THE CLEVELAND ELECTRIC ILLUMINATING
COMPANY
TO
JPMORGAN CHASE BANK,
N.A.
(formerly known as THE CHASE
MANHATTAN BANK),
(successor to
Morgan Guaranty Trust Company of New York,
formerly Guaranty
Trust Company of New York)
as Trustee
under
The Cleveland
Electric Illuminating Company’s Mortgage
and Deed of Trust,
Dated July 1, 1940
Eighty-Ninth Supplemental
Indenture
Dated as of November 1,
2008
First Mortgage Bonds, 8.875% Series
due 2018
EIGHTY-NINTH SUPPLEMENTAL
INDENTURE, dated as of November 1, 2008, made by and between THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized
and existing under the laws of the State of Ohio (the “
Company ”), and JPMORGAN CHASE BANK, N.A., a
national banking association (formerly known as THE CHASE MANHATTAN
BANK), successor by merger to The Chase Manhattan Bank (National
Association), which in turn was successor to Morgan Guaranty Trust
Company of New York, formerly Guaranty Trust Company of New York,
(the “ Trustee ”), as Trustee under the
Mortgage and Deed of Trust dated July 1, 1940, hereinafter
mentioned:
RECITALS
In order to secure First
Mortgage Bonds of the Company (“ Bonds
”), the Company has heretofore executed and delivered to the
Trustee the Mortgage and Deed of Trust dated July 1, 1940 (the
“ 1940 Mortgage ”) and eighty-eight
Supplemental Indentures thereto; and
The 1940 Mortgage, as
supplemented and modified by said Supplemental Indentures and by
this Eighty-ninth Supplemental Indenture, will be hereinafter
collectively referred to as the “ Indenture
” and this Eighty-ninth Supplemental Indenture will be
hereinafter referred to as “ this Supplemental
Indenture ”; and
The Indenture provides among
other things that the Company, from time to time, in addition to
the Bonds authorized to be executed, authenticated and delivered
pursuant to other provisions therein, may execute and deliver
additional Bonds to the Trustee and the Trustee shall thereupon
authenticate and deliver such Bonds to or upon the order of the
Company; and
Pursuant to the provisions of
the Indenture, the Company has issued 141 series of Bonds in the
aggregate principal amount of $7,718,555,376, of which 138 series
in the aggregate principal amount of $7,262,562,000 are no longer
outstanding; and
The Company has determined to
create pursuant to the provisions of the Indenture one new series
of Bonds designated as "First Mortgage Bonds, 8.875% Series due
2018" (the “ Bonds of Series due 2018 ”)
with the denominations, rate of interest, date of maturity,
redemption provisions and other provisions and agreements in
respect thereof as in this Supplemental Indenture set forth;
and
The Company, in the exercise
of the powers and authority conferred upon and reserved to it under
the provisions of the Indenture, and pursuant to appropriate
resolutions of its Board of Directors, has duly resolved and
determined to make, execute and deliver to the Trustee this
Supplemental Indenture in the form hereof for the purposes herein
provided; and
All conditions and
requirements necessary to make this Supplemental Indenture a valid,
binding and legal instrument have been done, performed and
fulfilled and the execution and delivery hereof have been in all
respects duly authorized.
NOW, THEREFORE, THIS
SUPPLEMENTAL INDENTURE WITNESSETH:
That The Cleveland Electric
Illuminating Company, in consideration of the premises and of the
mutual covenants herein contained and of the sum of One Dollar
($1.00) to it duly paid by
the Trustee at or before the
ensealing and delivery of these presents and for other valuable
considerations, the receipt whereof is hereby acknowledged, and in
order to secure the payment of the principal and interest (and
premium, if any) on all Bonds at any time issued and outstanding
under the Indenture according to their tenor and effect and the
performance and observance of all the covenants and conditions
contained in such Bonds and in the Indenture, has granted,
bargained, sold, warranted, aliened, remised, released, conveyed,
assigned, transferred, mortgaged, pledged, set over and confirmed,
and by these presents does grant, bargain, sell, warrant, alien,
remise, release, convey, assign, transfer, mortgage, pledge, set
over and confirm unto the Trustee and to its successors in said
trust, and to its and their assigns, forever, all of the
Company’s interests in the parcels of land described in
Schedule A attached hereto and made a part hereof.
TOGETHER with all and singular
the buildings, improvements, tenements, hereditaments and
appurtenances belonging or in anywise appertaining, or hereafter to
belong or appertain, to the aforesaid property or any part thereof,
with the reversion and reversions, remainder and remainders, tolls,
rents, revenues, issues, income, products and profits thereof, and
all the estate, right, title, interest and claim whatsoever which
the Company now has or may hereafter acquire in and to the same, at
law as well as in equity, and every part and parcel
thereof.
TO HAVE AND TO HOLD the same
unto the Trustee and to its successors and assigns
forever;
SUBJECT, HOWEVER, to the
exceptions and reservations and matters hereinabove and in the
Indenture recited, to existing leases other than leases which by
their terms are subordinate to the lien of the Indenture, to
existing “liens upon rights-of-way for the transmission or
distribution line purposes,” as defined in Article I of the
Indenture, and any extensions thereof, and subject to existing
easements for streets, alleys, rights-of way and railroad purposes
over, upon or across certain of the property hereinbefore
described, and also any restrictions as to use imposed by law and
to the lien of certain judgments against the Company not exceeding
$75,000 in aggregate amount, and subject also to all the terms,
conditions, agreements, covenants, exceptions and reservations
expressed or provided in the deeds or other instruments,
respectively, under and by virtue of which the Company now owns or
may hereafter acquire any property subject to the lien of the
Indenture and to undetermined lines and charges, if any, incidental
to construction or other existing permitted liens as defined in
Article I of the Indenture;
IN TRUST, NEVERTHELESS, upon
the terms and trusts set forth in the Indenture for the equal and
proportionate benefit and security of all present and future
holders of the Bonds and coupons issued and to be issued under the
Indenture, without preference of any such Bonds and coupons of any
particular series over the Bonds and coupons of any other series,
by reason of priority in the time of the issue, sale or negotiation
thereof, or by reason of the purpose of issue or otherwise,
howsoever, except as otherwise provided in Section 2 of Article IV
of the Indenture.
ARTICLE
I
CONFIRMATION OF
1940
MORTGAGE AND
SUPPLEMENTAL INDENTURES
The 1940 Mortgage (as modified
in Article V of the Supplemental Indenture dated December 1, 1947,
Article V of the Supplemental Indenture dated May 1, 1954, Article
V of the Supplemental Indenture dated March 1, 1958, Article V of
the Supplemental Indenture dated January 15, 1969, Article III of
the Supplemental Indenture dated November 23, 1976, Article III of
the Supplemental Indenture dated April 15, 1985 and Article II of
the Supplemental Indenture dated as of June 30, 1999) and the
Supplemental Indentures dated July 1, 1940, August 18, 1944,
December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954,
March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969,
November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974,
April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976,
November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978,
September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980,
June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981,
March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982,
November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June
27, 1984, September 4, 1984, November 14, 1984, November 15, 1984,
April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985,
November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986,
February 25, 1987, October 15, 1987, February 24, 1988, September
15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1,
1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July
31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1,
1993, September 15, 1994, May 1, 1995, May 2, 1995, June 1, 1995,
July 15, 1995, August 1, 1995, June 15, 1997, August 1, 1997,
October 15, 1997, June 1, 1998 and October 1, 1998, October 1,
1998, April 1, 1999, June 30, 1999, January 15, 2000, May 15, 2002,
October 1, 2002, September 1, 2004, October 1, 2004, April 1, 2005
and July 1, 2005, respectively, are hereby in all respects
confirmed.
ARTICLE
II
CREATION,
PROVISIONS, REDEMPTION,
PRINCIPAL AMOUNT
AND FORM OF BONDS OF SERIES DUE 2018
Section 2.01
The
Company hereby creates a new series of Bonds to be issued under and
secured by the Indenture and to be designated as “First
Mortgage Bonds, 8.875% Series due 2018” of the Company and
hereinabove and hereinafter called the “ Bonds of
Series due 2018 .” The Bonds of Series due
2018 shall be executed, authenticated and delivered in accordance
with the provisions of, and shall in all respects be subject to,
all of the terms, conditions and covenants of the
Indenture.
Section 2.02
The
Bonds of Series due 2018 shall be issued as fully registered Bonds
only, without coupons, in the denominations of $2,000 and integral
multiples of $1,000 in excess thereof.
(a) The
Bonds of Series due 2018 shall be dated the date of authentication,
shall mature on November 15, 2018, and shall bear interest from the
time hereinafter provided at the rate of 8.875% per annum payable
on May 15 and November 15 in each year beginning on May 15, 2009
(each such date hereinafter called an “ interest
payment date ”) on and until maturity, or, in the
case of any such Bonds of Series due 2018 duly called for
redemption, on and until the redemption date, or, in the case of
any default by the Company in the payment of the principal due on
any such Bonds of Series due 2018, until the Company's obligation
with respect to the payment of the principal shall be discharged as
provided in the Indenture. If the maturity date or any
redemption date should fall on a day that is not a Business Day,
the principal due on such date shall be paid on the next succeeding
Business Day and no interest shall accrue for the intervening
period with respect to the payment so deferred.
(b) The
Bonds of Series due 2018 shall be payable as to principal (and
premium, if any) and interest at the agency of the Company in the
Borough of Manhattan, The City of New York, the City of Akron,
State of Ohio, or the City of Cleveland, State of Ohio in any coin
or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private
debts; provided that payment by wire transfer of immediately
available funds shall be required with respect to principal of (and
premium, if any), and interest on the Bonds of Series due 2018 so
long as such Bonds are held by a Depository (as hereinafter
defined) in the form of one or more Global Bonds (as hereinafter
defined).
(c) Except
as hereinafter provided, each Bond of Series due 2018 shall bear
interest from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid or duly
provided for, then from the date of initial authentication of such
Bonds of Series due 2018, until the principal of such Bonds of
Series due 2018 is paid or duly provided for. Interest
on the Bonds of Series due 2018 shall be computed on the basis of
twelve 30-day months and a 360-day year and for any period shorter
than a full month, on the basis of the actual number of days
elapsed in such period.
(d) The
interest payable on any interest payment date shall be paid to the
respective persons in whose name the Bonds of Series due 2018 shall
be registered at the close of business on the Record Date (as
hereinafter defined) with respect to such interest payment date,
notwithstanding the cancellation of any such Bonds of Series due
2018 upon any transfer or exchange thereof subsequent to such
Record Date and prior to such interest payment date;
provided , however , that if and to the extent the
Company shall default in the payment of the interest due on such
interest payment date, such defaulted interest shall be paid to the
respective persons in whose names such outstanding Bonds of Series
due 2018 are registered at the close of business on a date (the
“ Subsequent Record Date ”) not less than
ten (10) days nor more than fifteen (15) days next preceding the
date of payment of such defaulted interest, such Subsequent Record
Date to be established by the Company by notice given by mail by or
on behalf of the Company to the registered owners of Bonds of
Series due 2018 not less than ten (10) days next preceding such
Subsequent Record Date. Notwithstanding the foregoing, interest
payable at maturity or upon earlier redemption will be payable to
the person to whom principal shall be payable. If any
interest payment date should fall on a day that is not a Business
Day (as hereinafter defined), then the interest payment shall be
made on the next succeeding Business
Day and no interest shall
accrue for the intervening period with respect to the payment so
deferred.
(e) The
term “ Record Date ” shall mean, with
respect to each interest payment date (other than an interest
payment date that is the maturity date or redemption date) of any
Bond of Series due 2018, the close of business on the
fifteenth (15 th ) calendar day next preceding
the respective interest payment date (whether or not a Business
Day); provided, however, that so long as the Bonds of Series due
2018 are held by a Depository (as defined below) in the form of one
or more Global Bonds, the Record Date with respect to each interest
payment date (other than an interest payment date that is the
maturity date or redemption date) will be the close of business on
the Business Day before the applicable interest payment
date.
(f) The
term “ Business Day ” shall mean, any
day, other than a Saturday or Sunday, which is not a day on which
the corporate trust office of the Trustee or banking institutions
or trust companies in New York, New York are generally authorized
or required by law, regulation or executive order to remain
closed.
(a) In
the manner and subject to the limitations provided in the Indenture
and herein, Bonds of Series due 2018 may be transferred or may be
exchanged for a like aggregate principal amount of Bonds of Series
due 2018 of other authorized denominations, in either case without
charge, except for any tax or taxes or other governmental charges
incidental to such transfer or exchange, at the office or agency of
the Company in the Borough of Manhattan, The City of New York, the
City of Akron, State of Ohio or the City of Cleveland, State of
Ohio.
(b) In
the event less than all of the Bonds of Series due 2018 at the time
outstanding are called for redemption, the Company shall not be
required (a) to register any transfer or make any exchange of any
such Bonds of Series due 2018 for a period of fifteen (15) days
next preceding the mailing of the notice of redemption of any such
Bonds of Series due 2018, (b) to register any transfer or make any
exchange of any such Bonds of Series due 2018 so called for
redemption in its entirety or (c) to register any transfer or make
any exchange of any portion of any such Bonds of Series due 2018
which has been called for redemption.
(c) Except
as otherwise provided in Section 2.03 of this Article II with
respect to the payment of interest, the Company, the agencies of
the Company and the Trustee may deem and treat the person in whose
name a Bond of this Series due 2018 is registered as the absolute
owner thereof for the purpose of receiving any payment and for all
other purposes.
Section 2.05
The
Bonds of Series due 2018 shall be redeemable as provided in this
Article II and the form of Bond of Series due 2018, subject to the
provisions contained in Article V of the Indenture.
(a) The
Bonds of Series 2018 are subject to redemption, at the option of
the Company prior to maturity in whole or in part at any time, at a
redemption price (the “ redemption price
”) equal to the greater of (1) 100% of the principal amount
of the Bonds of Series 2018 to be
redeemed and (2) the sum
of the present values of the Remaining Scheduled Payments (as
hereinafter defined) discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as hereinafter defined) plus
50 basis points, plus, in the case of each of clause (1) and (2),
accrued and unpaid interest, if any, to the redemption date. The
Bonds of Series due 2018 shall not otherwise be subject to
redemption by the Company prior to maturity.
(b) For
purposes of this Section 2.06 and the form of Bond of Series due
2018, the following terms shall have the meanings set forth
below:
“ Comparable
Treasury Issue ” shall mean the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term (“
Remaining Life ”) of the Bonds of Series due
2018 to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice in
pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Bonds.
“ Comparable
Treasury Price ” shall mean with respect to any
redemption date: (1) the average of five Reference Treasury Dealer
Quotations for such redemption date after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the
Independent Investment Banker obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such
quotations.
“ Independent
Investment Banker ” shall mean one of the Reference
Treasury Dealers appointed by the Company, as selected by the
Company, or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking
institution of national standing selected by the
Company.
“ Reference
Treasury Dealer ” shall mean (1) each of Barclays
Capital Inc., Credit Suisse Securities (USA) LLC, Greenwich Capital
Markets, Inc., J.P. Morgan Securities Inc. and Morgan Stanley &
Co. Incorporated, and their respective successors, provided,
however, that if any of the foregoing shall cease to be a primary
U.S. Government securities dealer in The City of New York (a
“ Primary Treasury Dealer ”), the Company
shall substitute therefor another Primary Treasury Dealer; and (2)
any other Primary Treasury Dealer selected by the Independent
Investment Banker after consultation with the Company.
“ Reference
Treasury Dealer Quotations ” shall mean, with respect
to each Reference Treasury Dealer and any redemption date, the
average as determined by the Independent Investment Banker, of the
bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in
writing to the Independent Investment Banker at 5:00 p.m. New York
City time, on the third Business Day preceding such redemption
date.
“ Remaining
Scheduled Payments ” shall mean, with respect to the
Bonds of Series due 2018 to be redeemed, the remaining scheduled
payments of principal and interest on the Bonds of Series due 2018
that would be due after the related redemption
date but for such
redemption. If such redemption date is not an interest
payment date with respect to such Bonds of Series due 2018, the
amount of the next succeeding scheduled interest payment on those
Bonds of Series due 2018 will be reduced by the amount of interest
accrued on such Bonds of Series due 2018 to such redemption
date.
“ Treasury
Rate ” shall mean, with respect to any redemption
date,
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the yield, under the heading
which represents the average for the immediately preceding week,
appearing in the most recently published statistical release
designated "H.15(519)", or any successor publication which is
published weekly by the Federal Reserve and which establishes
yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or
after the Remaining Life, yields for the two published maturities
most closely corresponding to the Comparable Treasury Issue shall
be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to
the nearest month) or
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if such release (or any
successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date.
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The Treasury Rate shall be
calculated on the third Business Day preceding the redemption
date.
Section 2.07
Subject to the applicable provisions of the Indenture and the form
of Bonds of Series due 2018 hereinafter set forth, written notice
of redemption of Bonds of Series due 2018 pursuant to this
Supplemental Indenture shall be given by the Trustee by mailing to
each registered owner of such Bonds of Series due 2018 to be
redeemed a notice of such redemption, first class postage prepaid,
at its last address as it shall appear upon the books of the
Company for the registration and transfer of such Bonds of Series
due 2018. Any notice of redemption shall be mailed at
least thirty (30) days and not more than sixty (60) days before the
redemption date, unless a shorter notice period is consented to in
writing by the registered owner or owners of all Bonds of Series
due 2018 to be redeemed and such consent is filed with the
Trustee. Notwithstanding Article V, Section 1 of the
Indenture, such notice of redemption need not specify the premium
payable in connection with such redemption but only the manner of
calculation thereof. The Company shall notify the
Trustee of the redemption price promptly after the calculation
thereof and the Trustee shall not be responsible for calculating
the redemption price. In the event of partial redemption
of Bonds of Series due 2018, the Trustee shall select, not more
than 60 days prior to the redemption date, the particular portions
thereof for redemption from the outstanding Bonds of Series due
2018 to be redeemed, subject to the provisions of this Supplemental
Indenture, in such manner as the Trustee shall deem appropriate and
fair. Any notice of redemption of the Bonds of Series
due 2018 may be conditional on the
Company depositing funds with
the Trustee, or irrevocably directing the Trustee to apply moneys
held by it, sufficient to pay the redemption price thereof, and if
such funds are not so deposited or such direction is not given,
such notice shall be of no effect.
Section 2.08
Any
Bonds of Series due 2018 at any time purchased or otherwise
acquired by the Company shall be surrendered to the Trustee for
cancellation and the Trustee shall forthwith cancel the
same.
Section 2.09
All
Bonds of Series due 2018 redeemed as provided in Sections 2.05,
2.06 and 2.07 shall be surrendered to the Trustee for cancellation
and the Trustee shall forthwith cancel the same. In the
event that part of a Bond of Series due 2018 shall be redeemed as
provided in said Sections 2.05, 2.06 and 2.07, upon surrender of
such Bond to the Trustee for cancellation as aforesaid, the Trustee
shall cancel such Bond and the Company shall execute and the
Trustee shall authenticate and deliver to the registered owner
Bonds of Series due 2018 in such authorized denominations as shall
be specified by the registered owner in an aggregate principal
amount equal to the unpaid balance of the principal amount of such
surrendered Bond of Series due 2018.
Section 2.10
(a) Bonds
of Series due 2018 shall be issued initially in the form of one or
more permanent global securities in definitive, fully registered
form without interest coupons with the global bonds legend set
forth on the form of Bonds of Series due 2018 (each, a “
Global Bond ”), deposited with, or on behalf
of, The Depository Trust Company (the “
Depository ”) and registered in the name of
Cede & Co., as the Depository’s nominee and duly executed
by the Company and authenticated by the Trustee as hereinafter
provided. Each such Global Bond shall be deposited with
the Trustee as custodian for the Depository.
(b) Members
of, or participants in, the Depository (“ Agent
Members ") shall have no rights under this Supplemental
Indenture or the Indenture with respect to any Global Bond held on
their behalf by the Depository or by the Trustee as the custodian
for the Depository or under such Global Bond, and the Depository
may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Bond
for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or
any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices of such Depository
governing the exercise of the rights of a holder of a beneficial
interest in any Global Bond.
(c) Except
as provided in this Section 2.10, owners of beneficial interests in
Global Bonds will not be entitled to receive physical delivery of
Bonds of Series due 2018.
(d) Neither
the Company, the Trustee nor any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect
of the records relating to or payments made on account of
beneficial ownership interests in a Global Bond or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
(e) A
Global Bond may not be transferred except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or to a successor
Depository or its nominee.
(f) Subject
to the procedures of the Depository, a Global Bond shall be
exchangeable for Bonds of Series due 2018 registered in the names
of persons other than the Depository or its nominee only if (i) the
Depository notifies the Company that it is unwilling or unable to
continue as a Depository for such Global Bond and no successor
Depository shall have been appointed by the Company, or if at any
time the Depository ceases to be a clearing agency registered under
the Securities Exch
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