Univ.of ill. Library- 51 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY to THE UNION TRUST COMPANY, of Cleveland, Ohio, As Trustee. Urust Indenture Dated August 1, 1921 Seeuring 85,000,000 20- Year 7% Sinking Fund Gold Debenture Bonds. Interest Payable February 1st and August 1st. Digitized by the Internet Archive in 2017 with funding from University of Illinois Urbana-Champaign Alternates https://archive.org/details/clevelandelectriOOclev /u_c_ TABLE OF CONTENTS. PAGE Parties Recitals Form of bond Form of interest coupon — to February 1, 1932 Form of interest coupon — on and after February 1, 1932 Form of Trustee’s certificate Trust Clause ARTICLE I. Amount, denomination and issue numbers of bonds 7 Issue, authentication and delivery of bonds 7 Matured coupons to be cancelled 8 Signature of former officers 8 Covenant to pay taxes on issue of bonds 8 Temporary bonds 9 Mutilated, lost, stolen or destroyed bonds and coupons 9 Covenant to issue bonds only in accordance with provisions hereof 10 ARTICLE II. Covenant to pay principal and interest of bonds without deduction for taxes 10 Covenant to refund Pennsylvania tax 10 Covenant to keep agency in New York City for payment of principal and interest 11 Notices and demands, how given 11 Registration of bonds as to principal 12 Paid bonds and coupons to be cancelled 12 ARTICLE III. Covenant as to sinking fund 12 Semi-annual payments 13 Delivery of bonds in lieu of cash payments 13 Purchase of bonds at public or private sale 13 Return of unexpended balances to Company 14 Bonds purchased for Sinking Fund to be in full force hereunder .... 15 ARTICLE IV. Company may retire bonds on any interest day 16 Retirement prices 16 Retirement, how made. Election of Company 17 Notice of retirement 17 Payment of retirement price 18 this Indenture as executed, but have been added for convenience in refer- ence. 11 PAGE Notice of retirement of registered bonds 18 Bonds called for retirement not to draw interest thereafter 18 Bonds called for retirement not thereafter deemed outstanding .... 19 Company to pay expenses of notices, ete 19 ARTICLE V. Covenants of Company: 19 Truth of recitals 19 To furnish financial statements to Trustee 19 To allow Trustee to examine books and property 20 To comply with laws of State of Ohio 20 To maintain corporate existence 20 To pay taxes, assessments and other charges 21 Company may contest validity of taxes 21 To keep property in repair and insured 21 To perform covenants of prior Mortgages and Indentures 21 Not to issue other bonds, etc., unless net earnings are 1% times interest charges 22 “Funded debt” defined 22 “Net earnings” defined 22 Refunding permitted 23 Not to issue bonds, etc., except for refunding or 80% of new property 23 To comply with provisions of Article Fourth of Articles of In- corporation 25 To deposit $1,812,722.96 with Trustee 25 How deposited cash can be withdrawn 25 ARTICLE VI. Income to be paid to Company 26 Events of default: 26 Non-payment of interest or sinking fund 26 Failure to perform other covenants 27 Default under prior Mortgages or Indentures 27 Bankruptcy, etc., of Company 27 Unsatisfied judgment against Company during default 27 Attachment, etc., of Company’s property 27 In case of default Trustee may declare principal of bonds due 28 Trustee may waive default 28 On default Trustee may institute proceedings 29 And prosecute to final judgment 29 Application of moneys recovered 29 Company will not plead any stay or extension law 30 On discontinuance of proceedings parties to be restored to former position 30 Default not waived by delay or previous waiver 30 Remedies cumulative 30 No suit by bondholders without prior request and indemnity to Trustee 31 Indenture for exclusive benefit of parties and bondholders 31 ARTICLE VII. Resignation or removal of Trustee 32 Appointment of successor 32 Powers of pew trustee 33 Merger or consolidation of Trustee 33 1U ARTICLE VIII. PAGE Execution of instruments by bondholders 34 Proof of execution 34 Proof of ownership of bonds 35 Persons who may be treated as absolute owners: 35 Bearer bonds and coupons 35 Registered bonds 35 Action of owner to bind future owners 36 ARTICLE IX. Acceptance of trusts hereunder 36 Rights, duties and immunities of Trustee 36 ARTICLE X. Defeasance clause 39 ARTICLE XI. No recourse to stockholders, officers or directors 40 ARTICLE XII. Consolidation or merger of Company or transfer of essential part of its property 41 ARTICLE XIII. Definition of “Trustee” and “Company” 41 Definition of other terms 41 ARTICLE XIV. Execution of Indenture in counterparts 42 Indenture to bind successors and assigns 42 Testimonium 42 Signatures 43 Acknowledgments 44 Gbi0 1nt>enture f made as of the first day ofp art i es- August, one thousand nine hundred and twenty-one, be- tween The Cleveland Electric Illuminating Company (hereinafter sometimes called the “Company”), a cor- poration organized and existing under and by virtue of the laws of the State of Ohio, and having a legal resi- dence and principal office and place of business at No. 75 Public Square, in the City of Cleveland, County of Cuyahoga and State of Ohio, party of the first part; and The Union Trust Company (hereinafter sometimes called the “Trustee”), a cor- poration organized and existing under and by virtue of the laws of the State of Ohio, and having a legal resi- dence and principal office and place of business at No. 814 Euclid Avenue, in the City of Cleveland, County of Cuyahoga, and State of Ohio, party of the second part; Whereas, for the lawful purposes of its incorpora- R eei t a i a . tion, the Company has found it necessary and to its best interest to borrow money, and to that end to make and issue a series of its coupon bonds, to be known as its “20-Year 7% Sinking Fund Cold Debenture Bonds” (hereinafter sometimes called the “bonds”), of the de- nomination of one thousand dollars ($1,000) each, to an aggregate principal amount of five million dollars, to be dated August 1st, 1921, and to mature August 1st, 1941 ; and Whereas, at a meeting of the Board of Directors of the Company, duly called and held, it was determined, by resolutions then duly adopted in that behalf, that, for the purposes aforesaid, the Company make and issue its bonds, as aforesaid, to the said aggregate amount of five million dollars, and secure the payment thereof by 2 the execution and delivery of a trust indenture in the form hereof, that said trust indenture be executed on behalf and in the name of the Company by the President or Vice-President, for the time being, thereof, and its corporate seal affixed duly attested by the Secretary or Assistant Secretary, for the time being, thereof; that said bonds be executed on behalf and in the name of the Company by the President or Vice-President, for the time being, thereof, and its corporate seal affixed duly attested by the Secretary or Assistant Secretary, for the time being, thereof ; that the interest coupons on said bonds be authenticated by the fac-simile signature of the Treasurer, for the time being, thereof; and that said bonds, the interest coupons pertaining to the bonds, and the certificate of the Trustee to be endorsed upon the bonds, be substantially of the following tenor and form, to wit: [form of bond] UNITED STATES OF AMERICA State of Ohio Form of bond. No $ 1 , 000 . THE CLEVELAND ELECTRIC ILLUMINATING COMPANY 20-Year 7% Sinking Fund Gold Debenture Bond Due August 1st, 1941 For value received, The Cleveland Electric Illumi- nating Company, hereinafter termed the “Company,” a corporation of the State of Ohio, promises to pay to the. bearer, or, if this bond be registered, to the registered owner hereof, One Thousand Dollars, in gold coin of the United States of America of or equal to the present standard of weight and fineness, at the principal office of The Union Trust Company, in the City of Cleveland, Ohio, or, at the option of the holder, at the office of 3 Dillon, Read & Co. or other agency of the Com- pany in the Borough of Manhattan of The City of New York, N. Y., on the first day of August, 1941, un- less before that time this bond shall be retired, and to pay interest thereon, until said principal sum is paid, at the rate of seven per cent, per annum, in like gold coin, semi-annually on the first days of February and August in each year, at said office or agency, upon presentation and surrender of the annexed interest cou- pons as they severally mature. All payments both of principal and interest upon this bond shall be made without deduction for any taxes, assessments, govern- mental or other charges (except estate or inheritance taxes and such part of any Federal income tax as shall be in excess of two per cent.) which the Company or the Trustee hereinafter mentioned may be required or per- mitted to pay thereon or to retain therefrom under any present or future law of the United States of America, or of any State, County, Municipality or other taxing authority therein, the Company hereby agreeing to pay all such taxes, assessments and charges. This bond is one of a duly authorized issue of cou- pon bonds of the Company, known as its 20-Year 7% Sinking Fund Gold Debenture Bonds, numbered consecu- tively from 1 to 5,000, both inclusive, of the de- nomination of $1,000 each, issued and to be issued, but not to exceed at any time the aggregate outstanding principal sum of Five Million Dollars ($5,000,000) face value thereof ; all of which bonds are of like date, tenor and effect. Each and all of said bonds are issued or to be issued pursuant to, and the payment of the principal thereof and of the interest thereon, without preference, priority or discrimination on account of the time of issue thereof or otherwise, is equally and ratably secured by, a certain Trust Indenture bearing date as of the first day of August, 1921, duly made, executed and delivered by the Company to The Union Trust Company, of Cleve- 4 land, Ohio, as Trustee, to which indenture reference is hereby made for a statement of the nature and extent of the rights thereunder of the holders of the bonds. This bond is entitled to the benefits of a sinking fund as in said indenture provided. On and after August 1, 1931, all or any part of the bonds of this issue may be retired by the Company, on any interest date, upon thirty days’ published notice, in the manner specified in said indenture, at the price of 105 and accrued interest for the first year, to and including February 1, 1932, and decreasing of 1% for each year thereafter. In case default he made in the payment of interest on any of the said bonds, or in any sinking fund payment, or in respect of any other condition, covenant or agree- ment in said bonds or in said indenture contained, the principal of all of said bonds may forthwith become due and payable as provided in said indenture. This bond may be registered in the name of the owner, as to the payment of the principal thereof, at the princi- pal office of the Trustee, and when so registered a certifi- cate of such registration shall be endorsed hereon. Upon such registration, only such registered owner, or the legal representatives of such owner, shall be entitled to receive the principal hereof, and no transfer shall be valid un- less made at said office by the registered owner hereof in person or by his duly authorized attorney and similar- ly noted hereon. This bond, may, however, be again made transferable by delivery, by registering the same at the aforesaid office to bearer and having the certificate of such registration endorsed hereon, and this bond shall be subject to successive registrations in the name of the owner or to bearer, as aforesaid. No such registration shall affect the negotiability of the coupons by delivery thereof. No owner or holder of this bond shall assert against any stockholder, officer or director of the Company any personal liability with respect to this bond or the cou- 5 pons thereto belonging in any manner whatsoever, it being expressly agreed that any and all liability, either at common law or in equity or by statute, of every such stockholder, officer and director, as such, is hereby waived and released as a condition of and consideration for the issue and delivery of this bond. This bond shall not be valid or obligatory for any pur- pose unless and until authenticated by the certificate, en- dorsed hereon, of the Trustee under said indenture. In witness whereof, The Cleveland Electric Illuminat- ing Company has caused this bond to be signed by its President or Vice-President, and its corporate seal to be hereunto affixed and attested by its Secretary or As- sistant Secretary, and has caused the attached interest coupons to be authenticated by the fac-simile signature of its Treasurer, all as of the first day of August, 1921. The Cleveland Electric Illuminating Company, Attest: By President. Secretary. [form of coupon for interest maturing FEBRUARY 1st, 1932.] $35.00 No. Form of interest PRIOR TO coupon : — to Febru- ary 1, 1932. On the first day of , 19 .... , The Cleveland Electric Illuminating Company will pay to the bearer, at its agency in The City of New York or at the principal office of The Union Trust Com- pany in the City of Cleveland, without deduction for taxes (except estate or inheritance taxes and Federal income taxes in excess of 2%), thirty- five dollars in gold coin of the United States of 6 — on and after February 1932. Form of Trustee ’s Certificate. America, being six months’ interesit then due on its 20-Year 7% Sinking Fund Gold Debenture Bond, No , dated August 1, 1921. [FORM OF COUPON FOR INTEREST MATURING ON AND AFTER FEBRUARY 1st, 1932.] $35.00 No On the first day of , 19 , The Cleveland Electric Illuminating Company will pay to the bearer, at its agency in The City of New York or at the principal office of The Union Trust Company in the City of Cleveland, without deduction for taxes (ex- cept estate or inheritance taxes and Federal income taxes in excess of 2%), thirty-five dollars in gold coin of the United States of America, being six months’ interest then due on its 20-Year 7% Sinking Fund Gold Debenture Bond, No , dated August 1, 1921, unless such bond shall have been called for previous retirement. Treasurer. [form of trustee’s certificate.] This bond is one of the bonds described in the within mentioned indenture. The Union Trust Company, Trustee. By and Whereas, all requirements of law have been duly com- plied with to make this Indenture and the bonds the valid and subsisting agreement and obligations of the Com- pany; 7 NOW, THEREFORE, THIS INDENTURE WITNESSETH, that for Trust clause. and in consideration of the premises and of the purchase and acceptance of the bonds by the holders thereof, and of the sum of one dollar, lawful money of the United States, by each party to the other in hand paid at or before the ensealing and delivery of these presents, the receipt whereof is hereby severally acknowledged, and in order equally and ratably to secure the due and punctual payment of the principal and interest of all the bonds issued hereunder and at any time out- standing, according to their tenor and effect, without preference or priority of any bond or bonds over others by reason of a difference in time of actual issuance or otherwise, it is covenanted and agreed as follows: ARTICLE I. Section 1. The amount of bonds which may be issued Amount, de- under this Indenture shall not exceed at any time the n01 l li f ation aggregate outstanding principal sum of five million numbers of dollars face value thereof, and all such bonds and the bon ' ls ' interest coupons at any time outstanding shall in all re- spects be equally and ratably secured hereby, without any preference, priority or discrimination from any cause. The said bonds shall be consecutively numbered from 1 to 5,000, both inclusive, and shall be for the princi- pal sum of one thousand dollars each. Section 2. Upon the execution and delivery of this issue, Indenture, the Company may forthwith execute and de-tio^anT liver to the Trustee, and the Trustee shall thereupon delivery of . _ . bonds. authenticate and deliver to the Company, or upon its written order, all of the bonds authorized to be issued hereunder, with all unmatured coupons thereto attached. Such order shall be executed in the name and on be- half of the Company by either the President, a Vice- President, the Secretary, or the Treasurer, for the time 8 being thereof. No bond shall be deemed valid or issued or be secured hereby unless there shall be endorsed thereon the certificate of the Trustee, substantially in the form hereinbefore recited, that it is one of the bonds (or temporary bonds) herein described. Such authen- tication by the Trustee endorsed upon any such bond executed on behalf of the Company shall be conclusive Matured evidence that the bond so authenticated has been duly be" canceled, issued hereunder. All coupons maturing before the de- livery of the bonds to the Company shall be cut off and cancelled by the Trustee before such delivery. Signatures of former officers. Section 3. In case the officer or officers of the Com- pany who shall have signed and sealed any of the bonds, or whose fac-simile signature shall have been attached to any of the coupons, shall cease to be such officer or offi- cers before the bonds so signed and sealed shall have been actually authenticated and delivered by the Trustee, such bond or bonds may nevertheless be issued, authenti- cated and delivered as though the person or persons who shall have signed and sealed such bonds, or whose fac- simile signature shall have been attached to any of the coupons, had not ceased to be such officer or officers. Covenant to Section 4. The Company covenants that upon the issue L ay i 8 r 8 of of each and every bond hereby secured it shall and will bonds. p a y a n such United States Internal Revenue and other taxes as may be imposed by any law of the United States of America 'or of the State of Ohio or of the State of New York then in force applicable to the issue of such bond, and that as evidence of such payment it will cause to be affixed to each bond issued hereunder or to this Inden- ture, and duly cancelled, all such Internal Revenue and other stamps, and that it will cause to be endorsed or stamped upon each such bond and upon this Indenture such statement or recital, as shall be necessary to com- ply with any and every such law then in force. 9 Section 5. Until the definitive bonds to be issued Temporary under and secured by this Indenture are ready for de- livery, the Company may execute, and upon its request the Trustee shall authenticate and deliver, in lieu of such definitive bonds, temporary printed or typewritten bonds, or a single temporary printed or typewritten bond, without coupons, of substantially the tenor of the defini- tive bonds to be issued hereunder, but provision for the registration thereof may be omitted, and interest on such temporary bonds, when and as payable, shall be paid and endorsed thereon. Such temporary bonds shall there- after be exchangeable by the holder or holders thereof, at the principal office of the Trustee, for the definitive bonds secured and to be issued hereunder, and shall be so exchanged when and so soon as the definitive bonds can be prepared and are ready for delivery. Upon the surrender of such temporary bonds for exchange the Company shall execute, and upon the cancellation of such temporary bonds the Trustee shall authenticate and deliver in ex- change therefor, a definitive bond or definitive bonds of the same face amount as the temporary bond or bonds surrendered. Until so exchanged the temporary bonds shall be entitled to and shall have the same rights, reme- dies and securities hereunder, so far as applicable, as the definitive bonds to be issued hereunder. All expenses in connection with the preparation of the said definitive bonds and the exchange of temporary bonds therefor shall be borne by the Company. Section 6. In case any bond or the coupons thereto Mutilated, appertaining shall become mutilated or be lost, stolen, or ^’destroyed destroyed, the Company, in its discretion, may issue, and bonds and thereupon the Trustee shall authenticate and deliver, a coupons- new bond of like tenor and date, bearing the same issue number as the one mutilated, lost, stolen or destroyed, in exchange and substitution for, and upon cancellation of, the mutilated bond or coupons, or in lieu of and substitu- 10 tion for the same, if lost, stolen or destroyed. In case of loss, theft, or destruction, the applicant for a substitut- ed bond or coupons shall furnish to the Company and the Trustee evidence of the loss, theft, or destruction of such bond or coupons so lost, stolen, or destroyed, which evi- dence must be satisfactory to the Company and the Trus- tee in their discretion ; and the said applicant must also furnish indemnity satisfactory to both of them in their discretion. Covenant to Section 7. The Company will not issue, or permit to LTiy b° n< ac- i ssue( l, an y bonds hereby secured in any manner other cordance than in accordance with the provisions of this Indenture, slons hereof. an d the agreements in that behalf herein contained and the requirements of law, and it will not negotiate, sell or dispose of any of the bonds save in accordance with the requirements of law. ARTICLE II. Covenant to Section 1. The Company shall and will pay the prin- and^in- °ip a l and interest of the bonds, and of each and every terest of bonds with- out deduc- tion for taxes. one thereof, duly and punctually according to the terms thereof and of this Indenture, without deduction from either said principal or interest for any taxes, assess- ments, or governmental or other charges (except estate or inheritance taxes and such part of any Federal income tax as shall be in excess of two per cent.) which the Com- pany or the Trustee may be required or permitted to pay thereon or to retain therefrom under or by reason of any present or future law of the United States of America, or of any state, county, municipality or other taxing authority therein, the Company hereby agreeing to pay all such taxes, assessments and charges. Covenant to refund Pennsyl- vania tax. Section 2. The Company shall and will reimburse to the holder of any bond issued hereunder, when paid by or on behalf of said holder, all taxes (other than succession 11 and inheritance taxes) assessed by the State of Pennsyl- vania, or any subdivision thereof, upon such bond or the interest thereon, or upon said holder as a resident of said State, by reason of the ownership thereof, upon a duly verified request for such reimbursement, stating the issue number of said bond and setting forth the owner’s place of residence and the fact of own- ership at the date when such tax was assessed and that such tax was assessed upon and paid by or for ac- count of said holder as a resident of the State of Pennsyl- vania, owning said bond. Such request shall be made to the Trustee, hereby constituted the agent of the Com- pany in that behalf, in writing at its principal office in the City of Cleveland, Ohio, within the period of ninety days from the date of each and every payment of such tax by said holder. The Company shall not be liable to reimburse said holder for any tax un- less such request be made within such period, and it shall in no event be liable to reimburse said holder for any interest or penalty assessed upon or paid in addition to the amount of said tax as originally assessed. Pro- vided, further, that the maximum liability of the Com- pany under this section in respect of any bond and/or the interest thereon shall not in any year exceed a sum equal to four-tenths of one per cent, of the principal amount of the bond. Section 3. The Company covenants and agrees that Covenant to it will keep an agency in the Borough of Manhattan of Thejj^P ag y“ c £ City of New York, N. Y., for the payment of the prin- City for pay- cipal and interest of the bonds, and at the option of the™^”^ bondholder said principal and interest shall be payable and interest, at said New York agency or at the principal office of the Trustee. If the company fails to keep such agency, the principal and interest of the bonds shall be payable at the said office of the Trustee. Any notice or demand by any Notices and bondholder upon the Company shall be due and suffi how^iven. 12 cient notice or demand for each and every purpose here- under if made either at said New York agency or at the principal office of the Trustee. Any notice or demand which by any provision of this Indenture is required or provided to be given or served by the Trustee on the Company, shall be deemed to have been sufficiently given and served, for all purposes, by being deposited, postage prepaid, in a post-office letter box in the City of Cleveland, Ohio, addressed as follows : The Cleveland Electric Illuminat- ing Company, Cleveland, Ohio. Registration Section 4. The Company covenants and agrees that it to principal 8 will keep books for the registering of the bonds, as to the payment of the principal thereof, at the principal office of the Trustee in the City of Cleveland, and that it will, at such office and under such reasonable regulations as it may prescribe, register any of the bonds presented by any bondholder for registration free of expense to such hold- er. Such registration shall be noted on the bond and shall be subject to each and every of the provisions con- tained in the form of bond hereinbefore set forth. The Trustee is hereby appointed the bond registrar of the Company for all purposes of this section. Paid bonds Section 5. All bonds and coupons when paid, whether and coupons ma t U rity or upon retirement thereof or otherwise here- to be can- J ^ ceiled. under, shall forthwith be duly cancelled, and no bond or coupon under this Indenture shall in any event be issued in the place thereof or in substitution therefor or in suc- cession thereto. ARTICLE III. Covenant as Section 1. The Company covenants and agrees that in fund Dking ca l en dar year 1922 and in each and every calendar year thereafter, until the principal and interest of the bonds hereby secured and at any time issued hereunder shall have been fully paid or the moneys to pay or retire 13 the same shall, as hereinafter provided, have been deposit- ed with the Trustee, the Company will set aside and pay to some one or more hanks and trust companies do- ing business in the Borough of Manhattan of The City of New York, and/or in the City of Cleveland, Ohio, in cash, to be held by such depositaries as and for ad- ditional security for the bonds hereunder, the sum of One hundred and twenty-five thousand Dollars ($125,000) per annum. Such sum shall be paid semi-annually, in semi-annual equal instalments of Sixty-two thousand five hundred payinents - Dollars ($62,500) each, on or before the! 1st day of April and the 1st day of October in each year. Each such semi-annual payment is hereinafter sometimes called a “sinking fund payment.” The Company will within fif- teen days after the making of each sinking fund payment file with the Trustee written evidence of the receipt there- of by such depositary or depositaries. In lieu of any such cash sinking fund payment, or any Delivery of part thereof, the Company shall have the right to deliver ^°* ds of m eash to the Trustee bonds of this issue at the face value there- payments, of. Provided, however, that the bonds so delivered to the Trustee shall have been purchased or otherwise ac- quired by the Company within the six calendar months immediately preceding the due date of the cash sinking fund payment in lieu of which or of any part of which said bonds are delivered. All bonds so delivered to the Trustee shall be accompanied by a certificate, duly veri- fied by the President or a Vice-President and the Treas- urer or an Assistant Treasurer of the Company, specify- ing the issue numbers of said bonds and the date or re- spective dates on which said bonds were purchased or ac- quired by the Company. Section 2. The moneys thus set aside and paid by the Purchase of Company shall constitute a Sinking Fund and shall be public ^r applied by the Company in the purchase of bonds issued private sale, and outstanding hereunder at a price for each bond not exceeding the face value of said bond and the interest accrued thereon to the date of purchase. 14 Return of unexpended balances to Company. The amount of the accrued interest upon any such pur- chase shall not, however, be paid out of the Sinking’ Fund but shall be supplied by the Company at the time of the purchase. Such purchase of bonds may he made by the Company at any broker’s board or at public or private sale as the Board of Directors of the Company or the Executive Committee of said Board may from time to time determine, and it may employ for such purpose bankers, brokers or other agents, in its discretion. From time to time after any such sinking fund payment date the Company shall, with all reasonable despatch, de- liver to the Trustee bonds of this issue so purchased by it, together with a statement duly verified by the President or a Vice-President or the Treasurer of the Company specifying the issue numbers and aggregate principal amount of the bonds so purchased and de- livered by it, and the price paid by the Company therefor. Section 3. If, at the expiration of ninety days next ensuing the date upon which each such sinking fund payment was due, the Company shall have been unable to purchase as aforesaid, at a price not exceeding the face value thereof and the ac- crued interest thereon, sufficient bonds of this is- sue to exhaust the amount of the sinking fund payment so made, the Company shall make a certificate to that effect specifying the amount of bonds purchased during said ninety day period, the price paid therefor, and the extent to which such purchases are insufficient to exhaust the amount of the sinking fund payment. Such certificate shall be duly verified by the President or a Vice-President and the Treasurer or an Assistant Treasurer of the Company and shall be filed with the Trustee within the fifteen days next ensuing the close of said ninety day period. Thereupon the Trustee, un- less it shall desire a period of not exceeding fifteen days within which to make independent inquiry into the 15 facts as hereinafter permitted, shall forthwith con- sent in writing that the Company apply for its gen- eral corporate purposes the unexpended balance then re- maining in the Sinking Fund; and upon receipt of such consent the Company may so apply said balance in its discretion. However, if such balance amount to only one thousand dollars or less, the Company shall not apply it to general purposes but shall carry it over and add it to the next sinking fund payment. Any certificate thus filed with the Trustee may be treated by the Trustee as full and conclu- sive evidence of the facts therein set forth, and the Trustee shall be fully protected in acting in reliance upon any such certificate. Nevertheless, the Trustee may in its discretion make other or further inquiry into the facts and shall be fully protected in anything it may do or not do in reliance upon such independent investigation. Should such investigation disclose that bonds hereunder may be bought at not exceeding the said price, the Trus- tee in its discretion may direct that the Company apply the balance in the Sinking Fund in the purchase of bonds hereunder at not exceeding the face value thereof and the accrued interest thereon to the date of purchase, and thereupon the Company shall forthwith so apply said balance, and supply the amount of any accrued interest. However, should the Trustee not give such direction with- in fifteen days after receipt by it of the certificate from the Company, the Company shall be entitled to apply the balance in the Sinking Fund, if the same be in excess of one thousand dollars, for its general corporate pur- poses. Section 4 . All bonds so purchased and/or delivered to Bomls pur . the Trustee for account of the Sinking Fund shall be in phased for negotiable form and in full force and effect as bonds issu- Fund to be ed and outstanding hereunder, and all unmatured coupons herein, den' ' pertaining to said bonds, shall be attached thereto. Upon receipt of said bonds by the Trustee the same shall forth- 16 with be duly cancelled together with the coupons per- taining thereto. Such bonds shall cease to draw interest, shall not thereafter be deemed to be outstanding for anv purpose hereunder, and no bond or coupon under this Indenture shall in any event be issued in the place there- of or in substitution therefor or in succession thereto. ARTICLE IV. Company Section 1. On and after August 1st, 1931, the Com- bonds^on 6 P an y shall have the right to retire, on any semi-annual any interest interest date, all or any part of the bonds then out- standing at the following prices for each bond: Retirement If such retirement be made as of August 1st, 1931, prmes. ()r February 1st, 1932, at one hundred and five per centum (105%) of the face value thereof and the accrued in- terest thereon. If such retirement be made as of August 1st, 1932, or February 1st, 1933, at one hundred and four and one- half per centum (1041/2%) of the face value thereof and the accrued interest thereon. If such retirement be made as of August 1st, 1933, or February 1st, 1934, at one hundred and four per centum (104%) of the face value thereof and the ac- crued interest thereon. If such retirement be made as of August 1st, 1934, or February 1st, 1935, at one hundred and three and one-half per centum (103i/ 2 %) of the face value there- of and the accrued interest thereon. If such retirement be made as of August 1st, 1935, or February 1st, *1936, at one hundred and three per centum (103%) of the face value thereof and the ac- crued interest thereon. If such retirement be made as of August 1st, 1936, or February 1st, 1937, at one hundred and two and one- half per centum (102*4%) of the face value thereof and the accrued interest thereon. If such retirement be made as of August 1st, 1937 17 or February 1st, 1938, at one hundred and two per cen- tum (102%) of the face value thereof and the accrued interest thereon. If such retirement be made as of August 1st, 1938, or February 1st, 1939, at one hundred and one and one- half per centum (101%%) of the face value thereof and the accrued interest thereon. If such retirement be made as of August 1st, 1939, or February 1st, 1940, at one hundred and one per cen- tum (101%) of the face value thereof and the ac- crued interest thereon. If such retirement be made as of August 1st, 1940, or February 1st, 1941, at one hundred and one-lialf per centum (100;%%) of the face value thereof and the ac- crued interest thereon. Section 2. Whenever and as often as the Company Retirement, shall elect so to retire any of the bonds, the Board of Directors of the Company shall adopt a resolution setting Company, forth the election of the Company to retire bonds here- under, the amount of the bonds so to be retired, and the in- terest day as of which such retirement is to be made, and shall, not less than sixty days nor more than ninety days prior to the interest day so designated, deliver to the Trustee a copy of such resolution duly authenti- cated by the Secretary or an Assistant Secretary of the Company under its corporate seal. If such proposed retirement shall be of less than all of the outstanding bonds, the Trustee shall thereupon immediately draw by lot, from the total number of the bonds then out- standing, the amount of bonds which the Company shall Notice of have so elected to retire. Notice of the retirement of retirement ‘ the bonds, as aforesaid, the retirement price, and, if such retirement be of less than all of the outstanding bonds, the issue numbers of the bonds so drawn for retirement, shall thereupon be published by the Trustee in a daily news- paper of general circulation published in the Borough of 18 Payment of retirement price. Manhattan of The City of New York, and in a daily news- paper of general circulation published in the City of Cleveland, at least once a week for four successive weeks beginning not less than thirty days before such interest day. If the Company shall so elect to retire bonds here- under it shall at least five days before the retirement date specified in said notice, pay to the Trustee for each bond so to be retired a sum equal to the retirement price here- inbefore specified, including the interest on such bond in full to the semi-annual interest day upon which such retirement is to be made, and thereupon, provided such notice by publication has been given and the amount for the retirement of said bonds has been so paid to the Trustee and remains available for the retirement thereof, the interest on the bonds so designated shall cease from such interest day, whether the said bonds be presented for retirement or not, and the coupons representing the interest on said bonds thereafter to accrue shall from that date be void and of no effect, and the Company shall not thenceforth be liable for the payment of any of the said interest. Notice of Section 3. In case any bond drawn for retirement of^registered P ursuan t the provisions of Section 2 of this Article bonds. is registered, a copy of the notice of retirement shall be mailed by the Trustee to the registered owner of such bond at his last registered post office address at least thirty days prior to the day upon which such retirement is to be made. Such notice by mail shall not, however, be a condition precedent to such retirement nor shall failure to give such notice constitute a default hereunder. Bonds called Section 4. If any bond called for retirement is not for retire- presen ted for retirement at the time and place specified ment not to 1 A A draw inter- in the notice of retirement thereof, the Trustee shall after. 1 '" ° credit to such bond the retirement price thereof and the 19 interest accrued thereon to the date of retirement and shall pay over the sum so credited to such bond to the holder or registered owner thereof upon surrender of said bond with all the coupons thereunto belonging maturing on and after, said retirement date. The sum so credited to bonds which have not been presented for retirement shall not bear interest, and the holders of such bonds shall thereafter look only to the sum on deposit with the Trustee to the credit of such bonds for the payment thereof. Section 5. If any bond shall have been called for® 0,Kls . caJled •• ... , ^ 0r re ^ lre " retirement pursuant to the provisions of this Article andment not if, on or before the date designated for such retirement, ae^ed^out- there shall have been paid to the Trustee the amount for standing, the retirement thereof, then, even though such bond shall not have been presented for retirement, it shall not there- after be deemed to be outstanding for any purpose here- under, except to receive from the Trustee payment of the sum so deposited with the Trustee for the principal thereof and the premium thereon and the interest thereon to the date designated in the notice of retirement. Section 6. The expenses of any and all advertisements Company to and publication and service of notice under the provi- of y notmes^ CS sions of this Article shall be paid by the Company. etc - ARTICLE V. The Company covenants and agrees as follows: Covenants of Company: Section 1. That the recitals of facts and the state- - 'V. u t h of recitals; ments contained herein and in the bonds herein provided for are true. Section 2. That it will from time to time, on the de-— to furnish mand of the Trustee, furnish the Trustee with due and statements satisfactory proof of the amount of any and all interest 10 Trustee ; 20 — to allow Trustee to examine books and property ; moneys paid on the bonds, and each of them. The Com- pany will also furnish the Trustee, at any time that the latter may so request in writing, a verified statement of the operations, earnings, assets and liabilities of the Company, and such other information as may, in the Trustee’s sole judgment, be necessary and proper to give to it sufficient grounds for the taking or not taking of any action, or the doing or not doing of any thing, required or permitted to be taken or done by it hereunder; and the Company will permit the Trustee or its agents, upon like request, at any time, to examine the Company’s premises, property, records, papers, documents, and books of account. —to comply Section 3- That it will comply with all the require- state^T ° f ments of the laws of the State of Ohio in order to author- 0hio J ize the Company, and that the Company is under said laws duly authorized, to execute and deliver this Inden- ture and to issue and sell the bonds ; and that the Com- pany will not suffer or permit any default to occur under this Indenture, but will faithfully observe and perform all the conditions, covenants and requirements hereof. —to main- Section 4. That it will at all times do or cause to be rate ex°ist° done all things necessary to, and wall diligently pre- ence > serve and keep in full force and effect, its corporate exist- ence and all its rights and privileges now existing, or which may hereafter be granted or conferred by law, or otherwise, and whenever necessary to that end will comply with the laws of the State of Ohio and with the laws of any other state, territory, county or municipality, or of the United States, or of any foreign country, or of any dependency thereof, in which it may from time to time transact its business, in such manner and form as counsel shall advise. Section 5. That it will from time to time promptly pay 21 and discharge all taxes, assessments and governmental or— to pay other charges, and all statutory liens, lawfully levied or im- assessments posed upon any of its franchises or property or upon the ^ r g° t s h . er income and profits thereof. It will, at maturity thereof, duly and punctually pay all its lawful indebtedness, de- fault in the payment of which might impair the security for the bonds hereunder. Provided, however, that noth- ing in this section contained shall require the Company Company to pay, discharge or make provision for the satisfaction ^Mity^f 8 and discharge of any such taxes, assessments, charges, taxes ' liens or indebtedness so long as it shall, in good faith and by appropriate legal proceedings, contest the validity thereof. Section 6. That it will at all times, at its own cost— to keep and expense, maintain, preserve and keep all of itsfepair^and” premises and properties, including all extensions thereof insure< b and additions thereto, and every part thereof, in good repair, working order and condition, and will at all times actively conduct and prosecute its business to the best of its ability and will at its own cost and expense insure and keep insured against loss or damage by fire, in responsible insurance companies, all its property usually insured by like companies similarly situated, and in the same manner and to the same extent; and that it will during all such time fully comply with all the provisions and terms of such insurance policies. Section 7. That it will at all times duly observe and— t0 per- fully perform the covenants, terms and conditions of its na nts of First Mortgage dated April 1st, 1909, made by it to The P™ eg ^° rt ' Citizens Savings & Trust Company and Acosta Nichols, indentures; as Trustees, and of its Trust Indenture dated July 1st, 1920, made by it to Central Union Trust Company of New York, as Trustee, and will not suffer or permit any default under either said mortgage or trust inden- ture. It shall and will, also, duly observe and fully per- 22 form the covenants, terms and conditions of any mort- gage or indenture hereafter created by it to secure in- debtedness taking precedence over the bonds hereunder, and it will not suffer or permit any default under any such mortgage or indenture which might impair the security for the bonds hereunder. — not to issue other bonds, etc., unless net earnings are 1 % times interest charges. ‘ 1 funded debt” defined, “net earnings ’ ’ defined, Section 8. That so long as any of the bonds hereby secured are outstanding it shall not and will not make or issue any bonds, notes or other evidences of indebtedness payable more than twelve months from the date of issuance thereof, unless the net earnings of the Company, calculated and defined as hereinafter pro- vided and applicable to interest charges, for any twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the date of is- suance, shall be at least one and three-quarter (1-3/4) times the interest charges for one year upon all funded debt of the Company then outstanding and upon the ob- ligations proposed to be issued. As herein used, the term “funded debt” shall include and mean any bonds, notes or other evidences of indebtedness payable more than twelve months from the date of issuance thereof. For the purpose of this section the net earnings of the Company shall be calculated as follows: From the ag- gregate gross revenue of the Company from all sources, there shall be deducted all expenses of the Company in- curred in or in connection with the conduct of its business or the operation of its plants or properties or otherwise in producing such gross revenue, including in such ex- penses all liabilities incurred for rentals, taxes and insur- ance, for repairs, renewals and maintenance, and for in- terest upon and all expense of obtaining borrowed money, properly chargeable against said twelve months period, but in determining such net earnings no deduction shall be made for depreciation or deferred upkeep, nor for payments (including bond purchases) to or for account 23 of the Sinking Fund hereunder, nor for interest paid upon the funded debt, nor for interest paid upon any then outstanding current obligations intended to be re- funded by or through the obligations then proposed to be issued, nor for payments made in the retirement of bonds hereunder. Provided, however, that nothing contained Refunding in this section shall be taken to prohibit the Company P ermitted - from issuing in its discretion bonds, notes or other evi- dences of indebtedness for the purpose of retiring or refunding all or any part of its funded debt so long as the total face amount of funded debt of the Company is not thereby increased. Section 9. That so long as any of the bonds hereby— to secured are outstanding it shall not and will not make etc., except ’ or issue any bonds, notes or other evidences of indebted- for ref o l n^‘ ness payable more than twelve months from the date of new of issuance thereof, except pioperty. (1) Bonds issued under and pursuant to the provi- sions of its First Mortgage, dated April 1st, 1909, to The Citizens Savings & Trust Company of Cleveland, Ohio, and Acosta Nichols of the City of New York, as Trustees, and of its Trust Indenture, dated July 1st, 1920, to Central Union Trust Company of New York, as Trustee, which bonds may be issued in the manner and to the extent provided in said mortgage and said trust indenture respectively, subject to the restrictions speci- fied in Section 8 of this Article. (2) Bonds, notes and other evidences of indebtedness issued in payment for additions, betterments and im- provements, made or acquired subsequent to October 29, 1920, of or to the plants and properties of the Company, to an aggregate principal amount thereof which shall not exceed eighty per cent. (80%) of the cash cost to the Company of the additions, betterments and improve- ments in respect of which said bonds, notes or evidences of indebtedness are issued. But no bonds, notes or other evidences of indebtedness may be issued under 24 subdivision (1) or this subdivision (2) in respect of ad- ditions, betterments or improvements against which bonds, notes or other evidences of indebtedness shall have been issued under either of said subdivisions. Bonds and notes issued under this subdivision (2) may be issued under and secured by the same mortgage or agreement as bonds and notes issued under subdivision (3), or said bonds and notes may be issued under separ- ate mortgages or agreements or be unsecured. For the purpose of this subdivision (2), bonds issued and out- standing under this Indenture shall be included when computing the amount of bonds, notes or evidences of indebtedness that have been issued against additions, betterments and improvements made or acquired sub- sequent to October 29, 1920. (3) Bonds, notes and other evidences of indebtedness issued for the purpose of retiring or refunding all or any part of the following, if and so long as the total face amount of the funded debt of the Company is not thereby increased, viz : bonds heretofore or hereafter issued under said First Mortgage of April 1st, 1909; bonds heretofore or hereafter issued under said Trust Indenture of July 1st, 1920; bonds, notes and other evidences of indebted- ness issued pursuant to the provisions of sub- division (2), including the bonds issued under tliis Indenture; bonds, notes and other evidences of indebted- ness hereafter issued for refunding bonds, notes and other evidences of indebtedness hereafter issued pursuant to the provisions of this sub- division (3). The provisions of Section 8 are independent of the pro- visions of Section 9 of this Article, and no bonds, notes 25 or other evidences of indebtedness shall be made or issued except in compliance with the restrictions specified in each of said sections. Section 10. That in the authorizing and issuance of— to comply the bonds under this Indenture it has complied and will si o ns |’f° ^' r . in all respects comply with the provisions of subdivision ^-^^ourth (e) of Article Fourth of the copy and certificate of amend- of incorpo- ment to the Articles of Incorporation of the Company, iatl0n ’ which copy and certificate are dated the 30th day of Octo- ber, 1920, and were on the said 30th day of October, 1920, filed in the office of the Secretary of State of Ohio and recorded in volume 250, page 6G5 of the Records of In- corporations in said office. As greater security for the performance by the Company of its covenants in this section contained, the Company will simultaneously with the execution and delivery of this Indenture and the is- suance of any bonds hereunder, deposit with the Trustee the sum of $1,812,722.96 in cash. Upon the written re-_ t0 deposit quest of the Company, signed by the President or a Vice- President or the Treasurer thereof, the Trustee shall from time to time invest or reinvest all or any part of the money so received by it in such United States, state or municipal obligations, and to such amounts, as the Company may specify in such request. Such money and securities shall be held by the Trustee for the benefit of the bonds outstanding hereunder, and shall be paid over and/or delivered by the Trustee to the Company as follows: From time to time the Company How de- shall file with the Trustee a certificate, duly verified by e an 'be with- the President or a Vice-President and the Treasurer or drawn - an Assistant Treasurer of the Company, stating that the Company has since October 29, 1920, made or acquired additions, betterments and improvements of or to the plants and properties of the Company, to be specified therein in reasonable detail, and setting forth the cash cost to the Company of the said additions, betterments 26 Income to be paid to Company. Events of default: — non-pay- ment of in terest on sinking fund; and improvements. Upon the receipt by it of any such certificate the Trustee shall pay over and/or deliver to the Company cash or securities so held by it up to, but not in the aggregate exceeding, eighty per cent, of the amount by which the cash cost of the additions, betterments and improvements specified in said certificate shall exceed $3,984,096.31. For such purpose the securities so de- livered shall be taken as the equivalent of cash at the cost price thereof to the Trustee. It being the intent and purpose hereof that when the Company shall, sub- sequent to October 29, 1920, have acquired or made ad- ditions, betterments or improvements to the amount of $6,250,000 aggregate cost thereof, the entire $5,000,000 face value of the bonds of this issue shall have been issued in payment for the said additions, betterments and improvements; and thereupon the Company shall forth- with make and file with the Trustee a certificate to that effect duly verified by the President or a Vice-President and the Treasurer or an Assistant Treasurer of the Com- pany. As used in the last preceding sentence the word “payment” shall include “reimbursement,” and the word “bonds” shall include the “proceeds” of such bonds. So long as the Company is not in default under this Indenture the Trustee shall forthwith pay over to the Company the income received by the Trustee upon the money and/or securities held by the Trustee under this section. ARTICLE VI. Section 1. If one or more of the following events, herein called the events of default, shall happen: (1) The Company make default in the payment of any interest on any of the bonds, or in respect of any sinking fund payment, and any such default shall have continued for thirty days ; or 27 (2) The Company make default, other than default— failure to in any interest or sinking fund payment, in respect of other "cove- any condition, covenant or agreement hereby required nants ; to be done, observed, kept or performed by it, and such default shall have continued for sixty days after writ- ten notice thereof to the Company from the Trustee; or (3) If the Company make default under its said First— default Mortgage dated April 1, 1909, to the Citizens Savings Mortgaged & Trust Company and Acosta Nichols, as Trustees, or °^ re g“ den ' under its said Trust Indenture dated July 1, 1920, to Central Union Trust Company of New York, as Trus- tee, or under any other mortgage hereafter created by the Company upon its properties or any part thereof essential to the profitable operation of its business, and such default shall have continued beyond the period of grace, if any, in said mortgage or trust indenture speci- fied; or (4) By the decree of a court of competent jurisdic-— bank - tion the Company shall be adjudicated a bankrupt or in-of P com- CtC ’ solvent, or, by order of such court, a receiver shall be pany; appointed of the Company or its property or the greater part of its property, or the Company shall file a peti- tion in voluntary bankruptcy, or shall make an assign- ment for the benefit of creditors; or (5) The Company make default in any respect under — unsatis- this Indenture and at any time during the continuance meat Against of such default there shall be any existing judgment company against the Company unsatisfied and not either stayed fault f or secured by bond on appeal ; or (6) In any judicial proceeding by any party other— attach- than the Trustee the greater part of the property of j^ en ^’ 01 ^ c '’ the Company shall be seized under writ of attachment pany’s prop- or other legal process and shall not be released or dis- eity ’ charged therefrom by giving bond or otherwise within twenty days; 28 in ease of — then, and in every such case, the Trustee may, and Trustee may u P on the written request of the holders of a majority declare ^prin-m amount of the bonds then outstanding the bonds ° due. Trustee shall, declare the principal of all the bonds to be immediately due and payable, and the same and the interest accrued thereon shall thereupon become and be immediately due and payable, with interest at the rate of seven per centum per annum upon the over- due principal and instalments of interest, anything in said bonds or herein contained to the contrary notwithstand- ing. In such event the Company shall and will, and it hereby so agrees, on written demand therefor by the Trustee, forthwith pay to the Trustee an amount equal to the principal of all the outstanding unpaid, bonds and all unpaid interest thereon, with interest at the rate of seven per cent, per annum upon the overdue principal and in- stallments of interest; and all amounts so paid to the Trustee shall be received by it, in trust, for the equal and pro rata benefit of the outstanding bonds and cou- pons, and shall be applied by it in the manner in Section 2 of this Article provided. Trustee may The foregoing provisions of this section are, however, faun de subject to the condition that if, at any time after the principal of the bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been entered, all interest then overdue on the bonds, according to the orig- inal tenor thereof, and all sinking fund payments in arrears, with interest thereon at the rate of seven per cent, per annum, and the expenses of the Trustee and any other sums that may be due from the Company, shall be paid by the Company, and all other defaults of the Company, if any, made good, then and in every such case the Trustee may, and upon the written re- quest of the holders of a majority in amount of the bonds then outstanding shall, waive such default and rescind such declaration, but no such waiver or rescis- 29 sion shall extend to or affect any subsequent default or impair any right subsequently accruing thereon. Section 2. If the Company shall fail after written de-On default mand therefor by the Trustee to pay forthwith any institute may amounts due from the Company when the same shall P roceedm s s ’ become due and payable under the terms of this Inden- ture, whether at maturity or urpon declaration or other- wise, the Trustee, in its own name and as Trustee of an express trust, shall be entitled to, and upon the written request of the holders of not less than twenty per cent, in amount of the bonds then outstanding and upon being furnished with indemnity satisfactory to it against the expense and liability to be incurred thereby it shall, in- stitute such action or proceedings at law or in equity as may be necessary or proper for the collection of the sums so due and unpaid, and prosecute any such action or pro- — and prose- ceedings to final judgment or decree, and enforce any j. J° nt final such judgment or final decree against the Company, and collect the moneys adjudged or decreed to be payable out of the property of the Company, wherever situated, in the manner provided by law. All rights of action under this Indenture or under any of the bonds, enforceable by the Trustee, may be enforced by the Trustee without the possession of any of such bonds or the coupons thereunto belonging or the production thereof on the trial or other proceedings relative thereto, and any such suit or pro- ceedings instituted by the Trustee shall be brought in its own name for the ratable benefit of the holders of said bonds and coupons. All moneys collected by the Trustee AppUcation shall be applied, first, to the payment of the expenses, recovered! 8 disbursements and compensation of the Trustee, its agents and attorneys, and, second, to the payment of the amounts then due and unpaid for principal and interest upon the bonds and coupons in respect of which such moneys shall have been collected, ratably and without any preference or priority of any kind, according to the 30 Company will not jtlead any stay or ex- tension law. On discon- tinuance of proceedings parties to be restored to former posi- tion. Default not waived by delay or pre- vious waiver. Remedies cumulative. amounts due and payable upon such bonds and coupons, respectively, at the date fixed by the Trustee for the distribution of such moneys, upon presentation of the several bonds and coupons and stamping such payment thereon, if partly paid, and upon surrender thereof, if paid in full. Section 3. The Company will not at any time in- sist upon or plead, or in any manner whatever claim, or take the benefit or advantage of, any stay or exten- sion law now or at any time hereafter in force; and it hereby expressly waives all benefit or advantage of any such law or laws and covenants that it will not hinder, delay or impede the execution of any power herein granted and delegated to the Trustee, but that it will suffer and permit the execution of every such power, as though no such law or laws had been enacted. Section 4. In case the Trustee shall have proceed- ed to enforce any right under this Indenture, and such proceedings shall for any reason have been dis- continued or abandoned, or shall have been determined adversely to the Trustee, then and in every such case the Company and the Trustee shall be restored to their former position and rights hereunder as though no such proceeding had been taken. No delay or omission of the Trustee or of any holder of bonds to exercise any right or power arising from any default continuing as aforesaid shall exhaust or impair any such right or power or be construed to be a waiver of any such default or an acquiescence therein. No waiver by the Trustee or the bondholders of any such default, whether such waiver be full or partial, shall extend to or be taken to affect any subsequent default or to impair the rights resulting there- from. Every power and remedy given by this Indenture to the Trustee or to the holders of bonds shall be cumu- lative and not exclusive, and may be exercised from time 31 to time and as often as may be deemed expedient by the Trustee or by the holders of bonds. Section 5. No holder of any bond or coupon here- No suit by by secured shall have the right to institute any suit, ^ 1 0 l J 1 ° t lders action or proceeding at law or in equity upon or in prior request respect of this Indenture, or for the execution of any n it y to trust or power thereof, or for any remedy thereunder, un- Trustee - less such holder shall previously have given to the Trus- tee written notice of any existing default and of the con- tinuance thereof as herein provided, nor unless, also, the holders of not less than twenty per cent, in amount of the bonds then outstanding shall have made written request upon the Trustee, and shall have afforded to it reason- able opportunity, either to proceed itself to exercise the powers herein granted, or to institute such action, suit or proceeding in its own name, nor unless, also, such holder or holders shall have offered to the Trustee security and indemnity, satisfactory to it, against the costs, expenses and liabilities to be incurred in or by reason of such ac- tion, suit or proceeding, and the Trustee shall have re- fused or neglected to comply with such request within a reasonable time thereafter; it being understood and intended that no one or more holders of bonds or coupons shall have any right, in any manner whatever, to enforce any right hereunder, except in the manner herein pro- vided, and that all proceedings hereunder shall be insti- tuted, had and maintained in the manner herein pro- vided, and for the equal benefit of all holders of such outstanding bonds and coupons. Section 6. Nothing in this Indenture expressed or im- Indenture plied shall confer upon any person, firm or corporation, £nefit Cl of 81Ve other than the parties hereto and the holders of the bondsP arties and and coupons, any right, remedy or claim, legal or equit- ban,lholders - able, hereunder or by reason hereof, this Indenture and all of its covenants, conditions and stipulations being 32 Resignation or removal of Trustee. Appoint- ment of sue cessor. intended to be and being for the sole and exclusive benefit of the parties hereto and of the holders from time to time of the bonds and coupons hereby secured. ARTICLE VII. Section 1. The Trustee may resign the trusts hereby created upon giving thirty days’ notice in writing to the Company, or such shorter notice as the Company and the holders of a majority in amount of the bonds then out- standing hereunder may accept. The Trustee may be re- moved by an instrument or concurrent instruments in writing duly signed and acknowledged in duplicate by the holders of not less than two-thirds in amount of the then outstanding bonds secured hereby, such instrument or instruments to be delivered to the Trustee and the Company. In case one or more of the following events shall occur, (1) the Trustee shall resign or be removed, or (2) the Trustee shall be adjudicated a bankrupt or insolvent, or (3) a receiver for the Trustee shall be ap- pointed, or (4) any Federal or State official shall take charge or control of the Trustee, — any of which events shall forthwith and ipso facto create a vacancy in the office of Trustee hereunder,— a new Trustee may be ap- pointed by the holders of a majority in amount of the bonds then outstanding by an instrument or concurrent instruments in writing, signed and acknowledged in dup- licate by such holders, and delivered to the Company and to such new Trustee. Until a new Trustee shall be appointed by the bondholders as above authorized, the Company by an instrument executed under its corporate seal by order of its Board of Directors, may appoint a Trustee to fill such vacancy. After any such appoint- ment by the Company, it shall cause notice of such ap- pointment to be published once a week in each of four successive weeks in a daily newspaper of general cir- culation published in the Borough of Manhattan of The City of New York, and in a daily newspaper of general 33 circulation published in the City of Cleveland, Ohio; but any new Trustee so appointed by the Company shall immediately and without further act be superseded by a Trustee appointed, in the manner above provided, by the holders of a majority in amount of the bonds at the time outstanding, provided that such appointment by the bondholders be made prior to the expiration of one year from the date of the first publication of such notice. Section 2. Every new Trustee, however appointed, powers of shall be a trust company having an office in the City Iiew Trustee ' of Cleveland, Ohio, or in the Borough of Manhattan of The City of New York, N. Y., in good standing, and hav- ing a capital of at least one million dollars, if there be such a trust company qualified, able and willing to act as Trustee hereunder upon reasonable and customary terms. Every new Trustee shall immediately, upon due appointment and acceptance thereof, have and possess all the rights, powers and duties of the party of the second part as prescribed herein, and upon such appointment and acceptance as aforesaid the Trustee hereunder here- by covenants and agrees, after deducting therefrom its lawful charges and commissions, to pay over and de- liver to its successor in the trust all the moneys and other property that may be held by it hereunder with any interest accrued thereon. Section 3. Any company into which , the Trustee may Merger or be merged or with which it may be consolidated or any ®® n ^^ ion company resulting from any merger or consolidation to which the Trustee shall be a party, shall be the successor of the Trustee hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary not- withstanding. In case any of the bonds shall have been 34 authenticated but not delivered, any successor corporate Trustee may adopt the certificate of authentication of The Union Trust Company and deliver such bonds as authenticated; and in case any of the bonds shall not have been authenticated, any successor trustee may au- thenticate such bonds in the name of such successor trustee ; and in all such cases such certificate shall have the full force which it is anywhere in the bonds or in this Indenture provided that the certificate of the Trus- tee shall have. ARTICLE VIII. Execution of Section 1 . Any request, direction or other instrument by bond" S required by this Indenture to be signed and executed by holders. bondholders may be in any number of concurrent instru- ments of similar tenor, and may be executed by such bondholders in person, or by an agent or attorney ap- pointed by an instrument in writing. Proof of the ex- ecution of any such request, direction or other instru- ment, or of a writing appointing any such agent or at- torney, or of the holding by any person of bonds, shall be sufficient for any purpose of this Indenture, and shall be conclusive in favor of the Trustee with regard to any action taken by the Trustee under such request or other instrument, if made in the following manner, viz: (a) the fact and date of the execution by any person of any such request or direction or of any other instrument in writing may be proved by the certificate of any notary public or other officer au- thorized to take, either within or without the State of Ohio, acknowledgments of deeds to be recorded in said State, certifying that the per Proof of execution. 35 son signing such request or other instrument ac- knowledged to him the execution thereof ; and (b) the amount of bonds held by any person p r00 f 0 f executing any such request or other instrument as °^ n ^j i s p a bondholder, and the issue numbers of the bonds held by such person and the date of his holding the same, may be proved by a certificate executed by any trust company, bank, bankers or other de- positary, wheresoever situated, whose certificate shall be deemed by the Trustee to be satisfactory, showing that, at the date therein mentioned, such person had on deposit with such depositary, or exhibited to such depositary, the bonds numbered and described in such certificate. Section 2. The Company and the Trustee may deemp ers0 ns who and treat the bearer of any bond hereby secured which be # ( t trGRt/Bd as shall not at the time be registered m the name of the absolute owner thereof as hereinbefore authorized, and the holder of any coupon for interest on any bond whether such bonds antI bond be registered or not, as the absolute owner O f coupons ’ such bond or coupon as the case may be for the pur- pose of receiving payment thereof and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary. Section 3. The Company and the Trustee may deem —registered and treat the person in whose name any bond issued bonds - hereunder shall be registered as hereinbefore provided, as the absolute owner of such bond for the purpose of receiving payment of or on account of the principal of such bond and for all other purposes, except to re- ceive payment of interest represented by outstanding coupons. All such payments so made to any such regis- 36 Action of owner to bind future owners. Acceptance of trusts hereunder. Rights, duties and immunities of Trustee. tered holder, or upon his order, shall be valid and ef- fectual to satisfy and discharge the liability upon such bond to the extent of the sum or sums so paid. Section 4. Any action taken by the Trustee pursu- ant to any provision of this Indenture, upon the request or with the consent of any person who at the time is the owner as aforesaid of any bond or bonds, shall be con- clusive and binding upon all future owners of the same bond or bonds. ARTICLE IX. The Trustee hereby accepts the trusts hereby created and assumes the duties herein imposed, and agrees to au- thenticate bonds in accordance herewith, upon the terms and conditions herein contained, including the following: 1. The recitals of facts and the statements herein con- tained and contained in the bonds herein provided for shall be taken as statements by the Company, and shall not be construed as made by the Trustee. The Trustee makes no representation as to the validity of this In- denture, or of any bonds or coupons issued hereunder, or as to the security hereby afforded. 2. The Trustee shall not be liable to any one for act- ing upon or in accordance with any notice, request, con- sent, certificate, bond, coupon or other document or paper believed by it to be genuine and to be signed or presented by the proper person or duly authorized or properly made. The Trustee shall not be bound to recognize any person as a bondholder until his title to the bonds he 37 claims to hold, shall, if disputed, have been established to its reasonable satisfaction; and it may, in its discre- tion, require the production of any bond or bonds or other and further proof of the ownership thereof. 3. The Trustee shall receive reasonable compensation for its services hereunder, and it may select and employ in and about its powers and duties suitable agents and attorneys, whose reasonable compensation and ex- penses, together with the compensation and expenses of the Trustee, shall be paid by the party of the first part, or, in default thereof, shall be a first lien upon any sums recovered hereunder, prior to that of the bonds issued hereunder. The Trustee shall not be liable for any neglect, omission or wrongdoing of any such agent or attorney if reasonable care has been exercised in his selection, nor shall it be liable for the exercise or failure to exercise any discretion or power hereunder, or for mistake or error of judgment, or for any action taken by it in good faith upon the advice of its attorneys, or be otherwise answerable for anything whatever in con- nection with this Indenture save for its own wilful negli- gence and default. 4. The Trustee shall not be bound to do any act, or appear in or defend any suit as Trustee, unless thereunto requested in writing as herein specifically provided and indemnified in advance, to its reasonable satisfaction, against all charges, loss or liability incident to, or directly or indirectly resulting from, the act, suit, appearance or defense requested. If such indemnity becomes impaired the Trustee may call for additional indemnity, and stop and cease to do the acts indemnified against until such additional indemnity is given. 5. The Trustee shall not incur any liability or respon- sibility whatever for not exercising, on its own motion, 38 any of the rights, powers, duties and powers of supervi- sion or proceeding conferred upon it hereby. 6. The Trustee shall he under no duty to see or to keep itself informed as to the performance or observance by the Company of any of the covenants or conditions herein agreed to be performed or observed by the Company; and unless and until the Trustee shall have received writ- ten notice from the holders of not less than twenty per cent, in amount of the bonds then outstanding, stating that a default has occurred in the performance or ob- servance by the Company of some covenant or condition herein contained, distinctly specifying such default, the Trustee shall be entitled to assume that no default has occurred. 7. Whenever, in the administration of the trusts of this Indenture, the Trustee shall deem it necessary or desirable that any matter be proved or established prior to the Trustee taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed by it to be conclusively proved and established by a certificate signed by the President, or a Vice-President, and the Treasurer or an Assistant Treasurer of the Com- pany and delivered to the Trustee, and such cer- tificate shall be full warrant and protection to the Trustee for any action taken or suffered by it under the provisions of this Indenture on the faith thereof ; but in its discretion the Trustee may require such further or additional evidence as to it may seem reasonable. 8. The Trustee may receive a certificate signed by the Secretary or an Assistant Secretary of the Company as sufficient evidence of the adoption of any resolution of 39 the Board of Directors of the Company or of the stock- holders thereof. 9. Any money, securities or instruments required or permitted by the provisions of this Indenture to be de- livered to the Trustee shall be delivered to it at its principal office in the City of Cleveland, Ohio.' ARTICLE X. If the Company, its Successors or Assigns shall well Defeasance • clause and truly pay, or cause to be paid, the whole amount of the principal and interest due upon all the bonds issued hereunder and secured hereby as in said bonds and herein agreed to be paid, or shall upon the maturity of the bonds deposit with the Trustee the whole amount due for principal and interest upon all the bonds and coupons then outstanding, or if all the bonds shall have been called for retirement and the amount to make such retirement shall have been paid by the Oumpany to the Trustee, and if all charges of the Trustee hereunder shall have been paid or satisfied by the Company, and the Company shall have fully performed all its covenants and agree- ments hereunder, then and in that case the Company shall be entitled to have this Indenture satisfied and dis- charged. Thereupon the Trustee, having first cancelled all the bonds and coupons of this issue then held by it, shall deliver such bonds and coupons to the Company, and the Trustee shall satisfy and discharge this Inden- ture and shall also pay over and deliver to the Company, or to its successors or assigns, all money and other prop- erty then in the hands of the Trustee and received by it under any of the provisions of this Indenture, in excess of such amount as may be necessary duly to pay, or provide for the payment of, the principal, interest and premium (if any) upon such of the bonds and coupons as shall not have been presented for payment. 40 No recourse to stock- holders, offi- cers or di- rectors. Consolida- tion or merger of Company or ARTICLE XI. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any bond secured hereby, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any stockholder, officer or director, present or future, of the Company or of any successor corporation, either directly or through the Company or its successors, whether by the enforcement of any assessments or penalties, or by any legal or equitable proceeding by virtue of any constitu- tional provision or any statute, or otherwise, in any man- ner whatsoever; it being expressly agreed that this In- denture and the obligations hereby secured are solely corporate obligations and that no personal liability what- ever shall attach to, or be incurred by, the stock- holders, directors or officers of the Company, or of any successor corporation, under or by reason of any of the bonds or coupons hereby secured in favor of the holders of any of the said bonds or coupons; all such personal liability of every name and nature, either at common law or in equity or by statute, being hereby expressly waived as a condition of and in consideration for the execution of this Indenture and the issue and acceptance of said bonds and coupons. ARTICLE XII. Nothing in this Indenture or in the bonds shall prevent the consolidation or merger of the Company with or into any other corporation, or any conveyance, tians- 41 fer or lease of all or an essential part of the property transfer of of the Company to any corporation lawfully entitled tOof^it^prop* acquire or lease and operate the same; provided, how- ert y- ever, and the Company covenants and agrees, that upon any such consolidation, merger, conveyance, transfer or lease the due and punctual payment of the principal and interest of all the bonds, and the due and punctual ob- servance and performance of all the covenants and con- ditions of this Indenture to be kept or performed by the Company, shall be assumed by the successor cor- poration formed by such consolidation, or into which such merger shall have been made, or to which all or an essential part of the property of the Company shall so be conveyed, transferred or leased. ARTICLE XIII. Section 1. The term “Trustee” as used in these pres-Definition of ents, and in the bonds' and coupons hereby secured, ^d^Com shall be deemed to be the Trustee for the time being, pany.” whether such Trustee be the original Trustee or a new Trustee appointed as hereinbefore provided or other- wise by legal authority; and the term “Company,” as used herein, shall be deemed to include the successors and assigns of the party of the first part and any cor- poration into which it may be consolidated or merged; subject, however, to the provisions of Article XII. Section 2. Except when otherwise indicated, the words Definition of 1 ‘ bond, ” “ coupon, ” “ bondholder ’ ’ and ‘ ‘ holder ’ ’ as used othei ter " 1S ‘ in this Indenture shall include the plural as well as the singular number; the word “person” used with refer- 42 ence to a bondholder shall include associations or cor- porations owning such bonds; the words “Board of Di- rectors” or “Directors” shall include “Board of Trus- tees” or “Trustees”; the word “corporation” shall in- clude “association”. Whenever any officer of the Com- pany is referred to herein it shall be taken and held to mean the person who shall hold such office for the time being. ARTICLE XIV. Execution of Section 1. This Indenture may be executed in several counter-^ lu counterparts, each of which so executed shall, irrespec- parts. live 0 f t} le date of its acknowledgment and delivery, be deemed to be an original, and such counterparts shall together constitute one and the same instrument. Indenture to bind succes- sors and Section 2. Tills Indenture, and every part hereof, and the several conditions, covenants, promises and agree- assigns. ments herein contained, shall inure to the benefit of and be binding upon the holders of the bonds hereby secured and their legal representatives and upon the respective successors and assigns of the parties hereto. Testi- In witness whereof, The Cleveland Electric Illumi- momum. na ting Company, party of the first part, has caused its corporate name to be hereunto subscribed by its I^esi- dent or Vice-President, and its corporate seal affixed, at- tested by its Secretary or an Assistant Secretary ; and in testimony of its acceptance of the trusts herein created and conferred, said The Union Trust Company, party of the second part, has caused its corporate name to be here- unto subscribed by its President or one of its Vice-Presi- dents, and its corporate seal affixed, attested by its Secre- t 43 tary or an Assistant Secretary, as of the day and year first above written. The Cleveland Electric Illuminating Company, By Robert Lindsay, [corporate seal] President. Attest: E. G. Crawford, Secretary. Signed, sealed and delivered as to the Company in the presence of: Elijah Anthony, Stephen J. McCrimlisk, Jr. [corporate seal] The Union Trust Company, By R. C. Hyatt, Vice-President. Attest: C. W. Carlson, Ass’t Secretary. Signed, sealed and delivered as to the Trustee in the presence of: Elijah Anthony, Stephen J. McCrimlisk, Jr. 44 Acknowledg- ments. State of New York, \ . County of New York, J Before me, a Notary Public within and for the said County of New York and State of New York, duly commissioned and sworn, personally came The Cleveland Electric Illuminating Company, a body corporate, duly organ- ized and doing business under and by virtue of the laws of the State of Ohio, by Robert Lindsay, its duly elected, qualified and acting Presi- dent, and Eben. G. Crawford, its duly elected, qualified and acting Secretary, who severally acknowledged that they caused the cor- porate name of the said The Cleveland Electric Illuminating Company to be signed to the above and foregoing Indenture, and that they signed their own names thereto as such officers of said corporation and caused the corporate seal of the said The Cleveland Electric Illuminating Com- pany to be thereunto duly affixed; that said acts and deeds are the free and voluntary acts and deeds of the said The Cleveland Electric Illuminating Company, a body corporate, and of themselves as such officers thereof, thereunto duly authorized and empowered by a resolution of the Board of Directors of the said The Cleveland Electric Illuminating Company, a body corporate, duly passed and entered upon the minutes of their pro- ceedings. And on this 16th day of August, 1921, before me personally came the said Robert Lindsay, to me known, who, being by me duly sworn, did depose and say: That he resides at Cleveland, Ohio; that he is the President of said The Cleveland Electric Illuminating Company, one of the corporations described in and which executed the foregoing instru- ment; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by the like order. In witness whereof I have hereunto set my hand and official seal at New York, N. Y., this 16th day of August, A. D., 1921. Robert S. Dornon, [notarial seal] Notary Public within and for the County of New York, in the State of New York, No. 339. My commission as Notary Public as aforesaid expires the 30th day of March, 1923. 45 State of New York,^ County of New York,j SS " Before me, a Notary Public within and for the said County of New York and State of New York, duly com- missioned and sworn, personally came The Union Trust Company, a body corporate, duly organized and doing business under and by virtue of the Laws of the State of Ohio, by Roger C. Hyatt, its duly elected, qualified and acting Vice-President, and Charles W. Carlson, its duly elected, qualified and act- ing Assistant Secretary, who severally acknowledged that they caused the corporate name of the said The Union Trust Company to be signed to the above and foregoing Indenture, and that they signed their own names thereto as such officers of said cor- poration, and caused the corporate seal of the said The Union Trust Company to be thereunto duly affixed; that said acts and deeds are the free and voluntary acts and deeds of the said The Union Trust Company, a body corporate, and of themselves as such officers thereof, thereunto duly authorized and empowered by a resolu- tion of the Board of Directors of the said The Union Trust Company, a body corporate, duly passed and en- tered upon the minutes of their proceedings. And on this 16th day of August, 1921, before me personally came the said Roger C. Hyatt, to me known, who, being by me duly sworn, did depose and say: That he resides at Cleveland, Ohio; that he is a Vice-President of said The Union Trust Company, one of the corporations described in and which executed the foregoing instrument; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal ; that it was so affixed by order of the Board of Directors of said cor- 46 poration, and that he signed his name thereto by the like order. In witness whereof I have hereunto set my hand and official seal at New York, N. Y., this 16th day of August, A. D. 1921. Robert S. Dornon, [notarial seal] Notary Public within and for the County of New York, in the State of New York, No. 339. My commission as Notary Public as aforesaid expires the 30th day of March, 1923. U. S. Internal Revenue Documentary Stamps for $2500 were affixed to the original counterpart hereof in the possession of the Trustee and duly cancelled before the delivery of the bonds hereunder. i 3 0112 105646746