Brazil - Brazilian Traction, Light And Power Company, Ltd. : Loan 0011 - Collateral Trust Indenture - 2 - Conformed

up Proof of September 1i7, 1948. BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED AND NATIONAL TRUST COMPANY, LIMITED as Trustee Collateral Tru!t 3inbenture Dated January 1, 1949 Collateral Trust Bonds Pandick Press. Inc.. 22 Thames St., New York 6. N. Y.. U. S. A. PRINTED IN U. S. A. THIS INDENTURE, dated the first day of January, 1949, between BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED, a corpo- ration duly organized and existing under the laws of the Dominion of Canada (hereinafter called the "Company"), party of the first part, and NATIONAL TRUST COMPANY, LIMITED, a corporation duly organized and existing under the laws of the Province of Ontario (hereinafter called the "Trustee"), party of the second part, WITNESSETH: that WHEREAS, the Company is desirous of borrowing money and for that purpose of creating and issuing from time to time its Collateral Trust Bonds to be constituted and secured in the manner hereinafter appearing; and WHEREAS, the Company under the laws relating thereto is duly authorized to create and issue the said Bonds to be issued as herein provided and to secure the same by this Indenture; and WHEREAS, all necessary by-laws and resolutions of the directors and shareholders of the Company have been duly enacted and passed to make the creation and issue of the Bonds intended to be issued here- under and secured hereby and this Indenture and the execution thereof legal and valid and in accordance with th laws relating to the Com- pany; and WHEREAS, the Bonds to be issued under this Indenture (herein sometimes called the "Bonds") are to be issuable in series and, in the case of each particular series (except the initial series, the terms of which are fixed by this Indenture), the designation of the series, the date of the Bonds thereof, the date of maturity, the rate of interest, the interest payment dates, the place or places of payment, the denomi- nations, the prices at which such Bonds may be called for redemption at the option of the Company or for any sinking fund, provisions for the issuance of coupon Bonds or registered Bonds without coupons, and the right of interchange thereof, and any limitation upon the aggre- gate principal amount of the Bonds of such series, the currency or currencies in which the Bonds may be payable and the rate of exchange at which payment thereof may be made, any right conferred on the holders of such Bonds to convert the same into other obligations or 2 capital stock of the Company or into other securities and the terms of any such conversion, as well as such additional provisions as are required or permitted by this Indenture, are to be determined by the Board of Directors of the Company at the time of the authorization of such series; and WHEREAS, the texts of such coupon Bonds and of the coupons to be appurtenant thereto and of the registered Bonds without coupons, and of the Trustee's certificate of authentication to be endorsed on said Bonds, are to be severally substantially as follows, with such appropriate omissions, insertions and variations as are in this Inden- ture provided for: [FORM OF CoupoN BOND] N o ... -..........- -..... BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED COLLATERAL TRUST --..%o BOND Series --.--------.---- D ue ---------------------------- . BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED, a corpo- ration organized and existing under the laws of the Dominion of Canada, hereinafter called the "Company", for value received, hereby promises to pay to the bearer, or, if this Bond be registered as to prin- cipal, then to the registered holder hereof, on the day of (unless this Bond shall be called for previous redemption and payment thereof duly provided for), the principal sum of , and to pay interest on said principal sum at the rate of per cent. ( %) per annum from the date hereof, semi-annually on the day of and on the day of in each year until payment of the said principal sum, but until the maturity of this Bond only upon presentation and sur- render of the appropriate coupons for such interest instalments, hereto attached, as they severally mature. The principal of, premium, if any, and interest on this Bond are payable at the office or agency of the Company in in 3 This Bond is one of an authorized issue of Bonds of the Company (unlimited as to aggregate principal amount except as provided in the Indenture hereinafter mentioned), issued and to be issued under and pursuant to, and all equally and ratably secured by, an indenture, hereinafter called the "Indenture", dated January 1, 1949, executed by the Company to National Trust Company, Limited, as Trustee, to which Indenture reference is hereby made for a description of the security pledged with the Trustee, the rights of the holders of the Bonds and coupons and of the Trustee in respect of the security, and the terms and conditions upon which the Bonds are secured. No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Bond at the time and place and in the amount or at the rate and in the currency herein prescribed. The Bonds are issuable in series, and the Bonds of any series may be for varying aggregate principal amounts, and the Bonds of any one series may differ from the Bonds of any other series as to date, maturity, interest rate, currency in which payable and otherwise all as in the Indenture provided and set forth. The Bonds of the series in which this Bond is included are designated " Collateral Trust % Bonds, Series , Due ", limited to an aggregate principal amount of at any time outstanding except for Series Bonds issued in lieu of lost, destroyed, stolen or mutilated Series Bonds. If an event of default, as defined in the Indenture, shall occur, the principal of the Bonds may be declared or may become due and payable, in the manner and with the effect provided in the Indenture. The Indenture contains provisions giving to the holders of sixty- six and two-thirds per cent. (662/3%) in aggregate principal amount of each series of Bonds then outstanding affected by the particular modi- fication or addition acted upon, the power by resolution at a bondhold- ers meeting to take the various actions therein specified, including the power to make any modification in or addition to the provisions of the Indenture or any supplement thereto, or to the rights and obligations of the Company or to the rights of the holders of the Bonds and appur- tenant coupons under the Indenture or any supplement thereto, pro- vided that no such modification or addition shall be effective until approved by the Board of Directors of the Company, and pro- 4 vided that no such modification or addition which in the opinion of the Trustee shall affect the rights, duties br immunities of the Trustee under the Indenture or any supplement thereto, may be made without its written consent; and provided that the bondholders shall have no power to (a) extend the maturity of any Bonds, or reduce the rate of interest thereon, or otherwise modify the terms of payment of the principal (other than a modification of any sinking fund pro- visions) or interest, without the consent of the holder of each Bond so affected, or (b) effect a reduction of the percentage required for any action authorized to be taken by the bondholders. This Bond is transferable by delivery unless registered as herein provided. This Bond may be registered as to the principal sum in the name of the holder at the office or agency to be maintained by the Company in , such registration being noted hereon, after which no transfer shall be valid unless made at said office or agency by the registered holder, in person or by duly authorized attorney, and similarly noted hereon; but this Bond may be discharged from registration by like transfer to bearer similarly noted hereon, whereupon transferability by delivery shall be restored. This Bond shall continue to be subject to successive registrations and transfers to bearer. No such registra- tion, however, shall affect the negotiability of the coupons for interest hereto attached, which shall always continue to be payable to bearer and to be transferable by delivery merely, and payment to the bearer of any such coupon shall fully discharge the Company in respect of the interest instalment represented thereby whether or not this Bond be registered. Coupon Bonds of Series are issuable in the denomination of . Registered Bonds without coupons of Series are issuable in the denomination of and, with the consent of the Company, may be issued in other denominations which are multiples of . Such coupon Bonds and registered Bonds without coupons and the several denominations of such registered Bonds without cou- pons are interchangeable in authorized denominations upon presenta- tion thereof for that purpose at the office or agency of the Company in , and upon payment of charges, all as provided in the Indenture. 5 No recourse shall be had for the principal of, premium, if any, or interest on this Bond, or any part thereof, or for any claim based hereon or otherwise in respect hereof or of the indebtedness repre- sented hereby, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, of the Company, as such, either directly or through the Company or any other person, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, it being expressly understood and agreed that the Indenture and the obligations thereby secured are solely corporate obligations and that no personal liability whatever shall attach to or be incurred by any incorporator, stockholder, officer or director of the Company, as such, because of the incurring of the indebtedness thereby secured or under or by reason of any of the obligations, covenants or agree- ments contained in the Indenture or any of the Bonds or coupons, any and all such personal liability, whether presently existing or hereafter arising, being hereby expressly waived and released as a part of the consideration for the execution of the Indenture and the issue of the Bonds. Neither this B ind nor any of the coupons hereto attached shall be valid or obligatory for any purpose unless and until the certificate of authentication hereon shall have been signed by and on behalf of the Trustee under the Indenture. IN WITNESS WHEREOF, Brazilian Traction, Light and Power Com- pany, Limited, has caused this Bond to be executed by its President or a Vice President either manually or by facsimile signature and by its Secretary or an Assistant Secretary manually, and its corporate seal or a facsimile thereof to be affixed hereunto' or imprinted hereon and coupons for interest, bearing the facsimile signature of its Treas- urer, to be attached hereto, and this Bond to be dated the day of BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED, By...------------..-...........-------------------------- By...---------------------- Assistant Secretary. Vice President. 6 [Foum oF INTEREST COUPON] On the day of unless the Bond hereinafter mentioned shall have been called for previous redemption and pay- ment thereof duly provided for, Brazilian Traction, Light and Power Company, Limited, will pay to bearer at the office or agency of the Company in upon surrender of this coupon, in , being six months' interest the due on its Collateral Trust o Bond, Series , Due No......... . --. Treasurer. [FoRm OF REGISTERED BOND WITHOUT COUPONS] N o.-.-----....... -------------------- BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED COLLATERAL TRUST o BOND Series ........ ------- Due .......... Brazilian Traction, Light and Power Company, Limited, a cor- poration organized and existing under the laws of the Dominion of Canada, hereinafter called the "Company", for value received, hereby promises to pay to Y or registered assigns, on the day of , (unless this Bond shall be called for previous redemption and payment thereof duly provided for), the principal sum of ( ), and to pay interest on said principal sum at the rate of per cent. ( o) per annum from the 7 date hereof, semi-annually on the day of and on the day of in each year until payment of the said principal sum. The principal of, premium, if any, and interest on this Bond are payable at the office or agency of the Company in in This Bond is one of an authorized issue of Bonds of the Company (unlimited as to aggregate principal amount except as provided in the Indenture hereinafter mentioned), issued and to be issued under and pursuant to, and all equally and ratably secured by, an inden- ture, hereinafter called the "Indenture", dated January 1, 1949, exe- cuted by the Company to National Trust Company, Limited, as Trustee, to which Indenture reference is hereby made for a description.of the security pledged with the Trustee, the rights of the holders of the Bonds and coupons and of the Trustee in respect of the security, and the terms and conditions upon which the Bonds are secured. No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Com- pany, which is absolute and unconditional, to pay the principal of and interest on this Bond at the time and place and in the amount or at the rate and in the currency herein prescribed. The Bonds are issuable in series, and the Bonds of any series may be for varying aggregate principal amounts, and the Bonds of any one series may differ from the Bonds of any other series as to date, maturity, interest rate, currency in which payable and otherwise all as in the Indenture provided and set forth. The Bonds of the series in which this Bond is included are designated " Collateral Trust % Bonds, Series , Due ", limited to an aggregate principal amount of at any time outstanding except for Series Bonds issued in lieu of lost, destroyed, stolen or mutilated Series Bonds. If an event of default, as defined in the Indenture, shall occur, the principal of the Bonds may be declared or may become due and payable, in the manner and with the effect provided in the Indenture. The Indenture contains provisions giving to the holders of sixty-six and two-thirds per cent. (66%%) in aggregate principal amount of each series of Bonds then outstanding affected by the par- 8 ticular modification or addition acted upon, the power by resolution at a bondholders meeting to take the various actions therein specified, including the power to make any modification in or addition to the provisions of the Indenture or any supplement thereto, or to the rights and obligations of the Company or to the rights of the holders of the Bonds and appurtenant coupons under the Indenture or any supplement thereto, provided that no such modification or addition shall be effective until approved by the Board of Directors of the Company, and provided that no such modification or addition which in the opinion of the Trustee shall affect the rights, duties or immu- nities of the Trustee under the Indenture or any supplement thereto, may be made without its written consent; and provided that the bond- holders shall have no power to (a) extend the maturity of any Bonds, or reduce the rate of interest thereon, or otherwise modify the terms of payment of the principal (other than a modification of any sinking fund provisions) or interest, without the consent of the holder of each Bond so affected, or (b) effect a reduction of the percentage required for any action authorized to be taken by the bondholders. This Bond is transferable by the registered holder in person or by duly authorized attorney at the office or agency to be maintained by the Company in upon surrender and cancellation of this Bond as provided in the Indenture and upon payment of the charges therein specified; and upon any such transfer a new registered Bond or Bonds without coupons of the same series, for a like aggregate principal amount, will be issued to the transferee. Coupon Bonds of Series are issuable in the denomination of . Registered Bonds without coupons of Series are issuable in the denomination -of and, with the consent of the Company, may be issued in other denominations which are multiples of Such coupon Bonds and registered Bonds without coupons and the several denominations of such registered Bonds without coupons are interchangeable in authorized denominations upon presentation thereof for that purpose at the office or agency of the Company in and upon payment of charges, all as provided in the Indenture. No recourse shall be had for the principal of, premium, if any, or interest on this Bond, or any part thereof, or for any claim based hereon or otherwise in respect hereof or of the indebtedness represented hereby or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, of the Company, as such, either directly or through the Company or any other person, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, it being expressly understood and agreed that the Indenture and the obliga- tions thereby secured are solely corporate obligations and that no personal liability whatever shall attach to or be incurred by any incorporator, stockholder, officer or director of the Company, as such, because of the incurring of the indebtedness thereby secured or under or by reason of any of the obligations, covenants or agreements con- tained in the Indenture or any of the Bonds or coupons, any and all such personal liability, whether presently existing or hereafter arising, being hereby expressly waived and released as a part of the consider- ation for the execution of the Indenture and the issue of the Bonds. This Bond shall not be valid or obligatory for any purpose unless and until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee under the Indenture. IN WITNESS WHEREOF, Brazilian Traction, Light and Power Com- pany, Limited, has caused this Bond to be executed by its President or a Vice President either manually or by facsimile signature and by its Secretary or an Assistant Secretary manually, and its corporate seal or a facsimile thereof to be affixed hereunto or imprinted hereon and this Bond to be dated the day of , 19 . BRAZILIAN TRACTION, LIGHT AND POWER COMPANY, LIMITED, B y .---....-.-------.----.-.----------.--......-....--..-..-.. B y .....-.- .....--....-...----------------------.. .... . Assistant Secretary. Vice President. 10 [FORM OF TRUSTEE'S CERTIFICATE] This Bond is one of the Collateral Trust ---.-% Bonds, Series -.. Due ------------------., referred to in the within-mentioned Indenture. NATIONAL TRUST COMPANY, LIMITED, as Trustee, By .........-............................. ... - Certifying Officer. AND WHEREAS, there shall be inserted in the form of Bonds and coupons hereinbefore recited appropriate words and figures to indicate as to each series the currency or currencies in which payable, the denomination or denominations, the place or places of payment or of registration or of interchange of Bonds; and WHEREAS, in case any series of Bonds issued hereunder shall be made redeemable before maturity either at the option of the Company or for the purpose of any sinking fund provided for such series, a brief statement as to the nature of any such sinking fund and of the reserved right of redemption is to be inserted in such Bonds; and WHEREAS, in case the Company covenants that the Bonds of any series shall be paid free of any tax, duty, impost or fee, a statement to that effect is to be inserted in such Bonds; and THEREAS, the form of the Bonds of any series may differ from the form of the Bonds and the coupons hereinbefore recited as permitted by the Indenture; and in such respects the form of the Bonds and of the coupons hereinbef ore recited shall be changed so as appropriately to express the several provisions applicable to the Bonds of each series. Now, THEREFORE, THIS INDENTURE WITNESSETH: In consideration of the premises and of One Dollar ($1.00) to it in hand paid by the Trustee (receipt whereof is hereby acknowledged) and to secnre the due payment of all principal of, premium, if any, and interest on the Bonds from time to time authenticated and delivered hereunder and all other moneys for the time being and from time to time owing on or charged or chargeable on the security of this Indenture and of the Bonds and the performance of the obligations of the Company herein contained and in pursuance of each and every power and authority it thereunto enabliiig, the Company doth hereby grant, con- vey, assign, transfer, hypothecate, mortgage, pledge and charge as and by way of a first fixed and specific mortgage, pledge and charge to and in favour of the Trustee the securities listed or referred to in the First Schedule hereto annexed and any other securities and other property, assets and rights of whatsoever kind, nature or description (subject to the exception as to leaseholds hereinafter contained) which may hereafter from time to time be mortgaged, pledged or charged or required to be mortgaged, pledged or charged by way of a fixed and specific chargo in favour of the Trustee under any of the provisions of this Indenture (all of which securities are hereinafter collectively referred to as the "Pledged Debentures"). And for the consideration aforesaid and for the purposes afore- said and in pursuance of the powers aforesaid the Company also charges (subject to the exception as to leaseholds hereinafter contained) as and by way of a first floating charge to and in favour of the Trustee for and with the payment of all principal moneys, interest, premium, if any, and other moneys for the time being owing on the security of this Indenture and of the Bonds, its undertaking and all its property, assets and riglits for the time being both presentand future (other than the property, assets and rights from time to time and for the time being mortgaged, pledged and charged by way of a fixed and specific security for the payment of the moneys intended to be hereby secured), including but not so as to limit the generality of the foregoing all its present and future goodwill, rents, revenues, incomes and sources of money, moneys, rights, powers, privileges and franchises, contracts, agreeme nts, book debts, accounts, negotiable and non-negoti- able instruments, judgments, shares of capital stock, bonds, debentures and other securities, choses in action and all other property and things of value of every kind and nature, tangible or intangible, legal or equitable, which the Company may be possessed cf or entitled to or which may be hereafter acquired by the Company; provided that such floating charge shall in no way hinder or prevent the Company, subject to the provisions of this Indenture, (until the security hereby consti- tuted shall have become enforceable and the Trustee shall have deter- 12 mined or become bound to enforce the same) from paying dividends or from selling, alienating, assigning or otherwise disposing of or dealing with the subject matters of such floating charge in the ordinary course of its business and for the purpose of carrying on the same, or from selling or otherwise disposing of any property which, in the opinion of the Board of Directors of the Company, may be advantageously sold or otherwise disposed of or is no longer useful or of productive value to the business, and provided further that such floating charge shall in no way hinder or prevent the Company from pledging, assign- ing or giving security or securities (whether by way of floating charge or otherwise) from time to time on its revenues, moneys, securities (other than shares of subsidiaries), book debts, accounts receivable, contracts or mercantile documents to any bank or banks for present or future debts, liabilities or obligations of the Company to such bank or banks maturing by their terms not more than twelve months after their date (including without limiting the generality of the foregoing the giving of any security permitted by the Bank Act of Canada other than security on shares of subsidiaries but excluding always the giving of security on fixed physical assets) and any such pledge, assignment, security or securities shall rank in priority over the floating charge hereby created. PROVIDED ALWAYs that until the security hereby constituted shall have become enforceable and the Trustee shall have determined or become bound to enforce the same pursuant to the provisions of this Indenture the Company shall, subject, however, to the express terms hereof, be suffered and permitted to possess, manage, administer, use and enjoy the trust estate and freely to control the conduct of its busi- ness and to take and use any incomes, interest, dividends, rents, issues and profits thereof in the ordinary course of its business and for the purpose of carrying on the same. PROVIDED FURTHER and it is hereby declared that the last day of any term of years reserved by any lease, verbal or written, or any agreement therefor, now held or hereafter acquired by the Company, and whether falling within the general or particular description of the trust estate hereunder is hereby and shall be excepted out of the mort- gage, pledge and charge hereby or by any other instrument created and does not and shall not form any part of the trust estate, but the Com- pany shall stand possessed of the reversion remaining in the Company 13 of any leasehold premises, for the time being demised, as aforesaid, upon trust to assign and dispose thereof as the Trustee shall direct; and upon any sale or sales of the leasehold premises or any part thereof, the Trustee, for the purpose of vesting the aforesaid residue of any such term or any renewal thereof in any purchaser or purchasers thereof, shall be entitled by deed or writing to appoint such purchaser or purchasers or any other person or persons a new trustee or trustees of the aforesaid residue of any such term or renewal thereof in the place of the Company and to vest the same accordingly in the new trustee or trustees so appointed free and discharged from any obliga- tion respecting the same. To HAVE AND To HOLD the Pledged Debentures and the undertaking of the Company and all other property and assets of the Company, present or future, hereby in this Trust Indenture or in any indenture or other instrument supplemental or ancillary hereto mortgaged, pledged and charged or intended so to be to secure payment of the moneys intended to be secured hereby, whether by fixed or floating charge (herein generally referred to as the "trust estate") unto the Trustee, its successors and assigns forever. IN TRUsT, nevertheless, for the equal and ratable use and benefit of all present and future holders of the Bonds and coupons issued and to be issued under and secured by this Indenture, and for the enforce- ment of the payment of said Bonds and coupons when payable, and the performance of and compliance with the covenants and conditions of this Indenture, without preference, priority or distinction as to lien or otherwise of one Bond over any other Bond of the same or of any other series by reason of priority in the issue, sale or negotiation thereof or otherwise, so that, except as in this Indenture otherwise provided, each and every Bond issued and to be issued and authenti- cated as aforesaid shall have the same right, lien and privilege under this Indenture, and so that, subject to the terms hereof, the principal of, premium, if any, and interest upon every such Bond shall be equally and ratably secured hereby as if all such Bonds at any time outstanding had been made, executed, delivered and negotiated simultaneously with the execution and delivery of this Indenture. The mortgages, pledges and charges hereby created shall be and be deemed to be effective and shall have effect whether or not the moneys hereby secured shall be 14 advanced before or after or at the same time as the issue of any ef the Bonds intended to be hereby secured or whether the advance of the moneys hereby secured, or any part thereof, be before or after or upon the date of the execution of this Indenture. AND IT IS HEREBY COVENANTED AND DECLARED that all such Bonds, with the coupons for interest thereon, are to be issued, authenticated and delivered, and that the trust estate is to be held by the Trus- tee, upon and subject to the following covenants, conditions, uses and trusts; and it is agreed and covenanted by the Company with the Trustee and the respective holders from time to time of Bonds hereby secured, as follows, namely: ARTICLE ONE. Amount of Issue of Bonds; Form, Execution and Registry of Bonds. SECTION 1.01. The authorized aggregate principal amount of Bonds which may be outstanding at any one time hereunder is unlim- ited, except that Bonds may be authenticated and delivered by the Trustee only in accordance with the provisions of this Indenture here- inafter set forth. SECTION 1.02. The Bonds to be issued under this Indenture, together with the interest coupons appertaining thereto, shall be sub- stantially of the tenor and purport set forth in the preambles of this Indenture, with appropriate insertions, omissions, substitutions and variations in all respects as required or permitted by the terms of this Indenture. Said Bonds shall be designated, generally, as the Com- pany's "Collateral Trust Bonds" and shall be issuable in series as from time to time shall be authorized by the Board of Directors of the Company. In authorizing the issue of any series (except the initial series, the terms of which are hereinafter fixed by the succeeding paragraph) the Board of Directors of the Company shall determine and specify in re- spect to the Bonds of such series the designation of the series, the date, the maturity, the rate of interest, the interest payment dates, the place 15 or places of payment, the denominations, the redemption provisions, if any, the sinking fund provisions, if any, any provisions as to tax exemp- tions or tax payments by the Company, any limitation of the aggregate principal amount of the series, the currency or currencies in which the Bonds may be payable and the rate of exchange at which payment thereof may be made, any right conferred on the holder of such Bonds to convert the same into other obligations or capital stock of the Com- pany or into other securities and the terms of any such conversion, any right conferred on any holder of such Bonds or other person to declare the principal of all or any of the Bonds of such series to be immediately due and payable upon the happening of any specified event, any provisions as to the right of interchange of coupon Bonds or registered Bonds without coupons and of the several denominations of either form, and any variations from the above specified provisions of the coupon Bonds or the registered Bonds without coupons or both which may be permitted by this Indenture. The initial series (hereinafter called "Series A Bonds") (a) shall be designated as " Collateral Trust % Bonds, Series A, due January 1, 1974"; (b) shall be dated January 1, 1949 (except that registered Bonds without coupons shall be dated as elsewhere provided in this Section 1.02); (c) shall mature January 1, 1974; (d) shall bear interest at the rate of ..---- ..-------.-.-------------------..- per cent. (--..-- o per annum, payable semi-annually on January 1 and July 1 in each year until payment of the principal sum; (e) shall be payable both as to principal and interest at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts; (f) shall be issuable in the form of coupon Bonds in the denomination of $1,000 and of registered Bonds without coupons in the denomination of $1,000 and, with the authorization of the Com- pany, in other denominations which are multiples of $1,000, and the coupon Bonds and the registered Bonds without coupons and the several denominations of the registered Bonds without coupons shall, upon payment of charges as hereinafter in Section 1.04 of this Article provided, be interchangeable in authorized denominations, and the coupon Bonds shall be registerable as to principal at the office or agency of the Company in the Borough of Manhattan, The City of 16 New York, New York, as provided in Section 1.04 of this Article; (g) shall be redeemable before maturity at the option of the Company as a whole or in part by lot, at any time or from time to time, as provided in Article Three hereof; (h) shall be entitled to the benefits of, and shall be redeemable for, the sinking fund provided in Article Four hereof ; (i) shall ,be payable as to principal, premium, if any, sinking fund and interest without deduction for and free from any and all taxes, duties, imposts and fees imposed by the United States of Brazil or by any taxing authority thereof or therein except when such Bonds are beneficially owned by an individual or corporation resident in the United States of Brazil; (j) shall provide that if there shall occur an Event of Default, as defined in a Loan Agreement dated ............------------ 1948 between International Bank for Reconstruction and Development and the Company, a copy of which has been lodged with the Trustee, the principal of such Bonds may be declared and become due and pay- able in the manner and with the effect provided in said Loan Agree- ment; (k) shall be in substantially the form set forth in the preambles of this Indenture with such additions and changes as are necessary to give effect to the foregoing terms; and (1) shall be limited to an aggre- gate principal amount of $75,000,000 at any time outstanding, except for Bonds issued in lieu of lost, destroyed, stolen or mutilated Bonds. The Bonds shall be executed in the name and on behalf of the Company by its President or a Vice President either manually or by facsimile signature and by its Secretary or an Assistant Secretary manually, and its corporate seal (which may be in facsimile form with the same effect as if the official seal had been affixed or impressed) affixed thereto. Only such Bonds as shall bear thereon a certificate substantially in the form hereinbefore recited, executed by the Trus- tee, shall be entitled to the benefit of this Indenture. No bond or any coupon thereunto appertaining shall be valid for any purpose until such certificate shall have been duly executed on the Bond by the Trustee; and such certificate of the Trustee upon any Bond executed by the Company shall be conclusive evidence that the Bond so authen- ticated was duly authenticated and delivered hereunder, and that the holder is entitled to the benefit of this Indenture. In case any of the officers of the Company who shall have executed any of the Bonds shall cease to be such officers of the Company before the Bonds so executed shall have been authenticated and delivered by 17 the Trustee, such Bonds may be authenticated and delivered and disposed of as though the persons who executed the Bonds had not ceased to be such officers of the Company; and also any Bond may be executed in behalf of the Company by such persons as, at the actual date of the execution of the Bond, shall be the proper officers of the Company, although on the date of such Bond, any such person was not such officer. The coupons attached to the Bonds shall bear the facsimile signa- ture of the present Treasurer or of any future Treasurer of the Company, and for that purpose the Company may adopt and use the facsimile signature of any person who shall have been such Treasurer, notwithstanding the fact that at the time when such Bonds shall be authenticated and delivered or disposed of he shall have ceased to be the Treasurer of the Company. The Trustee shall not authenticate or deliver any coupon Bonds unless all coupons appurtenant thereto then matured, except coupons representing interest accrued thereon the payment of which has not been duly provided for, shall have been detached and cancelled, except as hereinafter in Section 1.06 of this Article otherwise provided. Registered Bonds without coupons shall be dated the semi-annual interest payment date to which interest has been paid on Bonds of such series next preceding the date of authentication thereof, unless the date of authentication be an interest payment date to which interest has been paid, in which case the Bonds shall be dated the date of authentication, provided that registered Bonds without coupons authenticated prior to the first interest payment date of any series shall be dated six months prior to such first interest payment date. Every registered Bond with- out coupons shall bear interest from its date. SECTION 1.03. Bonds may be issued originally either as coupon Bonds or as registered Bonds without coupons and, with respect to Series A Bonds and Bonds of other series to the extent authorized, the coupon Bonds and the registered Bonds without coupons, and the sev- eral denominations of registered Bonds without coupons, shall be inter- changeable as hereinafter provided. Any of the Bonds may have imprinted thereon any legend or legends required in order to com- ply with any law or with any rules or regulations of any govern- mental body or agency made pursuant thereto, or with the rules and regulations of any stock exchange or to conform to general usage, 18 and the Board of Directors, by resolution, may amend any legend on Bonds then outstanding so as to comply with any such law, rule or regulation, or so as to conform to such usage. SEcTIoN 1.04. The Company covenants to make in the manner hereinafter provided in this Section, at the office or agency of the Company to be maintained for that purpose in accordance with the provisions of Section 5.01 of Article Five of this Indenture, exchanges and transfers of Bonds to which the right of such exchange or transfer attaches under the provisions of this Indenture. The Company shall not he required to make transfers or exchanges (a) of Bonds of any series for a period of ten days next preceding any interest payment date thereof or next preceding any selection by lot of Bonds of such series to be redeemed, or (b) of any Bonds called or being called for redemption. Whenever any Bond or Bonds, whether coupon or registered with- out coupons, shall be surrendered for exchange or, in the case of registered Bonds without coupons, for transfer, the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, as may be requested, a coupon Bond or Bonds or a registered Bond or Bonds without coupons of the same series in the same aggre- gate principal amount and of the authorized denominations which may be requested, provided that any registered Bond or Bonds so surrend- ered shall be accompanied by a written instrument of transfer in form approved by the Company, executed by the registered holder in person or by duly authorized attorney. The coupon Bonds surrendered for exchange as above provided in this Section, and the coupon Bonds issued upon such exchange, shall each bear all unmatured coupons and all matured coupons not fully paid, if any. Each Bond delivered pursuant to the exercise of any privilege of transfer or exchange or in substitution for the whole or any part of one or more other Bonds shall carry all of the rights to interest ac- crued and unpaid, and to accrue, which were carried by the whole or such part of such one or more other Bonds, and such Bond, if a regis- tered Bond without coupons, shall be so dated, or, if a coupon Bond, shall have attached thereto such coupons, that neither gain nor loss in interest shall result from such transfer or exchange or sub- stitution. 19 For any exchange or any transfer of Bonds, the Company, at its option, may require the payment of a sum sufficient to reimburse it for any stamp tax or other tax or governmental charge, and, for any exchange of Bonds, but not for any transfer, a further sum in addi- tion thereto in the amount of Two Dollars ($2.00) for each new Bond issued. Except as above provided, no charge shall be made to the holder of any Bond for any registration, transfer or discharge from registration of such Bond. Upon presentation of any coupon Bond and request therefor, the Company shall register such Bond as to the principal thereof, in the name of the holder, on registry books to be provided for such purpose at the office or agency of Ibe Company to be maintained for that purpose and such registration shall be noted on the Bond. After such registration no transfer of any Bond so registered shall be valid unless made on said books by the registered holder, in person or by duly authorized attorney, and similarly noted on the Bond. Upon presentation to the Company, at such office or agency, of any such coupon Bond registered as to principal, accompanied by a written in- strument of transfer in form approved by the Company, executed by the registered holder in person or by duly authorized attorney, such Bond shall be transferred upon such registry books and such transfer shall be noted upon such Bond. The registered holder of any such coupon Bond registered as to principal also shall have the right to cause the same to be registered as payable to bearer, in which case transferability of the Bond by delivery shall be restored and thereafter the principal of such Bond when due shall be payable to the person presenting the Bond; but any such Bond registered as pay- able to bearer may be registered again in the name of the holder as aforesaid with the same effect as on the first registration Ihereof, and successive registrations and transfers as aforesaid may be made from time to time as desired. Each registration of a coupon Bond, and each transfer of a coupon Bond so registered, shall be recorded on the registry books and shall be noted on the Bond by the Bond registrar of the Company. Registration of any of the coupon Bonds as to principal shall not affect the negotiability of the coupons appertain- ing to such Bond, but every such coupon shall always continue to be transferable by delivery merely and shall remain payable to bearer. 20 If one or more of the events of default enumerated in Section 7.02 of Article Seven of this Indenture shall have happened and be con- tinuing, the Trustee, in its discretion, may nevertheless authenticate and deliver Bonds for the purpose of making the exchanges and trans- fers provided for in this Section. SECTION 1.05. The Company and the Trustee may deem and treat the bearer of any coupon or the bearer of any coupon Bond which shall not at the time be registered as to principal as the absolute owner of such coupon or Bond for all purposes whatsoever and the rights of the Company and the Trustee in this respect shall not be affected by any notice to the contrary. As to all registered Bonds and all coupon Bonds registered as to principal, the person in whose name they shall be registered shall for all purposes of this Indenture be deemed and treated as the owner thereof and payment on account of the principal of, or premium, if any, on such Bond if it be a coupon Bond registered as to principal, or of the principal of, or premium, if any, or interest on such Bond, if it be a registered Bond without coupons, shall be made only to or upon the order of such registered holder. All such payments so made shall . be valid and effectual to satisfy and discharge the liability of the Com- pany upon such Bonds to the extent of the sum or sums so paid, and no claim of any kind for the payment of the interest, or premium, if any, on or principal of any such Bond by any person other than the registered holder thereof shall affect the right to make the payments to the regis- tered holder as above provided. SECTION 1.06. In case any coupon Bond issued hereunder, with the coupons thereto appertaining, or any registered Bond without cou- pons, shall become mutilated or be lost or destroyed or stolen, the Company, in the case of a mutilated Bond shall, and in the case of a lost or destroyed or stolen Bond may in its discretion, issue, and there- upon the Trustee shall authenticate and deliver, a new Bond with or without coupons as the case may be, of like tenor and date and of the same series, bearing the same or different serial number or numbers, and bearing the same rights with respect to interest, in exchange and substitution for and upon cancellation of the mutilated Bond and its cou- pons, or the mutilated registered Bond without coupons, or in lieu of and 21 in substitution for the Bond and its coupons, or the registered Bond without coupons, so lost or destroyed or stolen, or if any Bond, so mutilated, lost, destroyed or stolen, or any coupon thereto appertaining, shall have matured or shall be about to mature, instead of issuing a substitute Bond or coupon the Company may pay the same and, except as to a mutilated Bond or coupon, may waive surrender thereof. The applicant for such substitute Bond or for such payment shall produce evidence satisfactory to the Company and the Trustee of the loss or destruction or theft of such Bond and its coupons, or of such registered Bonds without coupons, or that the mutilated Bond was one of the Bonds issued hereunder, as the case may be, and shall give the Com- pany and the Trustee, respectively, such indemnity as in their discre- tion they may require. The applicant for such substituted Bond shall pay all expenses, including counsel fees, in connection with the prepara- tion and issue thereof. SECTION 1.07. Pending the preparation of the definitive engraved Bonds to be issued hereunder, the Company may execute, and the Trustee upon the written request of the Company shall authenticate and deliver in lieu of such definitive engraved Bonds, and subject to the same provisions and limitations, temporary Bonds in any denom- ination, either in bearer form without coupons, or with one or more coupons attached, or in registered form without coupons, substan- tially of the tenor of the definitive engraved Bonds in lieu of which they are to be issued, and with or without registration provisions, and with appropriate omissions, insertions and variations. Such tempo- rary Bonds shall be exchangeable, without charge to the holder, for the definitive engraved Bonds in lieu of which they are issued, and upon surrender and cancellation of such temporary Bonds, the Company shall execute and the Trustee upon the written request of the Company shall authenticate and deliver in exchange therefor definitive engraved Bonds for the same aggregate principal amount. Until so exchanged, the temporary Bonds in all respects shall be entitled to the same lien and security of this Indenture as definitive engraved Bonds issued and authenticated hereunder. In lieu of temporary Bonds the Company may deliver definitive Bonds, either in coupon or registered form, printed on steel engraved borders, and in such event the holders of such printed definitive Bonds shall have the same rights of exchange for definitive engraved Bonds as above set forth with respect to the holders of temporary Bonds. 22 SEOTION 1.08. All Bonds and coupons delivered to the Trustee under the provisions of this Indenture, unless previously canceled, shall be canceled by the Trustee, except Bonds and coupons delivered to the Trustee for authentication or delivered to or purchased by the Trustee for the reserve fund provided in Section 5.10 of Article Five hereof. Canceled coupon Bonds and coupons shall be cremated by the Trustee and certificates of cremation delivered by the Trustee to the Company. Canceled registered Bonds shall be returned to the Bond registrar. ARTICLE TWO. Issue of Bonds. SECTION 2.01. Whenever used in this Indenture, unless the con- text otherwise requires, the following terms shall have the following meanings: (a) The term "subsidiary" means a corporation at least a majority of the shares of voting stock of which is owned directly by the Company or by any such corporation. (b) The term "voting stock" means shares of capital stock of any class having ordinary voting power for the election of a major- ity of directors, other than stock having such power only by reason of the happening of a contingency. (c) The term "funded debt" means debt maturing by its terms more than 12 months after its date, except debt to suppliers incurred for the purciase of supplies and equipment for use in con- struction or installation. (d) The term "electric and telephone property". means the fixed physical property of a subsidiary in service in the electric or telephone business or the electric and telephone business of such subsidiary, adequately maintained under the circumstances and conditions of its use, and charged and of such a nature as to be properly chargeable in accordance with sound and generally accepted accounting procedures applicable in the circumstances to the fixed property accounts of such subsidiary. Electric and tele- phI (e property shall not include intangible property, inventories or property in the course of construction or installation. 23 (e) The term "net depreciated book value of electric and telephone property" means the net depreciated book value thereof as of December 31, 1947 adjusted in respect of subsequen+ additions at cost (excluding any intercompany profit), retirements, write-offs and provisions for depreciation, obsolescence and retirement, as such additions, retirements, write-offs and provisions for deprecia- tion, obsolescence and retirement are recorded on the books of such subsidiary in accordance with sound and generally accepted accounting procedures applicable in the circumstances, with costs incurred in any currency other than United States currency trans- lated into United States currency at the rate or rates of exchange prevailing at the time such costs were incurred. (f) The term "subordinated debt" means funded debt owing by a subsidiary the terms of which provide that no payment on account of principal or sinking fund shall be made thereon as long as any secured unsubordinated debt of such subsidiary is outstand- ing and the terms of which further provide that no payment on account of interest shall be made thereon until full payment has been made of amounts then due for principal, sinking fund and interest on all secured unsubordinated debt of such subsidiary. (g) The term "unsubordinated debt" means all funded debt of a subsidiary other than subordinated debt, plus past due interest on unsubordinated debt unless and until such past due interest is converted into unsecured open account indebtedness. (h) The term "Eligible Collateral" means unsubordinated debt of a subsidiary which at the time referred to complies with all the following requirements: (1) such debt is unconditionally payable as to principal on or before a specified date and bears fixed interest payable reg- ularly; (2) such debt is debt of a subsidiary whose total unsub- ordinated debt does not exceed 507o of the net depreciated book value of the electric and telephone property of such subsidiary; (3) such debt is secured by a mortgage or floating charge or both (or by mortgages or flohting charges or both) on all 24 property and assets of such subsidiary ranking prior to all other mortgages, pledges and charges securing indebtedness of such subsidiary other than (a) existing or purchase money mortgages or floating charges on property acquired by purchase, consolida- tion or merger, (b) security for bank loans as permitted by this Indenture, (c) renewals or extensions of any such mortgages, floating charges or security for refunding purposes only, (d) mortgages or floating charges securing obligations of the follow- ing subsidiaries or any successors in principal amounts at any one time outstanding not in excess of the following respective amounts: (i) The Rio de Janeiro Tramway, Light and Power Company, Limited, $12,000,000, (ii) The Sao Paulo Tramway, Light and Power Company,. Limited, $4,000,000 and (iii) Sao Paulo Electric Company, Limited, $4,500,000, and (e) liens arising by operation of law in the ordinary course of business of such subsidiary; and (4) such debt is debt of a subsidiary against which no receivership, insolvency, bankruptcy, liquidation, winding-up or reorganization proceedings are pending in any court of com- potent jurisdiction, and which is not in default in payment of principal, premium, if any, or interest on any of, its unsubor- dinated debt. Past-due interest which has been converted into unsecured open account indebtedness shall not be considered to be in default for t}he purposes of this subparagraph. Except as otherwise specifically provided or as otherwise required by the context in particular cases, all references in this Indenture to money, cash or dollars, or to amounts, shall be deemed to refer to coin or currency of the United States of America, or amounts expressed therein; and in the application of any provisions of this Indenture where it is necessary to translate amounts in one currency into amounts in another currency such translation shall be made by the Trustee at such rate or rates of excliange as the Trustee may deem equitable. SECTION 2.02. Unless and until any of the events of default enu- merated in Section 7.02 of Article Seven hereof shall have happened and be continuing, Bonds shtll be authenticated and delivered by the 25 Trustee pursuant to the provisions of this Article, but only if, after such action, the covenant contained in Section 5.09 of Article Five of this Indenture shall be complied with. Subject to the foregoing provisions of this Section, and within the limitations and upon the conditions hereinafter in this Article provided, and only within such limitations and upon such conditions, the Company may from time to time execute Bonds and the Trustee shall thereupon authenticate such Bonds and deliver the same to or upon the order of the Company. SECTION 2.03. Bonds other than Bonds to be issued under the pro- visions of Article One of this Indenture in exchange for or in lieu of and in substitution for Bonds issued hereunder and then outstanding, may from time to time be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authen- ticate and deliver such Bonds, upon tie written application of the Com- pany, signed by its President or a Vice President and by its Treasurer or an Assistant Treasurer, accompanied by the following documents: (a) A certified copy of the resolution of the Board of Direc- tors of the Company authorizing the proposed issue and setting forth the amount thereof, and stating that such Bonds are of a designated series previously authorized, or specifying, as pro- vided in Section 1.02 of Article One of this Indenture, the par- ticular provisions of the Bonds of the proposed series, which provisions (except for Series A Bonds) shall be set forth in a supplemental indenture between the Company and the Trustee; (b) An opinion of counsel to the effect that no authorization of the issue of such Bonds is required by law to be given by any commission or other governmental authority except as therein shall be specified, and that in all other respects the Company is authorized by law to issue the Bonds proposed to be issued; (c) A copy, authenticated in such manner as may be satis- factory to the Trustee, of the order or orders or certificate or certificates authorizing such issue of Bonds made or given by the governmental autbority or authorities specified in said opinion of counsel; 26 (d) A certificate of the Company, dated the date the appli- cation is presented to the Trustee, signed by the President or a Vice President and by the Secretary or an Assistant Secretary of the Company to the effect that none of the events of default enumerated in Section 7.02 of Article Seven of this Indenture have happened and are continuing; (e) A certificate or certificates of the Company, dated the date the application is presented to the Trustee, substantially in the form and substance of the annual certificate required under Section 5.09 of Article Five of this Indenture, but setting forth such additional facts as are necessary to show that after the action requested is taken, the covenant contained in Section 5.09 of Article Five hereof will be complied with; (f) Such conveyances, declarations or instruments of fur- ther assurance, executed and acknowledged by the Company or otherwise, as in the opinion of counsel may be necessary for the purpose of subjecting to the lien and operation of this Indenture as a first fixed and specific mortgage, pledge and charge any obligations of subsidiaries upon the basis of which the action requested by the Company is to be taken, together with an opin- ion of counsel to the effect that such declarations, conveyances or other instruments are sufficient for that purpose; or, in lieu of such instruments, an opinion of such counsel that no declaration, conveyance or instrument of further assurance is necessary for the purpose aforesaid; and in either case an opinion of counsel to the effect that obligations of subsidiaries upon the basis of which the action requested by the Company is to be taken are legal and valid obligations of such subsidiaries and conform with the requirements of subdivisions (1) and (3) of paragraph (h) of Section 2.01 of this Article; (g) A certificate of independent auditors satisfactory to the Trustee, who may be the auditors regularly employed to audit the books of the Company or of any subsidiary, to the effect that, as of the close of the latest fiscal year as to which it is prac- ticable to give such certificate, the not depreciated book value of electric and telephone property of any subsidiary used as a basis 27 for qualification of the debt of such subsidiary as Eligible Col- lateral has been determined as provided by paragraph (e) of Section 2.01 of this Article; (h) A certificate of an independent Canadian or United States engineer, or engineering firm, of recognized standing satisfactory to the Trustee, who may have been previously employed or retained by the Company, setting forth that in the opinion of such engineer or firm, during the period from the end of the period covered by the last such certificate previously fur- nished to the Trustee, or from Decenlber 31, 1947 if no such certificate has previously been furnished, to a date not more than six months before the date the application is presented to the Trustee the electric and telephone property of such subsid- iary has been adequately maintained under the circumstances and conditions of its use, and that after making an independ- ent review of the depreciation policy followed by such sub- sidiary in its accounts, such policy and the provisions there- under recorded on the books of such subsidiary in respect of depreciation, obsolescence and retirement of electric and tele- phune property of such subsidiary represent in the opinion of such engineer or firm reasonable and adequate provision for such purposes, all in accordance with sound engineering standards; provided, however, that no such certificate shall be required prior to December 31, 1951 or thereafter covering any period of less than three years. ARTICLE THREE. Redemption of Bonds. SECTIoN 3.01. In the creation of any particular series of Bonds hereunder the Company may reserve the right to redeem, before maturity, all or any part of the Bonds of that series at such time or times and on such terms as the Board of Directors of the Company may determine and as shall be appropriately specified in each of the Bonds of that series. Except as otherwise determined by the Board of Directors of the Company prior to the issue under this Indenture of Bonds in respect of which the Company is reserving a right of redemption before maturity, the procedure for redemption shall be as set forth in this Article. 28 The Company hereby reserves the right to redeem the Series A Bonds before maturity as a whole at any time, or in part from time to time, all upon the notice and in the manner provided in this Article at redemption prices which shall be the following percentages of their principal amount: to and including January 1, 1953, at 103%; there- after, to and including January 1, 1957, at 1021/%; thereafter, to and including January 1, 1961, at 102%; thereafter, to and including Jan- uary 1, 1965, at 101%; thereafter, to and including January 1, 1969, at 101%; thereafter, to and including January 1, 1973, at 100%; and thereafter at 100%; in each case together with accrued intcrest on the principal amount thereof to the date fixed for redemption. In case the Company shall desire to exercise such right to redeem and pay off all or any part of the Bonds of a particular series on any date in accordance with the right reserved so to do, notice of redemp- tion, either of all or any part of the Bonds of such series, shall be given by the Company by publication in one newspaper printed in the English language and customarily published on each business day and of general circulation in the Borough of Manhattan, The City of New York, New York, and in one newspaper printed' in the English language and customarily published on each business day and of !- general circulation in the City of Toronto, Province of Ontario, at least four times prior to the date fixed for such redemption, the first publica. tion to be not less than forty-five (45) days nor more than sixty (60) days prior to the date fixed for such redemption; provided, however, that if at the time all of the Bonds outstanding shall be registered Bonds without coupon6 ur coupon Bonds registered as to principal, then no notice of redemption need be given except a notice by mailing to the holders of the Bonds designated for redemption as hereinafter provided. A copy of the notice of redemption shall be mailed by the Company at least forty-five (45) and not more than sixty (60) days before the date fixed for such redemption to the registered holders of Bonds (including coupon Bonds registered as to principal) called for redemption, at their last address appearing upon the Bond registry books, but if notice by publication shall have been given as above pro- vided where publication is required, failure to give such notice by mailing shall not affect the validity of such proceedings for the redemp- tion of Bonds. 29 In case the Company shall elect to redeem less than all of the Bonds of any series then outstanding, it shall give the Trustee adequate written notice of the aggregate principal amount of Bonds of such series to be redeemed, and thereupon the Trustee shall, not more than twenty (20) days before the date of first publication of notice of redemp- tion, draw by lot, in such manner as the Trustee may elect, from tho numbers of coupon Bonds of the said series outstanding and the numbers assigned as hereinafter provided to registered Bonds without coupons of the said series outstanding, the distinguishing numbers of a principal amount of Bonds equal to such aggregate principal amount of Bonds to be redeemed, and shall thereafter notify the Company in writing of the numbers of Bonds so drawn. The notice of redemption shall specify the numbers of the coupon Bonds so drawn and if any numbers so drawn shall be numbers assigned as hereinafter provided to outstand- ing registered Bonds without coupons, the notice of redemption shall specify the respective numbers of such registered Bonds; and in the case of any registered Bonds without coupons which are to be redeemed in part only (by reason of the fact that all the numbers assigned as hereinafter provided to such registered Bonds shall not have been drawn), such notice shall specify the respective portions of the principal amount thereof to be redeemed and shall state that on and after the redemption date upon surrender of such registered Bonds for redemp- tion new Bonds of the same series of an aggregate principal amount equal to the unredeemed portions of such registered Bonds will be issued in lieu thereof.. In case there shall have been drawn for redemption as aforesaid one or more but less than all of the numbers assigned to any registered Bond without coupons the Company shall execute and the Trustee shall authenticate and deliver to the registered holder thereof or upon his order and at the expense of the Company a new Bond or Bonds of the same series for the unredeemed portion of the surrendered Bond, or at the option of the registered holder of such Bond the Trustee or its authorized agent shall, upon presentation of such Bond for such purpose, make a notation thereon of the payment of the portion of the principal amount of such Bond so called for redemption. In case any Bonds are to be called for redemption the Trustee shall arbitrarily assign, for the purpose of the drawing, to each regis- tered Bond without coupons of the lowest denomination of such series a number, and in case any registered Bond without coupons shall be 30 of a denomination greater than the lowest denomination the Trustee shall assign to such Bond a number for each multiple thereof. SECTIoN 3.02. After the publication of the notice of redemption has been duly completed, or notice duly mailed if no publication is required, the Bonds so called for redemption (including the designated portion of any registered Bonds without coupons, if any) shall become due and payable on the date and at the place or places in such notice specified, at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after such date of redemption (unless the Company shall make default in the payment of said Bonds at the redemption price or prices aforesaid, together with interest accrued to the date fixed for redemption) interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, and on presentation and surrender thereof at the place or places of payment and redemption in said notice specified with all unmatured coupons, if any, thereto appertaining, they shall be paid and redeemed by the Company at the applicable redemption price afore- said, together with interest accrued to the date fixed for redemption. In case there shall not be presented with any coupon Bond called for redemption on an interest payment date the coupon for the interest maturing on such date, such Bond shall nevertheless be paid at the redemption price, and such interest shall be paid to the bearer of such coupon on presentation for payment. If Bonds called for redemption are not so paid and redeemed on presentation thereof, they shall con- tinue to bear interest at the rate expressed therein until paid. Whenever exercising its right of redemption, as provided for in this Article, the Company shall furnish to the Trustee a duly certified copy of a resolution of its Board of Directors providing for such redemption, specifying the particular series and the principal amount of Bonds to be called for redemption from such series. SECTION 3.03. If the Company shall deposit in trust with the Trustee an amount in cash equal to the redemption price of all of the Bonds called for redemption, and interest accrued to the date fixed for redemption, and shall furnish to the Trustee proof satisfactory to the Trustee that notice of redemption of such Bonds has been duly pub- lished, or that arrangements have been made insuring to the satisfac- 31 tion of the Trustee that all such publications of such notice will be made, or that notice has been duly mailed if no publication is required, then, the Bonds so called for redemption shall no longer be deemed to be outstanding hereunder for any purpose, except for the purpose of entitling the holders thereof to receive payment of the redemption price thereof, and accrued interest to the redemption date, and shall cease to be entitled to the security hereof, and such Bonds shall cease to bear interest after the redemption date and the coupons for interest appurtenant to such Bonds maturing subsequent to the redemption date shall be void. The Trustee shall hold the redemption moneys in trust for the holders of the Bonds called for redemption and shall pay the same to such holders respectively upon presentation and surrender of such Bonds, with all coupons thereto attached maturing after the redemption date. In any case where the redemption date shall be an interest pay- ment date, the coupons maturing on the redemption date shall be detached by the holders and presented for payment, and the Trustee shall apply the cash received by it for the payment of the accrued interest on the Bonds called for redemption to the payment of such coupons. SECTION 3.04. In any case where the redemption date shall be a Sunday or a legal holiday, generally or for banks or trust companies at the place of payment, payment of the redemption price and interest payable upon redemption may be mad on the next succeeding day not a Sunday or a legal holiday with the same force and effect as if made on the nominal redemption date. ARTICLE FOUR. Sinking Fund for Series A Bonds. SECTION 4.01. The Company covenants and agrees that so long as any Series A Bonds are outstanding it will pay to the Trustee, as and for a sinking fund for such Bonds, (a) on or before April 15, 1953, and semi-annually thereafter on or before each fifteenth day of April and October, to and including October 15, 1956, a sum equal to 2/3 of 1o of the aggregate principal amount of Series A Bonds authenti- 32 cated and delivered prior to the date of each such payment, and (b) thereafter semi-annually on or before each fifteenth day of April and October, (i) a sum to the nearest thousand dollars equal to 2.1775% of the aggregate principal amount of Series A Bonds theretofore authenticated and delivered after deducting from such aggregate prin- cipal amount the aggregate principal amount of Series A Bonds acquired before April 15, 1957, through the operation of the sink- ing fund, whether by purchase, redemption or otherwise, plus (ii) a sum to the nearest thousand dollars equal to 1.75o of the aggregate principal amount of all Series A Bonds theretofore acquired on or after April 15, 1957, through the operation of the sinking fund, whether by purchase, redemption or otherwise. Series A Bonds while held in the reserve fund provided for in Section 5.10 of Article Five of this Indenture shall not be deemed to have been acquired through the operation of the sinking fund. The Series A Bonds shall be redeemable for sinking fund purposes, on any interest payment date beginning with July 1, 1953, at 100% of their principal amount, together with accrued interest to the date fixed for redemption. At the option of the Company, sinking fund payments pursuant to this Article may be made in cash, or in Series A Bonds theretofore purchased or redeemed by the Company otherwise than through the operation of the sinking fund, with all unmatured coupons and matured coupons not fully paid attached (except that with respect to redeemed Bonds a certificate or certificates of cremation may be delivered in lieu of the coupon Bonds and coupons), at the principal amount thereof (exclusive of accrued interest), or partly in cash and partly in Series A Bonds. SECTION 4.02. At any time after the receipt of any sinking fund moneys and until a date sixty (60) days prior to the next interest pay- ment date for Series A Bonds, the Trustee, in such manner and from time to time in such amounts as it may deem advisable in its discretion (or in such manner as may be requested by the Company and approved by the Trustee), shall apply such moneys, so far as the same shall be adequate, to the purchase (including purchases from the Company) for the sinking fund of Series A Bonds at a price (exclusive of accrued 33 interest and brokerage com,* Gions) not exceeding the principal amount thereof. SECTION 4.03. If upon the date limited as aforesaid for sail- pur- chases the Trustee as above stated shall not have purchased Series A Bonds in an amount sufficient to exhaust the sinking fund moneys available therefor, the amount of such moneys remaining unexpended, if $25,000 or more (or any amount less than $25,000, if so requested by the Company), shall be applied by the Trustee on the next interest payment date to the redemption of outstanding Series A Bonds, in the manner and with the same effect hereinbefore in Article Three provided, at the principal amount thereof (exclusive of accrued interest). Any such amount of less than $25,000 not so to be applied may continue to be applied by the Trustee to the purchase for the sinking fund of Series A Bonds upon the terms set forth in Section 4.02 of this Article, and any part thereof not so applied prior to the next sinking fund payment date shall be added to the next sinking fund instalment and together with said instalment applied in accordance with the provisions of this Article. SECTION 4.04. Any Series A Bonds acquired through the operation of the sinking fund, together with appurtenant coupons, shall be can- celed by the Trustee, and no Bonds shall be issued hereunder in lieu thereof. SECTION 4.05. The Company will pay in addition to the sinking fund instalments the expenses of administering the said sinking fund as provided herein, inclidiiig the cost of advertisement of redemption notices and any other advertisements, and any customary brokerage or other commission upon the purchase of any Series A Bonds and any accrued interest payable with respect to any such Bonds purchased or redeemed. SECTION 4.06. When the Company shall pay or cause to be paid the principal of all tho Series A Bonds with interest and premium, if any, according to their terms, or shall deposit with the Trustee, in trust for the holders thereof, an amount or amounts sufficient to pay 34 the principal of all of said Series A Bonds with interest and premium, if any, according to their terms, all moneys then held by the Trustee in the sinking fund for Series A Bonds shall, upon demand of the Com- pany, be repaid to it. No such sinking fund moneys shall be applied to the purchase or redemption of Series A Bonds or, except as provided in the next preceding paragraph, be paid over to the Company during the con- tinuance of an event of default under this Indenture of which the Trustee shall have notice, and any moneys in such sinking fund at the time when such notice shall have been received by the Trustee shall be held, unless all such defaults are remedied, as additional security for the payment of the Series A Bonds then outstanding. ARTICLE FIVE. Particular Covenants of the Company. The Company covenants as follows: SECTION 5.01. It will duly and punctually pay, or cause to be paid, the principal of, premium if any, and interest on the Bonds, at the dates and place, and in the manner prescribed in the Bonds, or in the coupons thereto belonging. Upon request in writing by any holder of one or more Bonds, the Company will maintain an office or agency in the place or places where such Bond or Bonds are expressed to be payable, at which office or agency such of said Bonds and coupons as are there payable may be presented for payment and where such of said Bonds as are register- able, transferable or exchangeable may be presented for registration, transfer or exchange and where notices or demands in respect of any and all of the Bonds and coupons may be served. From time to time, the Company will give notice to the Trustee of the location of any such office or agency and of any change of location thereof, and in case the Company shall not maintain any such office or agency or shall fail to give such notice of any change thereof, presentation and demand may be made and notices may be served at the principal office of the Trustee. SECTION 5.02. Whenever required by the Trustee, the Company will do, execute, acknowledge and deliver or it will cause to be done, 35 executed, acknowledged and delivered, all and every such further acts, deeds, transfers and assurances for the better assuring, conveying and confirming unto the Trustee all and singular the trust estate hereby pledged or mortgaged, or intended so to be, as the Trustee shall reasonably require for better accomplishing the provisions and purposes of this Indenture, and for securing payment of the principal and interest of the Bonds. SECTION 5.03. The Company will not declare or pay any dividend on any of its shares of capital stock of any class or permit any sub- sidiary to declare or pay any dividend on the shares of capital stock of any class of such subsidiary, nor will the Company make any dis- tribution on any of its shares of capital stock of any class other than a dividend payable in shares of capital stock of the Company, or permit any subsidiary to make any distribution on tho shares of capital stock of any class of such subsidiary other than a dividend payable in the shares of capital stock of such subsidiary, nor will the Company acquire any shares of any of its capital stock of any class for a consideration, or permit any subsidiary to acquire any shares of the capital stock of any class of such subsidiary for a consideration if, after giving effect to any such dividend or distribution (other than those payable in shares of capital stock) or such acquisition of shares of capital stock, the aggregate payments by the Company and such subsi(liaries on a con- solidated basis, excluding intercompany dividends, distributions and acquisitions, for all such purposes subsequent to December 31, 1946, would exceed the consolidated net income of the Company and all sub- sidiaries (determined in accordance with sound accounting practice) available for shares of capital stock earned subsequent to December 31, 1946, provided, however, that payments by the Company and sub- sidiaries for acquisitions of shares of their capital stock shall be dis- regarded to the extent that such payments (excluding payments for intercompany acquisitions) do not exceed the net proceeds received after December 31, 1946 by the Company and subsidiaries (excluding intercompany sales) from the sale of shares of capital stock. The Company will deliver to the Trtt,'e aiinally on or before the last day of May in each year, a certificate signed by its President or a Vice President and by its Secretary or an Assistant Secretary, setting forth in reasonable detail the facts necessary to show com- 36 pliance for the preceding calendar year with the covenant contained in this Section, supported by the certificate or certificates of inde- pendent auditors satisfactory to the Trustee, who may be the auditors regularly employed to audit the books of the Company or of any subsidiary. SimoN 5.04. The Company, from time to time, will pay and dis- charge all taxes, assessments and governmental charges, the lien of which would be prior to the lien hereof, lawfully imposed upon the trust estate, or upon any part thereof, or upon the income and profits thereof, so that the lion and priority of this Indenture thereon shall be fully preserved at the cost of the Company without expense to the Trustee or to the bondholders in respect of such properties; and will also pay and discharge all taxes, assessments and governmental charges lawfully impo§ed upon the interest of the Trustee in the trust estate. Nothing contained in this Section shall require the Company to pay any such tax, assessment or charge so long as the Company in good faith shall contest the validity or amount thereof, unless in the opinion of the Trustee such action might jeopardize the interests of the bondholders. The Company will deliver to the Trustee annually on or before the last day of May in each year a certificate signed by its President or a Vice President and by its Secretary or an Assistant Secretary setting forth in reasonable detail a description of all such unpaid taxes, assess- ments or charges existing on January 1 of such year. SEOTION 5:05. If default shall be made in paying any sum which in Section 5.04 of this Article the Company has covenanted to pay or discharge, the Trustee, without affecting any of its rights hereunder, from time to time in its discretion may pay any sum so in default, and thereupon shall have and forthwith may assert a lien for such advances upon the trust estate and the proceeds thereof prior to the lien of the Bonds issued hereunder. In case the sunus so advanced shall amount at any one time to as much as $300,000, the Trustee shall give notice of such advances and the purposes and amounts thereof by publication in one newspaper printed in the English language and customarily published on each business day and of general circulation in the Borough of Manhattan, The City of New York, New York, and 37 in one newspaper printed in the English language and customarily published on each business day and of general circulation in the City of Toronto, Province of Ontario, at least once. A copy of such notice shall also be mailed by the Trustee on or before the date of such publication to the registered holders of Bonds (including coupon Bonds registered as to principal) at their last addresses appearing upon the registry books. SECTION 5.06. The Company will not issue Bonds hereunder contrary to the limitations heroin provided or in excess of such amounts as shall from time to time be lawful under the provisions of the laws and statutes legally applicable to and affecting the issue of Bonds under this Indenture and the aggregate amount thereof. SECTION 5.07. Subject to the provisions of Article Eleven of this Indenture the Company will, at all times, maintain its corporate exist- ence and right to carry on its business, and use its best efforts to procure all renewals and extensions thereof, if and when any shall be necessary, and, subject to the provisions of this Indenture, will cause its subsidiaries to use their best efforts to maintain, preserve and renew all the rights, powers, privileges and franchises owned by them; pro- vided, however, that nothing herein contained shall be construed to prevent any subsidiary from ceasing or omitting to exercise rights, powers, privileges or franchises which, in the judgment of such sub- sidiary, can no longer be profitably exercised or availed of. SECTION 5.08. The Company will not create or assume any moit- gage, pledge or charge on any of its property or assets (other than (a) existing or purchase money mortgages or floating charges on property acquired by purchase, consolidation or merger, (b) security for bank loans as permitted by this Indenture or (e) renewals or extensions of any such mortgages, floating charges or security for refunding pur- poses only) unless such mortgage, pledge or charge shall be in all respects subordinated to the lien of this Indenture and the instrument or instruments creating such mortgage, pledge or charge shall ex- pressly so provide; provided, however, that nothing contained in the foregoing covenant shall prevent any consolidation, merger, sale, con- veyance or lease as permitted in Article Eleven of this Indenture if 38 the lien of this Indenture upon the property of the Company imme- diately before such consolidation, merger, sale, conveyance or lease is not impaired thereby. SECTION 5.09. The Company will at all times maintain Eligible Collateral pledged hereunder in a principal amount at least equal to one hundred twenty per cent (120o) of the principal amount of the Bonds outstanding hereunder. For the purposes of this Section there shall be excluded from the principal amount of the Bonds outstand- ing hereunder a principal amount of Bonds equal to the amount of any cash then held by the Trustee (to the extent that such cash is in the same currency in which such Bonds are payable), except for cash held by the Trustee for interest, in trust for redemption or as a reserve u-nder Section 5.10 of this Article. Such Eligible Collateral shall bear fixed interest at a rate or rates which will be sufficient to pro- duce an amount annually at least equal to the annual interest and amortization requirements (including sinking fund payments, if any) of the Bonds then outstanding and the Company will cause such amount to be paid annually as interest on pledged Eligible Collateral; provided that the foregoing covenant shall not prevent the Company from mak- ing available to its subsidiaries or any of them, by way of unsecured open account advance, the whole or any part of the amount of such interest. Such Eligible Collateral shall be payable in United States currency except that, if any Bonds outstanding are payable in any other currency, such Eligible Collateral to the extent of 120%/o of the principal amount of such Bonds may be payable in such other currency in whole or in part. The Company will deliver to the Trustee, annually in the month of June in each year, a certificate signed by its President or a Vice President and by its Treasurer or an Assistant Treasurer, setting forth in reasonable detail (a) a statement as to the principal amount of Bonds outstanding hereunder determined as above provided, and (b) a statement as to the Eligible Collateral pledged and cash held by the Trustee under this Indenture, together with the facts required to be stated to show that such collateral is Eligible Collateral as defined in Section 2.01 of Article Two of this Indenture and that it is payable in the currency or currencies required by the foregoing covenant. Each such statement shall be made as of the date of the respective certificate, 39 except that the amount of the net depreciated book value of the electric and telephone property of any subsidiary whose obligations are then pledged hereunder may be stated as of a date not earlier than the end of the last preceding fiscal year of such subsidiary, adjusted, how- ever, to give effect to any net adverse change of more than ten per cent. (10%) of such net depreciated book value up to the date of the certificate. The Trustee shall be entitled to accept any such certificate as conclusive proof of such net depreciated book value as of the date of such certificate. SECTION 5.10. The Company will not declare or pay any dividends on any class of its capital stock unless it shall maintain with the Trustee a reserve fund for the payment of interest and sinking fund on the Series A Bonds outstanding in sums, in the manner and at the times hereafter provided: The original interest component of this reserve fund will be depos- ited upon the original authentication and delivery of each Series A Bond in an amount at least equal to the interest on each such Bond for a period of one year, and the original sinking fund component of this reserve fund will be deposited on or before January 15, 1953 in an amount at least equal to the sinking fund requirements for a period of six months for the Series A Bonds. The Company will maintain this reserve fund by depositing with the Trustee on or before the fif- teenth day of each January and July after the original deposits, sums sufficient to keep the reserve fund at least equal to the interest require- ments on the Series A Bonds then outstanding for a period of one year and sinking fund requirements on such Bonds for a period of six months. The sinking fund component of the reserve fund may consist either of oash or Series A Bonds, or both, as provided for sinking fund payments in Section 4.01 of Article Four of this Indenture. The interest component of the reserve fund shall consist of cash. The Trustee may invest (a) any part of the reserve fund deposited in cash in obligations of the United States of America maturing not more than three years from the date of such investment, and (b) any part of the sinking fund com- ponent of the reserve fund deposited in cash in Series A Bonds at a price not in excess of their principal amount. 40 The Company may satisfy its obligations to make semi-annual pay- ments for the sinking fund under Section 4.01 of Article Four of this Indenture, and to make semi-annual payments for interest, from the reserve fund to the extent it is sufficient for such purposes, but in that case the foregoing covenant against declaration or payment of divi- dends shall become effective and remain in effect until the reserve fund has been completely replenished and all semi-annual payments then due for interest and sinking fund shall have been duly made. The Company may withdraw from the reserve fund at any time amounts in excess of interest or sinking fund reserve fund requirements for Series A Bonds, provided that all semi-annual interest and sinking fund payments then due for Series A Bonds have been duly made. No failure by the Company to maintain the aforesaid reserve fund for interest and sinking fund shall constitute a default within the mean- ing of Section 7.02 of Article Seven hereof. SECTIoN 5.11. The Company will not permit any subsidiary whose obligations are specifically pledged as Eligible Collateral hereunder to contract any funded debt in excess of fifty per cent. (50o) of the net depreciated book value of the electric and telephone property of such subsidiary unless the instrument or instruments evidencing the funded debt contracted in excess of such percentage shall provide that neither principal nor sinking fund with respect to such funded debt shall be paid as long as any secured unsubordinated debt of such subsidiary is out- standing and that no interest on such subordinated debt shall be paid until full payment of amounts then due for principal, sinking fund and interest has been made on all secured unsubordinated debt of such subsidiary, and the Company will not permit any such subsidiary to make any payments with respect to such subordinated debt inconsistent with the foregoing provisions, provided, however, that the exchange by the Company with a subsidiary of funded debt of such subsidiary for shares of such subsidiary shall not be deemed to be a payment with respect to funded debt within the meaning of this Section. Subject to the restrictions on rights of withdrawal or substitution of collateral specifically pledged hereunder contained in Section. 6.04 of Article Six hereof, subordinated debt of any subsidiary may at any time and from time to time be converted into an equal principal amount of unsubordi- nated debt of such subsidiary if thereafter the foregoing covenant 41 shall be complied with, and unsubordinated debt of any subsidiary may at any time and from time to time be converted into an equal prin- cipal amount of subordinated debt of such subsidiary if thereafter the covenant contained in Section 5.09 of this Article shall be complied with. SECTION 5.12. The Company with all convenient speed will duly record, register and file and re-record, re-register and refile this Inden- ture and every indenture supplemental hereto which hereafter may be executed as may be required by law or as may be deemed advisable by the Trustee in order to protect the lien hereof on the property covered hereby or intended so to be, and will pay any recording, regis- tration or filing tax or fee legally due upon the recording of this Indenture or of any indenture supplemental hereto or due at any time upon or in connection with the issuance of the Bonds hereunder, and will make such statements and do such acts now or hereafter as are or shall be required by it to be made or done under any law affecting the recording hereof or of any supplemental indenture, and will furnish to the Trustee annually in the month of April an opinion of counsel that the covenants contained in this Section have been complied with as of a date or dates not more than four months prior to the date of such opinion. SECTION 5.13. Except as permitted by Article Eleven hereof, the Company will not sell or dispose of its assets as a whole or substantially as a whole. ARTICLE SIX. Pledged Debentures and Cash Held by Trustee. SECTIoN 6.01. The Pledged Debentures shall be in bearer form or in registered form in the name of the Trustee as registered owner. The Pledged Debentures shall be held by and in the custody of the Trustee under the terms and provisions of this Indenture. The Trus- tee is hereby authorized in its discretion to cause Pledged Debentures in registered form without coupons to be exchanged into bearer form, and the Trustee may cause all such Pledged Debentures in bearer form 42 to be transferred into its name as such Trustee, or into the name of its nominee; and it may make such other transfers and arrangements as may be required from time to time to protect the lien intended to be created hereby upon such Pledged Debentures. The voting power with respect to the Pledged Debentures shall be vested in the Trustee and exercised by it for the benefit of the trust estate in such manner as the Trustee in its discretion shall see fit. SECTION 6.02. Unless and until any of the events of default enumerated in Section 7.02 of Article Seven hereof shall have happened and be continuing, the Company shall be entitled to receive for its own use all interest paid on the Pledged Debentures and if the Trustee shall receive any such interest it shall forthwith deliver and pay such interest over to the Company; and the Trustee from time to time shall execute and deliver upon the written request of the Company suitable assign- ments and orders for the payment of such interest in favour of the Company and shall deliver to the Company upon a like request any and all coupons representing such interest, as they mature. Irrespective of whether any such event of default shall have hap- pened or be continuing, (1) except as permitted by Section 6.04 of this Article, the Company shall not be entitled to receive, and the Trustee shall not pay over or deliver to the Company, any moneys or property paid or received in respect of any of the Pledged Debentures as a result of any condemnation of the property of any subsidiary or the enforce- ment of any mortgage or other security for any of such Pledged Deben- tures; (2) except as permitted by Section 6.04 of this Article, the Com- pany shall not be entitled to receive, and the Trustee shall not pay over or deliver to the Company, any moneys or property paid or received on account of the principal of any Pledged Debentures; and (3) until actually paid, released or discharged, every coupon or right to interest appertaining to the Pledged Debentures shall remain subject to this Indenture. In case (1) any moneys or property shall be paid or received in respect of the Pledged Debentures as a result of any condemnation of the property of any subsidiary, or as a result of the enforcement of any mortgage or other security for such Pledged Debentures, or in case (2) any moneys or property shall be paid or received on account of the prin- 43 cipal of the Pledged Debentures,-then and in every such case all such moneys or property shall be collectible and received by the Trustee; and any and all moneys and property so received by the Trustee shall be held as part of the trust estate hereunder until paid out in conformity with the provisions of this Indenture. The Company shall have the right at any time or from time to time to pledge additional collateral hereunder or to deliver cash to the Trustee to be held as part of the trust estate hereunder until withdrawn or paid out in conformity with the provisions of this Indenture. SECTION 6.03. Upon the happening and during the continuance of any of the events of default enumerated in Section 7.02 of Article Seven hereof, the Trustee shall be entitled to collect and receive all interest on the Pledged Debentures. SECTION 6.04. Unless and until any of the events of default enumerated in Section 7.02 of Article Seven hereof shall have happened and be continuing, the Company shall have the following rights of with- drawal of or substitution for collateral spdcifically pledged hereunder or withdrawal of cash held by the Trustee subject to the condition that after the exercise of any such right the covenant contained in Section 5.09 of Article Five hereof shall be complied with: (a) Eligible Collateral may be withdrawn or other Eligible Collateral or cash or both substituted for Eligible Collateral on or after January 1, 1953 if thereafter (i) at least 831/3% of the amount of Eligible Collateral required to be pledged hereunder by reason of the covenant contained in Section 5.09 of Article Five hereof shall consist of obligations of subsidiaries whose combined average annual income from electric and telephone business available for fixed charges for the three preceding fiscal years shall have equalled at least 80% of the combined average annual income from electric and telephone business available for fixed charges for the same period of all corporations which are subsidiaries at the time of the proposed withdrawal or substi- tution and (ii) the principal amount of obligations of each subsid- iary included in the aforesaid 831/3% shall be in substantially the same proportion to the total principal amount of all obligations so included as the average annual income of each such subsidiary from electric and telephone business available for fixed charges for the period mentioned in said clause (i) bears to the combined average annual income of all such subsidiaries from electric and telephone business available for fixed charges for the same period; (b) Eligible Collateral may be withdrawn on or after Janu- ary 1, 1953, without regard to the limitations of paragraph (a) of this Section, against deposit of cash in an amount equal to 831/3o of the principal amount of such Eligible Collateral in trust with the Trustee for the redemption of Bonds, together with accrued interest and premium, if any, payable in connection with such redemption and upon compliance by the Company with the provisions of Section 3.03 of Article Three hereof as to notice of redemption; (c) Collateral which is not Eligible Collateral may be with- drawn at any time; (d) Cash received and held by the Trustee under any provi- sions of this Article other than paragraph (b) of this Section may be withdrawn at any time without any conditions as to its use by the Company; (e) Collateral consisting of unsubordinatect debt of any sub- sidiary may be substituted at any time, without regard to the limitations of paragraph (a) of this Section, for collateral con- sisting of subordinated debt of such subsidiary in an equal aggre- gate principal amount. In case the Company desires to avail itself of any of the rights of withdrawal or substitution of collateral or cash as provided in this Sec- tion it shall make a request in writing to the Trustee, accompanied, except for substitutions under paragraph (e) of this Section, by the certificates specified in paragraphs (d), (e), (g) and, when required, (h) of Section 2.03 of Article Two of this Indenture, and in case of withdrawal or substitution of Eligible Collateral or substitution of cash for Eligible Collateral pursuant to paragraph (a) of this Section a certificate setting forth in reasonable detail the facts necessary to show compliance with the limitations contained in clauses (i) and (ii) of para- 45 graph (a) of this Section, supported by the certificate or certificates of independent auditors satisfactory to the Trustee, who may be the auditors regularly employed to audit the books of the Company or of any subsidiary, as to the income available for fixed charges from electric and telephone business of each subsidiary and combined income available for fixed charges from electric and telephone business of any group of subsidiaries required to show such compliance. In addition, in case of substitution of collateral there shall be furnished to the Trustee the documents specified in paragraph (f) of Section 2.03 of Article Two of this Indenture, and in case of with- drawal of collateral such documents shall be furnished with respect to any Eligible Collateral required to remain pledged as to which no such documents previously have been furnished. SECTION 6.05. All securities and other property or assets at any time received by, delivered to or deposited with the Trustee hereunder shall until delivered, applied or paid out by the Trustee pursuant to the provisions of this Indenture, be subject to the first, fixed and specific mortgage, pledge and charge hereunder. ARTICLE SEVEN. Remedies of the Trustee and Bondholders. SECTION 7.01. The Company will not, directly or indirectly, extend or assent to the extension of the time for payment of any coupon or claim for interest on any of the Bonds hereby secured, and it will not, directly or indirectly, be a party to or approve any such arrangement by purchasing or funding said coupons or claims for interest or in any other manner. If the time for payment of any such coupon or claim for interest shall be so extended by or with the consent of the Company, such coupon or claim for interest shall not be entitled, in case of default hereunder, to the benefit of the security of this Inden- ture, except subject to the prior payment in full of the principal of all Bonds hereby secured and then outstanding and all coupons and interest on such Bonds the payment of which shall not have been ex- tended; provided, however, that the foregoing provisions of this See- 46 tion shall not be applicable to any coupon or claim for interest the time for the payment of which shall have been extended, if such extension be pursuant to a plan or offer proposed by the Company to all holders of Bonds then outstanding of the series to which such coupon or claim for interest appertains. SECTION 7.02. The security hereby constituted shall become en- forceable, subject to the terms hereinafter contained, if and when one or more of the following events (herein sometimes called "events of default") shall happen, that is to say: (a) If default shall be made in the payment of the principa1 of or premium, if any, on any of the Bonds when the same be- comes due and payable, either by the terms thereof or other- wise; or (b) If default shall be made in the payment of any interest due on any of the Bonds issued hereunder or in the due payment of any sinking fund instalment and such default shall have con- tinued for a period of sixty (60) days; or (c) If the Company shall be judicially declared insolvent or bankrupt; or a judgment or final decree appointing a receiver or an crder of a court having jurisdiction in the premises for winding-up or liquidating the business and affairs of the Company shall have been entered and shall have continued in force undis- charged and unstayed for a period of ten (10) days; or the Com- pany shall institute proceedings to be adjudicated a voluntary bankrupt or for the reorganization of the Company under the Bankruptcy Act or the Winding Up Act or any other bankruptcy or analogous laws, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of all or any substantial part of its property or shall admit in writing its inability to pay its debts generally as they become due, or otherwise acknowledge its insolvency; or a petition in proceed- ings in bankruptcy or for the winding up or reorganization of the Company under bankruptcy or analogous laws shall be filed against the Company and it shall admit the material allegations thereof, or such petition shall not be dismissed or discharged 47 within sixty (60) days after such filing (provided, however, that a resolution, judgment, decree or order for winding-up the Com- pany with a view to its consolidation, amalgamation or merger with another company or the transfer of its assets as a whole, or substantially as a whole, to such other company, as provided in Article Eleven hereof shall not constitute a default or make the security enforceable under this subsection (c) if such last- mentioned company shall, as a part of such consolidation, amal- gamation, merger or transfer, and within ninety (90) days from the passing of the resolution or the date of the order, comply with the conditions to that end stated in said Article Eleven hereof); or (d) If any process of execution shall be enforced or levied upon any of the propefty of the Company and remain unsatis- fied for a period of two (2) weeks, as to movable or personal property, or three (3) weeks, as to immovable or real property, unless, in any such case, (i) such process is in good faith dis- puted by the Company, and (ii) non-payment will not in the judgment of the Trustee jeopardize or impair the security hereby . - created, and (iii) the Company shall give security which, in the opinion of the Trustee, is sufficient to pay in full the amount claimed in the event that it shall be held to be a valid claim; or (e) If default shall be made in the due observance or per- formance of any other covenant or condition in this Indenture required to be observed or performed by the Company and any such default shall continue for a period of ninety (90) days after notice received by the Company from the Trustee specifying such default and requiring the Company to remedy such default. Any notice as aforesaid may be given by the Trustee on its own initiative and shall be given at the written request of the holders of not less than twenty-five per cent. (25%) in principal amount of the Bonds at the time outstanding hereunder. SECTION 7.03. In case the security hereby constituted shall become enforceable as hereinabove provided, the Trustee may in its discretion, and if so directed by a writing signed by the holders of not less than 48 twenty-five per cent. (25%) in principal amount of the Bonds then out- standing hereunder, the Trustee shall, by written notice to the Com- pany, declare the principal of all the Bonds then outstanding here- under, together with all other moneys secured hereby, to be forthwith due and payable, and the same shall become forthwith due and payable, anything therein or herein to the contrary notwithstanding, and the Company shall and will pay forthwith to the Trustee the amount of the principal of, premium, if any, and interest then accrued and unpaid on all of the Bonds then outstanding and all other moneys secured hereby, together with interest at the rate of interest specified in the respective Bonds on any overdue principal, premium and interest and at the rate of five per cent. (5%) per annum on such other moneys, from the date when said amounts respectively became due and payable until pay- ment is received by the Trustee, and payment on account of any of said amounts shall be applied by the Trustee in the same manner as proceeds of a sale or realization of the trust estate. SECTION 7.04. If at any time prior to the date of maturity of the Bonds as stated therein and before any sale of the trust estate shall have been made (whether or not after the principal of the Bonds shall have been declared due and payable as provided in Section 7.03 next above) all arrears of interest upon the Bonds, with interest on over- due instalments of interest at the rate of interest specified in the respective Bonds, together with the expenses of the Trustee and all other amounts then due and payable hereunder by the Company (ex- cept on account of principal so declared due and payable), shall be paid by the Company or be collected and paid out of the trust estate, and if all defaults known to the Trustee (other than in the payment of the principal so declared due and payable) shall have been made good or provision to that end satisfactory to the Trustee shall have been made, then and in every such case the Trustee, if so directed by a writing signed by the holders of not less than a majority in principal amount of the Bonds then outstanding hereunder, shall by written notice to the Company waive any such existing default and rescind and annul any such declaration of maturity upon such terms and conditions as the bondholders making any such request shall direct and, in the absence of such direction, upon such terms and condi- 49 tions as the Trustee may deem advisable. After any such waiver of default, and subject to the terms and conditions thereof, the security hereby constituted shall no longer be deemed to have become enforce- able by reason of the default which has been waived; provided always, that no act or omission either of the Trustee or of the bondholders in the premises shall extend to, or be taken in any manner whatsoever to affect, any other or subsequent default or the rights resulting therefrom. SECTION 7.05. In case the security hereby constituted shall have become epforceable and the Company shall have failed to pay to the Trustee, on demand, such amounts as are due from the Company and unpaid on the Bonds and coupons then outstanding, together with any other amounts due hereunder, and if bondholders have not directed otherwise pursuant to any of the provisions of this Indenture, the Trustee may, in its discretion or, in compliance with the written request of the holders of not less than twenty-five per cent. (25%) in principal amount of the outstanding Bonds and upon receiving reasonable indemnity, as provided in Article Ten hercof, against all costs, expenses and liabilities to be incurred, the Trustee shall (i) by its officers, agents or attorneys take possession of all or any part or parts of the trust estate with power to exclude the Company, its agents and servants therefrom; carry on, man- age, and conduct the business operations of the Company; preserve and maintain the trust estate and make such replace- ments and additions thereto as it shall deem judicious; receive the rents, incomes and profits thereof of any kind whatsoever and pay them out in accordance with the provisions of Section 7.07 of this Article; and enjoy and exercise all powers necessary to the performance of all functions provided for in this sub- section, including, but not in limitation thereof, the power to purchase on credit, borrow money in the Company's or its own name, and advance its own moneys at such rates of interest as it may deem reasonable (the debts representing all of which pur- chases, borrowings, and advances shall, while unpaid, be entitled to the security hereof in priority to the Bonds); provided that the Trustee shall, upon all defaults being made good, or waived as herein provided, restore the said property to the Company 50 subject to the floating charge created by this Indenture as if no default had occurred; or (ii) without regard to the adequacy of the security consti- tuted hereby or the solvency of the Company, apply to a court of competent jurisdiction for the appointment of a receiver to take possession of all or such part or parts of the trust estate as the Trustee in his petition shall designate, with the duties, powers and obligations set forth in the subsection immediately preceding and with such additional powers as the court making the appointment shall confer; and the Company hereby consents to the appointment of such receiver; or (iii) after giving the notice specified in Section 7.06 of this Article, and with or without taking possession, sell all or part of the trust estate, either as a whole or in separate parcels, at public auction or by public tender, at such times and places, subject to adjournment from time to time by the Trustee, and on such terms and conditions as to upset or reserve bid or price and as to payment as the Trustee shall appoint; and if there is no purchaser at such sale or tender, then upon written consent of no less than a majority in principal amount of the outstand- ing bonds, sell at private sale without further notice; or (iv) proceed by suit or suits in equity or law to enforce payment of the Bonds or performance of any other covenant contained herein, or to enforce the security hereby constituted and to bring to sale the trust estate or any part or parts thereof under a judgment or decree of a court or courts of competent jurisdiction or by the enforcement of any other legal remedy which the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of its rights or any of the rights of the bondholders. SECTION 7.06 In any sale of the whole or any part or parts of the trust estate, whether made under the power of sale herein contained or in pursuance of judicial proceedings, (i) notice thereof shall state the time and place when and where the same is to be made and shall contain a brief general 51 description of the property to be sold, and, except as otherwise provided herein, shall be sufficiently given if published once in each of six (6) consecutive calendar weeks in each of two news- papers printed in the English language, customarily published on each business day and of general circulation one in the City of Toronto, Province of Ontario, the other in the Borough of Manhattan, The City of New York, New York; and (ii) the Trustee or any one or more of the bondholders or any agent or representative thereof may become purchasers. SECTION 7.07. Except as herein otherwise expressly provided, the moneys arising from the carrying on of the business under the provi- sions of Section 7.05 of this Article or from any sale or realization of the whole or any part of the trust estate pursuant to any proceedings based upon default hereunder or received from any custodian or trustee in bankruptcy or liquidator of the Company, shall be applied, together with any other moneys then in the hands of the Trustee available for such purposes, in the first place to pay or reimburse to the Trustee its compensation, costs, charges, expenses, borrowings, advances or any other moneys furnished or provided by or at the instance of the Trustee in or about the cxecution of its trust or otherwise in relation to these presents, with interest thereon as herein provided, and to pay all other charges against the property ranking in priority to the Bonds; and the residue of the said moneys shall be applied: (i) First, to the payment equally and ratably of the whole amount then owing and unpaid for principal of and premium, if any, and interest upon the Bonds hereby secured, together with interest on any overdue instalment of interest, and in case such proceeds shall be insufficient to pay in full the amount so due and unpaid then to the payment of such principal and premium, if any, and interest without preference or priority of the Bonds of one series over those of another series, ratably to the aggregate of such principal and premium, if any, and interest owing by the Company to each bondholder; subject, however, to the provisions of Section 7.01 of this Article; and (ii) Second, to the payment of the surplus, if any, to the Com- pany or its assigns. 52 SECTION 7.OS. The Trustee shall have the right, at the time it makes any payment of principal, interest or premium required by this Article, to demand of the person claiming such payment "e production of the Bond or interest coupon under which he claims such payment, and may cause to be endorsed on the same a memorandum of the amount so paid and the date of payment, but the Trustee may, in its discretion, dispense with such production and endorsement in any special case, upon such indemnity, if any, as it shall deem sufficient being given to it and to the Company. SECTION 7.09. Upon any sale of the trust estate, or any part thereof pursuant to any proceedings based upon default hereunder, any purchaser may in paying purchase money turn in any of the outstanding Bonds hereby secured in place of cash to the amount which would upon distribution of the net proceeds of such sale be payable thereon and, in case the amount so payable thereon shall be less than the amount due thereon, the Bonds shall be returned after being properly stamped to show such partial payment. SECTION 7.10. TJpon any such sale of the trust estate, or any part thereof pursuant to any proceedings based upon default hereunder, the principal of all the Bonds issued hereunder and then outstanding, if not previously declared due, shall immediately become due and payable, anything in the Bonds or in this Indenture to the contrary notwith, standing. SECTION 7.11. The Company hereby irrevocably appoints the Trus- tee to be the attorney of the Company for and in the name and on behalf of the Company to execute and deliver any deeds, documents, transfers, conveyances, assignments, assurances and consents which the Company ought to execute and deliver hereunder and generally to use the name of the Company in the exercise of all or any of the powers hereby conferred on the Trustee, with full powers of substitution and revocation. SECTION 7.12. In case the security hereby constituted shall have become enforceable and the Company shall have failed to pay to the Trustee, on demand, such amounts as are due from the Company and 53 unpaid on Bonds and coupons then outstanding, together with all other amounts due hereunder, and if Bondholders have not directed other- wise pursuant to any of the provisions of this Indenture, the Trustee may in its discretion, and shall, upon the request in writing of the holders of at least twenty-five per cent (25%) in principal amount of the outstanding Bonds and upon receiving reasonable indemnity, as provided in Article Ten hereof, against all costs, expenses and liabili- ties to be incurred, proceed to obtain judgment in its own name and as trustee of an express trust for the whole amount so due and unpaid. The Trustee shall be entitled to obtain judgment as aforesaid, either before or after or during the pendency of any proceedings for the en- forcement of the security hereby constituted. No obtaining of any such judgment by the Trustee and no proceeding in execution of any such judgment upon the trust estate or any part or parts thereof shall in any manner or to any extent affect the lien or charge of this Indenture upon the trust estate or any part thereof, or any rights, powers or remedies of the Trustee hereunder, or any rights, powers, remedies or security of the holders of the Bonds, but such rights, powers and remedies of the Trustee and such rights, powers, remedies and security of the holders of the Bonds, shall continue unimpaired as before. All moneys collected by the Trustee under this Section shall be applied by the Trustee as provided in Section 7.07 of this Article. The Company covenants and agrees with the Trustee that, in case of any proceedings to enforce the security hereby created, judgment may be rendered against it in favour of the bondholders hereunder or in favour of the Trustee, as Trustee of an express trust for the bond- holders hereunder, for any amount which may remain due in respect of the Bonds and premium, if any, and interest thereon after the appli- cation to the payment thereof of the proceeds of any sale of the trust estate, or any part thereof. I SECTION 7.13. No person dealing with the Trustee or its agents shall be concerned to inquire whether the security hereby constituted has become enforceable or whether the powers which the Trustee is purporting to exercise have become exercisable or whether any money remains due upon the security of these presents or the Bonds or as to the necessity or expediency of the stipulations and conditions subject 54 to which any sale shall be made or otherwise as to the propriety or regularity of any sale or of any other dealing by the Trustee with the trust estate or to see to the application of any money paid to the Trustee; and, in the absence of fraud on the part of such person, such dealing shall be deemed, so far as regards the safety and protection of such person, to be within the powers hereby conferred and to be valid and effectual accordingly. SECTION 7.14. No holder of any Bond or coupon hereby secured shall have any right to institute or maintain any suit, *action or pro- ceeding for the purpose of bringing the trust estate or any part thereof to sale, or for the execution of any trust or power hereunder, or for the appointment of a liquidator or receiver or to have the Company wound up or for any other remedy for the enforcement of the security hereunder, unless such holder shall previously have given to the Trustee written notice of the happening of an event of default which has ren- dered enforceable the security hereby created and of the continuance thereof for one month, nor unless the holders of at least twenty-five per cent (25o) in principal amount of the then outstanding Bonds shall have made written request to the Trustee and shall have afforded to it reasonable opportunity either itself to proceed to exercise the powers hereinbefore granted or to institute an action, suit or proceed- ing in its own name for such purpose, nor unless also such bondholder or holders shall have afforded to the Trustee, when requested by the Trustee, sufficient funds, security and indemnity satisfactory to it, and the Trustee shall have failed to act within a reasonable time after such notification, request and offer of indemnity. SECTION 7.15. No remedy herein conferred upon or reserved to the Trustee or upon or to the holders of the Bonds is intended to be exclu- sive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given here- under or from time to time existing by law or by statute. SECTION 7.16. All the covenants, stipulations and agreements herein contained, by or on behalf of the Company to be kept, observed, fulfilled or performed, are and shall be for the sole and exclusive benefit of the parties hereto and of the respective holders of the Bonds and 55 coupons hereby secured. All provisions hereof, so far as they refer or are applicable to the Trustee, are subject in all respects to the provi- sions, conditions, rights and immunities set forth in Article Ten hereof. ARTICLE EIGHT. Immunity of Incorporators, Stockholders, Officers and Directors. SECTION 8.01. No recourse shall be had for the principal of, pre- mium, if any, or interest on any Bond, or any part thereof, or for any claim based thereon or otherwise in respect thereof or of the indebted- ness represented thereby, or based on or in respect of this Indenture, against any incorporator, stockholder, officer or director, past, present, or future, of the Company or of any successor corporation, as such, either directly or through the Company or any successor corporation or any other person, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or other- wise, it being expressly understood and agreed that this Indenture and the obligations hereby secured are solely corporate obligations and that no personal liability whatever shall attach to or be incurred by any incorporator, stockholder, officer or director of the Company or of any successor corporation, as such, because of the incurring of the indebted- ness hereby secured or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or any supple- mental indenture or any of the Bonds or coupons, any and all such'per- sonal liability, whether presently existing or hereafter arising, being hereby expressly waived and released as a part of the consideration for the execution of this Indenture and the issue of the Bonds. ARTICLE NINE. Bondholders Acts, Holdings and Apparent Authority. SECTION 9.01. Any demand, request or other instrument, provided by this Indenture to be signed and executed by bondholders, may be in any number of concurrent writings of similar tenor and may be signed or executed by such bondholders in person or by agent appointed in writing. Proof of the execution of any such demand, request or other 56 instrument, or of a writing appointing any such agent, and of the hold- ing by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture, and may be received by the Trustee as conclusive, if made in accordance with the provisions of this Article. The fact and date of the execution by any person of any such demand, request or other instrument or writing, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the place in which such document was acknowledged that the person signing such document acknowledged to him the execution thereof, or may be proved by an affidavit of a witness to such execution sworn to before any such notary or other such officer. The fact of the holding by any person of Bonds or coupons trans- ferable by delivery, and the principal amount and distinctive numbers of such Bonds or coupons, and the date of his holding the sam- "which holding the Trustee may deem to continue until the Trustee shall have received notice in writing to the contrary), may be proved (a) by the production of the Bonds or coupons, or (b) by a certificate executed by any trust company, bank, banker or other depositary, wherever situated, satisfactory to the Trustee, showing that on the date therein mentioned, such person had on deposit with such depositary or exhibited to it the Bonds or coupons described in such certificate; or such facts may be proved by the certificate or affidavit of the person holding such Bonds or coupons, if such proof shall be satisfactory to the Trustee. The fact of the holding of registered Bonds without coupons and of coupon Bonds registered as to principal shall be proved by the registry books of such Bonds, or by a certificate of the Bond registrar. The fact and date of the execution of such demand, request or other instrument, and the amount and numbers of Bonds held by the person by or for whom such request or other instrument is executed, may also be proved in any other manner which the Trustee may deem sufficient. Any request or consent of the holder of any Bond shall bind all future holders of the same Bond and of Bonds issued in exchange therefor or in place thereof, in respect of anything done, omitted or suffered by the Trustee in pursuance of such request or consent. 57 ARTICLE TEN. Concerning the Trustee. SECTION 10.01. The Trustee accepts the trusts hereby created upon the following terms and conditions, to all of which the Company and the holders of the Bonds and coupons at any time outstanding, by their acceptance thereof, agree: (a) The recitals herein and in the Bonds contained shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the value or validity of the Pledged Bonds or as to the security afforded thereby and hereby, or as to the validity of the lien of this Indenture or as to the validity of the Bonds issued hereunder, and the Trustee shall incur no responsibility in respect of any such matters; provided, however, that nothing herein contained shall relieve the Trustee of its duty to authenticate Bonds only as authorized by this Indenture. - (b) The Trustee shall be under no responsibility or duty with respect to the disposition of the Bonds authenticated and delivered under any of the provisions hereof or the application of the proceeds thereof or of any moneys paid to the Company under any of the provisions hereof. Should any taxes or other governmental charges be imposed upon the Trustee, in its capacity as Trustee hereunder, which it may be required to pay under any present or future law of the Dominion of Canada or the United States of America or of any other authority therein having jurisdiction, the Trustee shall be reimbursed and indemnified therefor by the Company, and any liability incurred or amounts paid by the Trustee in respect of any such taxes or other governmental charges, until paid, shall constitute a lien upon the trust estate prior to any claim of the holders of Bonds. (c) The Trustee may execute any of the trusts under this Indenture or exercise any of the powers hereby vested in it or perform any duty hereunder either itself or by or through its 58 attorneys or agents and the Trustee shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents, provided reasonable care has been exercised in the selection thereof and in the continued employ- ment of any such attorney or agent, nor shall the Trustee be otherwise answerable or accountable under any circumstances whatsoever, except for its negligence or bad faith. The Trustee shall nct be under any obligation or duty to institute, appear in or defend any suit in respect hereof, unless first reasonably indemnified against its costs, expenses and liabilities, and the Trustee shall not be under obligation to take any action in respect of any default or otherwise or toward the execution or enforce- ment of any of the trusts hereby created or to institute, appear in or defend any suit or other proceeding in connection there- with, unless one or more of the holders of the Bonds shall, as often as required by the Trustee, furnish it with reasonable security and indemnity against the costs, expenses and liabilities of said proceeding, but this provision shall not affect any discre- tionary power herein given to the Trustee to determine whether or not it shall take action in respect of such default or otherwise. (d) Except as herein otherwise provided, any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or any other person on the Company, shall be deemed to have been sufficiently given and served for all purposes if deposited, postage prepaid, in a Post Office letter box or mail chute, addressed (until another address is filed by the Company with the Trustee and thereafter if addressed to such other address) as follows: Brazilian Trac- tion, Light and Power Company, Limited, 25 King Street West, Toronto 1, Canada. Any notice, request or demand by any holder of a Bond or Bonds to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at the principal office of the Trustee. (e) The Trustee shall not be bound to recognize any person as the holder of a Bond outstanding hereunder unless and until the Bond is submitted to the Trustee for inspection if requested, and the title thereto established to the satisfaction of the Trustee. 59 (f) The Trustee shall be entitled to receive the resolutions, certificates, orders, opinions of counsel, and other writings, in this Indenture provided for, as conclusive evidence of the truth of the statements therein contained, respectively, and as full author- ity for the taking of any action in accordance therewith under this Indenture, and they shall constitute full authority and pro- tection to the Trustee for its authentication and delivery of Bonds and the payment of deposited cash and the withdrawal of Pledged Debentures under the provisions of this Indenture. The same officer or officers of the Company need not certify to all the facts required to be certified under the provisions of this Indenture, but different officers may certify to separate facts respectively. The Trustee shall be justified in relying upon the genuine- ness of any notice, resolution, request, waiver, consent, order, certificate, statement, affidavit, indemnity bond, report, appraisal, opinion, telegram, cablegram, radiogram, letter, bond or other paper, document or instrument believed by it in the exercise of reasonable care to be genuine and to have been signed, sent or presented by the proper party or parties. (g) In any instance or instances in which the Trustee is required or permitted, by any provision of this Indenture or in the execution of the trusts hereunder, to exercise judgment, the Trustee may employ an independent engineer, accountant, or other expert or adviser and the Trustee shall be entitled to rely upon any statement of fact or opinion of such engineer, account- ant, expert or adviser; but nothing in this paragraph shall be construed to require the employment of any such engineer, accountant, expert or adviser. (h) The Trustee may consult with counsel, who may be counsel for the Company, and the opinion of said counsel shall be full and complete authority and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion of said counsel. The Trustee shall not be under any responsibility for the acts or omissions of any counsel, engineer, accountant, expert, appraiser, adviser or other person or persons employed for any of the purposes of 60 this Indenture, provided that the Trustee shall have exercised reasonable care in the selection and continued employment of such counsel, engineer, accountant, appraiser, adviser or other person or persons. (i) The Company covenants and agrees to pay to the Trus- tee from time to time on demand of the Trustee, reasonable com- pensation (which shall not be limited by any piovision of law with respect to the compensation of fiduciaries or of the trustee of an express trust) for all services rendered by it hereunder and also its reasonable expenses and counsel fees and other disbursements, and those of its attorneys, agents and employees, incurred in and by the administration and execution of the trusts hereby created and the exercise of its powers and the performance of its duties hereunder. The Company also covenants to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending against any claim of liability in the premises. The Company further covenants and agrees to pay interest to the Trustee upon all amounts paid, advanced or disbursed by the Trustee for which it is entitled to reimbursement or indemnity as herein provided. The Trustee shall have a lien on the trust estate and the proceeds thereof, prior to the lien of the Bonds, for all amounts agreed to be paid by, and for all obligations of, the Company under this clause (i). (j) Whenever in the administration of the trusts created by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, said matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be proved and established by a certificate signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer of the Company and delivered to the 61 Trustee, but in its discretion the Trustee may require such further or additional evidence as to it may seem reasonable. (k) The Trustee shall be under no duty to invest any moneys paid to or deposited with it or to its credit pursuant to any of the provisions of this Indenture, and shall not be liable for interest on any moneys during the period such moneys remain on deposit with it, except such interest as the Trustee may agree with the Company to pay. (1) The Trustee shall not be required to take notice of any default hereunder unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Trustee, and in the absence of any such notice, the Trustee may, for all purposes of this Indenture, conclusively assume that the Company is not in default hereunder, provided, however, that nothing herein contained shall relieve the Trustee of its duty to authenticate Bonds and to permit the withdrawal of cash or collateral or substitution of collateral only as authorized by this Indenture. (m) The Trustee, or any company in or with which the Trustee may be interested or affiliated, or any officer or director or trustee or stockholder of the Trustee or of any such company, may acquire and hold Bonds or other securities of the Company or obligations or other securities of subsidiaries of the Company, and the Trustee may act as depositary, transfer agent, paying agent, registrar, trustee, custodian, escrow agent or fiscal agent for the Company or for any committee or other body, firm or corporation in respect of any bonds, notes or other securities, whether or not issued pursuant hereto. SECTION 10.02. Any moneys which at any time shall be deposited under this Indenture with the Trustee by or for the account of the Com- pany shall be held in trust by the Trustee for the holders of the Bonds and coupons issued hereunder until disposed of conformably with the provisions of this Indenture but need not be segregated and may be held as part of the general funds of the Trustee, and when deposited in funds constituting Canadian currency may be redeposited in trust 62 in any chartered bank of Canada and when constituting funds other than Canadian currency may be redeposited in trust with a bank or trust company satisfactory to the Trustee in the country whose currency is involved. The Trustee may place all pledged collateral in any safe or recep- tacle selected by the Trustee, or with any chartered bank or other depositary satisfactory to the Trustee, and the Trustee shall not be responsible for any greater measure of protection or safety for such collateral than is afforded by the premises in which they are located. The Company covenants with the Trustee that the Trustee may, but shall not be bound to, enforce or realize upon any collateral, and the Trustee shall not be responsible to the Company for any loss occasioned by any sale or by the retention of or the neglect or refusal to enforce or sell any collateral or to take any steps for the protection of the rights conferred thereby, or to collect or see to the payment of interest or dividends on any collateral. SECTION 10.03. Any company into which the Trustee or any suc- cessor to it in the trusts created by this Indenture may be merged or converted, or with which it or any such successor may be consolidated, or any company resulting from any merger, conversion, or consolida- tion to which the Trustee or any successor shall be a party, provided such company shall be a trust company or a banking corporation in good standing organized under the laws of the Dominion of Canada or of any province thereof or the United States of America or of any state thereof and shall have an office in the City of Toronto, Province of Ontario, or the Borough of Manhattan, The City of New York, New York, and shall have a capital and surplus aggregating at least $5,000,000, shall be the successor trustee under this Indenture without the execution or filing of any paper or the performance of any further act on the part of the parties hereto. In case any of the Bonds shall have been aathenticated but not delivered, any such successor trustee may adopt the certificate of authentication of National Trust Company, Limited, or of any successor to it, as Trustee hereunder, and deliver such Bonds so authenticated; and in case any of the Bonds shall not have been authenticated, any successor trustee may authenticate 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 this Indenture provided that the certificate of the Trustee shall have. 63 SEOTION 10.04. The Trustee or any successor trustee may at any time resign a.nd be discharged as herein provided from the trusts hereby created by giving to the Company written notice of such resignation specifying a date when such resignation shall take effect. Notice of such resignation shall be published once in each calendar week for two successive weeks, on days not more than sixty (60) days nor less than thirty (30) days prior to the date so specified, in one newspaper printed in the English language and customarily published on each business day and of general circulation in the City of Toronto, Province of Ontario, and in one newspaper printed in the English language and customarily published on each business day and of general circulation in the Borough of Manhattan, The City of New York, New York, and such resignation shall take effect on the date specified in said notice or on the date of the appointment of a successor trustee as hereinafter provided, whichever shall be later. SECTION 10.05. In case at any time the Trustee or any successor trustee shall submit to the Company a notice of resignation or shall be removed or shall become incapable of acting or shall be adjudged bank- rupt or insolvent, or if a receiver of the Trustee or any successor, or of its property, shall be appointed, or if any public officer in the exercise of his official powers shall take charge or control of the Trustee or any successor, or of its property or affairs, or if a vacancy shall arise in the trusteeship under this Indenture from any other cause, the Com- pany, by an instrument duly executed and acknowledged by its proper officers, by authority of its Board of Directors, may appoint a successor trustee to fill the vacancy, but such appointment shall be automatically terminated upon the appointment of a new trustee by the holders of Bonds or by a court as hereinafter provided. The Company shall publish notice of any such appointment made by it once in each calendar week for two successive weeks in one newspaper printed in the English language and customarily published on each business day and of general circulation in the City of Toronto, Province of Ontario, and in one newspaper printed in the English language and customarily published on each business day and of general circulation in the Borough of Manhattan, The City of New York, New York. In any instance in which the Company may be authorized to appoint a successor trustee to fill a vacancy, a successor trustee or successor 64 trustees may be appointed by the holders of a majority in principal amount of the Bonds outstanding by an instrument or concurrent instruments in writing signed and acknowledged by such holders or their attorneys-in-fact duly authorized, and delivered to such successor trustee hereunder, notification being given to the Company and the predecessor trustee; provided, however, that no such appointment may be made (1) more than one year after the first publication of a notice of the appointment by the Company of a successor trustee to fill such vacancy, or (2) after the appointment of a successor trustee by a court as hereinafter provided. If no appointment of a successor trustee shall be made by the Company pursuant to the foregoing provision of this Se,'tion within one month after the happening of any of the events set forth in the first paragraph of this Section, or if no such appointment shall be made by the bondholders pursuant to the foregoing provisions of this Section within three months after the happening of any of said events set forth in the first paragraph of this Section (although the Company may have duly appointed a successor trustee as hereinabove provided for), then the holder of any Bond or any retiring trustee here- under may apply to any court of competent jurisdiction to appoint a successor trustee. Said court may thereupon, after such notice, if any, as said court may deem proper and prescribe, appoint a successor trustee at any time not more than eighteen months after the happening of such event or the first publication of a notice of the appointment by the Company of a successor trustee to fill such vacancy, whichever is later. Upon the appointment of a successor trustee by the holders of Bonds or by a court, as hereinabove provided, any successor trustee theretofore appointed by the Company to fill a vacancy shall, immedi- ately and without further act, be superseded by the successor trustee so appointed. Every successor trustee appointed under any of the provisions of this Article shall be a trust company or a banking corporation in good standing organized under the laws of the Dominion of Canada or of any province thereof or of the United States of America or of any state thereof, having an office in the City of Toronto, Province of Ontario, or the Borough of Manhattan, The City of New York, New York, and a capital and surplus aggregating at least $5,000,000, if 65 there be such a trust company or banking corporation able and willing to act. Any successor trustee appointed hereunder shall execute, acknowl- edge and deliver to the predecessor trustee hereunder and to the Com- pany an instrument in writing accepting such appointment hereunder, and thereupon said successor trustee, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessor in trust hereunder, with like effect as if originally named as Trustee herein; but the retiring trustee, neve4theless, on the written request of the Company or of the successor trustee, and upon payment of its unpaid compensation and expenses, if any, shall execute, acknowledge and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in said successor trustee all the right, title and interest of the retiring trustee in and to the trust estate and said rights, powers, trusts, duties and obligations; and the retiring trustee shall also, upon like request and upon pay- ment of its unpaid compensation and expenses as aforesaid, pay over, assign and deliver to the successor trustee any money and other prop- erty subject to the lien of this Indenture then held by it, and deliver any and all records, or copies thereof, in respect of the trusts here- under which it may have; and upon request of any such successor trustee the Company shall execute, acknowledge and deliver any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee said estates, properties, rights, powers and duties. SECTION 10.06. If at any time or times, in order to conform to any legal requirements, the Trustee shall so request, the Company and the Trustee shall unite in the execution and performance of all instru- ments and agreements necessary or proper to appoint another bank or trust company or one or more persons approved by the Trustee, either to act as co-trustee or co-trustees of all or any part of the trust estate, jointly with the Trustee originally named herein or its succes- sor, or to act as separate trustee or trustees of any such property, with such power and authority as may be necessary to the effectual operation of the trusts herein set forth and specified in the instrument of appointment. 66 SECTION 10.07. The Trustee is hereby appointed (and the succes- sive holders of the Bonds issued hereunder, by taking and holding the same, shall conclusively be deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective holders of the Bonds issued hereunder, with authority to make or file, irrespective of whether the Bonds or any of them are in default as to payment of principal or interest, in the respective names of the holders of the Bonds and coupons or in behalf of all holders of the Bonds and cou- pons as a class, any proof of debt, amendment to any proof of debt, petition or other document, a4d to execute any and all other papers and documents and do and perform any and all other acts and things for and in behalf of the respective holders of the Bonds and coupons, or in behalf of all holders of the Bonds and coupons as a class, as may be necessary or advisable in the judgment of the Trustee in order to have the claims of the holders of the Bonds and coupons against the Company, or any successor, or any other person or corporation, allowed and paid in any equity receivership, insolvency, liquidation, bankruptcy, reorganizalion, winding-up, or other proceedings which shall involve the trust estate or any pa.rt thereof, and to receive payment of or on account of any such claim or claims; and any receiver, assignee 4. or trustee in any such proceeding is hereby authorized by each holder of a Bond or Bonds to make such payments to the Trustee, or in the event the Trustee shall consent to the making of such payments, directly to the holders of the Bonds, and to pay to the Trustee any amount due it for compensation and expenses, including counsel fees, incurred by it up to the date of such distribution. The Trustee shall have full power of substitution and delegation in respect of any such power. ARTICLE ELEVEN. Consolidation, Merger, Sale, Conveyance and Lease. SECTION 11.01. Nothing contained in this Indenture or in any of the Bonds shall prevent any consolidation or merger of the Company with or into any other corporation or corporations, or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, con- veyance or lease of the property of the Company as an entirety or 67 substantially as an entirety to any other corporation authorized to acquire the same; provided, however, that no such consolidation, merger, sale, conveyance or lease shall impair the obligations under this Indenture or any of the rights or powers hereunder of the Trustee or of the holders of the Bonds, or shall impair any lien or charge created by this Indenture, and provided further that upon any such consolida- tion, merger, sale, conveyance or lease the due and punctual payment of the principal of, premium, if any, and interest on all of the Bonds, according to their tenor, and the due and punctual performance of all of the covenants and conditions of this Indenture, shall be expressly assumed by the successor corporation or the lessee corporation, as the case may be. For the purposes of this Article the term "successor corporation" shall mean any corporation resulting from any such consolidation or merger or any corporation to which any such conveyance shall be made, and the term "lessee corporation" shall mean any corporation to which any such lease shall be made. SECTION 11.02. In case of any such consolidation, merger, sale, conveyance or lease, and in case the successor corporation shall have assumed, by instrument in writing delivered to the Trustee, satisfactory in form to the Trustee, the due and punctual payment of the principal of and interest on all of the Bonds and the due and punctual perform- ance of all of the covenants and conditions of this Indenture, such suc- cessor corporation shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the party of the first part; and upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limita- tions of this Indenture, the Trustee shall authenticate and deliver any of such Bonds as previously shall have been signed and delivered by the Company to the Trustee for authentication and any of such Bonds as thereafter shall be signed and delivered to the Trustee for that purpose. Any such successor corporation may cause to be signed and issued, either in its own name or in the name of the Company, any and all Bonds thereafter to be issued hercunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All of the Bonds so issued shall have in all respects the same benefit of this Indenture as Bonds theretofore or thereafter issued in accordance with 68 the terms of this Indenture, as though all of said Bonds had been issued at the date of the execution hereof. The Trustee shall be protected in acting iereunder upon an opinion of counsel that any such consolidation, merger, sale, conveyance or lease complies with the provisions of this Article. S-CION 11.03. For every purpose of this Indenture, including the execution, issue, authentication and delivery and use of any and all Bonds issuable hereunder, the terms "Company" and "Brazilian Trac- tion, Light and Power Company, Limited" include and mean not only the party of the first part hereto, but also any successor corporation formed by consolidation or otherwise, which shall execute an instru- ment with the Trustee as provided in Section 11.02 of this Article. Every successor corporation shall possess, and from time to time may exercise, each and every right and power hereunder of Brazilian Trac- tion, Light and Power Company, Limited, in its name or otherwise. Any act or proceeding by any provision of this Indenture author- ized or required to be done or performed by any board, committee or officer of the Company, shall and may be done and performed with like force and effect by the like board, committee or officer of any corpora- tion that shall at the time be such lawful successor of the Company. ARTICLE TWELVE. Discharge of Indenture. SROTrOw 12.01. If the Company shall provide for the discharge of all of the Bonds then outstanding in any one or more of the following ways-(a) by paying or causing to be paid the whole amount of the principal and premium, if any, and interest due on Bonds which have become due and payable at maturity, upon call for redemption, by declaration or otherwise, or by providing for the payment of such Bonds by depositing with the Trustee as trust funds the entire amount so due, (b) by depositing with the Trustee as trust funds an amount equal to the aggregate of the principal of Bonds which have not become due and payable and unpaid interest thereon to the date or dates when the same will become due and payable, or (c) by delivering to the Trustee for 69 cancelation all Bonds outstanding, whether or not due, in negotiable form-and if the Company shall pay to the Trustee all its costs, charges and expenses hereunder, then, and in that case, upon the written request of the Company, all of the Pledged Debentures and any other property then subject to this Indenture shall revert to the Company, and the estate, right, title and interest of the Trustee shall thereupon cease, determine and become void; and in such case the Trustee on demand of the Company, and at its cost and expense, shall execute proper instru- ments acknowledging satisfaction of and dicharging this Indenture, and shall redeliver to the Company all of the Pledged Debentures and any other property then held hereunder, accompanied, as to Pledged Debentures registered in the name of the Trustee or its nominee, by proper instruments of assignment and transfer; otherwise this In- denture shall be, continue and remain in full force and effect. ARTICLE THIRTEEN. Supplemental Indentures. SECTION 13.01. The Company, when authorized by a resolution of its Board of Directors, and the Trustee, from time to time and at any time, may enter into an indenture or indentures supplemental hereto and which thereafter shall form a part hereof, for one or more of the following purposes: (a) to convey, transfer and assign to the Trustee and to subject to the lien of this Indenture with the same force and effect as though included in the granting clauses hereof, addi- tional cash or other property, and to set forth any terms and provisions, other than or additional to those contained herein, upon which any such additional cash, securities or property shall be held by the Trustee; (b) to evidence ne succession of another corporation to the Company or successive successions and assumptions by a successor corporation of the covenants and obligations of the Company under this Indenture; (c) to add to the covenants of the Company such further covenants as its Board of Directors and the Trustee shall con- 70 sider to be for the protection of the trust estate and of the bond- holders, and to make the occurrence and continuance of a default in any of such additional covenants an event of default permit- ting the enforcement of all or any of the several remedies provided in this Indenture as hereinbefore set forth; (d) to establish the terms, provisions and conditions of a particular series of Bonds, as determined by the Board of Direc- tors of the Company and within the limitations herein expressed; (e) for any other purpose not inconsistent with the terms of this Indenture, or for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective or in- consistent provision contained herein or in any supplemental indenture. SECTION 13.02. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained, and to accept the conveyance, transfer and assign- ment of any property thereunder. ARTICLE FOURTEEN. Bondholders Meetings. SECTION 14.01. The Trustee may at any time call a meeting of the bondholders to be affected by the business to be submitted to the meet- ing and shall from time to time call a meeting of such bondholders on the written request of the Company, made pursuant to a resolution of the Board of Directors of the Company, or on the written request signed by bondholders representing at least ten per cent (10/o) of the princi- pal amount of the Bonds to be affected by the business to be submitted to the meeting outstanding at the time of the request, provided that it shall be furnished at the time of any such request with an amount suffi- cient to defray the cost of publishing notice of and of holding such meeting. Every such written request shall set forth the purpose, of such meeting in reasonable detail. In the event of the failure of the Trustee for twenty (20) days to call a meeting after being thereunto 71 requested and after having been furnished with the funds as above set forth, the Company pursuant to a resolution of the Board of Directors of the Company, or the holders of outstanding Bonds to the amount above specified in this Section, may call the meeting. In determining the percentage of the principal amount of the Bonds outstanding (or of Bonds of a particular series outstanding) entitling the holders thereof to take any action under this Article, Bonds owned or held by or for the account of the Company or any corporation, company or person directly or indirectly controlling, or controlled by, or under direct or indirect common control with, the Company shall be disregarded, except that for the purpose of determining whether the Trustee shall be protected in relying on any such action, only Bonds which the Trustee knows are so owned shall be disregarded. Bonds so owned which have been pledged shall be regarded as outstanding if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Bonms and that the pledgee does not directly or indirectly control, and is not controlled by or under direct or indirect common control with, the Company. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Every such meeting of bondholders shall be held at such place as the Trustee may determine. SECTION 14.02. Notice of every meeting of bondholders, setting forth the purpose of such meeting in reasonable detail, shall be given by publishing the same at least four times in one newspaper printed in the English language and customarily published on each business day and of general circulation in the City of Toronto, Province of Ontario, and in one newspaper printed in the English language and customarily published on each business day and of general circulation in the Bor- ough of Manhattan, The City of New York, New York, and by such other publication as the Trustee may determine, the first publication to be not less than twenty (20) and not more than sixty (60) days prior to the date fixed for the meeting. A copy of such notice shall also be mailed at least twenty (20) and not more than sixty (60) days prior to the date fixed for the meeting to the registered holders of Bonds of each series affected by the busi- iiess to be submitted to the meeting, (including coupon bonds registered as to principal), at their last address appearing upon the Bond registry 72 books, but if notice by publication shall have been given as above pro- vided, failure to give such notice by mailing shall not affect the validity of the proceedings at such meeting. SECTION 14.03. The Trustee may (for the purpose of enabling the bondholders to be present and vote at any meeting without producing their Bonds, and of enabling them to be present and vote at any such meetiig by proxy), make and may from time to time vary, such regula- tions as it shall think fit for the deposit of unregistered Bonds with or the exhibition thereof to any bank, banker or trust company or corpora- tion, firm or person, approved by the Trustee, and for the issue to the persons so depositing or exhibiting the same of certificates by such bank, trust company or corporation, firm or person entitling the persons depositing or exhibiting the same to be present and vote or to appoint proxies to represent them and vote for them at any such meeting and at any adjournment thereof in the same way as if the persons so present and voting either personally or by proxy were the actual bearers of the Bonds in respect of which such certificates shall have been issued not- withstanding any transfer of such Bonds subsequent to the issuance of such certificates, and any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Each such certificate shall state the date on which the Bond or Bonds in respect of which it is issued was or were so deposited or exhibited and the series and serial numbers thereof. Any such certificate which does not require such Bond or Bonds to be deposited and remain on deposit until after the meeting or until surrender of such certificate shall entitle the holder thereof to vote at any meeting only if such Bond or Bonds (or another coupon Bond or Bonds issued in exchange therefor) are not produced at the meeting and at the time of the meeting shall not have been registered as to principal or sur- rendered in exchange for a registered Bond without coupons. As be- tween two such certificates issued in respect of the same Bond or any Bond issued in exchange therefor the certificate bearing the later date shall prevail. If any such meeting shall have been called by bondholders or by the Company as aforesaid, upon failure of the Trustee to call the same after having been so requested to do under the provisions of 8ection 14.01 of this Article, regulations to like effect for such deposit of Bonds 73 with, or exhibition thereof to, and issue of certificates by, any bank, banker or trust company having a capital of not less than $50,000, shall be similarly binding and effective for all purposes hereof, if adopted or approved by the bondholders calling such meeting or by the Board of Directors of the Company, if such meeting shall have been called by the Company, provided that in either such case copies of such regula- tions shall be filed with the Trustee. Owners of fully registered Bonds and coupon Bonds registered as to principal to be affected by the business to be submitted to the meeting may, by proxy duly constituted in writing, appoint any person to vote at any meeting for them. Each such writing shall state the aggregate principal amount of Bonds in respect of which the person authorized thereby is entitled to vote. The only persons who shall be recognized at any meeting as entitled to vote in respect of Bonds outstanding hereunder or to be present at the meeting shall be (a) the persons who produce either certificates issued pursuant to regulations made as hereinabove provided or unregistered Bonds, and (b) the registered holders of Bonds (whether the same be fully registered or registered only as to principal) or the proxies of any of the foregoing appointed as herein or in such regulations pro- vided. SECTION 14.04. A quorum at any such meeting shall be persons holding or representing by proxy at least sixty-six and two-thirds per cent. (66-%%) of the aggregate principal amount of Bonds then out- standing to be affected by the business to be submitted to the meeting; but less than a quorum may adjourn the meeting from time to time and the meeting may be held as adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The meeting shall be organized by the election of a permanent chairman and a secretary. At any meeting, each bondholder shall be entitled to one vote for every $1,000 principal amount of Bonds (or the equivalent in any other currency) upon which he shall be entitled to vote, as aforesaid. The chairman of the meeting shall have no right to vote other than by virtue of Bonds held by him or instruments in writing as aforesaid duly designating him as the person to vote on behalf of other bondholders. SECTION 14.05. Any representative of the Trustee, and its counsel, and any representative of the Company, and its counsel, may attend and speak at any such meeting. 74 SECTION 14.06. A meeting of the bondholders shall have the power, by resolution affirmatively voted for by sixty-six and two-thirds per cent. (66% %) of the principal amount of Bonds of each series then outstanding to be affected by the business to be submitted to the meeting: (a) to make any modification in or addition to any provision of this Indenture or any supplement hereto or the rights and obligations of the Company or the rights of the holders of the Bonds and appurtenant coupons under this Indenture or any supplement hereto, provided that no modification of or addition to the provisions of this Indenture or any supplement hereto shall be effective until approved by resolution of the Board of Directors of the Company, and provided further that no modi- fication of or addition to the provisions of this Indenture or any supplement hereto which, in the opinion of the Trustee, shall affect the rights, duties or immunities of the Trustee under this Indenture or any supplement hereto may be made without its written consent; (b) to sanction any compromise of the rights of the bond- holders against the Company or against its property whether such rights shall arise under the provisions of this Indenture or otherwise; (c) to sanction the surrender or release of the trust estate or any part thereof; (d) to sanction any plan for the reorganization, readjust- ment, winding-up or liquidation of the Company; (e) to authorize the Trustee to accept in satisfaction or part satisfaction for the sale or transfer of all or any part of the trust estate any securities of any corporation formed or to be formed; (f) to waive any default on the part of the Company, other than the non-payment of any principal of the Bonds issued under this Indenture at maturity or any interest thereon when due, either unconditionally or upon such terms as may be approved at said meeting; and (g) to give any authorization or direction to the Trustee under the provisions of Article Seven of this Indenture; 75 provided, however, that the bondholders shall have no power to extend the maturity of any Bonds or reduce the rate of interest thereon or otherwise modify the terms of payment of principal (other than a modification of the provisions of any sinking fund established in respect of any Bonds issued under this Indenture) or interest, without the con- sent of the holder of each Bond so affected or to effect a reduction of the percentage required by this Section for any action authorized to be taken by the bondholders pursuant to this Section. In case more than one series of Bonds shall be outstanding under this Indenture and any business to be submitted to such meeting shall affect the rights of the holders of the Bonds of one or more series and shall not affect the rights of the holders of the Bonds of one or more of the other series, then the holders of the Bonds of the one or more series whose rights are not affected shall not be entitled to notice of, or to attend or vote at, any such meeting or to be counted for the purpose of a quorum. In case the rights appertaining to a particular series are to be affected, the affirmative vote of sixty-six and two-thirds per cent. (662/3%) of the principal amount of the Bonds of such series shall be requi-ed. Any adverse modification of the provisions of any sinking fund established in respect of a particular series shall be deemed to affect only the Bonds of that series. The determination of the Trustee as to which series of Bonds are to be affected shall be conclusive. The Trustee shall not incur any liability to anyone for any such determination made in good faith. SECTION 14.07. Any such resolution so passed at a meeting of the bondholders duly convened and held shall be effective to bind all bond- holders, whether or not voting in person or by proxy at such meeting, and all Bonds issued under this Indenture are to be owned and held on the condition, as part of the consideration for the issuance thereof, that any resolution so adopted at a meeting of the bondholders shall be final and conclusive upon all holders of Bonds and upon their successors and assigns. SECTION 14.08. The vote upon any resolution shall be by ballot and the chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their veri- I -o 76 fled written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of the bond- holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was published as provided in Section 14.02 of this Article. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meet- ing and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee. Any record so signed and verified shall be proof of the matters therein stated until the contrary is proved, and if the record shall also be signed and verified by the affidavit of a duly authorized representative of the Trustee, the meeting shall be deemed conclusively to have been duly convened and held, and any resolution or proceeding stated in the record to have been adopted or taken shall be deemed conclusively to have been duly adopted or taken at the meeting. SECTION 14.09. Bonds authenticated and delivered after the date of any bondholders meeting may bear a notation in form approved by the Trustee as to any action taken at meetings of bondholders there- tofore held, and upon the demand of the holder of any Bond outstand- ing at the date of any bondholders meeting and presentation of his Bond for the purpose, the Company shall cause suitable notation to be made on the Bond by endorsement or otherwise as to any action taken at any meeting of bondholders theretofore held. If the Company or the Trustee shall so determine, new Bonds so modified as to conform, in the opinion of the Trustee and the Board of Directors of the Company, to any bondholders resolution shall be prepared by the Company, authenticated by the Trustee and delivered without cost to the holders of Bonds of the same series then outstanding hereunder upon surrender of such Bonds with all unmatured coupons and all matured coupons not fully paid in equal aggregate principal amounts. The Company or the Trustee may require the Bonds outstanding to be presented for notation or exchange as aforesaid if it shall see fit to do so. Indentures supplemental to this Indenture embodying any modification of or addi- tion to the provisions of this Indenture or in the rights and obligations 77 of the Company or in the rights of the holders or registered owners of the Bonds and appurtenant coupons made at any bondholders meeting and approved by resolution of the Board of Directors of the Company as aforesaid may be executed by the Trustee and the Company, and upon demand of the Trustee, or if so specified in any resolution adopted at any bondholders meeting, shall be executed by the Company and the Trustee. ARTICLE FIFTEEN. Miscellaneous Provisions. SECTION 15.01. All the covenants, stipulations, promises and agree- ments in this Indenture contained by or in behalf of the Company, shall bind its successors and assigns, whether so expressed or not. SECTION 15.02. Wherever in this Indenture any action is required or may be taken by resolution or otherwise of the Board of Directors of the Company, such action may be taken by the Executive Committee of such Board with the same force and effect as though taken by the Board of Directors. SECTION 15.03. Upon the request of the Company any moneys held by the Trustee remaining unclaimed by the holders of the Bonds and coupons for six years after the date when such moneys were pay- able shall be paid over by ,:ie Trustee to the Company and any liability of the Trustee with respect to such moneys shall thereupon cease and the holders of said Bonds or coupons shall thereafter be entitled to look only to the Company, as the holders of general claims, for payment thereof; provided, however, that the Trustee, before being required to make any such repayment, may, at the expense of the Company, cause notice that said moneys have not been claimed and that after a date specified therein any unclaimed balance of such moneys then remaining will be repaid to the Company, to be published once each calendar week for four successive weeks in one daily newspaper printed in the English language and customarily puablished on each business day and of gen- eral circulation in the City of Toronto, Province of Ontario, and in one daily newspaper printed in the English laiguage and customarily pub- lished on each business day and of general circulation in the Borough 78 of Manhattan, The City of New York, New York. In no event shall the holders of such Bonds or coupons appertaining thereto be entitled to interest upon such ioney, whether remaining with the Trustee or so repaid to the Company. SECTION 15,04. Nothing in this Indenture expressed or implied is intended or shall be construed to give to any person, firm or corporation other than the parties hereto and thc holders of the Bonds ad coupons secured by this indenture, any legal or equitable right, remedy or claim under or in respect of this Indenture, or any covenant, condition or provision herein contained, all the covenants, conditions and provisions hereof being, and being intended to be, for the sole and exclusive benefit of the parties hereto, their successors and assigns, and of the holders of the Bonds and coupons hereby secured. SECTION 15.05. As used in this Indenture, except when otherwise indicated: the terms "this Indenture" or "Indenture'' shall mean this Inden- ture either as originally executed or as the same may from time to time be supplemented, modified or amended by any supplemental in- denture entered into pursuant to any of the provisions hereof; the term "Board of Directors" shall mean the Board of Directors of the Company, as from time to time constituted, or, in the event of the appointment of a receiver or trustee, such receiver or trustee; the words "Bond", "bondholder", "holder", "bearer" or "owner" shall include the plural as well as the singular number and the plural shall include the singular; the term "Bond registrar" or other equivalent term shiall mean the corporation or other person maintaining the office or offices or agency or agencies selected by the Company, a, provided in Section 5.01 of Article Five of this indenture, where Bonds may be registered or the Trustee with respect to any series of Bond as to which no such office or agency is maintained; the term "registry books" or other equivalent term shall mean the books kept by the Bond registrar; and the term "opinion of counsel" shall mean a written opinion of counsel, who may be counsel for the Company but who shall be satis- factory to the Trustee. 79 SazTIoN 15.06. This Indenture and each Bond issued hereunder shall be deemed to be a contract made under the laws of the Province of Ontario, and for all purposes shall be construed in accordance with the laws of said Provin'ee. SECTION 15.07. This Indenture may be simultaneously executed in any number o2 counterparts, ew2h of which so executed shall be deemed to be an original. This Indenture is dated, for convenience, January 1, 1949, although executed and delivered on the date of the acknowledgment hereof by the Trustee; and the same shall be effective from the date on which it is so executed and delivered. IN AVITNESS WHiEREOF, BRAZILIAN TRACTION, LIGHT AND POWER COM- PANY, LIMITED, the party of the first part, has caused this Indenture to be executed by its President or a Vice President and by its Secretary or an Assistant Secretary, and its corporate seal to be affixed hereunto; and National Trust Company, Limited, the party of the second part, has caused this Indenture to be executed by a Vice President and by an Assistant Secretary, and its corporate seal to be affixed hereunto. Executed and delivered in Toronto, Ontario, the day of 1948. BRAZILIAN TRACTION, Li;HT AND POWER COMPANY, LIMITED, B y ........................................................... President. (CORPORATE SEAL) By ..-.....-..-.. --....-................................- . Secretary. NATIONAL TRUST COMPAN , LIMITED, B y ---.--..-----.----.-.--.--..---.--..--.-..-----.----..-.-- (CORPORATE SEAL) By ..-................................................... 80 IN THE MATTER ov The Corporation Securities Registration Act, being Chapter 264 of the Revised Statutes of Ontario, 1937; PROVINCE OF ONTARIO AND IN THE MATTER OF the registration under the said Act of an indenture dated the 1st day of January, 1949, and made between Brazilian To WIT: Traction, Light and Power Company, Limited, and National Trust Company, Limited, as Trustee, for the purpose of securing an issue of Bonds of Brazilian Traction, Light and Power Company, Limited. I, , of the City of Toronto, in the County of York and Province of Ontario, MAKE OATH AND SAY THAT: 1. I am an officer holding the office of of Brazilian Traction, Light and Power Company, Limited, the mortgagor or assignor named in the annexed instrument containing a mortgage, clarge or assign- ment made by said Brazilian Traction, Light and. Power Company, Limited (hereinafter called "the Company") to Nitional Trust Com- pany, Limited, and I am aware of the circumstances connected with the transaction and have a personal knowledge of the facts deposed to. 2. , whose signature is affixed to the said ( instrument, is the of the Company, and whose signature is also affixed thereto, is the thereof, and the seal affixed thereto, is the Corporate Seal of the Company. 3. Under the by-laws of the Company, the and the of the Company are empowered to exe.cute on behalf of the Company all deeds and other instruments requiring the seal of the Company. 4. I am well acquainted with the said and and saw them execute the said instrument and saw the corporate seal of the Company thereto affixed and I am a sub- scribing witness to the execution of the said instrument. 5. The said instrument was executed by the Company at the City of Toronto, in the Province of Ontario, on the day of , 1948. SwORN before me at the City of Toronto, in the County of York, and Province of Ontario this day of , 1948. A N otary Public in and for the Province of Ontario. 81 IN THE MATTER OF The Corporation Securities Registration Act, being Chapter 264 of the Revised Statutes of Ontario, 1937; AND IN THE MATTER OF the registration under the ROVNE OF YORI said Act of an indenture dated the 1st day of January, 1949, and made between Brazilian To WIT: Traction, Light and Power Company, Limited, and National Trust Company, Limited, as Trustee, for the purpose of securing an issue of Bonds of Brazilian Traction, Light and Power Company, Limited. I, , of the City of Toronto, in the County of York and Province of Ontario, MAKE OATH AND SAY THAT: 1. I am an officer holding the office of Corporate Trust Officer of National Trust Company, Limited, the mortgagee, trustee or grantee named in the annexed indenture made by Brazilian Traction, Light and Power Company, Limited, to the said National Trust Company, Limited, and am aware of the circumstances connected with the transaction and - ~ have a personal knowledge of the facts herein deposed to. 2. The said indenture, being the instrument containing the mortgage, charge or assignment, was executed in good faith and for the purpose of securing payment of the bonds referred to therein and not for the mere purpose of protecting the chattels or book debts therein men- tioned against the creditors of the mortgagor or assignor or preventing such creditors from obtaining payment of any claim against the mort- gagor or assignor. SWORN before me at the City of Toronto, in the County of York, and Province of Ontario this day of , 1948. A Notary Public in and for the Province of Ontario.