Mode or with respect to a Flexible
Segment, the Business Day next preceding such Interest Payment Date,
and, with respect to any Interest Payment Date during a Semiannual
Rate Mode or a Term Rate Period, the fifteenth day of the calendar
month next preceding such Interest Payment Date.
"Remarketing Agent" means the remarketing agent appointed by the
Company in accordance with Section 408 of the Revenue Bond Indenture
and any permitted successor thereto.
"Revenue Bonds" means the Adjustable-Rate Gas Supply Refunding
Revenue Bonds, Series 2003B (The Peoples Gas Light and Coke Company
Project), issued by the Illinois Development Finance Authority in the
aggregate principal amount of $50,000,000
"Revenue Bond Indenture" means that certain Indenture of Trust
executed by and between the Illinois Development Finance Authority and
the Revenue Bond Trustee, dated as of February 1, 2003, and any
amendments or
28
supplements thereto, pursuant to which the Revenue Bonds may be
issued.
"Revenue Bond Trustee" means Bank One Trust Company, National
Association, and any successor trustee appointed pursuant to Sections
1105 or 1109 of the Revenue Bond Indenture at the time serving as
successor trustee thereunder and shall include any co-trustee serving
as such thereunder.
"Semiannual Rate" means the non-variable interest rate on the
bonds of Series LL established in accordance with Section 8(d) of this
Article I.
"Semiannual Rate Mode" means each period of time during which the
bonds of Series LL bear interest at a Semiannual Rate.
"Semiannual Rate Period" means each period during a Semiannual
Rate Mode from and commencing on the first day of a calendar month and
to but not including the first day of the sixth succeeding calendar
month, provided that the first Semiannual Rate Period in any
Semiannual Rate Mode shall be the period commencing on the effective
date of such Semiannual Rate Mode to but not including the first day
of the sixth calendar month thereafter.
"Term Rate" means a non-variable interest rate on the bonds of
Series LL established in accordance with Section 8(e) of this
Article I.
"Term Rate Period" means each period during which a Term Rate is
in effect.
"Variable Rate Mode" means each Daily Rate Mode, Weekly Rate Mode
and Quarterly Rate Mode.
"Weekly Rate" means the variable interest rate on the bonds of
Series LL established in accordance with Section 8(b) of this
Article I.
"Weekly Rate Mode" means each period of time during which the
bonds of Series LL bear interest at a Weekly Rate.
"Weekly Rate Period" means each period during a Weekly Rate Mode
from and commencing on a Thursday and ending on the next succeeding
Wednesday; provided, however, that if a Weekly Rate Mode shall end on
a day other than a Wednesday, the last Weekly Rate Period during such
Weekly Rate Mode shall end on the last day of such Weekly Rate Mode;
provided, further, that the first Weekly Rate Period during a Weekly
Rate Mode shall be the period from and commencing on the first day of
such Weekly Rate Mode and ending on the next succeeding Wednesday.
29
SECTION 10. In any case where the date of maturity of interest on or
principal of the bonds of Series LL or the date fixed for redemption of any
bonds of Series LL shall be in the location of the principal office of the
Trustee, a Saturday, Sunday or a legal holiday or a day on which banking
institutions are authorized by law to close in the State of Illinois, then
payment of interest or principal (and premium, if any) need not be made on such
date but may be made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for redemption, and
no interest shall accrue for the period after such date.
SECTION 11. The Company reserves the right, without any consent or other
action by holders of the bonds of Series LL or any subsequent series of bonds,
to amend the Mortgage by inserting the following language as Section 4 of
Article XVI immediately following current Section 3 of Article XVI of the
Mortgage:
SECTION 4. Anything in Section 1 of this Article to the contrary
notwithstanding, with the consent of the holders of not less than
sixty per centum (60%) in aggregate principal amount of the bonds at
the time outstanding or their attorneys-in-fact duly authorized, or,
if the rights of the holders of one or more, but not all, series then
outstanding are affected, the consent of the holders of not less than
sixty per centum (60%) in aggregate principal amount of the bonds at
the time outstanding of all affected series, taken together, and not
any other series, the Company, when authorized by resolution of its
Board of Directors, and the Trustee, from time to time and at any
time, subject to the restrictions in this Mortgage contained, may
enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any
supplemental indenture or modifying the rights and obligations of the
Company and the rights of the holders of any of the bonds and coupons;
provided, however, that no such supplemental indenture shall (1)
extend the maturity of any of the bonds or reduce the rate or extend
the time of payment of interest thereon, or reduce the amount of the
principal thereof, or reduce any premium payable on the redemption
thereof or change the coin or currency in which any bond or interest
thereon is payable, without the consent of the holder of each bond so
affected, or (2) permit the creation of any lien, not otherwise
permitted, prior to or on a parity with the lien of the Mortgage,
without the consent of the holders of all the bonds then outstanding,
or (3) reduce the aforesaid percentage of the aggregate principal
amount of bonds the holders of which are required to approve any such
supplemental indenture, without the consent of the holders of all the
bonds then outstanding. For the purposes of this Section 4, bonds
shall be deemed to be affected by a supplemental indenture if such
supplemental indenture adversely affects or diminishes the rights of
holders thereof against the Company or against its property.
30
Upon the written request of the Company, accompanied by resolution of
its Board of Directors authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of bondholders as aforesaid (the instrument or
instruments evidencing such consent to be dated within one year of
such request), the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under
this Mortgage or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee shall be entitled to receive and, subject to
Section 7 of Article XV hereof, may rely upon, an opinion of counsel
as conclusive evidence that any such supplemental indenture is
authorized or permitted by the provisions of this Section 4.
It shall not be necessary for the consent of the bondholders under
this Section 4 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
The Company and the Trustee, if they so elect, and either before or
after such 60% or greater consent has been obtained, may require the
holder of any bond consenting to the execution of any such
supplemental indenture to submit his bond to the Trustee or to such
bank, banker or trust company as may be designated by the Trustee for
the purpose, for the notation thereon of the fact that the holder of
such bond has consented to the execution of such supplemental
indenture, and in such case such notation, in form satisfactory to the
Trustee, shall be made upon all bonds so submitted, and such bonds
bearing such notation shall forthwith be returned to the persons
entitled thereto. All subsequent holders of bonds bearing such
notation shall be deemed to have consented to the execution of such
supplemental indenture, and consent, once given or deemed to be given,
may not be withdrawn.
Prior to the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 4,
the Company shall publish a notice, setting forth in general terms the
substance of such supplemental indenture, at least once in one daily
newspaper of general circulation in each city in which the principal
of any of the bonds shall be payable, or, if all bonds outstanding of
any series shall be registered bonds without coupons or coupon bonds
registered as to principal, such notice with respect to such series
shall be mailed first class, postage prepaid, and registered if the
Company so elects, to each registered holder of bonds of such series
at the last address of such holder appearing on the registry books,
such publication or mailing, as the case may be, to be made not less
than thirty (30) days prior to such execution. Any failure of the
Company to give such notice,
31
or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
ARTICLE II
COVENANTS OF THE COMPANY
SECTION 1. The Company covenants and agrees, so long as any of the bonds
of Series LL are outstanding or until provision shall have been made for the
redemption or payment thereof by the deposit with the Trustee of money necessary
to effect such redemption or payment, as follows:
(a) The Company, during or at the close of the calendar year 2003, and
during or at the close of each calendar year thereafter, shall charge
against the income for such calendar year and place to the credit of a
"depreciation reserve account" to be kept on its books, the greater of the
following two amounts: (i) the amount of $1,550,000, or (ii) an amount
equal to 2 1/2% of the sum of
(i) the aggregate principal amount of all bonds which, at the
time such credit is placed to said "depreciation reserve account",
shall be outstanding and shall have been outstanding under the
Mortgage as supplemented for a period of not less than six (6) months,
or which at such time shall have been outstanding under the Mortgage
supplemented for less than six (6) months, if such bonds shall have
been issued, or the proceeds thereof shall have been used, directly or
indirectly, for or on account of the pledge, acquisition, exchange,
cancellation, payment, refundment, redemption or discharge at, before
or after maturity of the bonds of any series theretofore issued under
the Mortgage or of any "underlying bonds" or "specified obligations"
as defined in Section 4 of Article III of the Mortgage; and
(ii) the aggregate principal of all indebtedness of the Company
secured by a mortgage lien upon the properties or assets of the
Company, which is a lien superior to the lien of the Mortgage, except
(A) any such mortgage indebtedness the evidences of which shall then
be pledged with the Trustee under the provisions of the Mortgage or
pledged with the Trustee under any mortgage constituting a lien
superior to the lien of the Mortgage on any part of the properties or
assets of the Company, and (B) any such mortgage indebtedness for the
payment or redemption of which the necessary moneys shall have been
deposited with the Trustee under the Mortgage securing the same;
provided, however, that (1) the amount required by this subparagraph
(a) to be placed to the credit of such "depreciation reserve account"
in or for any calendar year shall be deemed to include and not to be
in addition to amounts which, by the provisions of the Mortgage, the
Company is required to add to any depreciation reserve account for
such year, (2) nothing in this subparagraph (a) shall prevent the
Company from crediting to such "depreciation reserve account", during
or at
32
the close of any calendar year, an amount greater than the amount
required by this subparagraph (a) for such year, and (3) the Company
may, from time to time, during each such calendar year, charge against
such "depreciation reserve account" the cost of depreciable property
retired by it during such year, including the cost, if any, of
dismantling such retired property, less any salvage credits applicable
thereto.
(b) The Company after it shall have issued bonds of Series LL in the
aggregate principal amount of $50,000,000, shall not request the Trustee
(i) to authenticate bonds of any series under the Mortgage
(A) pursuant to Section 2 of Article III of the Mortgage
for or on account of the acquisition and cancellation, or of the
payment, cancellation, redemption or other discharge at, before or
after maturity, affected prior to January 1, 1951, of any bonds of
any series theretofore issued under the Mortgage, or
(B) pursuant to Section 4 of Article III of the Mortgage,
for or on account of the pledge, acquisition, exchange,
cancellation, payment, refundment, redemption or discharge effected
prior to January 1, 1951, of "underlying bonds" or "specified
obligations" mentioned in said Section 4, or
(C) pursuant to Section 5 of Article III of the Mortgage,
for or in respect of expenditures made prior to January 1, 1951,
for or on account of "permanent property", or
(ii) to pay to the Company any cash pursuant to Section 6 of said
Article III for or on account of any transactions mentioned in clause
(A) or clause (B) of subdivision (i) of this subparagraph (b) or for
or in respect of any expenditures mentioned in clause (C) of
subdivision (i) of this subparagraph (b).
Neither shall the Company request the Trustee to authenticate bonds of any
series under the provisions of Section 4 of Article III of the Mortgage or
to pay the Company any moneys under Section 6 of said Article III or under
Article IX of the Mortgage for or on account of the payment, discharge and
cancellation effected on or after January 1, 1944, at, before or after
maturity of any of the Refunding Mortgage Five Per Cent Gold Bonds of the
Company, dated September 1, 1897, due September 1, 1947.
(c) The Company shall not request the Trustee to authenticate bonds of
any series under the Mortgage or to pay to the Company any cash deposited
with or received by the Trustee under the Mortgage (except cash deposited
with or received by the Trustee as and for a sinking fund for any series of
bonds which
33
have been or may hereafter be issued under the Mortgage), unless the
Company as a part of such request, and in addition to all other documents
required by the Mortgage to be delivered to the Trustee in connection with
such request, shall deliver to the Trustee a certificate or certificates,
signed by the President or the Executive Vice President or the Chief
Financial Officer or a Vice President and by the Treasurer or an Assistant
Treasurer of the Company
(i) showing, in case such request is for the authentication of
bonds pursuant to Section 5 of Article III of the Mortgage or for the
payment of cash pursuant to Section 6 of said Article III for or in
respect of expenditures made by the Company on or after January 1,
1951, for or on account of "permanent property":
(A) the total amount of expenditures (reduced to the
extent required, if any, by the provisions of clause (G) of this
subdivision (i)) made on or after January 1, 1951, for or on
account of "permanent property";
(B) the original cost of all properties, subject to the
lien of the Mortgage at any time on or after January 1, 1951,
replaced or retired on or after January 1, 1951, less, if any such
property shall have been released from the lien of the Mortgage
pursuant to any applicable provision of the Mortgage and to obtain
such release cash shall have been deposited with the Trustee, the
amount of such cash;
(C) an amount equal to the sum of (1) 133-1/3% of the
aggregate principal amount of bonds which have been authenticated
after January 1, 1951, pursuant to Section 5 of Article III of the
Mortgage for or on account of such expenditures made on or after
January 1, 1951, plus (2) 133-1/3% of the aggregate amount of
deposited cash withdrawn after January 1, 1951, pursuant to the
provisions of Section 6 of Article III of the Mortgage for or in
respect of such expenditures made on or after January 1, 1951, plus
(3) 133-1/3% of the aggregate amount of excess of the nature
described in subdivision (2) of Section 4 of Article III of the
Mortgage eliminated or compensated, as in said subdivision (2)
provided, for or in respect of expenditures of the Company for or
on account of "permanent property" during said period commencing
January 1, 1951;
(D) an amount equal to 100% of the aggregate amount of
moneys withdrawn by the Company pursuant to the provisions of
Article IX of the Mortgage on or after January 1, 1951, for or in
respect of expenditures made for or on account of "permanent
property";
(E) an amount equal to the excess, if any, of the
34
amount shown pursuant to clause (A) above over the sum of the
amounts shown pursuant to clauses (B), (C) and (D) above;
(F) that, for a period of twelve (12) consecutive calendar
months (to be selected by the Company) ending within ninety (90)
days next preceding such request, the "net earnings of the Company"
shall have been at least twice the amount of the annual interest
requirement of all "mortgage and prior lien debt of the Company";
(G) that the amount of the expenditure, if any, included
in the expenditures set forth in clause (A) above in respect of any
particular "permanent property", which at the time of its
acquisition was subject to the lien of any mortgage existing or
placed thereon at the time of its acquisition, does not exceed an
amount equal to the excess, if any, of the value (determined as
provided in the first paragraph of Section 8 of Article III of the
Mortgage) of such particular "permanent property" at the time of
acquisition of such property over 133-1/3% of the principal amount
of all indebtedness secured by all such mortgages existing or
placed on such particular property at the time of the acquisition
thereof, and that the amount of the expenditure, if any, included
in the expenditures set forth in clause (A) above in respect of any
particular "permanent property", which at the time of its
acquisition was not subject to any such lien, does not exceed an
amount equal to the value (determined as provided in the first
paragraph of Section 8 of Article III of the Mortgage) of such
particular "permanent property" at the time of acquisition of such
property;
(ii) showing, in case such request is for the authentication of
bonds pursuant to Section 4 of Article III of the Mortgage or for the
payment of cash pursuant to Section 6 of said Article III for or on
account of the pledge, acquisition, exchange, cancellation, payment,
refundment, redemption or discharge effected on or after January 1,
1951, at, before or after maturity of any "specified obligations"
mentioned in said Section 4, that at the time such "specified
obligations" became "specified obligations" or at some later date the
Company, pursuant to the provisions of Section 5 of Article III of the
Mortgage, as limited by the provisions of this Section I, shall have
obtained, or shall have had the right to obtain, the authentication
and delivery of bonds in any principal amount for or in respect of
expenditures made on or after January 1, 1951, for or on account of
"permanent property";
(iii) showing, in case such request shall be for the payment of
moneys pursuant to Article IX of the Mortgage for or in respect of
expenditures made for or on account of "permanent property", that none
of
35
such expenditures were made (1) prior to January 1, 1951, or (2) for
or on account of "permanent property" acquired more than six months
prior to the date when the Trustee received the moneys so to be paid
(or in case of moneys representing the proceeds of obligations,
referred to in said Article IX, the date when the Trustee received
such obligations); and
(iv) showing, in case such request is for the application of any
moneys pursuant to Article IX of the Mortgage to the payment,
redemption or purchase of any "specified obligations", that such
"specified obligations", if pledged under the Mortgage, would permit
the Company to obtain the authentication of bonds in a principal
amount equal to the principal amount of such "specified obligations"
pursuant to the provisions of Section 4 of Article III of the Mortgage
as limited by the provisions of this Section 1.
(d) In connection with any request for the authentication of bonds pursuant
to Section 5 of Article III of the Mortgage or the payment of cash pursuant to
Section 6 of said Article III of Mortgage, for or in respect of expenditures
made by the Company on or after January 1, 1951, the Company shall not obtain
the authentication of bonds of any series under the Mortgage or the payment of
any cash in excess of 75% of the amount shown in the certificate delivered as a
part of such request pursuant to clause (E) of subdivision (i) of subparagraph
(c) of this Section 1; and the Company shall not obtain the authentication of
any bonds or the payment of any cash deposited with or received by the Trustee
under the Mortgage otherwise than in accordance with the provisions of the
Mortgage as supplemented.
(e) Wherever used in this Supplemental Indenture
(i) "mortgage and prior lien debt of the Company", as of the date
of any request to the Trustee for the authentication of bonds or the
payment of cash, shall mean:
(A) all the bonds then outstanding under the Mortgage,
less the amount of any of such bonds which shall then be held by or
be delivered to the Trustee for cancellation under any of the
provisions of the Mortgage, and less the amount of any such bonds
for the payment or redemption of which the necessary moneys shall
have been deposited under the Mortgage with the Trustee to effect
such payment or redemption;
(B) the bonds then requested to be authenticated under the
Mortgage; and
(C) all mortgage indebtedness secured by a lien superior
to the lien of the Mortgage on any part of the properties and
assets of the
36
Company, except any such mortgage indebtedness the evidences of
which shall then be pledged with the Trustee under the provisions
of the Mortgage or pledged with the Trustee under any mortgage
constituting a lien superior to the lien of the Mortgage on any
part of the properties and assets of the Company, and except any
such mortgage indebtedness for the payment or redemption of which
the necessary moneys shall have been deposited with the trustee
under the mortgage securing the same to effect such payment or
redemption;
(ii) "net earnings of the Company" for any twelve (12) months'
period shall mean the amount remaining after deducting from the sum of
(A) the gross operating revenues of the Company for such
period derived from its property subject to the lien of the
Mortgage, including but not limited to revenues derived from
electrical energy, gas or steam purchased by the Company and resold
by it, and the net income derived by the Company from its
merchandising and jobbing operations; and
(B) other income of the Company for such period derived
from interest on bank balances and from current working capital
invested in unpledged obligations of the United States of America
or of any state or of any municipality or subdivision thereof, and
other currently earned income of the Company derived from the
ownership of securities, in the treasury of the Company and
unpledged, of operating electric, gas or steam companies (including
natural or mixed gas production, storage, transportation or
distribution companies) or from unpledged advances to such
companies any of the securities of which are so owned, the sum of
the following:
(C) operating expenses of the Company for such period,
including maintenance and repairs, rentals, taxes (except taxes
based upon net income), insurance and the cost of electrical
energy, gas or steam purchased for resale, but excepting expenses
in connection with operations, the net income only of which is
included in clause (A) of subdivision (ii) of this subparagraph
(e), and excepting all reserves or charges for amortization of debt
discount and expense; and
(D) an amount, if such period shall end with the close of
a calendar year, equal to the amount which the Company is required
by subparagraph (a) of this Section 1 to place, during or at the
close of such calendar year, to the credit of the "depreciation
reserve account", mentioned in said subparagraph (a) (all
determined without deduction for any charge made to the
"depreciation reserve account" permitted by clause (3) of the
proviso of subparagraph (a) of this Section 1), or, if such period
shall include parts of two (2) calendar years, then an
37
amount which shall be determined by (1) prorating, on a monthly
basis over the portion of the earlier year thus included, the
amount which the Company shall have been so required to credit to
the "depreciation reserve account" during or at the close of such
earlier year, and (2) prorating, on a monthly basis over the
portion of the later of said two (2) years thus included, the
amount which the Company would be required to credit to such
"depreciation reserve account" if such credit were placed to such
account at the close of such period;
provided, however, that the amount of other income of the Company,
referred to in clause (B) of subdivision (ii) of this subparagraph (e),
shall not exceed 10% of said net earnings; and income in the form of
dividends received by the Company upon stock of any class owned by it
shall be considered as currently earned under the provisions of said
clause (B) to the extent that during such period the earnings of the
paying company shall be sufficient for the payment of dividends upon all
stock of such class during such period; and income in the form of
interest received by the Company upon evidences of indebtedness of any
class owned by it shall be considered as currently earned under the
provisions of said clause (B) to the extent that during such period the
earnings of the paying company shall be available for the payment of the
interest accruing during such period upon all indebtedness of such
class, after deducting from such earnings all interest charges accruing
during such period upon obligations secured by prior liens; and, in case
any property owned by the Company at the date of the request to the
Trustee for the authentication of bonds or payment or withdrawal of cash
shall not have been owned by it during any part of any such period, or
shall have been owned by it during a part only of such period, then and
in every such case the net earnings (or net losses) of such property
(ascertained in like manner as above provided) during said period, or
during such part thereof as shall have preceded the acquisition of such
property by the Company, shall be considered and treated as net earnings
(or net losses) of the Company for such period, and shall be included in
(or, if a net loss, deducted in determining) such net earnings of the
Company;
(iii) "permanent property" shall mean any and all plants,
equipment, additions, improvements, betterments, facilities, or other
property of any kind (and includes "extensions" and "purchased
property" as those terms are used in the Mortgage) acquired through
construction, purchase, consolidation, exchange or otherwise, as and
for a part of the permanent or fixed investment for the business of
the Company and used or useful in connection with the generation and
conversion of electrical energy or in the manufacture of gas or steam
or in the distribution or transmission of electrical energy or gas or
steam in the territory in which the Company is now operating its
present properties, or in territory contiguous thereto, or in
territory capable of economic interconnection
38
therewith, but "permanent property" shall not include cash, accounts
or bills receivable, securities, supplies, fuel or other assets
ordinarily classed as quick assets, or leasehold estates;
(iv) "original cost" of property shall mean the original cost of
such property to the Company if ascertainable from its records or, if
such original cost is not ascertainable, the value of such property at
the time of its acquisition, such value to be determined by an
engineer or firm of engineers to be selected by the Company and to be
acceptable to the Trustee, and the Trustee under such circumstances
shall be furnished with a certificate of such value signed by such
engineer or firm of engineers.
(f) In connection with any request to the Trustee for the
authentication of bonds, pursuant to the provisions of Section 5 of Article
III of the Mortgage or the payment of cash pursuant to the provisions of
Section 6 of said Article III or the provisions of Article IX of the
Mortgage or the elimination or compensation of any excess of the nature
described in subdivision (2) of Section 4 of said Article III, for or on
account of expenditures for "permanent property", the Company shall furnish
to the Trustee, in addition to the certificates and other documents
required to be delivered by the provisions of the Mortgage and the
provisions of other subparagraphs of this Section 1, the following:
(i) An opinion of counsel (who may be counsel for the Company),
selected by the Company and satisfactory to the Trustee, stating that
the Company has acquired good title to the property for or on account
of the expenditures for which additional bonds are requested to be
authenticated and that such property is subject to the Mortgage as a
direct lien thereon, subject only to the lien of any mortgages or
easements existing or placed on any of such property at the time of
its acquisition, liens for taxes and assessments not due or, if due,
in the course of contest, judgments in the course of appeal or
otherwise in contest and secured by sufficient bond, liens arising out
of proceedings in court in the course of contest and undetermined
liens charges (if any) incidental to current construction; and
(ii) A certificate signed by the President or the Executive Vice
President or the Chief Financial Officer or a Vice President and also
by the Treasurer or an Assistant Treasurer of the Company certifying
that the property for or on account of the expenditures for which
bonds are requested to be authenticated or cash is requested to be
paid is "permanent property".
(g) The Company shall not hereafter issue any bonds under any
"underlying mortgage" as defined in Section 4 of Article III of the
Mortgage, or under any mortgage which could become such an "underlying
mortgage" upon compliance with clause (b) of the proviso of subdivision (2)
of said Section 4.
39
(h) The Company shall not request the Trustee to authenticate any
bonds under the provisions of Section 2 or Section 3 or Section 4 of
Article III of the Mortgage and shall not apply for the payment of cash
under Section 6 of said Article or under Article IX of the Mortgage (i) for
or on account of bonds of Series J deposited by the Company with the
Trustee in lieu of cash under the provisions of the sinking fund provided
for in the supplemental indenture, dated as of May 1, 1961, or for or on
account of bonds of Series J redeemed through the operation of said sinking
fund, or (ii) for or on account of bonds of Series K redeemed through the
operation of the sinking fund provided for in the supplemental indenture
dated as of July 15, 1966, or (iii) for or on account of bonds of Series L
redeemed through the operation of the sinking fund provided for in the
supplemental indenture dated as of August 15, 1967, or (iv) for or on
account of bonds of Series M redeemed through the operation of the sinking
fund provided for in the supplemental indenture dated as of September 15,
1970, or (v) for or on account of bonds of Series N redeemed through the
operation of the sinking fund provided for in the supplemental indenture
dated as of April 1, 1972, or (vi) for or on account of bonds of Series 0
redeemed through the operation of the sinking fund provided for in the
supplemental indenture dated as of July 15, 1973, or (vii) for or on
account of bonds of Series T redeemed through the operation of the sinking
fund provided for in the supplemental indenture dated as of August 15,
1980, or (viii) on account of any cancelled or uncancelled underlying bonds
(or any uncancelled underlying bonds deposited as collateral under Section
4 of Article III of the Mortgage) which shall have been deposited under the
provisions of the supplemental indenture, dated as of August 1, 1941, in
lieu of cash.
(i) In the event of the acquisition at any time by any federal, state
or municipal authority of all or substantially all of the income-producing
properties of the Company which are subject to the lien of the Mortgage,
the Company shall be deemed to have elected to redeem and to have requested
the Trustee to redeem all the bonds of all series at the respective
applicable redemption price or prices (together with accrued interest to
the date of redemption), without the payment of any premium, on a date
determined by the Trustee in its discretion to be the earliest practicable
redemption date after receipt by the Trustee of all cash which the Trustee
is entitled to receive in respect of such acquisition by such federal,
state or municipal authority. If the cash so received by the Trustee and
all other cash then held by the Trustee as such, except funds held in trust
for the benefit of the holders of particular bonds and coupons, is not
sufficient to effect the redemption of all the bonds of all series as
aforesaid and to pay all amounts owing to the Trustee under the Mortgage as
supplemented (including fees and expenses to be incurred by the Trustee in
connection with such redemption), the Company covenants and agrees that,
within five (5) days after receipt by the Trustee of all cash which the
Trustee is entitled to receive as aforesaid in respect of such acquisition,
the Company will deposit with the Trustee for that purpose cash in an
amount sufficient to make up such deficiency.
40
Upon receipt by the Trustee of moneys sufficient for said purposes, notice
of such redemption shall be given by the Trustee for and on behalf and in
the name of the Company. To the extent that such cash received, held and
deposited as aforesaid shall be required for the purpose of redeeming bonds
pursuant to this subparagraph (i), the Company shall be deemed to have
directed the Trustee to apply the same for the purpose, and the balance, if
any, after payment of all said amounts owing to the Trustee, shall be paid
to or upon the order of the Company.
(j) The Company shall promptly classify as "property replaced or
retired", for the purposes of clause (B) of subdivision (i) of subparagraph
(c) of this Section 1 during any period all property which has been
replaced or has permanently ceased to be used or useful in the business of
the Company, but the Company shall not, in making such classification, be
bound by determinations, rulings or orders made by regulatory authorities
for rate-making or other purposes.
(k) The Company shall not consolidate with or merge into any other
corporation or transfer or lease all or substantially all the mortgaged
property as an entirety to any other corporation, unless the corporation
resulting from such consolidation or the corporation into which the Company
shall have been merged or the corporation to which such transfer or lease
shall have been made shall, by an instrument executed and delivered to the
Trustee, assume the due and punctual payment of the principal of and
premium, if any, and interest on all the bonds of all series according to
their tenor at the time outstanding under the Mortgage and the due and
punctual performance and observance of all the covenants and conditions of
the Mortgage and all indentures supplemental thereto to be performed or
observed by the Company.
SECTION 2. The Company covenants and agrees that any and all property
hereafter acquired by the Company and any and all improvements, extensions,
betterments or additions to property of the Company, which by the Original
Mortgage or any indenture supplemental thereto are to become subject to the
Mortgage, immediately upon the acquisition thereof by the Company or upon such
improvements, extension, betterments, or addition being made, as the case may
be, and without any further conveyance, mortgage, assignment or act on the part
of the Company or the Trustee, or either of them shall become and be subject to
the lien of the Mortgage fully and completely as though owned by the Company at
the date of the execution of the Original Mortgage and at the date of the
Indenture dated the first day of March, 1928, mentioned in the second paragraph
of the recitals of this Supplemental Indenture and at the dates of the
supplemental indentures dated May 20, 1936, May 10, 1950, as of June 1, 1951, as
of August 15, 1967, as of September 15, 1970, as of March 1, 1985, as of April
1, 1993, as of December 1, 1993, as of December 1, 1993, as of June 1, 1995, as
of March 1, 2000, as of March 1, 2000, as of March 1, 2000, as of March 1, 2000
and as of February 1, 2003 respectively, mentioned in the fourth paragraph of
the recitals of this Supplemental Indenture, and at the date of this
Supplemental Indenture, and specifically described in the granting clauses of
the Original Mortgage or said Indenture or said
41
supplemental indentures, but the provisions of this Section 2 shall not limit
the generality of the provisions of Sections 12 and 13 of Article IV of the
Original Mortgage.
SECTION 3. The Company covenants and agrees that in the furtherance of,
but without limiting the generality of, the provisions of Sections 12 and 13 of
Article IV of the Mortgage or of Section 2 of this Article II, the Company will
furnish to the Trustee on November 1, 1944, and thereafter within sixty (60)
days after and as often as the Company shall have acquired, subsequent to
September 3, 1944, any additional land or lands or interest or interests in
land, or any new plant or plants, not included in any certificate theretofore
furnished pursuant to this Section 3, the aggregate cost of which shall equal or
exceed $500,000, and at such other times as thirty-six (36) months shall have
elapsed since the date of furnishing the last preceding certificate to the
Trustee pursuant to this Section 3, the following:
(a) a certificate, signed by the President or the Executive Vice
President or the Chief Financial Officer or a Vice President and by the
Treasurer or an Assistant Treasurer of the Company and dated as of a date
not more than sixty (60) days preceding the date as of which such
certificate is required to be filed pursuant to this Section 3, briefly
describing any additional land or interest in land and any new plant which
the Company may have acquired since the date of the most recent Certificate
furnished to the Trustee pursuant to this Section, or, in the case of the
first such certificate, since the date of the execution and delivery of the
Indenture dated the first day of March, 1928 mentioned in the second
paragraph of the recitals of this Supplemental Indenture, which is required
by the provisions of the Mortgage and this Supplemental Indenture to be
subjected to the lien of the Mortgage;
(b) the mortgages, deeds, covenants, assignments, transfers and
instruments of further assurance, if any, specified in the opinion of
counsel referred to in the following subparagraph (c); and
(c) an opinion of counsel, who may be counsel for the Company,
specifying the mortgages, deeds, covenants, assignments, transfers and
instruments of further assurance which will be sufficient to subject to the
direct lien of the Mortgage (so far as permitted by law) all the Company's
right, title and interest in and to the land and interest in land and any
plant described in said certificate, or stating that no such mortgage,
deed, conveyance, assignment, transfer or instrument of further assurance
is necessary for such purpose, and that, upon the recordation or filing or
registering, in the manner stated in such opinion, of the instruments so
specified, if any, and upon the recordation and filing and registering of
the Mortgage or any supplemental indenture in the manner stated in such
opinion, or without any such recordation or filing or registering if such
opinion shall so state, the Mortgage will (so far as permitted by law)
constitute a valid lien upon all the Company's right, title and interest in
and to such land, interest in land or plant as against all creditors and
subsequent purchasers, subject
42
only to the lien of any mortgages or easements existing or placed on such
property at the time of its acquisition by the Company, liens for taxes and
assessments not due, or, if due, in the course of appeal or otherwise in
contest, liens arising out of proceedings in court in the course of contest
and undetermined liens and charges (if any) incidental to current
construction.
For the purposes of this Section 3, any certificate heretofore or hereafter
delivered to the Trustee pursuant to Section 3 of Article III of Division B of
the supplemental indenture dated as of June 1, 1951, or pursuant to Section 3 of
Article II of the Supplemental Indenture dated as of July 1, 1954, or pursuant
to Section 3 of Article III of the supplemental indenture dated as of May 1,
1961, or pursuant to Section 3 of Article III of the supplemental indenture
dated as of July 15, 1966, or pursuant to Section 3 of Article III of the
supplemental indenture dated as of August 15, 1967, or pursuant to Section 3 of
Article III of the supplemental indenture dated as of September 15, 1970, or
pursuant to Section 3 of Article III of the supplemental indenture dated as of
April 1, 1972, or pursuant to Section 3 of Article III of the supplemental
indenture dated as of July 15, 1973, or pursuant to Section 3 of Article II of
the Supplemental Indenture dated as of October 1, 1973, or pursuant to Section 3
of Article II of the Supplemental Indenture dated as of October 1, 1974, or
pursuant to Section 3 of Article II of the Supplemental Indenture dated as of
December 1, 1974, or pursuant to Section 3 of Article II of the Supplemental
Indenture dated as of April 1, 1975, or pursuant to Section 3 of Article III of
the Supplemental Indenture dated as of August 15, 1980, or pursuant to Section 3
of Article II of the supplemental indenture dated as of June 1, 1984, or
pursuant to Section 3 of Article II of the supplemental indenture dated as of
June 1, 1984, or pursuant to Section 3 of Article II of the supplemental
indenture dated as of October 1, 1984, or pursuant to Section 3 of Article II of
the supplemental indenture dated as of March 1, 1985, or pursuant to Section 3
of Article II of the supplemental indenture dated as of March 1, 1985, or
pursuant to Section 3 of Article II of the supplemental indenture dated as of
March 1, 1985, or pursuant to Section 3 of Article II of the supplemental
indenture dated as of March 1, 1985, or pursuant to Section 3 of Article II of
the supplemental indenture dated as of May 1, 1990, or pursuant to Section 3 of
Article II of the supplemental indenture dated as of April 1, 1993, or pursuant
to Section 3 of Article II of the supplemental indenture dated as of December 1,
1993, or pursuant to Section 3 of Article II of the supplemental indenture dated
as of December 1, 1993, or pursuant to Section 3 of Article II of the
supplemental indenture dated as of June 1, 1995, or pursuant to Section 3 of
Article II of the supplemental indenture dated as of March 1, 2000, or pursuant
to Section 3 of Article II of the supplemental indenture dated as of March 1,
2000, or pursuant to Section 3 of Article II of the supplemental indenture dated
as of March 1, 2000, or pursuant to Section 3 of Article II of the supplemental
indenture dated as of March 1, 2000, or pursuant to Section 3 of Article II of
the supplemental indenture dated as of February 1, 2003, shall be deemed to have
been delivered in compliance with this Section 3.
SECTION 4. The Company covenants and agrees that, upon cancellation and
discharge of any "prior lien", the Company shall cause all cash or obligations
then held by the trustee or other holder of such prior lien, which were received
by such trustee or
43
other holder by reason of the release of, or which represent the proceeds of the
taking by eminent domain or any disposition of, or the proceeds of insurance on,
any of the properties at any time subject to the lien of the Mortgage (including
all proceeds of or substitutions for any thereof), to be paid to or deposited
and pledged with the Trustee, subject to any lien or charge prior to the lien of
the Mortgage, such cash to be held and paid over or applied by the Trustee, and
such obligations to be held and disposed of, as provided in Article IX of the
Mortgage; provided, however, that in lieu of taking or delivering to the Trustee
all or any part of such cash or obligations, the Company may deliver to the
Trustee a certificate of the trustee or such other holder of such prior lien,
stating that a specified amount thereof has been deposited with such trustee or
other holder pursuant to the requirements of such other prior lien, in which
case there shall also be delivered to the Trustee an opinion of counsel, who may
be counsel for the Company, stating that such deposit is required by such other
prior lien. The term "prior lien" as used in this Section 4 shall mean and
include any "underlying mortgage" and shall also mean and include any other lien
(except liens for taxes and assessments not due, or, if due, in the course of
appeal or otherwise in contest, liens arising out of proceedings in court in
course of contest and undetermined liens and charges, if any, incidental to
current construction) prior to the lien of the Mortgage upon property acquired
by the Company after the execution and delivery of the Indenture, dated the
first day of March, 1928, referred to in the second paragraph of the recitals of
this Supplemental Indenture, existing on said property or placed thereon to
secure unpaid portions of the purchase price, at the time of such acquisition.
ARTICLE III
MISCELLANEOUS
SECTION 1. The Trustee hereby accepts the trusts hereunder and agrees to
perform the same upon the terms and subject to the applicable provisions of the
Mortgage and the indentures supplemental thereto now in effect.
SECTION 2. This Supplemental Indenture is executed by the parties hereto
pursuant to the provisions of Article XVI of the Mortgage, and so long as any of
the bonds of Series LL are or shall be outstanding the terms and conditions of
this Supplemental Indenture shall be deemed to be a part of the terms and
conditions of the Mortgage for any and all purposes. The provisions of this
Supplemental Indenture shall be inapplicable and shall terminate and become void
and of no effect upon the payment or redemption of all of the bonds of Series LL
in accordance with the provisions of the Mortgage and of the bonds of Series LL.
SECTION 3. All covenants, conditions and provisions contained in this
Supplemental Indenture by or on behalf of the Company shall bind its successors
and assigns, whether so expressed or not, legally or equitably under or by
reason of this Supplemental Indenture.
44
SECTION 4. Although this Supplemental Indenture is dated as of February 1,
2003, it shall be effective only from the actual time of its execution and
delivery by the Company and the Trustee on the date indicated by their
respective acknowledgments hereto annexed.
This Supplemental Indenture may be simultaneously executed in any number of
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument entered into by the
parties hereto pursuant to the provisions of Article XVI of the Mortgage.
45
IN WITNESS WHEREOF, THE PEOPLES GAS LIGHT AND COKE COMPANY has caused this
instrument to be executed in its corporate name by its Chairman, President, the
Executive Vice President, the Chief Financial Officer or a Vice President, and
its corporate seal to be hereunto affixed and attested by its Secretary or an
Assistant Secretary, and U.S. Bank National Association, as Trustee under the
Mortgage, has caused this instrument to be executed in its corporate name by one
of its Vice Presidents and its corporate seal to be hereto affixed and attested
by one of its Trust Officers, all as of the day and year first above written.
THE PEOPLES GAS LIGHT AND COKE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Operating Officer
ATTEST:
/s/ ▇.▇. ▇▇▇▇▇▇
------------------------
▇.▇. ▇▇▇▇▇▇
Assistant Secretary
U.S. BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Vice President
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
----------------------
Vice President
46
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇, a Notary Public in and for said County and State aforesaid,
DO HEREBY CERTIFY that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the President and Chief Operating
Officer of The Peoples Gas Light and Coke Company, an Illinois corporation, and
▇▇▇▇ ▇. ▇▇▇▇▇▇, Assistant Secretary of said corporation, who are both personally
known to me to be the same persons whose names are subscribed to the foregoing
instrument as such President and Chief Operating Officer and Assistant
Secretary, respectively, and who are both personally known to me to be the
President and Chief Operating Officer and Assistant Secretary, respectively, of
said corporation, appeared before me this day in person and severally
acknowledged that they signed, sealed and delivered said instrument as their
free and voluntary act as such President and Chief Operating Officer and
Assistant Secretary, respectively, of said corporation, and as the free and
voluntary act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 14th day of February, 2003.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Notary Public
My commission expires on the 14th day of June, 2006
47
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
I, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a Notary Public in and for said County and State
aforesaid, DO HEREBY CERTIFY that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a Vice President of
U.S. Bank National Association, a corporation organized under the laws of the
United States of America, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇, a Vice President of said
corporation, who are both personally known to me to be the same persons whose
names are subscribed to the foregoing instrument as such Vice President and
Vice President, respectively, and who are both personally known to me to be a
Vice President and Vice President, respectively, of said corporation,
appeared before me this day in person and severally acknowledged that they
signed, sealed and delivered said instrument as their free and voluntary act as
Vice President and Vice President, respectively, of said corporation, and as
the free and voluntary act of said corporation, for the uses and purposes
therein set forth.
GIVEN under my hand and notarial seal this 19th day of February, 2003.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------
Notary Public
My commission expires January 31, 2005
48
SCHEDULE A
EASEMENTS AND OTHER INTERESTS IN LAND
1. All rights of way, easements, franchises, licenses, permits, privileges,
leases, leaseholds and other authority granted to the Company for the purpose of
constructing, installing, operating, using, maintaining, renewing, replacing or
relocating gas mains, pipelines, services and other facilities on, over or in
private property owned by others and situated in the County of Cook in the State
of Illinois, including, without limiting the generality of the foregoing, those
certain easements granted to the Company by the grantors hereinafter named and
filed for record and recorded as hereinafter set forth, to wit:
PERMANENT DATE
FILE DOCUMENT INDEX OF DATE
GRANTOR NUMBER NUMBER NUMBER INSTRUMENT RECORDED
------- ------ ---------- -------------- ---------- --------
City of Chicago 1686 0030175285 ▇▇-▇▇-▇▇▇-▇▇▇, 12/31/03 2/5/03
▇▇-▇▇-▇▇▇-▇▇▇,
▇▇-▇▇-▇▇▇-▇▇▇
49
