-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Wt2PLkGRW0xO8ARsfN795e5yQTseaJ7OSVR2xkR4riTYOVbFwha7po4rgI0pG6EO 7u3wWX/RZN3IgEDmh2gXfw== 0000731802-94-000016.txt : 19940817 0000731802-94-000016.hdr.sgml : 19940817 ACCESSION NUMBER: 0000731802-94-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATMOS ENERGY CORP CENTRAL INDEX KEY: 0000731802 STANDARD INDUSTRIAL CLASSIFICATION: 4924 IRS NUMBER: 751743247 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10042 FILM NUMBER: 94542878 BUSINESS ADDRESS: STREET 1: 1800 THREE LINCOLN CTR STREET 2: 5430 LBJ FREEWAY CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2149349227 FORMER COMPANY: FORMER CONFORMED NAME: ENERGAS CO DATE OF NAME CHANGE: 19881024 10-Q 1 ATMOS ENERGY CORP 10-Q FOR QUARTER ENDED 6/30/94 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-10042 ATMOS ENERGY CORPORATION (Exact name of registrant as specified in its charter) TEXAS 75-1743247 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1800 Three Lincoln Centre 5430 LBJ Freeway, Dallas, Texas 75240 (Address of principal executive offices) (Zip Code) (214) 934-9227 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X .No . Number of shares outstanding of each of the issuer's classes of common stock, as of July 27, 1994. Class Shares Outstanding ------------ ------------------ No Par Value 15,261,505 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements ATMOS ENERGY CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 30, September 30, 1994 1993 --------- ------------- ASSETS (Unaudited) Property, plant and equipment $537,276 $501,512 Less accumulated depreciation and amortization 218,199 202,237 -------- -------- Net property, plant and equipment 319,077 299,275 Current assets Cash and cash equivalents 961 2,286 Accounts receivable, net 36,801 29,200 Inventories 6,025 6,064 Gas stored underground 8,596 17,603 Other current assets 2,340 4,240 -------- -------- Total current assets 54,723 59,393 Deferred charges and other assets 37,374 32,950 -------- -------- $411,174 $391,618 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Shareholders' equity Common stock outstanding: 15,249,954 shares at 6/30/94 and 14,868,902 shares at 9/30/93 $ 76 $ 74 Additional paid-in capital 101,476 94,279 Retained earnings 54,811 45,076 -------- -------- Total shareholders' equity 156,363 139,429 Long-term debt 98,303 105,853 -------- -------- Total capitalization 254,666 245,282 Current liabilities Current maturities of long-term debt 4,000 6,300 Notes payable to banks 33,600 35,700 Accounts payable 31,667 27,803 Taxes payable 7,442 3,797 Customers' deposits 8,167 7,862 Other current liabilities 8,608 6,455 -------- -------- Total current liabilities 93,484 87,917 Deferred income taxes 30,200 32,614 Deferred credits and other liabilities 32,824 25,805 -------- -------- $411,174 $391,618 ======== ======== See accompanying notes to consolidated financial statements. 2 ATMOS ENERGY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share data) Three months ended June 30, ----------------------- 1994 1993 -------- -------- Operating revenues $ 90,013 $ 91,219 Purchased gas cost 58,223 56,756 -------- -------- Gross profit 31,790 34,463 Operating expenses Operation 20,796 20,543 Maintenance 1,634 1,626 Depreciation and amortization 4,941 4,454 Taxes, other than income 3,673 3,640 Income taxes (benefit) (687) 353 ------- -------- Total operating expenses 30,357 30,616 ------- -------- Operating income 1,433 3,847 Other income 203 73 Interest charges 2,860 3,089 ------- -------- Net income (loss) $(1,224) $ 831 ======= ======= Net income (loss) per share $ (.08) $ .06 ======= ======= Cash dividends per share (See Note 2) $ .22 $ .21 ======= ======= Average shares outstanding 15,233 14,681 ======= ======= See accompanying notes to consolidated financial statements. 3 ATMOS ENERGY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share data) Nine months ended June 30, ----------------------- 1994 1993 -------- -------- Operating revenues $422,458 $388,157 Purchased gas cost 282,881 252,450 -------- -------- Gross profit 139,577 135,707 Operating expenses Operation 67,815 62,569 Maintenance 4,630 4,595 Depreciation and amortization 14,280 13,353 Taxes, other than income 14,020 13,632 Income taxes 10,752 11,104 -------- -------- Total operating expenses 111,497 105,253 -------- -------- Operating income 28,080 30,454 Other income 288 589 Interest charges 9,262 9,687 -------- -------- Net income $ 19,106 $ 21,356 ======== ======== Net income per share $ 1.26 $ 1.47 ======== ======== Cash dividends per share (See Note 2) $ .66 $ .64 ======== ======== Average shares outstanding 15,168 14,556 ======== ======== See accompanying notes to consolidated financial statements. 4 ATMOS ENERGY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share data) Twelve months ended June 30, ----------------------- 1994 1993 -------- -------- Operating revenues $493,942 $455,346 Purchased gas cost 326,963 294,452 -------- -------- Gross profit 166,979 160,894 Operating expenses Operation 88,025 81,652 Maintenance 6,370 5,939 Depreciation and amortization 18,246 17,334 Taxes, other than income 17,194 16,624 Income taxes 9,721 9,038 -------- -------- Total operating expenses 139,556 130,587 -------- -------- Operating income 27,423 30,307 Other income 249 422 Interest charges 12,377 12,899 -------- -------- Net income $ 15,295 $ 17,830 ======== ======== Net income per share $ 1.02 $ 1.26 ======== ======== Cash dividends per share (See Note 2) $ .87 $ .85 ======== ======== Average shares outstanding 15,045 14,142 ======== ======== See accompanying notes to consolidated financial statements. 5 ATMOS ENERGY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Nine months ended June 30, ----------------------- 1994 1993 -------- -------- Cash Flows From Operating Activities Net income $ 19,106 $ 21,356 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Charged to depreciation and amortization 14,280 13,353 Charged to other accounts 2,092 3,032 Deferred income taxes (2,414) 1,832 Other 605 390 -------- -------- 33,669 39,963 Net change in operating assets and liabilities 15,302 6,127 -------- -------- Net cash provided by operating activities 48,971 46,090 Cash Flows From Investing Activities Capital expenditures (35,682) (30,387) Retirements of property, plant and equipment (492) 57 -------- -------- Net cash used in investing activities (36,174) (30,330) Cash Flows From Financing Activities Net decrease in notes payable to banks (2,100) (12,153) Cash dividends and distributions paid (9,371) (7,089) Repayment of long-term debt (9,850) (4,800) Issuance of common stock 7,199 8,736 -------- -------- Net cash used in financing activities (14,122) (15,306) -------- -------- Net increase (decrease) in cash and cash equivalents (1,325) 454 Cash and cash equivalents at beginning of period 2,286 3,144 -------- -------- Cash and cash equivalents at end of period $ 961 $ 3,598 ======== ======== See accompanying notes to consolidated financial statements. 6 ATMOS ENERGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1994 1. Unaudited interim financial information In the opinion of management, all material adjustments necessary for a fair presentation have been made to the unaudited interim period financial statements. Such adjustments consisted only of normal recurring accruals. Because of seasonal and other fac- tors, the results of operations for the nine month period ended June 30, 1994 are not indicative of expected results of opera- tions for the year ending September 30, 1994. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q, and should be read in conjunction with the audited consolidated financial statements in the Form 8-K of Atmos Energy Corporation ("Atmos" or the "Company"), filed July 21, 1994, restating Atmos' 1993 financial statements to include Greeley Gas Company (See Note 2). Deferred charges and other assets - Deferred charges and other assets at June 30, 1994 and September 30, 1993 include assets of the Company's qualified defined benefit retirement plans in excess of the plans' recorded obligations in the amounts of $12,528,000 and $13,289,000, respectively, and Company assets related to the Company's nonqualified retirement plans at June 30, 1994 and September 30, 1993 of $16,640,000 and $12,758,000, respectively. Stock split - As of June 30, 1994, the Company had 50,000,000 shares of common stock, no par value (stated at $.005 per share), authorized and 15,249,954 shares outstanding. On February 9, 1994, the Board of Directors of Atmos approved a three-for-two split of its common stock implemented in the form of a stock dividend, which resulted in shareholders receiving one new share for every two shares previously held. Fractional shares were not issued but were paid in cash or credited to the accounts of participants of the Dividend Reinvestment and Stock Purchase Plan ("DRSPP") and ESOP. The record date for the split was May 4, 1994 and the payment date for mailing the new shares and cash for fractional shares to shareholders was May 16, 1994. Shares outstanding increased from approximately 10 million to slightly more than 15 million. All share information in this report is adjusted for the 3-for-2 stock split unless otherwise noted. Reclassifications - Certain prior period balances have been reclassified to be consistent between Atmos and Greeley Gas Company (see Note 2) and to make classification of prior year amounts consistent with the 1994 presentation. 2. Business combination On December 22, 1993, Atmos acquired by means of a merger all of the assets and liabilities of Greeley Gas Company ("GGC") in 7 accordance with the terms and provisions of an Agreement and Plan of Reorganization dated July 2, 1993. All the shares of GGC's common stock were exchanged for a total of 2,329,330 shares of Atmos common stock before the 3-for-2 stock split (3,493,995 shares on a post-split basis). GGC was a privately owned natural gas utility and is engaged in the distribution and sale of natural gas to residential, commer- cial, industrial, agricultural, and other customers throughout Colorado, Kansas, and a small portion of Missouri. This transaction was accounted for as a pooling of interests; therefore, prior year financial statements have been restated to reflect this merger. GGC prepared its financial statements on a December 31 fiscal year end. GGC's fiscal year has been changed to September 30 to conform to the Company's year end. The Sep- tember 30, 1993 balances, as presented, are the combined balances of Atmos and GGC reflecting the pooling of interests of the companies that occurred on December 22, 1993. The restated consolidated statements of income and cash flows presented herein for the three-month, nine-month and twelve-month periods ended June 30, 1994 and 1993 include GGC's operating results for the full period presented. Results of operations for the previously separate enterprises for the three months ended June 30, 1994 and 1993 are summarized as follows: Three months ended June 30, ----------------------- 1994 1993 -------- -------- (In thousands) Operating revenue: Atmos $ 76,768 $ 77,176 GGC 13,245 14,043 -------- -------- $ 90,013 $ 91,219 ======== ======== Net income (loss): Atmos $ (32) $ 1,256 GGC (1,192) (425) -------- -------- $ (1,224) $ 831 ======== ======== 8 Operating revenue and net income included in the Company's conso- lidated statements of income for the nine months ended June 30, 1994 and 1993 are as follows: Nine months ended June 30, ----------------------- 1994 1993 -------- -------- (In thousands) Operating revenue: Atmos $353,627 $325,747 GGC 68,831 62,410 -------- -------- $422,458 $388,157 ======== ======== Net income: Atmos $ 15,161 $ 18,016 GGC 3,945 3,340 -------- -------- $ 19,106 $ 21,356 ======== ======== Operating revenue and net income included in the Company's con- solidated statements of income for the twelve months ended June 30, 1994 and 1993 are as follows: Twelve months ended June 30, ----------------------- 1994 1993 -------- -------- (In thousands) Operating revenue: Atmos $416,375 $384,691 GGC 77,567 70,655 -------- -------- $493,942 $455,346 ======== ======== Net income: Atmos $ 11,924 $ 16,009 GGC 3,371 1,821 -------- -------- $ 15,295 $ 17,830 ======== ======== 9 The dividends per share presentation on the consolidated state- ment of income reflects historical Atmos dividends per share and has not been restated under the pooling of interests method of accounting for the merger. The historical and restated cash dividends and distributions per share of Atmos are as follows: Three months ended June 30, ----------------------- 1994 1993 -------- -------- Historical Atmos cash dividends per share $.22 $.21 Restated cash dividends and distributions per share, including GGC $.22 $.17 Nine months ended June 30, ----------------------- 1994 1993 -------- -------- Historical Atmos cash dividends per share $.66 $.64 Restated cash dividends and distributions per share, including GGC $.62 $.49 Twelve months ended June 30, ----------------------- 1994 1993 -------- -------- Historical Atmos cash dividends per share $.87 $.85 Restated cash dividends and distributions per share, including GGC $.80 $.65 3. Accounting for income taxes Effective October 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109") and, as permitted under the new rules, prior years' financial statements have not been restated. A regulatory liability reflecting the expected future rate treat- ment of approximately $2,673,000 in deferred tax deductions has been recorded in accordance with SFAS No. 109 and is included in other deferred credits. The effect of applying the new standard in the first nine months of fiscal 1994 had no significant effect on net income. This standard changes the Company's method of accounting for income taxes from the deferred method (APB 11) to the liability method. Previously the Company deferred the past tax effects of 10 timing differences between financial reporting and taxable in- come. Under the liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the estimated future tax effects of differences between the financial statement carry- ing amounts of existing assets and liabilities and their respec- tive tax bases. 4. Other postretirement benefits Effective October 1, 1993, the Company adopted Financial Account- ing Standards No. 106 ("SFAS No. 106"), the "Employers' Account- ing for Postretirement Benefits Other Than Pensions". SFAS No. 106 focuses principally on postretirement health care benefits and will significantly change the practice of accounting for postretirement benefits on a pay-as-you-go basis by requiring accrual of such benefit costs on an actuarial basis over the active service period of employees to the date of full eligibili- ty for such benefits. The Company is amortizing on a straight line basis the initial transition obligation of $33,354,000 over 20 years. The effect of adopting the new rules increased net periodic postretirement benefit cost for the nine months ended June 30, 1994 by $2,231,000 and decreased net income for the period by $1,427,000. Atmos sponsors two defined benefit postretirement plans other than pensions. One plan provides medical, dental, vision and life insurance benefits to retired employees of Greeley Gas Company. The other offers medical benefits to all other Atmos employees. Substantially all of the Company's employees may become eligible for these benefits if they reach retirement age while working for the Company and attain 10 consecutive years of service. Both the plan participant and the participant's spouse are required to contribute under these plans. The Atmos plan is not currently funded. During the quarter ended June 30, 1994, the Company made its first payment to the external trust set up to fund SFAS No. 106 costs in excess of the pay-as-you-go cost in Kansas in accordance with an order of the Kansas Corporation Commission. The amount of funding will ultimately depend upon the ratemaking treatment allowed in the Company's various rate jurisdictions. The following is a reconciliation of the funded status of the plans to the net postretirement benefits liability on the balance sheet as of September 30, 1993 (in thousands): Accumulated postretirement benefit obligation Retirees $(18,237) Fully eligible employees (8,596) Other employees (6,521) -------- $(33,354) ======== 11 Accumulated postretirement benefit obligation in excess of plan assets $(33,354) Unrecognized transition obligation 33,354 -------- Accrued postretirement benefits liability $ - ======== In the latest actuarial calculation of the accrued postretirement benefits liability, the assumed health care cost trend rate used to estimate the cost of postretirement benefits was 10.5% for the 1993-1994 year and is assumed to decrease gradually to 5.0% for 1999-2000 and remain at that level thereafter. Similarly, the dental trend rate is 8.0% for the 1993-1994 year and gradually decreases to 5.0% for 1999-2000 and remains level thereafter. The trend for vision benefits is assumed to remain level for all years at 4.5%. The effect of a 1% increase in the assumed health care cost trend rate for each future year is $410,000 on the annual aggregate of the service and interest cost components of net periodic postretirement benefit costs and $2,793,000 on the accumulated postretirement benefit obligation as of September 30, 1993. Other assumptions used in postretirement benefit account- ing are as follows: Discount rate - rate at which liabilities could be settled 7.0% Rate of increase in compensation levels 5.0% The Company is currently allowed to recover other postretirement benefit ("OPEB") costs through its regulated rates on a pay-as- you-go basis in a majority of its service areas. It is allowed to recover OPEB costs in its remaining service areas under SFAS No. 106 accrual accounting. The rate recovery of SFAS No. 106 cost by jurisdiction is discussed below. Management believes that accrual accounting in accordance with SFAS No. 106 is appro- priate and will seek rate recovery of accrual-based expenses in all of its ratemaking jurisdictions. The portion of the addi- tional expense in excess of the pay-as-you-go amount that will immediately or ultimately be allowed in rates cannot presently be determined. The difference of $2,231,000 between the level of expense using SFAS No. 106 and that using the prior accounting method for the nine months ended June 30, 1994 was expensed and no regulatory asset was recorded. In May 1993, the Louisiana Commission issued an order for all utilities under its jurisdiction to continue to use the pay-as- you-go accounting method for rate treatment of SFAS No. 106 costs. Utilities may apply to the Louisiana Commission for authority to recognize a regulatory asset to be amortized on a pay-as-you-go basis to bridge the gap between ratemaking and accounting. The Louisiana Commission retains the flexibility to examine individual companies' accounting for SFAS No. 106 costs to determine if special exceptions to this order are warranted. 12 Recovery of SFAS No. 106 costs were not allowed in the Company's Rate Stabilization Clause increase implemented March 1, 1994. In June 1992, the Kentucky Public Service Commission ("Kentucky Commission") declined a request by a group of utilities to grant a blanket commitment for the future recovery of SFAS No. 106 costs in excess of pay-as-you-go costs for all utilities. The Kentucky Commission's order stated that each utility could file an individual application to seek recovery of such costs. At a rehearing held in December 1992, the Kentucky Commission affirmed its initial order. In May 1993, the Company filed rate requests which included SFAS No. 106 costs in Fritch and Sanford, Texas and for the surround- ing environs. The rates for the environs are subject to the jurisdiction of the Railroad Commission of Texas ("Railroad Commission"). In its order of August 30, 1993, the Railroad Commission approved recovery of SFAS No. 106 costs and internal funding. In September 1993, GGC filed a rate request for its Colorado service area which included SFAS No. 106 costs. In May 1994, the Company began implementing new rates in its Colorado service area. The new rates will increase annual revenues by $3,200,000 and include recovery of accrual-based SFAS No. 106 costs. In its December 1993, rate order to GGC, the Kansas Corporation Commission approved recovery of SFAS No. 106 expenses with the agreement that the difference between amounts computed as SFAS No. 106 expense and pay-as-you-go expense shall be remitted quarterly to an external trust fund. The ultimate impact of the adoption of SFAS No. 106 on the Com- pany's financial position and results of operations will not be known with certainty until the regulatory treatment that will be allowed in each of the Company's ratemaking jurisdictions is determined. 5. Postemployment benefits The Company also provides postemployment benefits, primarily workers' compensation and long-term disability insurance, to former or inactive employees after employment but before retire- ment. The Financial Accounting Standards Board has issued State- ment of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" ("SFAS No. 112"), which applies to such benefits and will be effective for the Company's 1995 fiscal year. Under SFAS No. 112, employers are required to recognize the obligation to provide postemployment benefits if certain conditions are met. Postemployment benefit costs are currently recorded and recovered in rates on the pay-as-you-go basis. The rate treatment of SFAS No. 112 accrual based costs has not been determined at this time. The reduction in future earnings, if any, that would result from this accrual would be offset to the extent that it is approved to be recovered in 13 rates. Based on a preliminary actuarial study, the Company currently estimates the cumulative effect of implementation of SFAS No. 112 and the increase in future annual costs to be mini- mal. 6. Contingencies On March 15, 1991, suit was filed in the 15th Judicial District Court of Lafayette Parish, Louisiana, by the "Lafayette Daily Advertiser" and others against the Trans La Division, Trans Louisiana Industrial Gas Company, Inc. ("TLIG"), a wholly owned subsidiary of the Company, and Louisiana Intrastate Gas Corpora- tion and certain of its affiliates ("LIG"). LIG is the Company's primary supplier of natural gas in Louisiana and is not otherwise affiliated with the Company. The plaintiffs purported to represent a class consisting of all residential and commercial gas customers in the Trans La Divi- sion's service area. Among other things, the lawsuit alleged that the defendants violated antitrust laws of the state of Louisiana by manipulating the cost-of-gas component of the Trans La Division's gas rate to the purported customer class, thereby causing such purported class members to pay a higher rate. The plaintiffs made no specific allegation of an amount of damages. The defendants brought an appeal to the Louisiana Supreme Court of rulings by the trial court and the Third Circuit Court of Appeal which denied defendants' exceptions to the jurisdiction of the trial court. It was the position of the defendants that the plaintiffs' claims amount to complaints about the level of gas rates and should be within the exclusive jurisdiction of the Louisiana Commission. On January 19, 1993, the Louisiana Supreme Court issued a deci- sion reversing in part the lower courts' rulings, dismissing all of plaintiffs' claims against the defendants which seek damages due to alleged overcharges and further ruling that all such claims are within the exclusive jurisdiction of the Louisiana Commission. Any claims which seek damages other than overcharges were remanded to the trial court but were stayed pending the completion of the Louisiana Commission proceeding referred to below. The Louisiana Commission has instituted a docketed proceeding for the purpose of investigating the costs included in the Trans La Division's purchased gas adjustment component of its rates. Both the Trans La Division and LIG are parties to the proceeding. Much of the discovery in this proceeding has been conducted and a procedural schedule has been established. The Company believes the allegations as they relate to the Company, whether brought in court or at the Louisiana Commission, are without merit, and that the chances of a material adverse outcome are remote. The Com- pany will continue to vigorously protect its interest in this matter. 14 From time to time, claims are made and lawsuits are filed against the Company arising out of the ordinary business of the Company. In the opinion of the Company's management, liabilities, if any, arising from these actions are either covered by insurance, adequately reserved for by the Company or would not have a mate- rial adverse effect on the financial condition of the Company. 7. Long-term and short-term debt During the nine months ended June 30, 1994, the Company paid installments due of $3,000,000 on its 9.75% Senior Notes, $2,000,000 on its 11.2% Senior Notes, and paid the balance of $3,250,000 on its 13.75% Series I, First Mortgage Bonds, and $1,600,000 on its 13% Series G, First Mortgage Bonds. At June 30, 1994, the Company had committed, short-term, unse- cured bank credit facilities totaling $72,000,000, all of which was unused. The Company also had aggregate uncommitted lines of $120,000,000, of which $86,400,000 was unused at June 30, 1994. 8. Statements of cash flows Supplemental disclosures of cash flow information for the nine- month periods ended June 30, 1994 and 1993 are presented below. Nine months ended June 30, ------------------- 1994 1993 ------ ------ (In thousands) Cash paid for Interest $10,806 $11,646 Income taxes 6,370 7,564 15 INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors Atmos Energy Corporation We have reviewed the accompanying condensed consolidated balance sheet of Atmos Energy Corporation as of June 30, 1994, and the related condensed consolidated statements of income for the three-month and nine-month periods ended June 30, 1994 and the condensed consolidated statement of cash flows for the nine- month period ended June 30, 1994. These financial statements are the responsibility of the Company's management. We did not make a similar review of the condensed consolidated financial state- ments for the three-month and nine-month periods ended June 30, 1993. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit con- ducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifica- tions that should be made to the accompanying condensed consoli- dated financial statements at June 30, 1994, and for the three- month and nine-month periods then ended for them to be in confor- mity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Atmos Energy Corporation as of September 30, 1993, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated November 10, 1993, except for Notes 2 and 5, as to which the date is February 9, 1994, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of September 30, 1993, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP Dallas, Texas August 5, 1994 16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The Company distributes and sells natural gas to residential, commercial, industrial and agricultural customers in six states. Such business is subject to regulation by state and/or local authorities in each of the states in which the Company operates. In addition, the Company's business is affected by seasonal weather patterns, competitive factors within the energy industry, and economic conditions in the areas that the Company serves. Revenues and sales volume statistics for the three-month, nine- month and twelve-month periods ended June 30, 1994 and 1993 appear on pages 23-25. Meters in service are as follows: June 30 --------------------- 1994 1993 ------- ------- Meters in Service Residential 564,149 551,505 Commercial 59,683 57,961 Industrial (including agricultural) 19,718 20,102 Public authority and other 4,954 4,794 ------- ------- Total 648,504 634,362 ======= ======= Rate Activity Rate activity through September 1993 was discussed in the Company's 1993 Annual Report to Shareholders. Changes in pending rate matters and new developments since September 1993 are dis- cussed below. There has been no change in status of the Company's appeal re- garding the effective date of its last rate increase in Kentucky. The Company lost the issue at the trial court level. If the Company is successful, it could recover approximately $1.0 mil- lion in additional revenue; if it is unsuccessful, there would be no impact on its revenue. In December 1993, the Company received an order from the Kentucky Commission approving a large volume sales program and a revised gas cost adjustment method. Also in December 1993, the Kentucky Commission issued an order in a generic proceeding relating to the implications of FERC Order 636 on local distribution com- panies ("LDCs"). The order permitted the LDCs to flow through Order 636 transition costs incurred from their pipeline suppli- ers. 17 On March 1, 1994, the Company implemented an increase of $1.1 million or 2.7% under its second annual rate stabilization clause filing in Louisiana. In February 1993, the city of Amarillo, Texas appealed the Rail- road Commission's November 1992 rate order to the District Court of Travis County, Texas. In January 1994, the District Court denied the city's appeal. The city has appealed to the Court of Appeals. GGC filed a request for an increase in annual revenues of $4.5 million with the Colorado Public Utility Commission ("Colorado Commission") in September, 1993. On May 1, 1994, the Company implemented an annual increase of $3.2 million or 6.9%. The new rates reflect settlement of all issues and recovery of accrual accounting of postretirement benefits in accordance with SFAS No. 106. Following issuance of an order by the Colorado Commission, Phase 2 of the rate proceeding will commence, which will address rate redesign issues. Effective December 1, 1993, GGC received an annual rate increase of approximately $2.1 million or 10.6% in its Kansas service area. The settlement included recovery of SFAS No. 106 costs with external funding and a moratorium on rate requests in Kansas until December 1, 1996. In 1992 the Federal Energy Regulatory Commission (FERC) issued an order ("Order 636") which continues past FERC initiatives to substantially restructure the interstate natural gas pipeline industry by unbundling the availability and pricing of interstate pipeline services. The Company intervened in the restructuring proceedings of the interstate pipelines that serve its various service areas and actively participated in the proceedings of its major suppliers. New service agreements for its Western Kentucky Division became effective in September and November 1993 with Tennessee Gas and Texas Gas, respectively. Prior to October 1993, GGC purchased a portion of its natural gas supplies from interstate pipeline companies. It now has term commitments for the transportation of natural gas with the interstate pipelines but must secure that portion of its natural gas supplies previ- ously purchased from them from other parties. The Company be- lieves it has restructured its portfolio of natural gas supplies and pipeline services under Order 636 to replace the traditional pipeline sales service and enable it to continue to provide adequate and reliable service to its customers in 1994. Recently Issued Accounting Standards Not Yet Adopted The Company has not adopted Statement of Financial Accounting Standards No. 112 "Employers' Accounting for Postemployment Benefits" which is discussed in Note 5 of notes to consolidated financial statements. The rate treatment of SFAS No. 112 costs has not been determined at this time. Such costs are currently recorded and recovered on the pay-as-you-go basis. 18 FINANCIAL CONDITION For the nine months ended June 30, 1994, net cash provided by operating activities totaled $49.0 million compared with $46.1 million for the nine months ended June 30, 1993. Net operating assets and liabilities decreased $15.3 million for the nine months ended June 30, 1994 compared with a decrease of $6.1 million for the nine months ended June 30, 1993. Due to the seasonal nature of the natural gas distribution business, large swings in accounts receivable, accounts payable and inventories of gas in underground storage will occur when entering and leav- ing the winter or heating season. Major cash flows from investing activities for the nine months ended June 30, 1994 included capital expenditures of $35.7 mil- lion compared with $30.4 million for the nine months ended June 30, 1993. The capital expenditures budget for fiscal year 1994 is currently $52.6 million, as compared with actual capital expenditures of $44.8 million in fiscal 1993. Capital projects planned for 1994 include major expenditures for mains, services, meters, vehicles and computer software. These expenditures will be financed from internally generated funds and financing activi- ties. For the nine months ended June 30, 1994, cash used in financing activities amounted to $14.1 million compared with $15.3 million for the nine months ended June 30, 1993. During the nine months ended June 30, 1994, notes payable to banks was reduced $2.1 million, as compared with $12.2 million for the nine months ended June 30, 1993. Payments of long-term debt increased $5.1 million to $9.9 million for the nine months ended June 30, 1994. Pay- ments of long-term debt consisted of a $3.0 million installment on the Company's 9.75% Senior Notes due in 1996, a $2.0 million installment on the 11.2% Senior Notes, the balance of $3.25 million on the 13.75% Series I First Mortgage Bonds and the balance of $1.6 million on the 13% Series G First Mortgage Bonds. The Company paid $9.4 million in cash dividends and distributions during the nine months ended June 30, 1994, compared with $7.1 million paid during the nine months ended June 30, 1993. This reflects an increase in the quarterly dividend rate and an in- creased number of shares outstanding. During the nine months ended June 30, 1994, the Company issued common stock in connec- tion with the merger, under its Employee Stock Ownership Plan ("ESOP"), under its Restricted Stock Grant Plan and under its Dividend Reinvestment and Stock Purchase Plan ("DRSPP"). In the quarter ended December 31, 1993, the Company registered an addi- tional 700,000 shares (pre-split) of common stock with the Secu- rities and Exchange Commission for future issuance under the DRSPP. On February 9, 1994, the Board of Directors of Atmos approved a 3-for-2 split of its common stock implemented in the form of a stock dividend, which resulted in shareholders receiving one new share for every two shares previously held. Fractional shares were not issued but were paid in cash or credited to the accounts 19 of participants of the DRSPP and ESOP. The record date for the split was May 4, 1994 and the payment date for mailing the new shares and cash for fractional shares to shareholders was May 16, 1994. Shares outstanding increased from approximately 10 million to slightly more than 15 million. The Company believes that internally generated funds, its short- term credit facilities and access to the debt and equity capital markets will provide necessary working capital and liquidity for capital expenditures and other cash needs for the remainder of fiscal 1994. At June 30, 1994 the Company had $72.0 million of committed short-term credit facilities, all of which was avail- able for additional borrowing. The committed lines are renewed or renegotiated at least annually. At June 30, 1994, the Company also had $120.0 million of uncommitted short-term lines, of which $86.4 million was unused. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1994, COMPARED WITH THREE MONTHS ENDED JUNE 30, 1993 Operating revenues decreased by approximately 1% to $90.0 million for the three months ended June 30, 1994 from $91.2 million for the three months ended June 30, 1993. The primary factor con- tributing to the decrease in operating revenues was decreased sales to weather sensitive customers. During the quarter ended June 30, 1994, temperatures averaged 13% warmer than in the corresponding quarter of the prior year, and approximately 10% warmer than normal. The total volume of gas sold and transported for the three months ended June 30, 1994 was 28.9 billion cubic feet ("Bcf") compared with 32.4 Bcf for the three months ended June 30, 1993. Reasons for the decreased volumes include lower transportation volumes and decreased weather sensitive sales due to warmer weather in all service areas. Part of the decrease in transportation volumes and increase in industrial sales resulted from certain industrial customers switching from transportation service to firm sales in Kentucky. The average sales price per Mcf sold increased $.12 to $4.05 as a result of an $.18 increase in the average cost of gas and rate increases in the Trans La and Greeley Divisions implemented since the corresponding quarter of the prior year. Gross profit decreased by approximately 8% to $31.8 million for the three months ended June 30, 1994, from $34.5 million for the three months ended June 30, 1993. Factors contributing to the decrease were lower sales and transportation volumes. Operating expenses, excluding income taxes, increased from $30.3 million for the three months ended June 30, 1993 to $31.0 million for the three months ended June 30, 1994. The small increase in operat- ing expenses, excluding income taxes, resulted from small in- creases in each of the captions comprising this group. Operating income decreased for the three months ended June 30, 1994 to $1.4 million from $3.8 million for the three months ended June 30, 20 1993. The decrease in operating income primarily resulted from decreased gross profit. Net income decreased from $.8 million for the three months ended June 30, 1993 to a loss of $1.2 million for the three months ended June 30, 1994. This decrease in net income primarily re- sulted from the decrease in operating income. On June 29, 1994, Atmos announced a special early retirement program for eligible employees of Greeley Gas Company. Employees who were actively employed by Greeley Gas on July 1, 1994, and are age 55 or older and have completed ten years of vesting service in the Greeley Gas Company Employees' Pension Plan by August 15, 1994, are eligible for the voluntary program. Eligi- ble employees who elect to participate will retire effective September 16, 1994, and will begin receiving benefits on that date. The offering opened July 1, 1994, and closes August 15, 1994. The program was offered to 46 employees of Greeley Gas Company's approximately 340 employees in Colorado and Kansas. The program is limited to Greeley Gas. No such program is planned for Atmos or any of the other operating companies. The Company will not know until August 15, 1994, how many employees will accept this offer. The one-time cost associated with the program will be recognized in September 1994. The maximum charge would be approximately $1.7 million if all eligible employees ac- cepted the early retirement program. NINE MONTHS ENDED JUNE 30, 1994, COMPARED WITH NINE MONTHS ENDED JUNE 30, 1993 Operating revenues increased by approximately 9% to $422.5 mil- lion for the nine months ended June 30, 1994 from $388.2 million for the nine months ended June 30, 1993. Factors contributing to the higher operating revenues were the higher average cost of gas, which is reflected in the sales price, colder weather in Kentucky and Louisiana, drier weather in the West Texas irriga- tion market, and rate increases implemented in the Greeley Gas Division and the Trans La Division. Volumes sold to irrigation customers increased from the corresponding period of the prior year by 16%. The average sales price per Mcf increased from $4.04 for the nine months ended June 30, 1993 to $4.19 for the nine months ended June 30, 1994. The increase in the average sales price reflects increased cost of gas and rate increases in the Trans La and Greeley Gas Divisions implemented since June 30, 1993. The average cost of gas per Mcf sold increased from $2.73 for the nine months ended June 30, 1993 to $2.91 for the nine months ended June 30, 1994. Gross profit increased to $139.6 million for the nine months ended June 30, 1994, compared with $135.7 million for the nine months ended June 30, 1993. Operating expenses, excluding income taxes, increased from $94.1 million in the nine months ended June 30, 1993, to $100.7 million in the nine months ended June 30, 1994. The principal factors contributing to the increase in operating expenses were increases in distribution expense, em- 21 ployee welfare expenses including adoption of SFAS No. 106, acquisition costs, and outside services. Net income decreased for the nine months ended June 30, 1994, by approximately 11% to $19.1 million from $21.4 million for the nine months ended June 30, 1993. Earnings per share decreased to $1.26 for the nine months ended June 30, 1994 from $1.47 for the nine months ended June 30, 1993, while average shares outstanding increased approximately 4%. Dividends per share increased 3% to $.66 for the nine months ended June 30, 1994. All per share information is adjusted for the 3-for-2 stock split in May 1994. TWELVE MONTHS ENDED JUNE 30, 1994, COMPARED WITH TWELVE MONTHS ENDED JUNE 30, 1993 Operating revenues increased by approximately 8% to $493.9 mil- lion for the 12 months ended June 30, 1994 from $455.3 million for the 12 months ended June 30, 1993. The increased revenues resulted from increased sales volumes and increased sales prices for the 12 months ended June 30, 1994. Sales and transportation volumes increased to 114.1 Bcf for the 12 months ended June 30, 1994 compared with 110.1 Bcf for the corresponding prior period. The average sales price per Mcf increased from $3.97 to $4.16. The average cost of gas per Mcf sold increased from $2.67 to $2.86. The increase in the average sales price reflects the increased cost of gas and rate increases in the Trans La and Greeley Divisions implemented since June 30, 1993. Gross profit increased by approximately 4% to $167.0 million for the 12 months ended June 30, 1994, from $160.9 million for the 12 months ended June 30, 1993. Operating expenses, excluding income taxes, increased from $121.5 million for the 12 months ended June 30, 1993, to $129.8 million for the 12 months ended June 30, 1994. Factors contributing to the increase in operating expenses were increased wages and benefits expenses, outside services, GGC acquisition costs and the adoption of SFAS No. 106, as discussed in Note 4 of notes to consolidated financial statements. Income taxes increased $.7 million for the 12 months ended June 30, 1994, as compared with the 12 months ended June 30, 1993. Oper- ating income decreased in the 12 months ended June 30, 1994 by approximately 10% to $27.4 million. The primary reason for the decrease in operating income was the increase in operating ex- penses discussed above. Net income for the 12 months ended June 30, 1994 was $15.3 mil- lion compared with $17.8 million for the 12 months ended June 30, 1993. The decrease in net income resulted primarily from the decrease in operating income discussed above. Earnings per share decreased by 19% to $1.02. Average shares outstanding increased approximately 6% as compared with the prior year. Dividends per share increased approximately 2% to $.87. All per share informa- tion is adjusted for the 3-for-2 stock split in May 1994. 22 ATMOS ENERGY CORPORATION CONSOLIDATED OPERATING STATISTICS (1) Three months ended June 30, 1994 1993 ------- ------- Sales Volumes -- MMcf (2) Residential 6,160 7,676 Commercial 2,713 3,232 Industrial (including agricultural) 11,768 10,488 Public authority and other 522 647 ------- ------- Total 21,163 22,043 Transportation Volumes -- MMcf (2) 7,720 10,403 ------- ------- Total Volumes Handled - MMcf (2) 28,883 32,446 ======= ======= Operating Revenues (000's) Gas Sales Revenues Residential $ 34,709 $ 39,318 Commercial 12,998 14,354 Industrial (including agricultural) 35,705 30,047 Public authority and other 2,402 2,872 -------- -------- Total Gas Revenues 85,814 86,591 Transportation Revenues 2,859 3,356 Other Revenues 1,340 1,272 -------- -------- Total Operating Revenues $ 90,013 $ 91,219 ======== ======== Average Gas Sales Revenues per Mcf $ 4.05 $ 3.93 Average Transportation Revenue per Mcf $ .37 $ .32 Cost of Gas per Mcf Sold $ 2.75 $ 2.57 HEATING DEGREE DAYS Weather Three months ended June 30, Service Sensitive ------------------------- Area Customers % 1994 1993 Normal - - -------------- ----------- ---- ---- ------ Texas 47% 250 258 237 Kentucky 26% 287 307 349 Louisiana 11% 71 122 37 Colorado, Kansas and Missouri 16% 599 783 768 ---- System Average 100% 295 339 328 1. Consolidated operating statistics have been restated to include Greeley operations for all periods presented. 2. Volumes are reported as metered in million cubic feet("MMcf"). 23 ATMOS ENERGY CORPORATION CONSOLIDATED OPERATING STATISTICS (1) Nine months ended June 30, 1994 1993 ------- ------- Sales Volumes -- MMcf (2) Residential 47,552 47,699 Commercial 19,102 19,811 Industrial (including agricultural) 25,701 20,937 Public authority and other 4,853 4,030 ------- ------- Total 97,208 92,477 Transportation Volumes -- MMcf (2) 24,944 29,072 ------- ------- Total Volumes Handled - MMcf (2) 122,152 121,549 ======= ======= Operating Revenues (000's) Gas Sales Revenues Residential $222,431 $212,716 Commercial 82,601 81,278 Industrial (including agricultural) 81,975 62,825 Public authority and other 20,746 16,553 -------- -------- Total Gas Revenues 407,753 373,372 Transportation Revenues 10,854 11,138 Other Revenues 3,851 3,647 -------- -------- Total Operating Revenues $422,458 $388,157 ======== ======== Average Gas Sales Revenues per Mcf $ 4.19 $ 4.04 Average Transportation Revenue per Mcf $ .44 $ .38 Cost of Gas per Mcf Sold $ 2.91 $ 2.73 HEATING DEGREE DAYS Weather Service Sensitive Nine months ended June 30, Area Customers % 1994 1993 Normal - - -------------- ----------- ----- ----- ------ Texas 47% 3,546 3,638 3,512 Kentucky 26% 4,290 4,088 4,341 Louisiana 11% 1,922 1,810 1,760 Colorado, Kansas and Missouri 16% 5,793 6,384 6,060 ---- System Average 100% 3,917 3,989 3,939 See footnotes on page 23. 24 ATMOS ENERGY CORPORATION CONSOLIDATED OPERATING STATISTICS (1) Twelve months ended June 30, 1994 1993 ------- ------- Sales Volumes -- MMcf (2) Residential 51,616 51,721 Commercial 21,164 21,945 Industrial (including agricultural) 36,130 32,161 Public authority and other 5,226 4,296 ------- ------- Total 114,136 110,123 Transportation Volumes -- MMcf (2) 35,654 36,773 ------- ------- Total Volumes Handled - MMcf (2) 149,790 146,896 ======= ======= Operating Revenues (000's) Gas Sales Revenues Residential $247,629 $236,109 Commercial 92,573 90,925 Industrial (including agricultural) 111,605 92,875 Public authority and other 22,508 17,771 -------- -------- Total Gas Sales Revenues 474,315 437,680 Transportation Revenues 14,730 13,241 Other Revenues 4,897 4,425 -------- -------- Total Operating Revenues $493,942 $455,346 ======== ======== Average Gas Sales Revenues per Mcf $ 4.16 $ 3.97 Average Transportation Revenue per Mcf $ .41 $ .36 Cost of Gas per Mcf Sold $ 2.86 $ 2.67 HEATING DEGREE DAYS Weather Service Sensitive Twelve months ended June 30, Area Customers % 1994 1993 Normal - - -------------- ----------- ----- ----- ------ Texas 47% 3,569 3,645 3,528 Kentucky 26% 4,338 4,133 4,376 Louisiana 11% 1,924 1,812 1,760 Colorado, Kansas and Missouri 16% 6,001 6,545 6,234 ---- System Average 100% 3,974 4,030 3,983 See footnotes on page 23. 25 PART II. OTHER INFORMATION Item 1. Legal Proceedings See Note 6 of notes to consolidated financial statements on pages 14 and 15 herein for a description of legal proceedings. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The exhibits listed in the accompanying Exhibits Index are filed as part of this report. (b) Reports on Form 8-K On July 21, 1994, Atmos Energy Corporation filed a Current Report on Form 8-K, Item 5 Other Events, restating its 1993 financial statements as a result of the acquisition of Greeley Gas Company ("GGC") on December 22, 1993. The financial statements of Atmos Energy Corporation were restated to include the operations of GGC for all periods pre- sented under the pooling of interests accounting method and were adjusted for Atmos' 3-for-2 stock split, effected in the form of a stock dividend, in May 1994. The Form 8-K included the follow- ing restated financial information: Management's discussion and analysis of financial condition and results of operations for the three years ended Septem- ber 30, 1993 Report of independent auditors Financial statements and supplementary data: - - - Consolidated balance sheets at September 30, 1993 and 1992 - - - Consolidated statements of income for the years ended September 30, 1993, 1992 and 1991 - - - Consolidated statements of shareholders' equity for the years ended September 30, 1993, 1992 and 1991 - - - Consolidated statements of cash flows for the years ended September 30, 1993, 1992 and 1991 - - - Notes to consolidated financial statements - - - Supplementary data (unaudited) Financial statement schedules for the years ended September 30, 1993, 1992 and 1991: V - Property, plant and equipment VI - Accumulated depreciation and amortization of property, plant and equipment 26 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ATMOS ENERGY CORPORATION (Registrant) Date: August 11, 1994 By: /s/ JAMES F. PURSER ------------------------------ James F. Purser Executive Vice President and Chief Financial Officer Date: August 11, 1994 By: /s/ DAVID L. BICKERSTAFF ------------------------------ David L. Bickerstaff Vice President and Controller (Principal Accounting Officer) 27 EXHIBITS INDEX Item 6. (a) Exhibit Page Number or Number Description Incorporation by Reference to 3 By-Laws of Atmos Energy Corporation (Amended and restated as of May 11, 1994) 10.1 Seventh Supplemental Indenture, dated as of October 1, 1983 between Greeley Gas Company ("The Greeley Gas Divi- sion") and the Central Bank of Denver, N.A. ("Central Bank") 10.2 Ninth Supplemental Indenture, dated as of April 1, 1991, between The Greeley Gas Division and Central Bank 10.3 Bond Purchase Agreement, dated as of April 1, 1991, between The Greeley Gas Division and Central Bank 10.4 Tenth Supplemental Indenture, dated as of December 1, 1993, between the Com- pany and Colorado National Bank, for- merly Central Bank 15 Letter regarding unaudited interim financial information 28 EX-10 2 EXHIBIT 10.1 FOR 10-Q FOR QE 6/30/94 [CONFORMED COPY] GREELEY GAS COMPANY TO CENTRAL BANK OF DENVER (Formerly The Central Bank and Trust Company) TRUSTEE SEVENTH SUPPLEMENTAL INDENTURE Dated as of October 1, 1983 Supplementing and Amending Indenture of Mortgage and Deed of Trust dated as of March 1, 1957 and creating First Mortgage Bonds, 12-3/4% Series F, Due November 1, 1991 First Mortgage Bonds, 13% Series G, Due November 1, 1995 TABLE OF CONTENTS Section Heading Page Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE ONE Mortgage of Property Section l.01 . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE TWO Series F and G Bonds and Provisions Applicable Thereto Section 2.01. Series F Bonds . . . . . . . . . . . . . . . . 2 Section 2.02. Series G Bonds . . . . . . . . . . . . . . . . 3 Section 2.03. Restriction on Refunding of Series F and Series G Bonds . . . . . . . . . . . . . . . 4 Section 2.04. Provisions Generally Applicable to Sinking Funds for Bonds of Series F and G . . . . . . 4 Section 2.05. Place and Form of Payment on Bonds of Series F and G . . . . . . . . . . . . . . . 5 Section 2.06. Restriction on Dividends and Stock Purchases . . . . . . . . . . . . . . . . . . 5 Section 2.07. Authentication of Series F and Series G Bonds . . . . . . . . . . . . . . . 6 ARTICLE THREE Amendment of Indenture Section 3.01. Amendment of Original Indenture as Heretofore Amended . . . . . . . . . . . . . . . . . . . 6 ARTICLE FOUR General Provisions to the Bonds Section 4.01. General Designation, Form, Registration and Limitation in Amount of Bonds . . . . . . . . 7 Section 4.02. Execution of Bonds . . . . . . . . . . . . . . 7 Section 4.03. Number and Designation of Bonds . . . . . . . . 7 Section 4.04. Authentication and Delivery of Bonds by Trustee . . . . . . . . . . . . . . . . . . . 8 Section 4.05. Bonds Issuable in Series; Terms of Bonds . . . 8 Section 4.06. Procedure for Creation of New Series of Bonds . 8 Section 4.07. Equal Security of Bonds . . . . . . . . . . . . 9 Section 4.08. Date of Bonds and Interest . . . . . . . . . . 9 -i- Section 4.09. Bond Register, Registrar and Transfer Agent . . . . . . . . . . . . . . . . . . . . 9 Section 4.10. Transfer of Bonds; Charges Therefor; Ownership of Bonds . . . . . . . . . . . . . 9 Section 4.11. Temporary Bonds . . . . . . . . . . . . . . . 10 Section 4.12. Replacement Bonds . . . . . . . . . . . . . . 11 Section 4.13. Effect of Replacement . . . . . . . . . . . . 11 Section 4.14. Disposition of Surrendered Bonds . . . . . . 11 ARTICLE FIVE Issuance of Additional Bonds Section 5.01. Issuance of Additional Bonds Based on Net Bondable Property Additions . . . . . . 12 Section 5.02. Additional Bonds for Refunding . . . . . . . 15 Section 5.03. Additional Bonds Against Deposit of Cash . . 17 Section 5.04. Withdrawal of Deposited Cash . . . . . . . . 17 Section 5.05. Supplemental Indenture . . . . . . . . . . . 18 ARTICLE SIX Covenants of the Corporation Section 6.01. Payment . . . . . . . . . . . . . . . . . . . 18 Section 6.02. Taxes and Assessments . . . . . . . . . . . . 19 Section 6.03. Maintenance of Corporate Existence and Rights; Compliance With Laws . . . . . 19 Section 6.04. Carry on Business and Maintain Property . . . 19 Section 6.05. Insurance . . . . . . . . . . . . . . . . . . 20 Section 6.06. Restrictions on Encumbrances . . . . . . . . 21 Section 6.07. Records of Account and Certificate . . . . . 22 Section 6.08. Certificate as to Compliance . . . . . . . . 23 Section 6.09. Warranty of Title and Further Assurances . . 23 Section 6.10. Paying Agents . . . . . . . . . . . . . . . . 23 Section 6.11. Payment of Certain Charges . . . . . . . . . 24 Section 6.12. Appointment of Successor Trustee . . . . . . 25 Section 6.13. Transactions with Affiliates . . . . . . . . 26 Section 6.14. Inspection of Mortgaged Properties . . . . . 27 ARTICLE SEVEN Bondholder's Lists and Reports by the Corporation and the Trustee Section 7.01. Corporation to Furnish Trustee and Trustee to Preserve Lists of Bondholders . . . . . . . . . . . . . . . . 26 Section 7.02. Transmittal of Information . . . . . . . . . 27 Section 7.03. Corporation's and Trustee's Accountability for Disclosure . . . . . . . 28 -ii- Section 7.04. Reports to be filed With Trustee and Commission . . . . . . . . . . . . . . . . 28 Section 7.05. Opinions of Counsel to be Filed With Trustee . . . . . . . . . . . . . . . . . . 29 Section 7.06. Trustee's Reports to Bondholders . . . . . . 29 ARTICLE EIGHT Remedies of the Trustee and Bondholders on Event of Default Section 8.01. Events of Default Defined; Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . 31 Section 8.02. Covenant to Make Payments upon Default . . . 34 Section 8.03. Remedies in Case of Default . . . . . . . . . 34 Section 8.04. Trustee's Powers . . . . . . . . . . . . . . 36 Section 8.05. Application of Moneys by Trustee . . . . . . 37 Section 8.06. Limitation on Suits; Preservation of Rights to Payment and to Sue . . . . . . . 38 Section 8.07. Remedies Cumulative . . . . . . . . . . . . . 39 Section 8.08. Rights of Bondholders to Direct Trustee; Waivers . . . . . . . . . . . . . 39 Section 8.09. Notice by Trustee of Defaults . . . . . . . . 40 Section 8.10. Costs of Suit . . . . . . . . . . . . . . . . 40 ARTICLE NINE The Trustee Section 9.01. Certain Duties and Responsibilities . . . . . 41 Section 9.02. Certain Rights of the Trustee . . . . . . . . 42 Section 9.03. Trustee Not Responsible for Certain Matters . . . . . . . . . . . . . . . . . . 43 Section 9.04. Trustee's Relationship with Corporation . . . 43 Section 9.05. Trust Moneys . . . . . . . . . . . . . . . . 43 Section 9.06. Trustee's Compensation . . . . . . . . . . . 43 Section 9.07. Reliance on Officer's Certificates by Trustee and Other Persons . . . . . . . 44 Section 9.08. Conflicting Interests of Trustee . . . . . . 44 Section 9.09. Corporate Trustee Required; Eligibility . . . 50 Section 9.10. Resignation and Removal of Trustee; Appointment of Successor . . . . . . . . . 51 Section 9.11. Acceptance of Appointment by Successor . . . 52 Section 9.12. Successor to Trustee . . . . . . . . . . . . 53 Section 9.13. Trustee as Creditor of Corporation . . . . . 53 Section 9.14. Excluded Creditor Relationship . . . . . . . 56 Section 9.15. Particular Definitions . . . . . . . . . . . 56 Section 9.16. Separate or Co-Trustee, Powers . . . . . . . 57 -iii- ARTICLE TEN Concerning the Bondholders Section 10.01. Evidence of Action . . . . . . . . . . . . . 58 Section 10.02. Proof of Execution . . . . . . . . . . . . . 59 Section 10.03. Effect of Actions by Holders of Bonds . . . . 59 ARTICLE ELEVEN Bondholders' Meetings Section 11.01. Purposes . . . . . . . . . . . . . . . . . . 60 Section 11.02. Manner of Calling Meetings . . . . . . . . . 60 Section 11.03. Call of Meetings by Corporation or Bondholders . . . . . . . . . . . . . . . . 61 Section 11.04. Voting and Attending Meetings . . . . . . . . 61 Section 11.05. Conduct of Meetings . . . . . . . . . . . . . 61 Section 11.06. Voting and Records . . . . . . . . . . . . . 62 Section 11.07. Effect of Call of Meeting . . . . . . . . . . 62 ARTICLE TWELVE Supplemental Indentures Section 12.01. Supplemental Indentures Without Consent of Bondholders . . . . . . . . . . . . . . 63 Section 12.02. Modification of Indenture . . . . . . . . . . 64 Section 12.03. Effect of Supplemental Indentures . . . . . . 65 Section 12.04. Trust Indenture Act . . . . . . . . . . . . . 65 Section 12.05. Notation of Changes on Bonds . . . . . . . . 65 Section 12.06. Trustee's Reliance on Opinion of Counsel . . 66 ARTICLE THIRTEEN Consolidation, Merger, and Sale Section 13.01. Consolidation, Mergers or Sales Permitted on Certain Terms . . . . . . . . 66 Section 13.02. Successor Corporation Substituted . . . . . . 67 ARTICLE FOURTEEN Possession, Use and Release of Mortgaged Property Section 14.01. Possession and Use of Mortgaged Property . . 69 Section 14.02. Disposition of Mortgaged Property Without Release . . . . . . . . . . . . . . 69 Section 14.03. Release of Mortgaged Property . . . . . . . . 70 Section 14.04. Eminent Domain and Other Governmental Takings . . . . . . . . . . . . . . . . . . 73 -iv- Section 14.05. Purchaser Protected . . . . . . . . . . . . . 75 Section 14.06. Powers Exercisable Notwithstanding Event of Default . . . . . . . . . . . . . 75 Section 14.07. Powers Exercisable by Receiver or Trustee . . . . . . . . . . . . . . . . . . 75 ARTICLE FIFTEEN Redemption of Bonds Section 15.01. Redemption Price and Manner of Redemption . . 76 Section 15.02. Selection of Bonds to be Redeemed . . . . . . 76 Section 15.03. Notice of Redemption . . . . . . . . . . . . 77 Section 15.04. Payment of Redemption Price . . . . . . . . . 78 Section 15.05. Notation on Bond for Partial Redemption . . . 78 Section 15.06. Cancellation of Bonds . . . . . . . . . . . . 79 ARTICLE SIXTEEN Satisfaction and Discharge of Indenture; Unclaimed Moneys Section 16.01. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . 79 Section 16.02. Funds Deposited for Payment of Bonds . . . . 80 Section 16.03. Moneys Held by Paying Agent . . . . . . . . . 80 Section 16.04. Moneys Held by Trustee . . . . . . . . . . . 80 ARTICLE SEVENTEEN Application, Investment and Withdrawal of Trust Moneys Section 17.01. Trust Moneys Defined . . . . . . . . . . . . 81 Section 17.02. Withdrawal on Basis of Bondable Property . . 81 Section 17.03. Payment of Outstanding Bonds . . . . . . . . 82 Section 17.04. Withdrawal of Insurance Proceeds . . . . . . 83 Section 17.05. Powers Exercisable Notwithstanding Event of Default . . . . . . . . . . . . . 85 Section 17.06. Powers Exercisable by Trustee or Receiver . . . . . . . . . . . . . . . . . 85 Section 17.07. Disposition of Bonds Retired . . . . . . . . 86 Section 17.08. Condemnation of All Mortgaged Property . . . 86 Section 17.09. Investment of Trust Moneys . . . . . . . . . 87 ARTICLE EIGHTEEN Immunity of Incorporators, Stockholders, Officers, and Directors . . . . . . . . . . 88 -v- ARTICLE NINETEEN Definitions Section 19.01. General . . . . . . . . . . . . . . . . . . . 89 Section 19.02. Specific Definitions . . . . . . . . . . . . 89 ARTICLE TWENTY Miscellaneous Provisions Section 20.01. Certain Assignments of Bonds . . . . . . . . 97 Section 20.02. Successors and Assigns . . . . . . . . . . . 97 Section 20.03. Board and Other Action . . . . . . . . . . . 97 Section 20.04. Surrender of Powers . . . . . . . . . . . . . 97 Section 20.05. Service of Notices . . . . . . . . . . . . . 98 Section 20.06. Colorado Law Applicable . . . . . . . . . . . 98 Section 20.07. Certificates to Trustee . . . . . . . . . . . 98 Section 20.08. Payments Coming Due on Saturday, Sunday or Legal Holiday . . . . . . . . . . . . . 99 Section 20.09. Trust Indenture Act . . . . . . . . . . . . . 99 Section 20.10. Publication of Notice . . . . . . . . . . . . 99 Section 20.11. Counterparts . . . . . . . . . . . . . . . . 99 Section 20.12. Effect of Headings and Table of Contents . . 99 Section 20.13. Acceptance of Trust by Trustee . . . . . . . 99 Section 20.14. Separability of Provisions . . . . . . . . . 99 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 100 Attachments: Exhibit A - Form of Registered Bond Exhibit B - Available Income Certificate Schedule 1 to Exhibit B - Statement of Net Income Available for Interest Charges Exhibit C - Bondable Additions Certificate -vi- This is a SEVENTH SUPPLEMENTAL INDENTURE, dated as of October l, 1983, between GREELEY GAS COMPANY, a corporation organized and existing under the laws of the State of Colorado (the Corporation) having its principal place of business in Denver, Colorado, party of the first part, and CENTRAL BANK OF DENVER (formerly named The Central Bank and Trust Company), a banking corporation organized and existing under the laws of Colorado (the Trustee), as Trustee, party of the second part. R E C I T A L S The background of this Seventh Supplemental Indenture is: A. The Corporation heretofore executed and delivered to the Trustee its Indenture of Mortgage and Deed of Trust dated as of March 1, 1957 (the Original Indenture) to secure the payment of the principal of, premium, if any, and interest on, all Bonds at any time issued and outstanding there- under, and to establish and declare the terms and conditions upon which Bonds are to be issued and secured thereunder. B. The Corporation thereafter executed and delivered to the Trustee six Supplemental Indentures respectively dated as of November 1, 1957, October 1, 1959, March 1, 1961, June 1, 1965, March 1, 1973 and March 2, 1973 (the Original Indenture and all Supplemental Indentures being hereinafter sometimes collectively referred to as the Indenture), for the various purposes of creating and authorizing additional series of Bonds to be secured by the Indenture, conveying to the Trustee certain additional property, amending the Original Indenture and correcting the description of certain property. C. The Corporation proposes (1) to create and issue two additional series of bonds to be designated "First Mortgage Bonds, 12-3/4% Series F, due November 1, 1991," limited in aggregate principal amount to $2,500,000 (the Series F Bonds), and "First Mortgage Bonds, 13% Series G, due November 1, 1995," limited in aggregate principal amount to $2,500,000 (the Series G Bonds), (2) to mortgage and convey additional properties acquired or constructed by the Company since the date of the Original Indenture and (3) to amend the Original Indenture, as heretofore amended, as hereinafter set forth. D. The Corporation has obtained and filed with the Trustee the written consent of the holders of the requisite percentage of outstanding Bonds to the amendments herein con- tained. All acts and things necessary to make the Series F Bonds and the Series G Bonds, when executed by the Company and authen- ticated and delivered by the Trustee, the valid, binding and legal obligations of the Corporation, and to constitute these presents a valid indenture and agreement according to its terms, have been done and performed, and the execution of this Seventh Supplemental Indenture and the issue of the Series F Bonds and the Series G Bonds have in all respects been duly authorized, and the Corporation, in the exercise of the legal right and power vested in it, executes this Seventh Supplemental Indenture. NOW, THEREFORE, in consideration of the premises and of the sum of One Dollar to the Corporation duly paid by the Trustee at or before the ensealing and delivery hereof and for other good and valuable considerations, the receipt whereof is hereby acknowledged, the Corporation hereby covenants to and with the Trustee and its successors in the trusts under the Indenture, for the equal and pro rata benefit of all present and future holders of all Bonds issued and to be issued under the Indenture, without any preference, priority or distinction whatsoever, as follows: ARTICLE ONE Mortgage of Property Section 1.01. The Corporation in order to better secure the principal of and interest (and premium, if any) on all Bonds of the Corporation at any time outstanding under the Inden- ture according to their tenor and effect and the performance of and compliance with the covenants and conditions in the Indenture contained, does hereby mortgage, assign, grant, bargain, sell and convey unto the Trustee, and to its successors in said trust, forever, all of the property, rights and franchises acquired or constructed by the Corporation since the date of the Original Indenture, except property of the character specifically excepted from the lien of the Original Indenture. In trust, nevertheless, for the same purposes and upon the same conditions as are set forth in the Original Indenture. ARTICLE TWO Series F and G Bonds and Provisions Applicable Thereto Section 2.01. Series F Bonds (a) There is hereby created under the Indenture a series of Bonds entitled First Mortgage Bonds, 12-3/4% Series F, due November 1, 1991 (the Series F Bonds). The aggregate princi- pal amount of Series F Bonds that may be issued shall be limited to $2,500,000, exclusive of Series F Bonds issued in exchange or substitution for other Series F Bonds. The Series F Bonds shall be registered Bonds without coupons, issued in denominations of $1,000 or any multiple thereof and numbered F-1 and upward. The Series F Bonds shall be dated and shall bear interest as provided in Section 4.08, except that the Series F Bonds issued before May 1, 1984 (the first interest payment date for the Series F Bonds) shall be dated as of and shall bear interest from the date of initial issuance thereof. The Series F Bonds shall be due November 1, 1991 and shall bear interest on their unpaid principal amounts from their dates until due and -2- payable at the rate of 12-3/4% per annum (computed on the basis of a 360-day year of twelve 30-day months) payable semi-annually on May 1 and November 1 in each year, and at the rate of 13-3/4% per annum on any overdue principal and (to the extent legally enforceable) on any overdue installment of interest. (b) The Series F Bonds shall, subject to Section 2.03, be redeemable at the option of the Corporation, either as a whole or in part in multiples of $1,000, at any time or from time to time on or after November 1, 1988 at the following percentages of the principal amount thereof: If Redeemed During the The Redemption 12-Month Period ending Price is ---------------------- -------------- November 1, 1989 103.65% November 1, 1990 101.83% November 1, 1991 100.00% together in any case with the interest accrued thereon to the date of redemption. (c) There shall be a sinking fund of $250,000 per year payable on November 1 in each of the years 1986 through 1990 for retirement of Series F Bonds. Section 2.02. Series G Bonds. (a) There is hereby created under the Indenture a series of Bonds entitled First Mortgage Bonds, 13% Series G, due November 1, 1995 (the Series G Bonds). The aggregate principal amount of Series G Bonds that may be issued shall be limited to $2,500,000, exclusive of Series G Bonds issued in exchange or substitution for other Series G Bonds. The Series G Bonds shall be registered Bonds without coupons, issued in denominations of $1,000 or any multiple thereof and numbered G-1 and upward. The Series G Bonds shall be dated and shall bear interest as provided in Section 4.08, except that the Series G Bonds issued before May l, 1984 (the first interest payment date for the Series G Bonds) shall be dated as of and shall bear interest from the date of initial issuance thereof. The Series G Bonds shall be due November 1, 1995 and shall bear interest on their unpaid principal amounts from their dates until due and payable at the rate of 13% per annum (computed on the basis of a 360-day year of twelve 30-day months) payable semi-annually on May 1 and November 1 in each year, and at the rate of 14% per annum on any overdue principal and (to the extent legally en- forceable) on any overdue installment of interest. (b) The Series G Bonds shall, subject to Section 2.03, be redeemable at the option of the Corporation, either as a whole or in part in multiples of $1,000, at any time or from time to time on or after November 1, 1988 at the following percentages of the principal amount thereof: -3- If Redeemed During the The Redemption 12-Month Period Ending Price is ---------------------- --------------- November 1, 1989 107.10% November 1, 1990 105.92% November 1, 1991 104.74% November 1, 1992 103.56% November 1, 1993 102.38% November 1, 1994 101.20% November 1, 1995 100.00% (c) There shall be a sinking fund of $300,000 per year payable on November 1 in each of the years 1989 and 1990 and on November 1 in each of the years 1992, 1993 and 1994 for re- tirement of the Series G Bonds. No sinking fund payment shall be made in the year 1991. Section 2.03. Restriction on Refunding of Series F and Series G Bonds. The Company may not redeem any of the Series F Bonds Pursuant to Section 2.01 (b) or any of the Series G Bonds pursuant to Section 2.02 (b) as part of a refunding or antici- pated refunding operation by the application, directly or indi- rectly, of funds derived from any issuance or incurring of any indebtedness for borrowed money of the Company having (i) an effective interest cost (determined by standard financial prac- tice) less than 12-3/4% per annum in the case of the Series F Bonds or less than 13% per annum in the case of the Series G Bonds, or (ii) as of the date of the proposed redemption, a Weighted Average Life to Maturity less than the remaining Weighted Average Life to Maturity of the Series F Bonds or the Series G Bonds then to be redeemed. As used in this Section the terms Weighted Average Life to Maturity means as applied to any indebtedness for borrowed money at any date, the number of years obtained by dividing (a) the then outstanding principal amount of indebtedness into (b) the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment, including payment at final maturity by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of the payment. Section 2.04. Provisions Generally Applicable to Sinking Funds for Bonds of Series F and G. The following provisions shall apply to the operation of any and all Sinking Funds provided in this Article Two for Bonds of Series F and G: (a) All Bonds redeemed through the operation of Sinking Funds shall be redeemed at their principal amount and accrued interest to the date of redemption without premium. -4- (b) The Trustee, not less than 30 days before each Sinking Fund payment date, shall designate for redemption Bonds of the particular series to be redeemed pursuant to that Sinking Fund. Such designation shall be made in the manner provided in Section 15.02. Thereafter, the Trustee shall give notice, unless notice be waived, as provided in Section 15.03 that the Bonds so designated for redemption will be redeemed and paid on the next succeeding Sinking Fund payment date for that series at the office of the Trustee in Denver, Colorado. In case a portion of any Bond is designated for redemption under this Subsection (b), the holder thereof shall be entitled to the same rights as are set forth in Section 15.02 with respect to the designation for redemption of a portion of a Bond under such Section 15.02. (c) The Corporation covenants and agrees, not later than one day before each Sinking Fund payment date, to pay to the Trustee such amount of cash as shall be necessary to redeem the Bonds required to be retired on such Sinking Fund payment date pursuant to the Sinking Fund, together in any case with interest accrued thereon to the date of such payment. All sums so paid to the Trustee by the Corporation shall be applied by the Trustee to the redemption of the Bonds in accordance with notices theretofore given by the Trustee as provided above. (d) Each Bond redeemed in its entirety by the application of moneys in the Sinking Funds shall be cancelled immediately by the Trustee and disposed of as directed by Corporation Order. Section 2.05. Place and Form of Payment on Bonds of Series F and G. The principal of and premium (if any) and interest on Bonds of Series F and G (subject to any agreement entered into pursuant to section 6.01 hereof) shall be payable at the principal office of the Trustee in Denver, Colorado, in coin or currency of the United States of America that at the time of such payment is legal tender for the payment of public and private debts. Section 2.06. Restriction on Dividends and Stock Purchases. So long as any Bonds of Series F or Bonds of Series G remain outstanding, the Corporation will not, without the prior written consent of the holders of at least 66-2/3% in principal amount of each of the Series F Bonds and the Series G Bonds (a) declare or pay any dividend on shares of common stock (except a dividend payable solely in shares of common stock of the Company), or (b) directly or indirectly purchase or redeem shares of any common stock (except in exchange for other shares of common stock of the Company) or any warrants or other form of right to purchase any common stock of the Company, -5- all such non-excepted dividends, purchases and redemptions being herein called Restricted Payments, if after giving effect thereto the aggregate amount of Restricted Payments made during the period from and after December 31, 1982, to and including the date of the making of the Restricted Payment in question, would exceed the sum of (i) $800,000, plus (or minus in case of a deficit) the Net Income of the Corporation for such period, computed on a cumulative basis. Section 2.07. Authentication of Series F and Series G Bonds. After the execution and delivery of this Seventh Supplemental Indenture and upon compliance by the Corporation with Section 5.01, the Corporation may execute and deliver to the Trustee, and the Trustee shall authenticate and deliver as directed by Corporation Order, Series F Bonds in aggregate principal amount not exceeding $2,500,000 and Series G Bonds in aggregate principal amount not exceeding $2,500,000. ARTICLE THREE Amendment of Indenture Section 3.01. Amendment of Original Indenture as Heretofore Amended. Articles 1 through 17 of the Original Indenture as heretofore amended are deleted. In lieu thereof there are substituted Articles Four through Twenty hereof. No amendments effected hereby shall affect the specific terms and provisions of Bonds heretofore issued and now outstanding or any covenants for the benefit of any particular series of such bonds. ARTICLE FOUR General Provisions To The Bonds Section 4.01. General Designation, Form, Registration and Limitation in Amount of Bonds. The Bonds issued under this Indenture shall be designated generally as the Corporation's First Mortgage Bonds, with the Bonds of each series to be designated in such distinctive manner as the Board of Directors may determine. Bonds of series heretofore issued and outstanding shall be in the forms prescribed therefor in the Original Indenture or Supplemental Indenture creating such series. All Bonds to be hereafter issued shall be registered bonds without coupons, except as may otherwise be provided in any supplemental indenture executed pursuant to Section 12.01. Such Bonds and the Trustee's certificate of authentication to be endorsed on all Bonds shall be substantially in the form set forth in Exhibit A attached hereto and made a part hereof, subject only to such variations, additions, substitutions and omissions as are required or permitted by this Indenture. The definitive Bonds shall be printed, lithographed, engraved or typed or produced by any combination of these methods, or may be produced in any other manner permitted by the rules of any -6- national securities exchange, all as determined by the officers executing such Bonds, as evidenced by their execution of such Bonds. The aggregate principal amount of Bonds that may be executed and delivered and be Outstanding under this Indenture is not limited, except as may be provided in Article Five hereof and except as may by limited by law. Section 4.02. Execution of Bonds. All Bonds to be secured hereby, whether temporary or definitive, shall be signed by the President or a Vice President of the Corporation, and the corporate seal of the Corporation shall be thereto affixed and attested by its Secretary or an Assistant Secretary, which seal and which signatures may be facsimiles. In case any officer who shall sign or seal or whose facsimile signature has been placed upon a Bond shall cease to be such officer before the Bonds so signed or sealed shall have been actually authenticated and delivered by the Trustee, such Bond may, nevertheless, upon the request of the Corporation, be issued, authenticated and delivered as though such person had not ceased to be an officer of the Corporation. Any Bond secured hereby may be signed or sealed by any person who may be an officer of the Corporation at the time of such signing or sealing, although such person may not have been such officer at the date of such Bond. Section 4.03. Number and Designation of Bonds. Bonds authenticated under this Indenture shall bear such letters, numbers or other identification marks as may be determined by the Corporation and approved by the Trustee and may contain therein or have imprinted thereon such legend or legends as may be required in order to comply with any law or with any rules or regulations made pursuant thereto or with the rules of any national securities exchange. Section 4.04. Authentication and Delivery of Bonds by Trustee. All Bonds, when executed by the Corporation, shall be delivered to the Trustee to be authenticated by it and the Trustee shall authenticate and deliver the same only as provided in this Indenture. Only such Bonds as shall bear thereon the certificate of the Trustee, duly signed, shall be secured by this Indenture, or entitled to any lien or benefit hereunder, and such certificate of the Trustee upon any such Bond executed on behalf of the Corporation shall be conclusive evidence, and the only evidence, that the Bond so authenticated has been duly issued hereunder and that the holder thereof is entitled to the benefits of the trusts hereby created. Section 4.05. Bonds Issuable in Series; Terms of Bonds. At the option of the Corporation, the Bonds may be issuable in one or more series. The terms of the Bonds of Series F and G shall be as specified in Article Two hereof. The terms of the Bonds of series heretofore issued and outstanding shall be as specified in the Supplemental Indenture creating such Bonds. The Bonds of any series other than Series F and G may (1) be of -7- such denomination or denominations, (2) bear such rate of interest, payable on such interest payment dates, (3) mature at such time, and in the case of Bonds of serial maturities, at such times, (4) contain such provisions respecting any sinking, amortization, improvement, renewal or other analogous fund for the exclusive benefit of any one or more series, (5) be exchangeable for or convertible into stock or other securities, (6) be redeemable at such price or prices and upon such terms, (7) be payable and subject to registration and transfer at such place or places, and (8) contain such other provisions not inconsistent with the terms of this Indenture, all as may be specified in such Bonds and in the Board Resolutions and the supplemental indenture providing for the creation and issuance of such series. All Bonds of any one series shall be identical in all respects, except that they may differ as to denomination, date and, in the case of Bonds with serial maturities, as to time to maturity, interest rate and redemption price. Section 4.06. Procedure for Creation of New Series of Bonds. Whenever the Corporation shall determine to create a new series of Bonds (other than Series F and G Bonds) secured by this Indenture, it shall file with the Trustee a Board Resolution describing such series, and shall execute, acknowledge and deliver a supplemental indenture likewise describing such series, stating the amount of additional Bonds to be issued pursuant thereto and containing such other provisions as may be necessary or appropriate, and thereafter Bonds of such series may be issued from time to time subject to the conditions and provisions of this Indenture. Section 4.07. Equal Security of Bonds. No series of Bonds issued hereunder shall have any preference as to the security afforded by this Indenture over any other Series of Bonds issued or to be issued hereunder, and no Bond of any series shall have any such preference over any other Bond of the same or any other Series. Section 4.08. Date of Bonds and Interest. All Bonds issued under this Indenture shall bear interest from, and shall be dated as of, the interest payment date next preceding the date on which the same shall be authenticated by the Trustee, or, if such date of authentication shall be an interest payment date, such Bonds shall bear interest from, and shall be dated as of, such interest payment date, or if such date of authentication shall be a date prior to the first interest payment date for Bonds of the series being authenticated, such Bonds shall bear interest from, and shall be dated as of, the commencement of the first interest period for such series, which may be the date of initial issuance of such Bonds; provided, however, that if at the time of authentication of any Bond of any series, interest is in default on Outstanding Bonds of such series, such Bonds shall bear interest from, and shall be dated as of, the interest payment date for such series to which interest has previously been paid or made available for payment on Outstanding Bonds of such series. -8- Section 4.09. Bond Register, Registrar and Transfer Agent. The Corporation hereby constitutes and appoints the Trustee as Bond Registrar and transfer agent for the purpose of registering and transferring Bonds entitled to be so registered or transferred and the Corporation shall keep or cause to be kept at the principal office of the Trustee, books for the registration and transfer of Bonds issued hereunder (the Bond Register) showing, among other things, all original issuances and subsequent transfers of Bonds. The Corporation, by Board Resolution, may name such co-registrars and co-transfer agents of the Bonds as the Corporation deems appropriate and shall cause to be kept at the principal office of each such co-registrar or co-transfer agent a duplicate of the Bond Register. Section 4.10. Transfer of Bonds; Charges Therefor; Ownership of Bonds. Any Bond may be transferred upon surrender thereof to the Trustee, at its principal office, accompanied by such duly executed instruments of transfer as may be required by the Corporation and the Trustee, and thereupon the Corporation shall issue in the name of the transferee or transferees or in the name of the person making the transfer, as the case may be, and the Trustee shall authenticate and deliver a new Bond or Bonds of the same series and maturity, in authorized denominations, for a like aggregate principal amount. Unless otherwise provided in the supplemental indenture creating the particular series of Bonds, upon every transfer of Bonds as permitted in this Section, the Corporation shall make no service charge against any holder of a Bond or his transferee for any transfer, except that the Corporation may require, as a condition to such transfer, the payment of a sum sufficient to reimburse it for any stamp tax or other governmental charge that may be imposed thereon, which sum shall be paid by the party requesting such transfer. The Corporation shall not be required to make any transfer or transfers of any Bond or Bonds during the ten days next preceding any date on which either interest is to be paid thereon or Bonds of the same series are to be selected for redemption, nor may transfer be required with respect to any Bonds that have been called for redemption or that have matured. The person in whose name any Bond shall be registered shall for all the purposes of this Indenture be regarded as the owner thereof, and the payment of or on account of the principal of or interest (and premium, if any) on such Bond shall be made only to such registered holder or upon his order. All payments so made shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. Section 4.11. Temporary Bonds. Pending the preparation of any definitive Bonds to be issued under and -9- secured by this Indenture, the Corporation may execute and deliver temporary Bonds, which may be printed or typewritten, substantially of the tenor and effect of the definitive Bonds. Any such temporary Bond shall be authenticated by the Trustee in the same manner as the definitive Bonds and such authentication shall constitute conclusive evidence that the temporary Bonds so authenticated have been duly issued under this Indenture and that the holders thereof are entitled to the benefits of the trust hereby created. Such temporary Bonds so issued and authenticated shall be exchangeable without expense to the holder for definitive Bonds of the same series and maturity, to be issued under and secured by this Indenture, and upon any such exchange such temporary Bonds shall be forthwith cancelled by the Trustee. Any such temporary Bonds may also be exchanged for other temporary Bonds of the same series and maturity and for the same aggregate principal amount. Until so exchanged, such temporary Bonds shall be in all respects entitled to the lien and security of this Indenture as Bonds issued and authenticated hereunder. Upon demand, without unnecessary delay the Corporation will execute and will furnish definitive Bonds to be exchanged for such temporary Bonds upon surrender of such temporary Bonds at the office of the Trustee. Section 4.12. Replacement Bonds. In case any Bond issued hereunder shall be mutilated, lost, stolen, or destroyed, the Corporation may, in its discretion, issue and deliver and the Trustee shall authenticate a new Bond of like tenor, effect and date: (i) in lieu of and substitution for and upon surrender and cancellation of the mutilated Bond, or (ii) in lieu of and substitution for the Bond so lost, stolen or destroyed, upon receipt of evidence satisfactory to the Corporation and the Trustee of the loss, theft or destruction of such Bond, and upon receipt also of indemnity satisfactory to each of them. Subject to the provisions of Section 9.01 hereof, the Trustee shall incur no liability for anything done by it pursuant to this Section. Any Bond issued pursuant to this Section shall constitute an original contractual obligation on the part of the Corporation and shall be secured equally and ratably with all other Bonds issued hereunder and then Outstanding. Any such replacement Bond may bear such endorsement as may be prescribed by the Corporation with the approval of the Trustee. Section 4.13. Effect of Replacement. Each Bond delivered pursuant to any provision of this Indenture in substitution for the whole or any part, as the case may be, of one or more other Bonds shall carry all of the rights to interest accrued and unpaid, and to accrue, that were carried by the whole or such part, as the case may be, of such one or more other Bonds, and, notwithstanding anything contained in this Indenture, -10- such Bond shall bear such date that neither gain nor loss in interest shall result from such substitution. Section 4.14. Disposition of Surrendered Bonds. All Bonds surrendered for payment, redemption, transfer or replacement, if surrendered to the Trustee, shall be promptly cancelled by it, and, if surrendered to the Corporation, shall be delivered to the Trustee for cancellation and shall be promptly cancelled by the Trustee. The Corporation may at any time deliver to the Trustee for cancellation any Bonds previously authenticated and delivered hereunder that the Corporation may have acquired in any manner whatsoever and all Bonds so delivered shall be promptly cancelled by the Trustee. Upon cancellation by the Trustee of any Bonds pursuant to this Section or Section 4.11, such Bonds shall be disposed of as directed by a Corporation Order. ARTICLE FIVE Issuance of Additional Bonds Section 5.01. Issuance of Additional Bonds Based on Net Bondable Property Additions. In addition to the principal amount of Bonds of series heretofore issued, the Corporation may, at any time and from time to time execute and deliver to the Trustee for authentication additional Bonds (Additional Bonds) in an aggregate principal amount not exceeding 66-2/3% of Net Bondable Property Additions. The Additional Bonds so delivered shall be authenticated and delivered by the Trustee upon Corporation Order, dated as of the date of authentication and delivery of Additional Bonds then being applied for, accompanied by the following: (a) A Board Resolution authorizing the issuance of a specified principal amount of Additional Bonds of one or more designated Series. (b) An Officer's Certificate, dated the date of authentication of Additional Bonds, stating that (i) no Default of Event of Default exists hereunder, (ii) all conditions precedent set forth in this Indenture relating to the authentication and delivery of such Additional Bonds have been complied with, and (iii) there has been no change in the information set forth in the Certificate filed pursuant to Subsection (d) of this Section 5.01 that would alter the information set forth in such Certificates so as to cause such Certificates to fail to comply with the requirements of said Subsection as of the date of authentication and delivery of the Additional Bonds. (c) An Available Income Certificate, dated the date of authentication of Additional Bonds, in substantially the form attached hereto as Exhibit B, showing that the Income Available for Interest Charges of the Corporation (or its predecessors), -11- for a period of twelve consecutive months during the fifteen months immediately preceding the first day of the month in which the authentication of the Additional Bonds is made, shall have been at least two times Pro Forma Interest Charges for the twelve month period immediately succeeding the date of issuance of the Additional Bonds. In case the Corporation shall have acquired, by merger or otherwise, any property as an operating gas transmission and distribution system (an Acquired System) within or after the particular period for which the calculation of Income Available for Interest Charges is made, or, is to acquire such an Acquired System simultaneously with the authentication and delivery of the Bonds then applied for, then in computing Income Available for Interest Charges, there shall be included, to the extent it may not have been otherwise included, the Income Available for Interest Charges (or net loss) of such Acquired System, as if such Acquired System had been owned by the Corporation during the whole of such period. (d) A net Bondable Property Additions Certificate, dated as of a date not more than sixty days before the date of authentication of such Additional Bonds, substantially in the form attached hereto as Exhibit C, showing in substance: (1) The balance, if any, of Net Bondable Property Additions stated in the most recent Certificate, if any, theretofore filed with the Trustee, as the balance to remain after the action applied for in such prior Certificate; provided that in the first Certificate filed with the Trustee the balance shall be $13,899,855. (2) The amount of Property Additions since the period covered by the previous Certificate (or since June 30, 1983 in the case of the first Certificate delivered pursuant hereto) and up to a date within 60 days of the date such Certificate and briefly describing such Property Additions. (3) The amount of said Property Additions which constitute Funded Property. (4) The cost to the Corporation of said Property Additions and the statement that the fair value thereof to the Corporation on the date of said Certificate is not less than the cost so specified or if less, the fair value shall be shown in lieu of cost. (5) The aggregate amount of all Retirements during the period covered by said Certificate. (6) The amount of all Retirement Credits during the period covered by such Certificate. (7) The aggregate amount of Net Bondable Property Additions during the period covered by such Certificate. -12- (8) The amount of Net Bondable Property Additions then being used. (9) The balance of Net Bondable Property Additions that will remain after authentication of the Additional Bonds. There shall be excluded from the amount shown in Paragraph (1) above the recorded amount of all property otherwise reflected by the books of the Corporation in its fixed property accounts as to which the Opinion of Counsel required by Subsection (e) of this Section 5.01 cannot be given. (e) An Opinion of Counsel, dated not more than five days before the date of authentication of Additional Bonds, (1) specifying the certificates or other evidence that will be sufficient to show or provide compliance with the requirements, if any, of any tax or recording or filing law applicable to the issuance of the Additional Bonds, or stating that there are no such legal requirements; (2) specifying the certificates or other evidence that will be sufficient to show the authorization or approval of, or consent, to the issuance by the Corporation of the Additional Bonds, by any Federal, state or other governmental regulatory agency at the time having jurisdiction in the premises, or stating that no such authorization, approval or consent is required; (3) stating that the Additional Bonds have been duly authorized and, when executed by the Corporation, authenticated and delivered by the Trustee and issued by the Corporation, upon payment therefor, will be valid and binding obligations of the Corporation and entitled to the benefits of and secured by the lien of this Indenture equally and ratably with all other Bonds hereby secured, subject to the provisions of the National Bankruptcy Act and all other statutes affecting the rights of creditors generally; (4) stating that the document and other items that have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, and that, upon the basis of the Corporation Order and the accompanying documents or other items specified in this Article, all conditions precedent specified in this Indenture relating to the Additional Bonds have been complied with, and the Additional Bonds may be lawfully authenticated and delivered under this Article; (5) stating that the Corporation has, or upon delivery of the instruments of conveyance, transfer or assignment, if any, specified in such opinion will have, good and marketable title to all tracts or parcels of land and the improvements thereon the cost of which is included in Paragraph (1) of the Net Bondable Property Additions Certificate and that are specifically described (i) in all supplemental indentures -13- previously executed and recorded, or (ii) in the supplemental indenture providing for the creation of the Additional Bonds (except any of such tracts, parcels or improvements that have been duly released from the lien hereof), subject only to Permitted Encumbrances and that all of such tracts or parcels of land and improvements thereon have been subjected to the lien of this Indenture; and (6) based on an examination of pertinent records in all jurisdictions in which the Corporation owns personal property, all personal property of the Corporation (other than Excepted Property and property acquired within the limitations of Section 6.06) is free from any recorded lien or security interest subject only to Permitted Encumbrances. The Opinion of Counsel may be based, and may state that such counsel rely, upon title or mortgage insurance policies or the opinion of other counsel deemed reliable by such counsel and copies of any such policies or opinions shall be furnished to the Trustee. (f) The certificates and other evidence, specified in the Opinion of Counsel as provided by Paragraphs (1) and (2) of the foregoing Subsection (e). (g) A supplemental indenture providing for the creation and issuance of the Additional Bonds and stating the maximum principal amount thereof, and otherwise meeting the requirements of Section 5.05. The Certificates required by Subsections (c) and (d) of this Section shall be Officer's Certificates. Section 5.02. Additional Bonds for Refunding. The Corporation may at any time and from time to time execute and deliver to the Trustee for authentication Additional Bonds for the purpose of refunding Bonds of any other series theretofore issued and outstanding, but the aggregate principal amount of such Additional Bonds shall not exceed the aggregate principal amount of Bonds theretofore issued hereunder and acquired, paid, or redeemed by the Corporation. The Additional Bonds so delivered shall be authenticated and delivered by the Trustee upon Corporation Order, dated as of the date of authentication and delivery of Additional Bonds then being applied for, accompanied by the following: (a) A Board Resolution authorizing the issuance of a specified principal amount of Additional Bonds of one or more designated series. (b) An Officer's Certificate dated the date of authentication of Additional Bonds stating that (i) no Default or Event of Default exists hereunder, (ii) all conditions precedent set forth in this Indenture relating to the authentication and delivery of such Additional Bonds have been complied with, and -14- (iii) the Bonds, if any, delivered pursuant to Subsection (f) of this Section do not include (1) any Bond that has been previously made the basis or the authentication and delivery of Bonds under this Section, (2) any Bond that has been surrendered upon any exchange or transfer of any Bond, (3) any Bond in lieu of which another Bond has been authenticated and delivered under Section 4.12, or (4) any Bond whose payment, redemption or other retirement has been effected through the operation of any sinking, amortization, improvement or other analogous fund. (c) An Available Income Certificate meeting the requirements of Subsection (c) of Section 5.01. (d) An Opinion of Counsel, dated the date of authentication and delivery of the Additional Bonds, covering the matters set forth in Paragraphs (1), (2), (3) and (4) of Subsection (e) of Section 5.01. (e) Bonds theretofore authenticated and delivered under this Indenture in an aggregate principal amount equal to the aggregate principal amount of Additional Bonds whose authentication and delivery are then applied for; provided, however, that in lieu of delivering such Bonds to the Trustee, the Corporation may deliver cash in an amount sufficient to redeem certain specified Outstanding Bonds in an aggregate principal amount equal to the aggregate principal amount of Additional Bonds which are then requested to be authenticated and delivered, provided that notice of such redemption has been duly given pursuant to this Indenture or provision satisfactory to the Trustee has been made for the giving of such notice. (f) A supplemental indenture providing for the creation and issuance of the Additional Bonds and stating the maximum principal amount thereof and otherwise meeting the requirements of Section 5.05. All Bonds theretofore issued hereunder and received by the Trustee pursuant to the provisions of this Section 5.02 shall be cancelled by the Trustee as provided in Article Fifteen of this Indenture. If the Bonds delivered to the Trustee or in respect of the redemption of which cash has been deposited with the Trustee pursuant to Subsection (f) of this Section bear interest at a rate per annum equal to or more than that borne by the Additional Bonds then to be authenticated by the Trustee or if such Bonds shall have a final maturity not more than three years from the date of the authentication and delivery of such Additional Bonds, then the Certificates required by Subsection (d) of this Section need not be furnished by the Corporation and the Trustee shall authenticate such Additional Bonds upon receipt of such other Certificates and the opinion required by this Section. -15- Section 5.03. Additional Bonds Against Deposit of Cash. The Corporation may, at any time and from time to time execute and deliver to the Trustee for authentication Additional Bonds upon the deposit with the Trustee of an amount in cash equal to the aggregate principal amount of Additional Bonds then delivered. The Additional Bonds so delivered shall be authenticated and delivered by the Trustee upon Corporation Order, dated as of the date of authentication and delivery of Additional Bonds then being applied for, accompanied by the following: (a) A Board Resolution authorizing the issuance of a specified principal amount of Additional Bonds of one or more designated series. (b) An Officer's Certificate dated the date of authentication of Additional Bonds stating that (i) no Default or Event of Default exists hereunder and (ii) all conditions precedent set forth in this Indenture relating to the authentication and delivery of such Additional Bonds have been complied with. (c) An Available Income Certificate meeting the requirements of Subsection (d) of Section 5.01. (d) An Opinion of Counsel, dated the date of authentication and delivery of the Additional Bonds, covering the matters set forth in Paragraphs (1), (2), (3) and (4) of Subsection (e) of Section 5.01. (e) Cash in an amount equal to the aggregate principal amount of Additional Bonds which are then requested to be authenticated and delivered. (f) A supplemental indenture providing for the creation and issuance of the Additional Bonds and stating the maximum principal amount thereof, and otherwise meeting the requirements of Section 5.05. Section 5.04. Withdrawal of Deposited Cash. Cash deposited with the Trustee pursuant to Section 5.03 shall be held by the Trustee as part of the Mortgaged Property, and the Trustee shall deliver all or any part of such cash to the Corporation in an amount equal to the principal amount of Bonds which could then be authenticated by the Trustee pursuant to Section 5.01 upon receipt by the Trustee of a Corporation Order, dated as of the date of delivery of cash pursuant to this Section accompanied by the following: (a) A Board Resolution requesting the payment of a specified amount of deposited cash. (b) An Officer's Certificate dated the date of withdrawal of such deposited cash stating that (i) no Default or Event of Default exists hereunder, and (ii) all conditions -16- precedent set forth in this Indenture relating to the withdrawal of such deposited cash have been complied with. (c) A Net Bondable Property Additions Certificate meeting the requirements of Subsection (d) of Section 5.01 (with such appropriate omissions and variations as are applicable to deposited cash). (d) An Opinion of Counsel, dated the date of withdrawal of deposited cash, covering the matters set forth in Subsection (e) of Section 5.01. Section 5.05. Supplemental Indenture. Each supplemental indenture required by Sections 5.01, 5.02 or 5.03 shall be properly executed on its behalf by the appropriate officers of the Corporation, acceptable in form and content to the Trustee, and shall subject to the lien of the Indenture all property acquired by the Corporation after the date of the Original Indenture, other than Excepted Property, not previously described in any previously recorded supplemental indenture, specifically describing all tracts of parcels of land included in such property. Each such supplemental indenture shall be in such form as to qualify it for recording in the jurisdictions in which any property of the Corporation, other than Excepted Property, is located; and it shall be so recorded. ARTICLE SIX Covenants of the Corporation The Corporation hereby covenants and agrees for the benefit of the holders of the Bonds and their successors in interest that, so long as any Bonds remain Outstanding: Section 6.01. Payment. The Corporation will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Bonds at the times and places and in the manner specified in the Bonds and herein. Notwithstanding the above or any other provisions of this Indenture or any Bond issued hereunder, the Corporation may enter into an agreement with the holder of any Bond providing for the payment to such holder, without presentation or surrender of such Bond, of the principal of (and premium, if any) and interest on such Bond or any part thereof at a place other than as designated herein or in such Bond, and for the making of notation of principal payments on such Bond by such holder prior to any transfer, thereof. The Trustee is authorized to consent to any such agreement and shall not be liable or responsible to any such holder or to the Corporation for any act or omission on the part of the Corporation or any holder of a Bond in connection with any such agreement. The Corporation covenants to deposit with the Trustee, at its principal office in Denver Colorado, or with a Paying Agent other than the Trustee (or, if the Corporation is acting as its own Paying Agent, segregate and hold in trust as -17- provided in Section 6.14), an amount of money sufficient to make such payment of principal (and premium, if any) and interest on the Bonds, such deposit to be made with the Trustee not later than one business day before the date such payment or payments are due. All amounts so deposited shall be held in trust for the accounts of the holders of the obligations due on such date and shall be applied to the payment thereof. Section 6.02. Taxes and Assessments. The Corporation will duly and punctually pay and discharge, or cause to be paid and discharged, all taxes, assessments and governmental charges or levies imposed upon or assessed against the Corporation, or upon any of the Mortgaged Property; provided, however, that nothing herein contained shall require the Corporation to pay any such tax, assessment, charge or levy so long as the Corporation shall in good faith contest the validity of the same by appropriate legal proceedings and stay any execution thereof and so long as adequate reserves in respect thereof have been established in accordance with generally accepted accounting principles and the Corporation's title to and right to use its property is not adversely affected thereby. Section 6.03. Maintenance of Corporate Existence and Rights; Compliance With Laws. Subject to the provisions of Article Thirteen hereof, the Corporation will do or cause to be done, at its own cost and expense, all things necessary to preserve, extend and renew its corporate existence under the laws of the State of Colorado, and its qualified status in any state in which it may engage in business, and will use it best efforts to preserve and renew all franchises, rights of way, easements, permits and licenses now held by it or hereafter granted to or conferred upon it; provided, however, that the Corporation shall not be required to preserve any such franchise, right, easement, permit or license if the Board of Directors shall determine that such preservation is no longer desirable in the conduct of the business of the Corporation and will comply with all valid laws, ordinances, regulations and requirements applicable to it or its property. Section 6.04. Carry on Business and Maintain Property. The Corporation will at all times endeavor to carry on and conduct its business in an efficient manner and will cause the Mortgaged Property (except such property as may be disposed of or released from the lien hereof pursuant to Article Fourteen) to be maintained and preserved and kept in good repair and working order and will cause to be made all necessary repairs, renewals, replacements, and substitutions, so that at all times the efficiency of the Mortgaged Property shall be fully preserved and maintained in accordance with the standards generally accepted in the utility industry and by such regulatory authorities then exercising jurisdiction over vhe Corporatkon. Section 6.05. Insurance. The Corporation will insure and keep insured in a reasonable amount with financially sound and reputable insurance companies all property and -18- equipment of a character usually insured by companies of relatively the same size engaged in the same or a similar business against liabilities or famages of tje kind customarily insured against by such companies, provided that the Corporation may at its election act as self-insurer, any such system of self-insurance (including any appropriate reserve or reserves therefor) to be upon such terms and conditions as may be determined by the Board of Directors provided that the same conforms to approved practices of similar companies maintaining systems of self-insurance or to regulations of any regulatory commission having jurisdiction over the Corporation. All policies or other contracts for such insurance upon any part of the Mortgaged Property shall provide that the proceeds of such insurance (except in the case of any particular casualty resulting in damage or destruction not exceeding $100,000 in the aggregate) shall be payable to the Trustee to be held and applied by the Trustee as a part of the Mortgaged Property; provided, however, that, with respect to any part of the Mortgaged Property that is subject to a prior lien or Permitted Encumbrance, the loss under any such insurance policy or contract may be payable also to the trustee, mortgagee or other holder of such prior lien or Permitted Encumbrance, as its interest may appear. At any time upon the request of the Trustee, the Corporation will file with the Trustee an Officer's Certificate containing a detailed list of the insurance in effect upon the Mortgaged Property on a date therein specified (which date shall be within 30 days of the filing of such certificate) and stating the names of the insurers with which the outstanding policies and other contracts, and specifying the property and risks covered thereby, and stating that said insurance complies with this Section. Any appraisement or adjustment of any loss or damage of or to any part of the Mortgaged Property and any settlement in respect thereof which may be agreed upon between the Corporation and any insurer, as evidenced by an Officer's Certificate, shall be assented to and accepted by the Trustee. All proceeds of any insurance on any part of the Mortgaged Property not payable to the Trustee or the trustee, mortgagee or other holder of a prior lien or Permitted Encumbrance shall be applied by the Corporation to the repair, restoration or replacement of the Mortgaged Property. All proceeds of any insurance on any part of the Mortgaged Property payable to the Trustee shall be deposited with the Trustee to be held and paid over or applied by it as provided in Article Seventeen. The Corporation will maintain liability insurance against claims for personal injury or death or property damages suffered by members of the public or others in or about any property or premises owned or occupied or used by it or occurring by reason of its ownership, maintenance, use or operation of any pipelines, compressing stations, plants, shops, machinery, -19- automobiles, trucks or other vehicles, or airplanes or other facilities, provided that the Corporation may at its election act as a self-insurer, any such system of self-insurance (including an appropriate reserve or reserves therefor) to be upon such terms and conditions as may be determined by the Board of Directors provided that the same conforms to approved practices of similar companies maintaining systems of self-insurance or to regulations of any regulatory commission having jurisdiction over the Corporation; and the Corporation will maintain all such workmen's compensation or similar insurance as may be required under the laws of any jurisdiction in which it may be engaged in business. All such liability and workmen's compensation and similar insurance shall be maintained in such amounts as are customarily carried by responsible persons engaged in the same or similar business and shall be effected under a valid and enforceable policy or policies issued by insurers of recognized responsibility, except that the Corporation may effect workmen's compensation or similar insurance in respect of operations in any jurisdiction either through an insurance fund operated by such jurisdiction or by causing to be maintained a system or systems of self-insurance which is in accord with applicable Federal or state laws. Section 6.06. Restrictions on Encumbrances. The Corporation will not create or suffer to exist any mortgage, lien, security interest or encumbrance on any property or assets (other than the lien of the Indenture), except: (a) Permitted Encumbrances; and (b) Any purchase money mortgage or security interest created to secure part of the purchase price of any property or of any mortgage on, or security interest in, any property existing at the time of acquisition thereof, whether or not assumed by the Corporation, provided that: (1) such purchase money mortgage, mortgage or security interest shall extend only to the property so acquired and fixed improvements thereto; (2) at the time of acquisition thereof and after giving effect to the indebtedness secured by such outstanding purchase money mortgage, mortgage or security interest the aggregate principal amount of indebtedness secured by all such outstanding purchase money mortgages, mortgages and security interests shall not exceed 10% of the aggregate principal amount of all Outstanding Bonds; and (3) the principal amount of the indebtedness secured by any such purchase money mortgage, mortgage or security interest, together with all other indebtedness secured by a lien on such property, shall not exceed 66-2/3% of the cost of or fair value, whichever is less, of the property so acquired on the date of acquisition thereof; provided, however, if the principal amount of such indebtedness shall exceed 66-2/3% of the cost or -20- fair value, whichever is less, of such property, then the Corporation may acquire such property provided that the Corporation shall within 15 days after such acquisition furnish to the Trustee (i) a Net Bondable Property Additions Certificate in the form prescribed by Subsection (e) of Section 5.01 which shall certify Net Bondable Property Additions in an amount equal to 150% of such excess indebtedness and such Net Bondable Property Additions so certified shall thereafter constitute Funded Property, and (ii) a certificate in the form prescribed by Subsection (b) of Section 5.01, provided, however, that such certificate shall refer only to Subsection (d) of Section 5.01 and that both the Net Bondable Property Additions Certificate and the Certificate shall refer to the date of acquisition of such property rather than the date of authentication and delivery of Bonds. Section 6.07. Records of Account and Certificate. The Corporation will at all times keep proper books of record and account and therein will make full, true and proper entries of all dealings and transactions in relation to the property, business and affairs of the Corporation; and such books shall at all reasonable times be open to inspection by the Trustee and its duly authorized agents. Such books of account shall at all times conform strictly to the Accounting Requirements. On or before April 30 of each year, the Corporation shall file with the Trustee a balance sheet as of the end of the preceding calendar year and a profit and loss statement for such year, together with other related statements and appropriate notes, and such statements shall be reviewed by independent certified public accountants whose certificates shall accompany them and who, together with the chief financial officer of the Corporation, shall further certify that such statements have been prepared strictly in accordance with the Accounting Requirements. Section 6.08. Certificate as to Compliance. On or before April 30, 1984, and on or before April 30 in each calendar year thereafter, the Corporation will deliver to the Trustee (1) an Officer's Certificate stating whether or not the Corporation is in default in the payment of the principal or interest on the Bonds or has knowledge of any Default, and, if so, specifying each such Default of which the signers have knowledge, and (2) a certificate of the firm of public accountants that prepared the financial statements for the Corporation for the immediately preceding fiscal year to the effect that such firm, in making the examination in connection with its report on such financial statements, has obtained no knowledge of any Default (or if knowledge of Default has been obtained, specifying each such Default), by the Corporation during such fiscal year in the observance, performance, or fulfillment of any of the terms, provisions, or conditions contained in this Indenture. Section 6.09. Warranty of Title and Further Assurances. The Corporation warrants that (a) the Corporation is lawfully seized and possessed of all the Mortgaged Property described or otherwise identified in the Granting Clauses hereof; -21- the Corporation has satisfactory title to the rights-of-way, leases, and servitudes described in said Granting Clauses, sufficient for the possession, maintenance and operation of the pipelines and related facilities described in said Granting Clauses; the Corporation has validly obtained the franchises and permits described in said Granting Clauses; and (b) subject to Permitted Encumbrances, the Mortgaged Property on the date hereof is free and clear of any deed of trust, mortgage, lien, charge or encumbrance thereon or affecting the title thereto except the lien of this Indenture. The Corporation will from time to time execute, acknowledge and deliver any and all such further assurances, conveyances, mortgage, indentures supplemental hereto or assignments of property hereafter acquired by the Corporation as are required by the terms of this Indenture or as the Trustee may reasonably require to subject the property which is intended to be subject to the lien of this Indenture to the lien hereof. Section 6.10. Paying Agents. (a) Duties of Paying Agent. In the event that the Corporation designates any Paying Agents hereunder, the Corporation will cause each such Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 6.10, that such Paying Agent will: (1) hold all sums by it as such agent for the payment of the principal of (and premium, if any) or interest on the Bonds in trust for the benefit of the persons entitled thereto until such sums shall be paid to such persons or otherwise disposed of as provided herein; (2) give the Trustee notice of any failure by the Corporation to make any payment of the principal of (and premium, if any) or interest on the Bonds when the same shall be due and payable; and (3) at any time during the continuance of an Event of Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. (b) Corporation as Paying Agent. If the Corporation shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on the Bonds, segregate and hold in trust for the benefit of the persons entitled thereto, a sum sufficient to pay such principal (and premium, if any) or interest so becoming due until such sums shall be paid to such persons or otherwise disposed of as herein provided, and the Corporation will notify the trustee of such action and of the payment of such funds or any failure to take such action or make such payment. -22- (c) Holding Sums in Trust. Anything in this Section 6.10 to the contrary notwithstanding, (i) the agreement to hold sums in trust as provided in this Section 6.10 is subject to the provisions of Section 6.01, and (ii) for the purposes of obtaining the discharge and satisfaction of this Indenture or for any other purpose, the Corporation may deliver, or by Corporation Order may cause any such Paying Agent to deliver, to the Trustee any sums so held in trust as aforesaid, such sums thereafter to be held upon the same trusts as those upon which such sums were held by the Corporation or such Paying Agent; and upon such payment the party making such payment shall be discharged from such trust. Section 6.11. Payment of Certain Charges. In the event of the failure of the Corporation in any respect to comply with the covenants contained in Section 6.02, 6.04 or 6.05 hereof or to keep the Mortgaged Property in repair and free of liens and other charges, other than Permitted Encumbrances, the Trustee or any Bondholder shall have the right (without prejudice to any other rights arising by reason of such Default) to advance or expend moneys for the purpose of performing such covenants on behalf of the Corporation. The Corporation shall be immediately notified of any such advance. All sums so advanced for any of the aforesaid purposes shall at once be repayable by the Corporation, shall bear interest at the current prime rate announced by the Trustee until paid, and shall be secured hereby having the benefit of the lien hereby created in priority to the Bonds. Section 6.12. Appointment of Successor Trustee. The Corporation, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint a Trustee in the manner and in conformity with the requirements specified in Section 9.10 hereof, so that there shall at all times be a Trustee hereunder. Section 6.13. Transaction with Affiliates. Subject to applicable regulatory requirements, the Corporation will not enter into or be a party to, any transaction or arrangement with any Affiliate (including without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any Affiliate), except in the ordinary course of and pursuant to the reasonable requirements of the Corporation's business and upon fair and reasonable terms no less favorable to the Corporation than would obtain in a comparable arm's length transaction with a Person other than an Affiliate. Section 6.14. Inspection of Mortgaged Properties. The Corporation will, subsequent to September 1, 1983, upon the written request of the holders of not less than 25% of the aggregate principal amount of Bonds then outstanding, which request shall be delivered to the Trustee and the Corporation, cause an inspection of the mortgaged Properties to be made by an Engineer (hereinafter in this Section referred to as the Inspecting Engineer) to be selected by the Corporation (and who may be employed by or affiliated with the Corporation) for the -23- purpose of determining the matters hereinafter provided to be set forth in the report of the Inspecting Engineer, and that the Corporation will grant such Inspecting Engineer access to the properties, books and records of the Corporation for the purpose of such inspection; but no such inspection shall be made within three years from the date of filing with the Trustee of the report of any such inspection previously made hereunder. The Inspecting Engineer, within a reasonable time from the date of his appointment, shall file with the Trustee, the Corporation and the holders of the Bonds a written report stating whether or not the Mortgaged Properties, as an operating system or systems, have been maintained in good repair and working order in accordance with the requirements of Section 6.04. If such report shall state that the Mortgaged Properties, as an operating system or systems, have not been so maintained, there shall be clearly stated in such report the character and extent of the estimated cost of making good, and the time, if longer than one year, reasonably required to make good, such deficiency in maintenance. The Corporation covenants and agrees with all reasonable speed and diligence to do such maintenance work as may be necessary to make good any deficiency in maintenance disclosed by the report of the Inspecting Engineer. All expenses, including (without limitation) the reasonable compensation of the Inspecting Engineer which may be incurred pursuant to the provisions of this Section, shall be paid by the Corporation. ARTICLE SEVEN Bondholder's Lists and Reports by the Corporation and the Trustee [The provisions of Section 7.02, 7.04, and 7.06 shall be operative as parts of this Indenture only with respect to the period after the date on which this Indenture is qualified under the Trust Indenture Act and until such date shall not be deemed a part hereof.] Section 7.01. Corporation to Furnish Trustee and Trustee to Preserve Lists of Bondholders. (a) Duty to Furnish Lists. The Corporation covenants and agrees that it will furnish or cause to be furnished to the Trustee on July 1 of each year, beginning July 1, 1984, and at such other times as the Trustee may request in writing within thirty days after receipt by the Corporation of any such request, a list in such form as the Trustee may reasonably require containing all information in the possession or control of the Corporation as to the names and addresses of -24- the holders of Bonds obtained since the date as of which the next previous list, if any, was furnished, excluding from any such list names and addresses received by the Trustee in its capacity as Bond Registrar. Any such list must be dated as of a date not more than fifteen days prior to the time such information is furnished or caused to be furnished and need not include information received after such date. (b) Trustee's Duty to Preserve List of Bondholders. The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the holders of Bonds (1) contained in the most recent list furnished to it as provided in Subsection (a) of this Section 7.01 and (2) received by the Trustee in its capacity as Bond Registrar. The Trustee may destroy any list furnished to it as provided in Subsection (a) of this Section 7.01 upon receipt of a new list so furnished. Section 7.02. Transmittal of Information. If the holders of not less than 15% in aggregate principal amount of the Bonds then Outstanding hereunder (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Bond for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Bonds with respect to their rights under this Indenture or under the Bonds, and is accompanied by a copy of the form of proxy or other communication that such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either: (1) afford to such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of Subsection (b) of Section 7.01, or (2) inform such applicants as to the approximate number of holders of Bonds whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of Subsection (b) of Section 7.01, and as to the approximate cost of mailing to such Bondholders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Bondholder whose name and address appears in the information preserved at the time by the Trustee in accordance with the provisions of Subsection (b) of Section 7.01, a copy of the form of proxy or other communication that is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of -25- the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of the Bonds or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Bondholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise, the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. Section 7.03. Corporation's and Trustee's Accountability for Disclosure. Each and every holder of the Bonds, by receiving and holding the same, agrees with the Corporation and the Trustee that neither the Corporation nor the Trustee nor any Paying Agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Bondholders in accordance with the provisions of Section 7.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 6.02. Section 7.04. Reports to be Filed With Trustee and Commission. The Corporation covenants and agrees: (a) To file with the Trustee within fifteen days after the Corporation is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Corporation may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended; or, if the Corporation is not then required to file information, documents or reports pursuant to either of such section, then to file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports as may be required pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (b) To file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Corporation with -26- the conditions and covenants provided or in this Indenture as may be required from time to time by such rules and regulations; and (c) To transmit to the holders of Bonds within thirty days after the filing thereof with the Trustee, in the manner and to the extent provided in Subsection (c) of Section 7.06 with respect to reports pursuant to Subsection (a) of Section 7.06, such summaries of any information, documents, opinions and reports required to be filed by the Corporation pursuant to this Section 7.04 and Section 7.05 as may be required by rules and regulations prescribed from time to time by the Commission. Section 7.05. Opinions of Counsel to be Filed With Trustee. The Corporation covenants and agrees: (a) To file with the Trustee, promptly after execution and delivery of this Indenture, an opinion of Counsel either stating that in the opinion of such counsel this Indenture has been properly recorded and filed so as to make effective the lien intended to be created hereby, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to make such lien effective; and (b) To file with the Trustee on April 30 in each year, beginning with the year 1984, an Opinion of Counsel, dated as of April 30 of such year, either stating that in the opinion of such counsel such action has been taken with respect to the recording, filing, re-recording, and refiling of this Indenture and of each supplemental indenture or other instrument of further assurance, including, without limitation, financing statements, as is necessary to maintain the lien of this Indenture, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such lien. Section 7.06. Trustee's Report to Bondholders. (a) The term "reporting date," as used in this section, shall be May 15 in each year beginning with the year 1984. Within sixty days after the reporting date in each year, so long as any of the Bonds are outstanding hereunder, the Trustee shall transmit to the Bondholders, in the manner provided in Subsection (c) of this Section 7.06, a brief report dated as of such reporting date with respect to: (1) its eligibility under Section 9.09, and its qualifications under Section 9.08, if then operable, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under such Sections, a written statement to such effect; (2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) that remain unpaid -27- on the reporting date, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Bonds on any property or Funds held or collected by it as Trustee, if such advances so remaining unpaid aggregate more than one-half of one percent of the principal amount of the Bonds Outstanding on the reporting date; (3) the amount, interest rate, and maturity date of all other indebtedness owing by the Corporation to the Trustee in its individual capacity, on the reporting date, with a brief description of any property held as collateral security thereof, except any indebtedness based upon a creditor relationship arising in any matter described in Subsections (b), (c), (d) or (f) of Section 9.14; (4) the property and funds, if any, physically in the possession of the Trustee as such on the reporting date; (5) any release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) that the Trustee has not previously reported; provided however, that, to the extent that the aggregate value as shown by the release papers of all of such released properties does not on the reporting date exceed 1% of the principal amount of Bonds Outstanding on the reporting date, the report need only indicate the number of such releases, the total value of property released, the aggregate amount of cash received and the aggregate value of property received in substitution therefor, all as shown by the release papers. (6) any additional issue of Bonds that the Trustee has not previously reported; and (7) any action taken by the Trustee in the performance of its duties under this Indenture that it has not previously reported and that in its opinion materially affects the Bonds, except action in respect of a Default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 8.09. (b) the Trustee shall transmit to the Bondholders, in the manner provided in Subsection (c) of this Section 7.06, a brief report with respect to: (1) the release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) unless the fair value of such property, as set forth in the certificate or opinion required by Subsection (b) of Section 14.03, is less than 10% of the principal amount of Bonds Outstanding at the time of such release, or such release and substitution, such report to be so transmitted within ninety days after such time; and (2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the -28- making thereof) made by the Trustee as such since the date of the last report transmitted pursuant to the provisions of Subsection (a) of this Section 7.06 (or if no such report has yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which it claims or may claim a lien or charge prior to that of the Bonds on property or funds held or collected by it as Trustee, and that it has not previously reported pursuant to this subsection, such report to be transmitted within ninety days after such time; provided, however, that the Trustee shall not be required, but may elect, to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of Bonds Outstanding at such time; (c) Reports pursuant to this Section 7.06 shall be transmitted by mail to all Bondholders as their names and addresses appear in the Bond Register. (d) A copy of each such report shall, at the time of such transmission to Bondholders, be filed by the Trustee with the Corporation, with each national securities exchange upon which the Bonds are listed (if so listed) and also with the Commission, if at the time required. The Corporation agrees to notify the Trustee when and as the Bonds become listed on any national securities exchange. ARTICLE EIGHT Remedies of the Trustee and Bondholders on Event of Default Section 8.01. Events of Default Defined; Acceleration of Maturity; Rescission and Annulment. In case one or more of the following events (herein called Events of Default) shall have occurred and be continuing for any reason whatsoever (as whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law of otherwise), that is to say: (a) default in the payment of any installment of interest upon any Bond, when the same shall become due and payable, and continuance of such default for a period of five days; or (b) default in the payment of the principal of (and premium, if any, on) any Bond as and when the same shall become due and payable whether at maturity, upon redemption, by declaration, or as otherwise herein provided; or (c) default in the payment of any sinking fund installment provided for in this Indenture or in any Bond as and when the same shall become due and payable; or -29- (d) default on the part of the Corporation in the performance of any other of the covenants or agreements on the part of the Corporation in any Bonds or in this Indenture contained and continuance of such default for a period of thirty days after the date on which written notice specifying such default, stating that such notice is a Notice of Default hereunder, and requiring the same to be remedied, shall have been given to the Corporation by the Trustee, or to the Corporation and the Trustee by the holders of at least 15% in principal amount of the Bonds at the time Outstanding; or (e) default on the part of the Corporation in the payment of the principal of or interest on any indebtedness of the Corporation for borrowed money as and when the same shall become due and payable by the lapse of time, by declaration, or call for redemption or otherwise, and such default shall continue beyond the period of grace, if any, allowed with respect thereto; or (f) default on the part of the Corporation in the performance of any of the covenants or agreements on the part of the Corporation in any indenture, agreement or other instrument under which any indebtedness of the Corporation for borrowed money may be issued and such default or event shall continue for a period of time sufficient to permit the acceleration of the maturity of any indebtedness of the Corporation outstanding thereunder and such indebtedness shall have been accelerated; or (g) the entry of an order for relief or of a decree or order by a court having jurisdiction in the premises (1) adjudging the Corporation a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment, or composition of the Corporation or any of the indebtedness of the Corporation under the federal bankruptcy laws or any other similar, applicable federal or state law, or (2) appointing, on the ground of insolvency or bankruptcy, a custodian, receiver, liquidator, trustee or assignee in bankruptcy or insolvency of the Corporation or of any substantial part of its property, or for the winding up or liquidation of its affairs, and the continuance of such decree or order unvacated and unstayed for a period of thirty days; or (h) the Corporation shall apply for an order for relief or shall institute proceedings to be adjudicated a voluntary bankrupt or insolvent, or shall consent to the filing of a bankruptcy proceeding or insolvency proceeding against it, or shall file a petition or answer or consent seeking reorganization under the federal bankruptcy laws or any other similar applicable federal or state law, or shall consent to the filing of any such petition, or shall consent to the appointment on the ground of insolvency or bankruptcy of a custodian or receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of any substantial part of it property, or shall make a general assignment for the benefit of creditors or -30- shall admit in writing its inability to pay its debts generally as they become due; or (i) if final judgment for the payment of money in excess of $5O,OOO shall be entered against the Corporation and such judgment shall remain unsatisfied and the execution thereof shall remain unstayed for a period of sixty days after the entry of such judgment and receipt of actual notice thereof by the Corporation, or such judgment shall remain unsatisfied for a period of sixty days after termination of any stay of execution thereon entered within such sixty day period; then, and in each and every such case, the Trustee may, if it shall have knowledge of an Event of Default, and if directed by the holders of not less than 25% in aggregate principal amount of the Bonds then Outstanding hereunder shall, declare the principal of all the Bonds to be due and payable immediately, by notice in writing to the Corporation and, upon any such declaration, the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, but before any foreclosure sale of the Mortgaged Property, or any part thereof, shall have been made under this Article, or any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, 1. The Corporation shall pay or shall deposit with the Trustee a sum sufficient to pay: a) All matured installments of interest upon all the Bonds; and (b) The principal of (and premium, if any, on) any and all Bonds that shall have become due otherwise than acceleration (with interest at the rate or rates expressed in the Bonds to the date of such payment or deposit); and (c) To the extent that payment of such interest is enforceable under applicable law, and if provided for in any of the Bonds, interest upon overdue installments of interest at the rate or rates expressed in such Bonds to the date of such payment or deposit; and (d) The amount payable to the Trustee under Section 9.06; and 2. Any and all Events of Default, other than the nonpayment of principal on Bonds that shall have become due solely by such declaration of acceleration, shall have been remedied or waived as provided in Section 8.08, then and in the event the holders of a majority in aggregate principal amount of the Bonds then Outstanding, by written notice -31- to the Corporation and to the Trustee, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair any right consequent thereof. Section 8.02. Covenant to Make Payments upon Default. The Corporation covenants that if the principal and interest on any Bond shall have become due and payable by reason of the exercise by the Trustee of the right of acceleration as stated in Section 8.01 hereof, then, upon demand of the Trustee, the Corporation will promptly pay to the Trustee, for the benefit of the holders of the Bonds, the whole amount that then shall become due and payable on all such Bonds for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law and if provided for in the Bonds) upon overdue installments of interest at the rate or rates expressed in the Bonds; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 9.06. Section 8.03. Remedies in Case of Default. In case the Corporation shall fail to comply with the provisions of Section 8.02, the Trustee may and, if directed by the holders of a majority in aggregate principal amount of the Bonds Outstanding, shall (a) take possession and charge of all the Mortgaged Property, including the books, papers and accounts of the Corporation, and likewise take possession of any and all Excepted Property then on hand, and having and holding the same, may operate and manage the same, and from time to time to make all needful repairs and such extensions, additions and improvements as to the Trustee shall seem wise; and may receive the rents, revenues, issues, earnings, income and profits thereof, and out of the same may pay all proper costs and expenses of so taking, holding and managing the same, including reasonable compensation to the Trustee, its agents and counsel, and any charges of the Trustee hereunder, and any taxes and assessments and other charges prior to the lien of this Indenture that the Trustee may deem it wise to pay, and all expenses of such repairs, extensions, additions and improvements, and to apply the remainder of the moneys so received by the Trustee, first, to the payment of the installments of interest that are due and unpaid, in the order of their maturity, and next, if the principal of any of the Bonds is due, to the payment of the principal and accrued interest thereon at the same rate as is expressed in the Bonds pro rata without any preference or priority whatever, except as aforesaid; provided, however, that whenever all that is due upon such Bonds and under any of the terms of this Indenture shall have been paid and all Defaults made good, the Trustee shall surrender possession to the Corporation, its successors or assigns, but the same right of entry, however, shall exist upon any subsequent Event of Default; or -32- (b) by such officer or agent as it may appoint, with or without entry, sell all the Mortgaged Property as an entirety, or in such parcels as the holders of a majority in principal amount of the Bonds Outstanding hereunder shall in writing request, or in the absence of such request, as the Trustee may determine, at the office of the Trustee in Denver, Colorado, having first given written notice of such sale to the Corporation by certified mail to the address specified in Section 20.05 at least fourteen days before such sale and having given further notice of such sale by publication, in an Authorized Newspaper, of the time, place and terms of sale, once a week for four successive weeks; the Trustee may from time to time adjourn such sale in its discretion by announcement at the time and place fixed for such sale without further notice; and upon such sale the Trustee may make and deliver to the purchaser or purchasers good and sufficient bills of sale, deeds, or other conveyances for the same (for which purposes the Trustee is hereby irrevocably appointed the true and lawful attorney of the Corporation, in its name and stead, to make such conveyances), which sale shall be a perpetual bar, both at law and in equity, against the Corporation and all persons, firms and corporations lawfully claiming or who may claim by, through or under it; or (c) in its own name and as trustee of an express trust proceed to protect and enforce its rights and the rights of the holders of the Bonds under this Indenture by a suit or suits in equity or at law for: (1) collection of sums due and unpaid upon the Bonds; (2) the specific performance of any covenant or agreement contained herein; (3) the foreclosure of this Indenture; or (4) the enforcement of any other appropriate legal or equitable remedy (including the appointment of a receiver) as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of its rights and the rights of the holders of Bonds under this Indenture; and prosecute any such suit, action or proceeding to judgment or final decree, and, thereupon, cause such judgment or final decree to be enforced in the manner provided by law, including, where authorized or permitted, the collection out of any property, wherever situated, of the Corporation (or other obligor upon the Bonds) of any moneys adjudged or decreed to be payable. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of any waiver, rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case -33- the Corporation and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Corporation and the Trustee shall continue as though no such proceedings had been taken. Upon any sale being made either under the power of sale hereby given or under judgment or decree in any judicial proceedings or foreclosure or otherwise for the enforcement of this Indenture, the principal of all Bonds then Outstanding, if not previously due, and the interest accrued thereon, shall at once become and be immediately due and payable. Section 8.04. Trustee's Powers. The Trustee shall have all the powers, rights and privileges as may be required and reasonably necessary to perform, accomplish and comply with the duties, obligations and undertakings required or permitted by this Indenture to be made, kept and performed by the Trustee. Further, in case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition, or other similar judicial proceedings affecting the Corporation, any other obligor on the Bonds, or the creditors or property of either, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and the Bondholders allowed in any judicial proceeding relative to the Corporation, or any other obligor on the Bonds, or it creditors or its property, for the entire amount due and payable by the Corporation or such other obligor under the Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Corporation or such other obligor after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 9.06; and any receiver, assignee or trustee in bankruptcy, or reorganization is hereby authorized by each of the Bondholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Bondholders, to pay to the Trustee any amount due to it under Section 9.06. All rights of action and of asserting claims under this Indenture, or under any of the Bonds, may be enforced by the Trustee without the possession of any of the Bonds, or the production thereof on any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the pro rata benefit of the holders of the Bonds then Outstanding issued under the terms of this Indenture and supplements thereto. -34- In case of a Default or Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. Section 8.05. Application of Moneys by Trustee. Any moneys collected by the Trustee pursuant to this Article Eight shall be applied in the order following at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest: FIRST: To the payment of costs and expenses of collection, and of all amounts payable to the trustee under Section 9.06; SECOND: In case the principal of any of the Outstanding Bonds shall not have become due, to the payment of interest thereon, in the order of maturity of the installments of such interest, with interest (if such interest has been collected by the Trustee) upon the overdue installments of interest at the rate per annum expressed in the Bonds, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; THIRD: In case the principal of any of the Outstanding Bonds shall have become due, by acceleration or otherwise, to the payment of the whole amount then owing and unpaid upon the Bonds for principal (and premium, if any) and interest, with interest on the overdue principal (and premium, if any) and (if such interest has been collected by the Trustee) upon overdue installments of interest at the rate per annum expressed in the Bonds; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Bonds, then to the payment of such principal (and premium, if any) and interest, without preference or priority of principal (and premium, if any), over interest, or of interest over principal (and premium, if any), or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably to the aggregate of such principal (and premium, if any) and accrued and unpaid interest; and FOURTH: To the payment of the remainder, if any, to the Corporation, its successor or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. Section 8.06. Limitation on Suits; Preservation of Rights to Payment and to Sue. -35- (a) No holder of any Bond shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law against the Corporation, upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder against the Corporation, unless (1) such holder previously shall have given to the Trustee written notice of Default and of the continuance of the Event of Default therein specified, as hereinbefore provided; (2) the holders of not less than 25% in principal amount of the Bonds then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder; (3) the parties making such request shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; and (4) the Trustee for thirty days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action, suit or proceeding; it being understood and intended, and being expressly covenanted by the taker and holder of every Bond with every other taker and holder and the Trustee that no one or more holders of Bonds shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb, or prejudice the rights of the holders of any other Bonds, or to obtain or seek to obtain priority over or preference to any other such holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Bonds. For the protection and enforcement of the provisions of this Section 8.06, each and every Bondholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. (b) withstanding any other provisions of this Indenture, however, the right of any holder of any Bond to receive payment of the principal of (including any sinking fund payment due thereon) and premium, if any, and interest on such Bond, on or after the maturity date (or sinking fund payment date) expressed in such Bond, or to institute suit for the enforcement of any such payment on or after such dates, shall not be impaired or affected without the consent of such holder. Section 8.07. Remedies Cumulative. All powers and remedies given by this Article Eighth to the Trustee or to the Bondholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Bonds, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements -36- contained in this Indenture, and no delay or omission of the Trustee or any holder of any Bond to exercise any right or power accruing upon any Default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Default or Event of Default or any acquiescence therein; and, subject to the provision of Section 8.06, every power and remedy given by this Article Eight or by law to the Trustee or to the Bondholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Bondholders. Section 8.08. Rights of Bondholders to Direct Trustee; Waivers. The holders of a majority in aggregate principal amount of the Bonds at the time Outstanding shall have the right to direct the time, method and place of conducting any proceeding or any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee. The holders of a majority in principal amount of the Bonds at the time Outstanding may on behalf of the holders of all of the Bonds waive any Default or Event of Default and its consequences, except a Default in the payment of the principal of (including any sinking fund payment), or premium or interest on, any of the Bonds as and when the same shall become due by the terms of such Bonds, or a call for redemption, which may be waived only by written consent of each holder of any Bond so in Default. In the case of any waiver accomplished pursuant to this Section 8.08, such Default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose hereof, and the Corporation, the Trustee and the holders of the Bonds shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 8.09. Notice by Trustee of Defaults. The Trustee shall, within thirty days after the occurrence of an Event of Default of which it shall have knowledge, give to the Bondholders, in the manner provided in Subsection (c) of Section 7.06 (regardless of whether such Section is then in effect), notice of all Defaults known to the Trustee, unless such Defaults shall have been cured before the giving of such notice; provided, that except in the case of default in the payment of the principal of (or premium, if any), interest on or sinking fund payment relative to any of the Bonds, the Trustee shall be protected in withholding such notice if and so long as the Trustee and the Board of Directors, the executive committee, or a trust committee composed of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Bondholders. Section 8.10. Costs of Suit. The Corporation, the Trustee and each holder of any Bond, by his acceptance thereof, agree that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in -37- such suit of an undertaking to pay the cost of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney's fees against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provision of this Section 8.10 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Bondholder or group of Bondholders holding in the aggregate more than 25% in principal amount of the Bonds Outstanding, or to any suit instituted by any Bondholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Bond, on or after the respective due dates expressed in such Bond. ARTICLE NINE The Trustee Section 9.01. Certain Duties and Responsibilities. (a) except during the continuance of an Event of Default of which the Trustee shall have knowledge, (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee, and (2) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or mpinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise thereof, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) This Subsection shall not be construed to limit the effect of Subsection (a) of this Section; -38- (2) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (4) Whether or not an Event of Default shall have occurred, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Section 9.02. Certain Rights of the Trustee. Subject to and except as otherwise provided in Section 9.01: (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, coupon, note or other paper or document believed by it to been genuine and to have been signed or presented by the proper party or parties; (b) Any request, direction, order or demand of the Corporation mentioned herein shall be sufficiently evidenced by a Corporation Order or Corporation Request and any resolution of the Board of Directors of the Corporation shall be sufficiently evidence to the Trustee by a Board Resolution; (c) The Trustee may consult with counsel and the advice or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by ithereunder in good faith and in reliance thereon; (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Bondholders pursuant to the provisions of this Indenture, unless such Bondholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; subject to the provisions of Section 9.01(c)(4), nothing herein contained shall, however, relieve the Trustee of the obligation, upon the continuance of an Event of Default, to exercise such of the rights and powers -39- vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs; (e) The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) The Trustee shall not be liable, in case of entry by it upon the Mortgaged Property, for debts contracted or liabilities or damages incurred in the management or operation thereof; and (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. Section 9.03. Trustee Not Responsible for Certain Matters. The recitals contained herein and in the Bonds, except the Trustee's certificates of authentication, shall be taken as the statements of the Corporation, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any Indenture supplemental hereto or of any Bond. The Trustee shall not be accountable for the use of or application by the Corporation of any Bonds or of the proceeds of any Bonds or for the use or application of any Trust Moneys paid over by the Trustee in accordance with any provision of this Indenture, or for the use or application of any moneys received by any Paying Agent other than the Trustee. The Trustee shall not be deemed to have knowledge of any Default or Event of Default unless and until a Responsible Officer shall have actual knowledge thereof or the Trustee shall have received written notice thereof from the holder of any Bond or the Corporation. Section 9.04. Trustee's Relationship with Corporation. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Bonds and, subject to Section 9.08, 9.13 and 9.14, if operative, may otherwise deal with the Corporation with the same rights it would have if it were not the Trustee. Section 9.05. Trust Moneys. Subject to the provisions of Section 17.04, all Trust Moneys, as defined in Section 17.01., shall, until applied as herein provided, be held in trust by the Trustee for the purposes for which they were received but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any Trust Moneys except such as it may agree with the Corporation to pay thereon. Except during the continuance of an Event of Default, all Interest so agreed to be -40- paid on any Trust Moneys shall be paid from time to time upon Corporation Order. Section 9.06. Trustee's Compensation. The Corporation covenants and agrees to pay to the Trustee from time to time reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services rendered by it hereunder, and the Corporation will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the expenses and disbursements of the Trustee's counsel and of all persons not regularly in its employ) except any such expense, disbursement, or advances as may arise from the Trustee's negligence or bad faith. The Corporation also covenants to indemnify the Trustee for, and to hold the Trustee harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability in connection with the performance of its duties or exercise of its rights hereunder. The obligations of the Corporation under this Section 9.06 to compensate the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured under this Indenture by a lien prior to that of the Bonds upon all property and funds held or collected by the Trustee as such. Section 9.07. Reliance on Officer's Certificates by Trustee and Other Persons. Except as otherwise provided in Section 9.01, whenever in the administration of the provisions of 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, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee. The agents and representatives of the Trustee and any experts or counsel whose opinions are required or permitted to be delivered to the Trustee for any purpose hereunder shall likewise be fully warranted in relying and acting upon the existence of any matters proved or established by any such certificate delivered to any such expert or counsel (unless other evidence in respect thereof be herein specifically described). Section 9.08. Conflicting Interests of Trustee. [The provision of this Section 9.08 shall be operative as a part of this Indenture only on and after the date that this Indenture is qualified under the Trust Indenture Act, and until such date shall not be deemed a part hereof.] -41- (a) If the Trustee has or shall acquire any conflicting interest, as defined in this Section, it shall, within ninety days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect specified in Section 9.10. (b) In the event that the Trustee shall fail to comply with the provisions of Subsection (a) of this Section, the Trustee shall, within ten days after the expiration of such ninety day period, transmit notice of such failure to the Bondholders in the manner and to the extent provided in Subsection (c) of Section 7.06. (c) For the purposes of this Section, the Trustee shall be deemed to have a conflicting interest if: (1) the Trustee is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the corporation are outstanding, unless such indenture is a collateral trust indenture under which the only collateral consist of Bonds issued under this Indenture; provided that there shall be excluded from the operation of this paragraph any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Corporation are outstanding, if the Corporation shall have sustained the burden or proving, on application to the Commission and after opportunity for hearing thereon, that trusteeship under this Indenture and such other indenture or indentures is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under one of the indentures; (2) the Trustee, or any of its directors or executive officers, is an obligor upon the Bonds or an underwriter for the Corporation; (3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Corporation or an underwriter for the Corporation; (4) the Trustee, or any of its directors or executive officers, is a director, officer, partner, employee, appointee or representative of the Corporation, or of an underwriter (other than the Trustee itself) for the Corporation who is currently engaged in the business of underwriting, except that (A) one individual may be a director or an executive officer, or both, of the Trustee and a director or an executive officer, or both, of the Corporation, but may not be at the same time an executive officer of both the Trustee and the Corporation; and (B) if and so long as the number of directors of the Trustee in office is more than nine (9), one (1) additional -42- individual may be a director or an executive officer, or both, of the Trustee and a director of the Corporation; and (C) the Trustee may be designated by the Corporation or by an underwriter for the Corporation to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent or depositary, or in any other similar capacity, or, subject to the provisions of Paragraph (1) of this Subsection (c), to act as trustee whether under an indenture or otherwise; (5) 10% or more of the voting securities of the Trustee is beneficially owned either by the Corporation or by any director, partner or executive officer thereof, or 20% or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10% or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Corporation or by any director, partner, or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons; (6) the Trustee is the beneficial owner of, or holds as collateral security for an obligation that is in default (as hereinafter in this Subsection (c) defined), (A) 5% or more of the voting securities or 10% or more of any other class of security, of the Corporation, not including the Bonds Outstanding and securities issued under any other indenture under which the Trustee is also trustee, or (B) 10% or more of any class of security of an underwriter for the Corporation; (7) the Trustee is the beneficial owner of, or holds as collateral security for an obligation that is in default (as hereinafter in this Subsection (c) defined), 5% or more of the voting securities of any person who, to the knowledge of the Trustee, owns 10% of more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Corporation; (8) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this Subsection (c) defined, 10% or more of any class of security of any person who, to the knowledge of the Trustee, owns 50% or more of the voting securities of the Corporation; or (9) the Trustee owns on May 15, in any calendar year, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25% or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under Paragraph (6), (7), or (8) of this Subsection (c). As to any such securities of which the Trustee acquired ownership through becoming executor, administrator, or testamentary trustee of an estate that included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to -43- the extent that such securities included in such estate do not exceed 25% of such voting securities or 25% of any such class of security. Promptly after May 15, in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of May 15. If the Corporation fails to make payment in full of principal of, or premium, if any, or interest on any of the Bonds when and as the same become due and payable, and such failure continues for five days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such five day period, and after such date, notwithstanding the foregoing provisions of this Paragraph (9), all such securities so held by the Trustee, with sole or joint control over such securities vested in it shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of Paragraphs (6), (7) and (8) of this Subsection (c). The specification of percentages in Paragraphs (5) to (9), inclusive, of this Subsection (c) shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of Paragraph (3) or (7) of this Subsection (c). For the purposes of Paragraphs (6), (7), (8) and (9) of this Subsection (c) only (A) the terms security and securities shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (B) an obligation shall be deemed to be in default when a default in payment of principal shall have continued for five days or more and shall not have been cured; and (C) the Trustee shall not be deemed to be the owner or holder of (i) any security that it holds as collateral security (as trustee or otherwise) for an obligation that is not in default as defined in Subparagraph (B) above, (ii) any security that it holds as collateral security under this Indenture, irrespective of any default hereunder, or (iii) any security that it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity. -44- Except as above provided, the word security or securities as used in this Indenture shall mean any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a security, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. (d) For the purposes of this Section: (1) The term underwriter when used with reference to the Corporation shall mean every person who, within three years prior to the time as of which the determination is made, has purchased from the Corporation with a view to, or has offered or sold for the Corporation in connection with, the distribution of any security of the Corporation outstanding at such time or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission. (2) The term director shall mean any director of a corporation or any individual performing similar functions with respect to any organization whether incorporated or unincorporated. (3) The term person shall mean an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization or a government or political subdivision thereof. As used in this paragraph, the term trust shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security. (4) The term voting security shall mean any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person. (5) The term Corporation shall mean any obligor under the Bonds. -45- (6) The term executive officer shall mean the president, every vice-president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the Board of Directors unless he is also the chief executive officers. (e) The percentages of voting securities and other securities specified in this Section shall be calculated in accordance with the following provisions: (1) A specified percentage of the voting securities of the Trustee, the Corporation or any other person referred to in this Section (each of whom is referred to as a person in this paragraph) mean such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes that the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person. (2) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding. (3) The term amount, when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security. (4) For the purposes of this Section 9.08, the term outstanding means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition: (A) Securities of an issuer held in a sinking fund relating to securities of the issuer of the same class; (B) Securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise; (C) Securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; (D) Securities held in escrow if placed in escrow by the issuer thereof; provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof. -46- (5) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided, however that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes; and provided further that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture. Section 9.09. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder that shall be a corporation organized and doing business under the laws of the State of Colorado or of the United States of America authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least Twenty- Five Million Dollars subject to supervision or examination by federal or state authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section 9.09, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 9.10. Section 9.10. Resignation and Removal of Trustee; Appointment of Successor. (a) The Trustee, or any successor hereafter appointed, may at any time resign by giving written notice thereof to the Corporation and by publishing notice of such resignation, which notice shall be published at least once in an Authorized Newspaper. Upon receiving the notice resignation of the Trustee, the Corporation shall promptly appoint a successor trustee by a Board Resolution, in duplicate, one copy of which shall be delivered to the resigning Trustee and one copy to the successor Trustee. If no instrument of acceptance by a successor Trustee shall have been delivered to the resigning Trustee within thirty days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, or any Bondholder who has been a bona fide holder of a Bond or Bonds for at least six months may, subject to the provisions of Section 8.10, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee. -47- (b) If at any time any of the following shall occur: (1) the Trustee, after qualification of the Indenvure under the Trust Indenture Act, shall fail to comply with the provisions of Subsection (a) of Section 9.08 after written request therefor by the Corporation or by any Bondholder who has been a bona fide holder of a Bond or Bonds for at least six months; or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 9.09 and shall fail to resign after written request therefor by the Corporation or by any such Bondholder; or, (3) the Trustee shall become incapable of acting, or shall be adjusted a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of it property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Corporation may remove the Trustee and appoint a successor Trustee by Corporation Order in duplicate, one copy of which shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to the provisions of this Section 9.10, any Bondholder who has been a bona fide holder of a Bond or Bonds for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Such court may thereupon after such notice, if any, as it may deem proper remove the Trustee and appoint a successor Trustee. (c) The holders of a majority in aggregate principal amount of the Outstanding Bonds may at any time remove the Trustee and appoint a successor Trustee. (d) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Section shall become effective until the acceptance of appointment by the successor Trustee as provided in Section 9.11. Section 9.11. Acceptance of Appointment by Successor. Every Trustee appointed as provided in Section 9.10 shall execute, acknowledge and deliver to the Corporation and to the retiring Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of to the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligation of the retiring Trustee hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Corporation or of the successor Trustee, the retiring Trustee shall, upon payment of any amounts then due it pursuant to any of the provisions hereof, execute and deliver -48- an instrument transferring to such successor Trustee all the estate, properties, rights, powers, and trust of the returning Trustee and shall assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its liens, if any, provided for in Sections 6.11 and 9.06 hereof. Upon request of any such successor Trustee, the Corporation shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Trustee all such estates, properties, rights, powers and trusts. No successor Trustee shall accept appointment as provided in this Section 9.11 unless at the time of such acceptance such successor Trustee shall be qualified under the provisions of Section 9.08, to the extent operable, and eligible under the provisions of Section 9.09. Upon acceptance of appointment by a successor Trustee as provided in this Section 9.11, the Corporation shall publish notice of the succession of such Trustee hereunder at least once in an Authorized Newspaper. If the Corporation fails to publish such notice within ten days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be published at the expense of the Corporation. Section 9.12. Successor to Trustee. Any corporation into which the Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be qualified under the provisions of Section 9.08, to the extent operable, and eligible under the provisions of Section 9.09 without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In any such case such successor shall forthwith make a report to Bondholders of the character required by Paragraph (1) of Subsection (a) of Section 7.06, to extent operable, in the manner provided in that Section. Section 9.13. Trustee as Creditor of the Corporation. [The provisions of this Section 9.13 and Sections 9.14 and 9.15 shall be operative as a part of this Indenture only with respect to the period after the date on which this Indenture is qualified under the Trust Indenture Act, and until such date shall not be deemed a part hereof.] (a) Subject to the provisions of Section 9.14, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Corporation within four months prior to a default, as defined in Section 9.15, or -49- subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the holders of the Bonds and the holders of any indenture securities, as defined in Section 9.15: (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such four month period and valid as against the Corporation and its other creditor, except any such reduction resulting from the receipt or disposition of any property described in Paragraph (2) of this Subsection, or from the exercise of any right of set-off that the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Corporation upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such four month period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Corporation and its other creditors in such property or such proceeds. (b) Nothing herein contained. however, shall affect the right of the Trustee: (1) to retain for its own account (a) payment made on account of any such claim by any person (other than the Corporation) who is liable thereon, (b) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (c) distributions made in cash, securities or other property in respect of claims filed against the Corporation in bankruptcy or receivership or in proceedings for reorganization pursuant to the National Bankruptcy Act or applicable state law; (2) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such four month period. (3) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security or any such claim, if such claim was created after the beginning of such four month period and such property was received as security therefor simultaneously with the creation thereon, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default, as defined in Section 9.15, would occur within four months; or (4) to receive payment on any claim referred to in Paragraph (2) or (3), against the release of any property held as security for such claim as provided in such Paragraph (2) or (3), -50- as the case may be, to the extent of the fair value of such property. For the purposes of Paragraph (2), (3) and (4), property substituted after the beginning of such four month period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any preexisting claim of the Trustee as such creditor, such claim shall have the same status as such preexisting claim. (c) If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among the Trustee, the Bondholders and the holders of other indenture securities in such manner that the Trustee, the Bondholders and the holders of other indenture securities realize, as a result of payments form such special account and payments of dividends on claims filed against the Corporation in bankruptcy or receivership or in proceedings for reorganization pursuant to the National Bankruptcy Act or applicable state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by the Trustee from the Corporation of the funds and property in such special account and before crediting to the respective claims of the Trustee, the Bondholders and the holders of other indenture securities, dividends on claims filed against the Corporation in bankruptcy or receivership or in proceedings for reorganization pursuant to the National Bankruptcy Act or applicable state law, but after crediting thereon receipt on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term dividends shall include any distribution with respect to any such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the National Bankruptcy Act or applicable state law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceedings for reorganization is pending shall have jurisdiction (i) to apportion among the Trustee, the Bondholders and the holders of other indenture securities, in accordance with provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, the Bondholders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such -51- special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee who has resigned or been removed after the beginning of such four month period shall be subject to the provisions of this Section 9.13 as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such four month period, it shall be subject to the provisions of this Section 9.13 if and only if the following conditions exist: (i) the receipt of property or reduction of claim that would have given rise to the obligation to account, if such Trustee had continued as trustee, occurred after the beginning of such four month period; and (ii) such receipt of property or reduction of claim occurred within four months after such resignation or removal. Section 9.14. Excluded Creditor Relationships. There shall be excluded from the operation of Section 9.13 a creditor relationship arising from: (a) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee: (b) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property that shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof is given to the Bondholders at the time and in the manner provided in this Indenture; (c) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; (d) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction, as defined in Section 9.15; (e) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, that is directly or indirectly a creditor of the Corporation; or -52- (f) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations that fall within the classification of self- liquidating paper as defined in Section 9.15. Section 9.15. Particular Definitions. Notwithstanding any definition contained elsewhere in this Indenture, for the purposes of Sections 9.13 and 9.14: (a) The terms default shall mean any failure to make payment in full of the principal or interest upon any of the Bonds or upon the other indenture securities when and as such principal or interest becomes due and payable. (b) The term other indenture securities shall mean securities upon which the Corporation is an obligor outstanding under any other indenture (i) under which the Trustee is also trustee, (ii) that contains provisions substantially similar to the provisions of Section 9.13, and (iii) under which a default exists at the time of the apportionment of the funds and property held in such special account. (c) The term cash transaction shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand. (d) The term self-liquidating paper shall mean any draft, bill of exchange, acceptance or obligation that is made, drawn, negotiated or incurred by the Corporation for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and that is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Corporation arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. (e) The term Corporation shall mean any obligor upon the Bonds. Section 9.16. Separator or Co-Trustee Powers. At any time or times, for the purposes of conforming to any legal requirements, restrictions or conditions in any state in which any part of the Trust Estate may be located, the Corporation and the Trustee shall have power to appoint, and, upon the request of the Trustee, the Corporation shall for such purpose join with the Trustee in the execution, delivery and performance of any instruments and agreements necessary or proper to appoint, another corporation or one or more persons, approved by the Trustee, to act either as separate trustee or trustees or as co- -53- trustee or co-trustees jointly with the Trustee of all or any part of the Trust Estate. Such separate trustee or trustees or co-trustee or co-trustees shall have such powers and duties as shall be conferred or imposed by the terms of its or their appointment; but every such separate trustee or co-trustee shall, to the extent permitted by law, be appointed subject to the following provisions and conditions, namely: (1) Bonds issued hereunder shall be authenticated and delivered, and all powers, duties, obligations and rights conferred upon the Trustee in respect of the custody of all obligations and other securities and of all cash pledged or deposited hereunder shall be exercised, solely by the Trustee or its successor in the trust hereunder, and any moneys at any time coming into the hands of any such separate trustee or trustees or co-trustee or co-trustees shall be at once paid over to the Trustee or its successor in the trust hereunder; (2) No power shall be exercised hereunder by any such separate trustee or trustees or co-trustee or co-trustees except jointly or with the consent in writing of the Trustee or its successor in the trust hereunder; (3) The Corporation and the Trustee or its successor in the trust hereunder, at any time by an instrument in writing executed by them jointly, may remove any separate trustee or co- trustee appointed under this Section 9.16, and may likewise and in like manner appoint a successor to such separate trustee or co-trustee so removed or who shall resign or become incapable of acting, anything herein contained to the contrary notwithstanding; and (4) Any notice, request or other writing delivered solely to the Trustee or its successor in the trust hereunder shall be deemed to have to have been delivered to all of the trustees as effectually as if delivered to each of them. ARTICLE TEN Concerning the Bondholders Section 10.01. Evidence of Action. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Bondholders may be embodied in and evidenced by (a) an instrument or any number of instruments of similar tenor executed by such Bondholders in person or by agent or proxy appointed in writing, or -54- (b) the record of the holders of Bonds voting in favor thereof at any meeting of Bondholders duly called and held in accordance with the provision of Article Eleven, or (c) a combination of such instrument or instruments and any such record of such a meeting of Bondholders; and, except as herein otherwise expressly provided, such action shall become effective where such instrument or instruments or record, or combination of both, are delivered to the Trustee, and, where expressly required hereby, to the Corporation. Section 10.02. Proof of Execution. (a) Subject to the provisions of Section 9.01, proof of the execution of any instrument by a Bondholder or his agent or proxy and proof of the holding by any person of any of the Bonds shall be sufficient if made in the following manner: The fact and date of the execution by any such person of any instrument may be proved by (1) the certificate of any notary public, or other officer of any jurisdiction within the United States of America authorized to take acknowledgments of deeds to be recorded in such jurisdiction, that the person executing such instrument acknowledged to him the execution thereof, or (2) an affidavit of a witness to such execution sworn to before any such notary or other such officer, or (3) the guarantee of the signature of such person by any trust company, commercial bank or member of a national stock exchange. Where such execution is by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument and the amount and numbers or other designations of Bonds held by the persons so executing such instrument may also be proved in any other manner that the Trustee may deem sufficient, and the Trustee may require such additional proof of any matter referred to in this Section 10.02 as it shall deem necessary. (b) The ownership of any Bond shall be proved by the Bond Register. (c) The record of any Bondholders' meeting shall be proved in the manner provided in Section 11.06. Section 10.03. Effect of Actions by Holders of Bonds. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 10.01, of the taking of any action by the holders of Bonds, any holder of a Bond or Bonds who has consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 10.02, revoke such action so far as concerns such Bond or Bonds. Except as aforesaid, any such action taken by the holder of any -55- Bond shall be conclusive and binding upon such holder and upon all future holders and owners of the same Bond, and of any Bond issued upon the transfer thereof or in exchange therefor or in place thereof, in respect of anything done or suffered to be done by the Trustee or the Corporation in reliance thereon, whether or not any notation in regard thereto is made upon such Bond. ARTICLE ELEVEN Bondholders' Meetings Section 11.01. Purposes. A meeting of Bondholders may be called at any time and from time to time pursuant to the provision of this Article Eleven for any of the following purposes: (a) To give any notice to the Corporation or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Bondholders pursuant to any of the provisions of Article Ten; (b) To remove the Trustee and appoint a successor Trustee pursuant to the provisions of Article Nine; (c) To consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 12.02; or (d) To take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Bonds under any provision of this Indenture or under applicable law. zing the action proposed to be taken at such meeting, shall be published by the Trustee at least once in an Authorized Newspaper, the first publication to be not less than twenty nor more than ninety days prior to the date fixed for the meeting. In addition, the Trustee shall give written notice by certified mail to the Corporation and to each Bondholder setting forth the information above stated not less than twenty days nor more than ninety days prior to the date fixed for the meeting and addressed to the Bondholders at the addresses maintained by the Trustee under Article Six hereof. Section 11.03. Call of Meetings by Corporation or Bondholders. In case at any time (i) the Corporation, pursuant to a Board Resolution, or (ii) the holders of at least 10% in aggregate principal amount of the Bonds Outstanding shall have requested the Trustee to call a meeting of Bondholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made publication of the notice of such meeting within twenty -56- days after receipt of such request, then the Corporation or the holders of the Bonds in the amount above specified may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 11.01, by giving notice thereof as provided in Section 11.02. Section 11.04. Voting and Attending Meetings. To be entitled to vote at any meeting of Bondholders, a person shall be either a registered holder of one or more Bonds Outstanding, or a person appointed by an instrument in writing as proxy or attorney-in-fact by a registered holder of one or more Bonds Outstanding. The only persons who shall be entitled to be present or to speak at any meeting of Bondholders shall be the persons entitled to vote at such meeting and their counsel, representatives of the Trustee and its counsel and representatives of the Corporation and its counsel. Section 11.05. Conduct of Meetings. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Bondholders, as follows (a) in regard to proof of the appointment of proxies or attorneys-in-fact, and (b) in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and (c) such other matters concerning the conduct of the meeting as it deems appropriate. Except as otherwise permitted or required by any such regulations, the holding of Bonds shall be proved in the manner specified in Subsection (b) of Section 9.02 and the appointment of any proxy shall be proved in the manner specified in Subsection (a) of Section 10.02. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Corporation or by Bondholders as provided in Section 11.03, in which case the party or parties calling the meeting shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of a majority in principal amount of the Outstanding Bonds represented at the meeting and entitled to vote. At any meeting each Bondholder or proxy or attorney- in-fact shall be entitled to one vote for each $1,000 principal amount of Outstanding Bonds held by such Bondholder or by the Bondholder for whom such proxy or attorney-in-fact is acting; provided, however, that no vote shall be cast or counted at any meeting in respect of any Bonds challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Outstanding Bonds held by him on instruments in writing as aforesaid duly designating him as the person to vote on behalf of other Bondholders. Any meeting of Bondholders duly called pursuant to the provision of Section 11.02 or 11.03 may be -57- adjourned from time to time, and the meeting may be held as so adjourned without further notice. Section 11.06. Voting and Records. The vote upon any resolution submitted to any meeting of Bondholders shall be by written ballot on which shall be subscribed the signatures of the holders of Bonds or of their proxies or attorneys-in-fact and the serial number or numbers of the Bonds held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes, who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Bondholders shall be prepared by the secretary of the meeting, and there shall be attached to such record the original reports of the inspectors of votes on any vote taken at such meeting, setting forth a copy of the notice of the meeting and showing that such notice was given as provided in Section 11.02. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Corporation and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. Section 11.07. Effect of Call of Meeting. Nothing in this Article Eleven contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Bondholders or any right expressly or impliedly conferred hereunder to make such call, any hinderance or delay in exercise of any right or rights conferred upon or reserved to the Trustee or to the Bondholders under any of the provisions of this Indenture or of the Bonds. ARTICLE TWELVE Supplemental Indentures Section 12.01. Supplemental Indentures Without Consent of Bondholders. In addition to any supplemental indenture otherwise authorized by this Indenture, the Corporation, when authorized by a Board Resolution, and the Trustee from time to time and at any time, may, without the consent of the holders of any Bond, enter into an indenture or indentures supplemental hereto, in form satisfactory to the Trustee, for one or more of the following purposes: (a) to evidence the succession of another corporation to the Corporation, or successive successions, and the assumption by any such successor corporation of the -58- covenants, agreements and obligations of the Corporation pursuant to Article Thirteen hereof; (b) to add to the covenants of the Corporation and to the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of the Bonds or any series of Bonds, such further covenants, restrictions, conditions or provisions for the protection of the holders of the Bonds or any series of Bonds, or to surrender any right or power herein conferred on the Corporation; (c) to cure any ambiguity, to correct or supplement any provision contained herein or in any supplemental indenture that may be inconsistent with any other provision contained herein or in any supplemental indenture or to make such other provisions in regard to matters or questions arising under this Indenture as shall not be inconsistent with the provisions of this Indenture and shall not adversely affect the interests of the holders of the Bonds; (d) to provide for the creation of any series of Bonds (other than Bonds of Series F and G, whose creation is provided for in Article Two hereof), pursuant to the provisions of Article Five hereof; (e) to modify, eliminate or add to the provisions of this Indenture to the extent necessary to permit any additional series of Bonds to be issued as coupon Bonds; (f) to modify, eliminate or add to the provisions of this Indenture to the extent necessary to permit the appointment of a separate or co-trustee pursuant to Section 9.16; (g) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture; and (h) to modify, eliminate or add to the provisions of this Indenture to the extent necessary to effect the qualification of this Indenture under the Trust Indenture Act as that Act, or any similar federal statute enacted in lieu thereof, is in effect at the time of the entering into any such supplemental indenture. The Trustee is hereby authorized to join with the Corporation in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be herein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. -59- Section 12.02. Modification of Indenture. With the consent (evidenced as provided in Section 10.01) of the holders of not less than 66-2/3% in aggregate principal amount of all the Bonds at the time Outstanding that are adversely affected by such supplemental indenture, the Corporation, when authorized by a Board Resolution, and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Bonds; except that no such supplemental indenture shall, without the consent of the holder of each Outstanding Bond adversely affected thereby, (i) extend the stated maturity of the principal of, or any installment of interest on, any Bond, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or extend the time or reduce the amount of any sinking fund payment in respect thereof, or (ii) reduce either the aforesaid percentage in principal amount of Bonds, the holders of which are required to consent to any such supplemental indenture, or the percentages specified in Section 8.08 or (iii) modify any of the provisions of this Section 12.02 or Section 8.08, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the holder of each Bond adversely affected thereby. For purposes of amending, eliminating or otherwise modifying any covenant or other provision of this Indenture or any supplemental indenture which provision by its terms is binding upon the Corporation only so long as such series of Bonds or which by its terms is binding upon the Corporation only so long as such series of Bonds shall be Outstanding, the holders of any Series of Bonds not expressly entitled to the benefit of such provision or covenant shall not be deemed to be adversely affected by such modification. Upon the request of the Corporation, accompanied by c copy of a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Bondholders as aforesaid, the Trustee shall join with the Corporation in the execution or such supplemental indenture unless any such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion (but shall not be obligated to) enter into such supplemental indenture; provided, however, that the Trustee shall be so obligated with respect to a supplemental indenture entered into under Subsections (a) or (h) of Section 12.01, notwithstanding any such effect. It shall not be necessary for the consent of the Bondholders under this Section 12.02 to approve the particular form or any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. -60- Section 12.03. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article Twelve, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Corporation, and every holder of Bonds theretofore or thereafter authenticated and delivered hereunder shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendments; and all the terms and conditions of any such supplemental indenture shall band be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 12.04. Trust Indenture Act. Every supplemental indenture executed pursuant to this Article Twelve shall conform to the requirements of the Trust Indenture Act, as in effect at the time of execution of such supplemental indenture, if this Indenture shall then be qualified under that Act. Section 12.05 Notation of Changes on Bonds. Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article Twelve may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Corporation or the Trustee shall so determine, new Bonds so modified as to conform, in the opinion of the Trustee and the Corporation's Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Corporation, authenticated and delivered by the Trustee in exchange for the Outstanding Bonds. Section 12.06. Trustee's Reliance on Opinion of Counsel. In executing any supplemental indenture permitted by this Article Twelve, the Trustee shall be entitled to receive and (subject to Section 9.01) shall be entitled to rely upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by, and conforms to, the terms of this Article Twelve. ARTICLE THIRTEEN Consolidation, Merger, and Sale Section 13.01. Consolidation, Mergers or Sales Permitted on Certain Terms. So long as no Default or Event of Default shall have occurred and be continuing, nothing contained in this Indenture or in any of the Bonds shall prevent any consolidation with or merger of the Corporation into any other corporation or corporations (whether or not affiliated with the Corporation), or successive consolidations or mergers in which the Corporation or its successor or successors shall be a party -61- or parties, and in which the Corporation shall not be the surviving corporation, or shall prevent any sale, conveyance, transfer or other disposition of the Mortgaged Property as an entirety or substantially as an entirety, to any other corporation (whether or not affiliated with the Corporation or its successor or successors) organized under the laws of the United States of America or any state thereof or the District of Columbia and having not less than 75% of its gross assets located in the United State of America, and lawfully entitled to acquire and operate the same; provided, however, that, upon any such consolidation, merger, sale, conveyance, transfer or other disposition, (a) The corporation formed by such consolidation, or into which the Corporation shall have been merged, or the corporation that acquires the Mortgaged Property, shall execute and deliver to the Trustee, simultaneously with such merger, consolidation or transfer, an indenture supplemental hereto in form recordable and satisfactory to the Trustee, containing; (1) an assumption by such successor corporation of the due and punctual payment of the principal of (and premium, if any) and interest on all the Bonds and the performance and observance of every covenant and condition of this Indenture to be performed or observed by the Corporation, and (2) a grant, conveyance, transfer and mortgage of the character described in Subsection (a) or (b) of Section 13.02. (b) Immediately after giving effect to such transaction, (i) no Default or Event of Default shall have occurred and be continuing, (ii) the corporation formed by such consolidation, or into which the Corporation shall have been merged, or the corporation that acquires the Mortgaged Property, shall be engaged in substantially the same business as the Corporation. (c) The Corporation shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this Article Thirteen and that all conditions precedent herein provided for relating to such transaction have been complied with, and, subject to the provisions of Section 9.01 hereof, the Trustee shall be entitled to rely upon such Officer's Certificate and Opinion of Counsel in executing any such supplemental indenture. Section 13.02. Successor Corporation Substituted. Upon any consolidation or merger, or any conveyance or transfer of the Mortgaged Property substantially as an entirety in accordance with Section 13.01, the successor corporation formed by such consolidation or into which the Corporation is merged or to which such conveyance or transfer is made, upon causing to be recorded the supplemental indenture referred to in such Section -62- 13.01, shall succeed to, and be substituted for, and may exercise every right and power of, the Corporation under this Indenture with the same effect as if such successor corporation had been named as the Corporation herein; subject, however, to the following limitations and restrictions: (a) If such supplemental indenture shall contain a grant, conveyance, transfer and mortgage in terms sufficient to include and subject to the lien of this Indenture all property and franchises owned by such successor corporation at the time of such consolidation, merger, conveyance, or transfer of that may be thereafter acquired by such successor corporation (other than Excepted Property), thereupon and thereafter such successor corporation may cause to be executed, either in its own name or in the name of Greeley Gas Company, and delivered to the Trustee for authentication, any Bonds issuable hereunder; and upon the order of such successor corporation, and subject to all the terms of this Indenture, the Trustee shall authenticate and deliver any Bonds that shall have been previously executed and delivered by the Corporation to the Trustee for authentication, and any Bonds that such successor corporation shall thereafter, in accordance with this Indenture, cause to be executed and delivered to the Trustee for such purpose. Such change in phraseology and form (but not in substance) may be made in such Bonds as may be appropriate in view of such consolidation or merger or conveyance or transfer. (b) If such supplemental indenture shall not contain the grant, conveyance, transfer and mortgage described in the preceding Subsection (a), then such successor corporation shall not be entitled to procure the authentication and delivery of Bonds under Article Five, and (notwithstanding the generality of the Granting Clauses in the Indenture contained) this Indenture shall not, by virtue of such consolidation, merger, conveyance or transfer, or by virtue of said supplemental indenture, become a lien upon any of the properties or franchises of such successor corporation owned by it, immediately before such consolidation, merger, conveyance or transfer (unless such successor corporation, in its discretion, shall subject the same to the lien hereof), but this Indenture shall become and be a lien upon only the following properties and franchises acquired by such successor corporation after the date of such consolidation, merger, conveyance or transfer, to wit: (1) all betterments, extensions, improvements, additions, repairs, renewals, replacements, substitutions and alterations to, upon, for and of the property or franchises, or both, subject to the lien hereof, and all property constituting appurtenances of the Mortgaged Property; (2) all property acquired or constructed with the proceeds of any insurance on any part of the Mortgaged Property or with the proceeds of any part of the Mortgaged Property released from the lien of this Indenture or a prior lien or -63- disposed of free from any such lien, or taken by eminent domain, or purchased by a public authority; and (3) all property acquired in pursuance of the covenants herein contained to maintain and preserve and keep the Mortgaged Property in good condition, repair and working order, or in pursuance of any other covenant or agreement herein contained to be performed by the Corporation; and in such event such supplemental indenture shall contain a grant, conveyance, transfer and mortgage subjecting the property described in the preceding Paragraphs (1) through (3), inclusive, of this Subsection to the lien of this Indenture. (c) No such conveyance or transfer of the Mortgaged Property substantially as an entirety shall have the effect of releasing the entity named as the Corporation in the first paragraph of this instrument or any successor corporation that shall theretofore have become such in the manner prescribed in this Article from its liability as obligor and maker on any of the Bonds. ARTICLE FOURTEEN Possession, Use and Release of Mortgaged Property Section 14.01. Possession and Use of Mortgaged Property. Unless an Event of Default shall have occurred and be continuing, the Corporation shall be suffered and permitted to possess, use and enjoy all the Mortgaged Property, to receive and use the rents, issues, income and profits thereof and in ordinary course of business to use and consume its materials and supplies all as if this Indenture had not been made. Section 14.02. Disposition of Mortgaged Property Without Release. At any time and from time to time while in possession of the Mortgaged Property and not in default hereunder, the Corporation may without any release or consent by the Trustee: (a) Sell or otherwise dispose of free from the lien of this Indenture any machinery, equipment, or other property that has become worn out, obsolete, unserviceable, undesirable or unnecessary for use in the conduct of its business upon replacing the same with or substituting for the same new machinery, equipment or other property not necessarily of the same character but being of at least equal value and utility to the property so disposed of, which new property shall without further action become subject to the lien of this Indenture. (b) Abandon any property the use of which is no longer necessary or desirable in the proper conduct of the business of the Corporation and the maintenance of its earnings, provided that any required consent and approval of any -64- governmental authority is first secured and a copy of any required order or certificate for authority so to abandon such property is filed with the Trustee; (c) Surrender or assent to the modification of any franchise, license, or permit which it may hold or under which it may be operating, provided that the Corporation shall still have the right, in the Opinion of Counsel, under the modified or some other franchise, license or permit, or without any franchise, license or permit, to conduct its business in the same or an extended territory during the same or any extended or indefinite period of time; and for the purpose of this subdivision, the right of any municipality to terminate a permit, license or franchise by purchase shall not be deemed to abridge its duration; (d) Surrender, assent to or procure a modification of any contract, franchise, license or permit under which it is operating that in the opinion of the Board of Directors is no longer necessary or desirable in the conduct of the Corporation's business and where the value and utility of the Mortgaged Property will not thereby be substantially impaired; or (e) Grant rights-of-way and easements over or in respect of any Mortgaged Property, provided that such grant will not, in the opinion of the Board of Directors, impair the usefulness of such property in the conduct of the Corporation's business, and will not be prejudicial to the interest of the Bondholders. The Trustee shall, from time to time, execute any written instrument to confirm the propriety of any action taken by the Corporation under this Section 14.02, upon receipt by the Trustee of a Board Resolution requesting the same, together with an Officer's Certificate stating that such action was duly taken in conformity with a designated Paragraph of this Section 14.02 and an Opinion of Counsel stating that such action was duly taken by the Corporation in conformity with such Paragraph and that the execution of such written instrument is appropriate to confirm the propriety of such action under this Section 14.02. Section 14.03. Release of Mortgaged Property. The Corporation shall have the right, at any time and from time to time, to sell, exchange or otherwise dispose of any of the Mortgaged Property constituting less than all or substantially all of the Mortgaged Property (in addition to the property referred to in Section 14.02) subject to the lien of this Indenture, upon compliance with the requirements and conditions of this Section 14.03, and the Trustee shall release the same from the lien of this Indenture upon receipt by the Trustee or Corporation Order, dated as of a date not more than ten days prior to such release requesting such release and describing the property to be so released, together with: -65- (a) A Board Resolution requesting such release and authorizing an application to the Trustee therefor; (b) An Officer's Certificate, dated as of a date not more than ten days prior to such release signed also by an Engineer, or, if such property consists of securities, by an Appraiser, in each case selected by the Board of Directors and satisfactory to the Trustee, stating in substance as follows: (1) that, in the opinion of the signers, such release is in the best interest of the Corporation, the security afforded by this Indenture will not be impaired by such release, and the property to be released is not necessary for the efficient operation of its remaining property that is used or useful in connection with its business; (2) either (i) that the Corporation has sold or exchanged or otherwise disposed of, or has or intends to contract to sell or exchange or otherwise dispose of, the property so to be released for a consideration representing, in the opinion of the signers, its full value to the Corporation, which consideration may consist of any one or more of the following: (a) cash, (b) obligations secured by a purchase money first lien upon the property so to be released, but only in an amount not in excess of two-thirds of the full value to the Corporation of such property, and (c) any other property that, upon acquisition thereof by the Corporation, would be subject to the lien of this Indenture, free of any easements or other encumbrances except such as do not materially impair the use of such property for the purposes for which it was acquired, and subject to no lien other than Permitted Encumbrances, all of such consideration to be briefly described in the certificate, or (ii) that the property so to be released has been or is to be disposed of without consideration (or for consideration less than full value to the Corporation), in which event such certificate shall state an amount representing, in the opinion of the signers, its full value to the Corporation, and the reason for its disposition at less than full value; (3) that, to the best of the knowledge and belief of the signers, no Default or Event of Default has occurred and is continuing; (4) the then fair value to the Corporation, in the opinion of the signers, of the property to be released; and (5) that all conditions precedent herein provided relating to the release of the property in question have been complied with; (c) In case (i) the fair value of the property to be released and of all other property released from the lien of this Indenture since the commencement of the then current calendar year, as shown by certificates required by Subsection (b) of this Section, is 10% or more of the aggregate principal amount of the -66- Bonds Outstanding on the date of the Corporation Order, and (ii) the fair value of the property to be so released, as shown by the certificate filed pursuant to Subsection (b) of this Section, is at least $100,000 and at least 1% of the aggregate principal amount of the Bonds Outstanding, a certificate of an Independent Engineer, or if such property consists of securities, a certificate of an Independent Appraiser, stating: (1) the then fair value, in the opinion of the signer, of the property to be released and (2) that such release, in the opinion of the signer, will not impair the security under this Indenture in contravention of it terms; (d) Any cash or obligations received or to be received as consideration for any property so to be released or, if the property so to be released has been or is to be disposed of without consideration (or for consideration less than full value to the Corporation), cash sufficient to meet any deficiency between the consideration delivered to the Trustee and the amount representing the full value of the property to the Corporation (or, if the property so to be released is subject to a lien prior to the lien of this Indenture, a certificate of the trustee or other holder of such prior lien that it has received such money or obligations and has been irrevocably authorized by the Corporation to pay over to the Trustee any balance of such money or obligation, remaining after the discharge of such prior lien); and, if any property other than cash or obligations is included in the consideration for any property so to be released, such instruments of conveyance, assignment and transfer, if any, as may be necessary, in the Opinion of Counsel hereinafter referred to, to subject to the lien of this Indenture all the right, title and interest of the Corporation in and to such property; (e) An Opinion of Counsel to the effect (i) that any obligations included in the consideration for any property so to be released are valid obligations and are effectively pledged hereunder, (ii) that any purchase money lien securing such obligation is sufficient to afford a valid first lien upon the property to be released, (iii) in case the Trustee is requested to release any franchise, license or permit, that such release will not impair the then existing right of the Corporation to operate any of its remaining property in it business, (iv) either (x) that such instruments of conveyance, assignment and transfer as have been or are then delivered to the Trustee are sufficient to subject to the lien of this Indenture all the right, title and interest of the Corporation in and to any property, other than cash and obligations that may be included in the consideration for the property so to be released, subject to no lien other than Permitted Encumbrances or (y) that no instruments of conveyance, assignment or transfer are necessary for such purpose, (v) that the Corporation has corporate power to own all property included in the consideration for such release, and (vi) in case any part of the money or obligations referred to in Paragraph (d) of this -67- Section 14.03 has been deposited with the trustee or other holder of a prior lien, that such trustee or other holder (specifying the trustee or other holder and the lien) is entitled to receive the same; and (f) Either (i) a certificate constituting evidence of the authorization, approval or consent of any governmental body or bodies at the time having jurisdiction in the premises to the sale, exchange or other disposition of the property so to be released, the consideration to be received therefor (if any) and the acquisition of any property constituting any part of such consideration, together with an Opinion of Counsel that the same constitutes sufficient evidence thereof and that the authorization, approval or consent of no other governmental body is required, or (ii) an Opinion of Counsel that no authorization, approval or consent of any governmental body is required. Notwithstanding the foregoing provisions of this Section 14.03, the Corporation shall have the right, at any time and from time to time, so long as this Indenture is not qualified under the Trust Indenture Act to sell, exchange or otherwise dispose or any of its property (in addition to the property referred to in Section 14.02) at any time subject to the lien hereof, of an aggregate value not exceeding $100,000 in any one calendar year, and the Trustee shall release the same from the lien hereof upon receipt by the Trustee of: (aa) A Board Resolution requesting such release and authorizing an application to the Trustee therefor; (bb) The proceeds received from the sale of such property as provided in Paragraph (d) of this Section 14.03; and (cc) An Officer's Certificate meeting the requirements of Subsection (b) of this Section; provided such certificate need not be signed by an Engineer. Section 14.04. Eminent Domain and Other Governmental Takings. Should less than substantially all the Mortgaged Property be taken by eminent domain or be sold pursuant to the exercise by the United States of America or any state, municipality or other governmental authority of any right which it may then have to purchase, or to designate a purchaser or to order a sale of, all or any part of the Mortgaged Property, the Corporation, forthwith upon receipt, shall deposit the award for any property so taken or the proceeds of any such sale with the Trustee, or, to the extent required in the Opinion of Counsel by the terms of a prior lien or Permitted Encumbrance on all or any part of any property so taken or purchased, with the trustee, mortgagee or other holder of such prior lien or Permitted Encumbrance. In the event of any such taking or sale, the Trustee shall release the property so taken or purchased, but only upon receipt by the Trustee of the following: -68- (a) A Board Resolution requesting such release and describing the property so to be released; (b) An Officer's Certificate dated as of a date not more than ten days prior to such release stating that such property has been taken by eminent domain and the amount of the award therefor, or that said property has been sold pursuant to a right vested in the United States of America, or a state, municipality or other governmental authority to purchase, or to designate a purchaser, or order a sale of such property and the amount of the proceeds of such sale, and that all conditions precedent herein provided for relating to such release have been complied with; (c) The award for such property or the proceeds of such sale; provided, however, that, in lieu of all or any part of such award or proceeds, the Corporation shall have the right to deliver to the Trustee a certificate of the trustee, mortgagee or other holder of a prior lien or a Permitted Encumbrance on all or any part of the property to be released, stating that such award or proceeds, or a specified part thereof, has been deposited with such trustee, mortgagee or other holder pursuant to the requirements of such prior lien or Permitted Encumbrance, in which case the balance of the award, if any, shall be delivered to the Trustee; and (d) An Opinion of Counsel stating (1) that such property has been taken by eminent domain, or has been sold pursuant to the exercise of a right vested in the United States of America or a state, municipality or other governmental authority to purchase, or to designate a purchaser or order a sale of, such property; (2) in the case of any such taking by eminent domain; that the award for the property so taken has become final or that an appeal from such award is not advisable in the interests of the Corporation or the holders of the Bonds; (3) in the case of any such sale, that the amount of the proceeds of the property so sold is not less than the amount to which the Corporation is legally entitled under the terms of such right to purchase or designate a purchaser, or under the order or orders directing such sale, as the case may be; (4) in case, pursuant to Subsection (c) of this Section, the award for such property or the proceeds of such sale, or a specified portion thereof, shall be certified to have been deposited with the trustee, mortgagee or other holder of a prior lien or a Permitted Encumbrance, that the property to be released, or a specified portion thereof, is or immediately before such taking or purchase was subject to such prior lien or Permitted Encumbrance, and that such deposit is required by such prior lien or Permitted Encumbrance; and -69- (5) that the instruments or the instruments and the award or proceeds of such sale which have been or are therewith delivered to and deposited with the Trustee conform to the requirements of this Indenture and that, upon the basis of such application, the Trustee is permitted by the terms of this Indenture to execute and deliver the release requested, and that all conditions precedent herein provided for relating to such release have been complied with. In any proceedings or the taking or purchase or sale of any part of the Mortgaged Property, by eminent domain or by virtue of any such right to purchase or designate a purchaser or to order a sale, the Trustee may be represented by counsel who may be counsel for the Corporation. Section 14.05. Purchaser Protected. In no event shall any purchaser or purchasers in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article Fourteen to be sold be under obligation to ascertain or inquire into the authority of the Corporation to make any such sale or other transfer. Section 14.06. Powers Exercisable Notwithstanding Event of Default. Subject to the provisions of Subsection (b) of Section 9.01, the Trustee may in its discretion (but shall not be bound to) execute any release or consent under the provisions of this Article Fourteen notwithstanding that at the time any Default or Event of Default shall have happened and be continuing. The Officer's Certificate for such release or consent shall, instead of stating that no Default or Event of Default exists, specify each Default or Event of Default which shall, to the knowledge of the signers, have happened and be continuing. Section 14.07. Powers Exercisable by Receiver or Trustee. In case the Mortgaged Property shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article Fourteen upon the Corporation with respect to the release, sale or other disposition of property subject to the lien hereof may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Corporation or of any officer or officers thereof required by the provision of this Article Fourteen; and if the Trustee shall be in the possession of the Mortgaged Property under any provision of this Indenture, then such powers may be exercised by the Trustee. ARTICLE FIFTEEN -70- Redemption of Bonds Section 15.01. Redemption Price and Manner of Redemption. The redemption price and the terms, place and manner of redemption of the Bonds shall be as stated in the respective Bonds and shall also be governed by this Article Fifteen, except as may otherwise be provided for the redemption of Bonds in Section 2.04 hereof, with respect to Bonds of Series F and G, and in any supplemental indenture creating any other series of Bonds, with respect to such other series, and in any agreement filed with the Trustee in accordance with the provisions of Section 6.01. Section 15.02. Selection of Bonds to Be Redeemed. If less than all of the Bonds are to be redeemed, the Corporation shall select the particular series of Bonds which are to be redeemed, either in whole or in part, and the principal amount of Bonds which are to be redeemed, by written notice mailed to the Trustee at least twenty days in advance of the date fixed for the mailing of the notice of the redemption. If less than all of the Bonds of any series Outstanding hereunder are to be redeemed, the particular Bonds to be redeemed shall (except as may be otherwise provided in a supplemental indenture creating any series of Bonds) be selected not more than sixty days prior to the redemption date by the Trustee from the Outstanding Bonds of such series not previously called for redemption by prorating, as nearly as may be, the principal amount of Bonds of such series to be redeemed among the registered holder of Bonds of the series according to the respective aggregate principal amounts of Bonds of such series held by such holders; provided, however, that, if a written consent of all the registered holders of Bonds of the series is filed with the Trustee specifying some other method of selecting the Bonds of such series to be redeemed, such selection shall be made by the Trustee in accordance therewith; and provided further that, if any series of Bonds shall have been sold by the Corporation pursuant to a public offering registered under the Securities Act of 1933, as amended, or any similar statute enacted in substitution or replacement thereof, the Trustee shall select by lot or in any other manner that it deems equitable the Bonds of such series then to be redeemed. In any proration pursuant to this Section, the Trustee may make such adjustments as it shall deem proper and practicable to the end that the principal amount of Bonds so redeemed shall be $1,000 or a multiple thereof, by increasing or decreasing the amount which would be allocable to any Bondholder on the basis of exact proration by an amount not exceeding $1,000. The Trustee may in its discretion determine the Bonds, if there are more than one, registered in the name of any Bondholder that are to be redeemed, in whole or in part. Section 15.03. Notice of Redemption. In case the Corporation shall desire to exercise such right to redeem all, or, as the case may be, any part of the Bonds in accordance with -71- the right reserved so to do, it shall give written notice of such redemption to holders of the Bonds to be redeemed in whole or in part as hereinafter in this Section 15.03 provided. Written notice of such redemption shall also be given the Trustee and shall be accompanied by an Officer's Certificate and, in the case of redemption other than through an mandatory sinking fund, a Board Resolution calling for redemption of the Bonds referred to in such notice. Notice of redemption to holders of Bonds to be redeemed in whole or in part shall be given by sending, by certified mail, a notice of such redemption not less than thirty days and not more than sixty days before the date fixed for redemption to such holders at their last addresses as they shall appear upon the registration books. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give notice or any defect in the notice to the holder of any Bonds designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Bonds. Each such notice of redemption shall specify the date fixed for redemption, the redemption price at which Bonds are to be redeemed, and shall state that payment of the redemption price of the Bonds to be redeemed will be made at the corporate trust office of the Trustee upon presentation and surrender of such Bonds, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that interest thereon will cease to accrue at the close of business on the date fixed for redemption. If less than all the Bonds of a series are to be redeemed, the notice which relates to each Bond shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Bond, a new Bond in principal amount equal to the unredeemed portion thereof will be issued or, at the option of the holder, such Bond may be presented for notation thereon of the payment, as of the redemption date, of the redeemed portion of the principal thereof. Section 15.04. Payment of Redemption Price. If the giving of notice of redemption shall have been completed as above provided, the Bonds or portions of Bonds specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption. In such case and if moneys in the necessary amount to pay such Bonds or portions of Bonds at the redemption price, together with interest thereon to the date fixed for redemption, shall prior to the date fixed for redemption have been deposited in trust with the Trustee or with any Paying Agent (other than the Corporation) or have been set aside and segregated in trust by the Corporation (if the Corporation shall act as its own Paying Agent), interest on such Bonds or portions of Bonds shall cease to accrue on and after the date fixed or redemption. Interest on Bonds or -72- portions of Bonds called for redemption as aforesaid shall cease to accrue on and after the date fixed for redemption, in any event, irrespective of whether or not any such deposit in trust or setting aside and segregation in trust shall have been made, except with respect to any Bond or portion thereof so called for redemption on which the Corporation shall default in the payment of the redemption price, together with interest accrued thereon to the date fixed for redemption. On presentation and surrender of such Bonds on or after the date fixed for redemption at the place of payment specified in the notice, such Bonds shall be paid and redeemed at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption. Upon presentation of any Bond which is redeemed in part only, the Corporation shall execute and the Trustee shall authenticate and deliver to the holder thereof, at the expense of the Corporation, a new Bond or Bonds in principal amount equal to the unredeemed portion of the Bond so presented or, at the option of the holder, the same may be presented for notation thereon of the payment, as of the date fixed for redemption, of the redeemed portion of the principal thereof. Section 15.05. Notation on Bond for Partial Redemption. Notwithstanding the provisions of Section 15.03 and 15.04, in the event of the payment of a portion of any Bond, the Trustee, in lieu of requiring the presentation of such Bond to be partially paid and redeemed and noting such payment thereon, may in its letter transmitting such payment to any such Bondholder instruct such holder to endorse such payment on such Bond, provided that the Corporation or the Trustee shall have first obtained a written undertaking from such Bondholder that such holder will not sell, transfer or otherwise dispose of any Bond so partially paid without first presenting such Bond to the Trustee in exchange for a new Bond or Bonds of aggregate principal amount equal to the unpaid portion thereof. Section 15.06. Cancellation of Bonds. All Bonds redeemed and paid under this Article Fifteen shall, except as provided in Section 15.05, be cancelled by the Trustee and a certificate as to such cancellation shall be delivered by the Trustee to the Corporation. ARTICLE SIXTEEN Satisfaction and Discharge of Indenture; Unclaimed Moneys Section 16.01. Satisfaction and Discharge of Indenture. If at any time: (a) either: (i) there shall have been cancelled by the Trustee or delivered to the Trustee for cancellation all Bonds theretofore authenticated and delivered (other than any Bonds are -73- that are asserted to have been destroyed, lost or stolen and that shall have been replaced as provided in Section 4.12, or paid, or Bonds for whose payment money has theretofore been deposited in trust with the Trustee or segregated and held in trust by the Corporation, and thereafter repaid to the Corporation or discharged from such trust as provided by Section 16.04), or (ii) all such Bonds not theretofore cancelled by the Trustee or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year, or have been or are to be called for redemption within on year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Corporation has deposited or caused to be deposited with the Trustee as trust funds the entire amount sufficient to pay at maturity or upon redemption all such Bonds not theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; and (b) the Corporation has paid or caused to be paid all other sums payable hereunder by the Corporation; and (c) the Corporation has delivered to the Trustee an Officer's Certificate stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with; and (d) the Corporation has delivered an Opinion of Counsel stating that the documents and other items that have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, and that, upon the basis of the Corporation Request and the accompanying documents and items specified in this Section, all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with, then, upon Corporation Request authorized by Board Resolution, this Indenture and the lien, rights and interests hereby created shall cease to be of further effect, and the Trustee, at the cost and expense of the Corporation, shall execute and deliver proper instruments acknowledging satisfaction of and discharging this Indenture. Such instruments shall be in form satisfactory for recording as a release of mortgage with the appropriate recording office. Forthwith upon such execution and delivery the estate, right, title and interest of the Trustee in and to all securities, cash (except cash deposited pursuant to this Section) and other personal property held by it as part of the Mortgaged Property shall cease to be of further effect and the Trustee shall transfer, deliver and pay the same to the Corporation. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Corporation to the Trustee under Section 9.06 shall survive. -74- Section 16.02. Funds Deposited for Payment of Bonds. All moneys deposited with the Trustee pursuant to Section 16.01 shall be held in trust and shall be available for immediate payment, either directly or through any Paying Agent (including the Corporation acting as its own Paying Agent), to the holders of the particular Bonds for the payment or redemption of which such moneys have been deposited with the Trustee. Section 16.03. Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under the provisions of this Indenture shall, upon demand of the Corporation, be paid to the Trustee and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. Section 16.04. Moneys Held by Trustee. Any moneys deposited with any Paying Agent or the Trustee or then held by the Corporation in trust for the payment of the principal of (and premium, if any) or interest on any Bond that are not applied but remain unclaimed by the holder of such Bond for six years after the date upon which the principal of (and premium, if any) or interest on such Bond shall have respectively become due and payable shall be repaid to the Corporation on Corporation Request, or (if then held by the Corporation) shall be discharged from such trust; and thereupon such Paying Agent and Trustee shall be released from all further liability with respect to such moneys, and the holder of such Bond entitled to receive such payment shall thereafter look only to the Corporation for the payment thereof; nevertheless, any such Paying Agent or the Trustee, before being required to make any such repayment, may at the expense of the Corporation either mail to each Bondholder affected, at the address shown in the Bond Register, or cause to be published once a week for two successive weeks (in each case on any regular business day) in an Authorized Newspaper a notice that such moneys have not been so applied and that after a date named therein any unclaimed balance of said moneys then remaining will be returned to the Corporation. ARTICLE SEVENTEEN Application, Investment and Withdrawal of Trust Moneys Section 17.01. Trust Moneys Defined. All moneys received by the Trustee (a) upon the release of property from the lien of this Indenture, including the principal of all purchase money obligations, or (b) as compensation for, or proceeds of sale of, any part of the Mortgaged Property taken by eminent domain or -75- purchased by, or sold pursuant to an order of, a governmental authority or otherwise disposed of, or (c) as proceeds of insurance upon any part of the Mortgaged Property, or (d) elsewhere in this Indenture provided to be held and applied under this Article, or required to be paid to the Trustee and whose disposition is not elsewhere herein otherwise specifically provided for, (all such moneys being herein sometimes called Trust Moneys), shall be held by the Trustee as a part of the Mortgaged Property and upon any sale of the Mortgaged Property, or any part thereof, under Article Seven, said Trust Moneys shall be applied in accordance with Section 8.05; but, before any such sale, all or any part of the Trust Moneys may be withdrawn, and shall be paid or applied by the Trustee, from time to time provided in Section 17.02 through 17.06, inclusive and Section 17.09. Section 17.02. Withdrawal on Basis of Bondable Property. Subject to the provisions of Sections 17.04 and 17.08, Trust Moneys may be withdrawn by the Corporation and shall be paid by the Trustee upon Corporation Order, in an amount equal to the amount of Net Bondable Property Additions stated in the Net Bondable Property Additions Certificate required by Subsection (c) of this Section at any time and from time to time, upon receipt by the Trustee of a Corporation Order, dated as of a date not more than ten days prior to such withdrawal, together with the following: a) A Board Resolution requesting the withdrawal and payment of a specified amount of Trust Moneys and designating the source thereof. (b) An Officer's Certificate dated not more than ten days before the date of the application for the withdrawal and payment of such Trust Moneys, stating (1) that no Default or Event of Default exists hereunder; (2) that no part of such Trust Moneys has been, or is required to be, set aside under Section 17.08; and (3) that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with. (c) A Net Bondable Property Additions Certificate in the form prescribed by Subsection (d) of Section 5.01 (with such variations and omissions as are appropriate for the withdrawal of Trust Moneys rather than the authentication and delivery of Additional Bonds). -76- (d) An Opinion of Counsel, dated the date of withdrawal and payment of such Trust Moneys, covering the matters set forth in Subsection (e) of Section 5.01 (with such variations and omissions as are appropriate for the withdrawal of Trust Moneys rather than the authentication and delivery of Additional Bonds). Wherever in this Indenture provision is made for the deposit of moneys with the Trustee that are Trust Moneys as provided in Section 17.01, such moneys need not actually be deposited if and to the extent that the Corporation shall at the time furnish to the Trustee evidence of its right to obtain the withdrawal of such Trust Moneys pursuant to this Section. In such event, however, such Trust Moneys shall, for the purposes of any references in this Indenture to moneys deposited with or received by the Trustee or withdrawn, be deemed to have been actually deposited with the Trustee and released and paid by it pursuant to this Section. Section 17.03. Payment of Outstanding Bonds. Trust Moneys may be applied by the Trustee at any time and from time to time to the payment of the principal of Outstanding Bonds hereby secured, either at their stated maturity or upon redemption, as the Corporation shall determine and request in accordance with Article Fifteen of this Indenture. If any Trust Moneys aggregating in excess of $25,000 shall have been on deposit with the Trustee for a period of one year and shall not have been withdrawn by the Corporation pursuant to Section 17.02 hereof, the Corporation shall direct the Trustee to apply all such Trust Moneys pro rata to the redemption of Outstanding Bonds then subject to redemption and, upon the failure of the Corporation to give such direction, the Trustee shall apply such Trustee Moneys pro rata to the redemption of Outstanding Bonds then subject to redemption and selected by it following the procedure established by Article Fifteen of this Indenture at the then applicable redemption price for all such Bonds redeemed pursuant to this Section, or if no such price shall be specified then at the highest voluntary redemption price then applicable to such Bonds. Section 17.04. Withdrawal of Insurance Proceeds. To the extent that any Trust Moneys are proceeds of insurance upon any part of the Mortgaged Property, they may be withdrawn by the Corporation and shall be paid by the Trustee upon Corporation Order dated not more than ten days prior to such proposed withdrawal, to reimburse the Corporation for expenditures made to repair, restore or replace the property destroyed or damaged, upon the receipt by the Trustee of the following: (a) An Officer's Certificate, dated not more than ten days before the date of application for the withdrawal and payment of such Trust Moneys, stating as follows: (1) That expenditures have been made in a specified amount for the purpose of making certain repairs, restorations and replacement of the Mortgaged Property, which shall be briefly -77- described, and stating the fair value thereof to the Corporation at the date of the acquisition thereof by the Corporation; except that it shall not be necessary under this Paragraph to state the fair value of any of such repairs, restorations or replacements that are separately described pursuant to Paragraph (4) of this Subsection and whose fair value is stated in the Independent Engineer's Certificate under the following Subsection (b) of this Section. (2) That no part of such expenditures, in any previous or then pending application, has been or is being made the basis for the withdrawal of any Trust Moneys pursuant to this Section. (3) That there is no outstanding indebtedness known, after due inquiry, to the Corporation, for the purchase price or construction of such repairs, restorations or replacements, or for labor, wages, materials or supplies in connection with the making thereof, that, if unpaid, might become the basis of mechanics', laborers', materialmen's, statutory or other similar lien, upon such repairs, restorations or replacements, or any part thereof, that might, in the opinion of the signers of such Certificate, materially impair the security afforded by said repairs, restorations or replacements. (4) Whether any part of such repairs, restorations or replacement has, within six months before the date of acquisition thereof by the Corporation, been used or operated by others than the Corporation, in a business similar to that in which such property has been or is to be used or operated by the Corporation, and whether the fair value to the Corporation, at the date of such acquisition, of such part of such repairs, restorations or replacements is at least $100,000 and at least 1% of the aggregate principal amount of Bonds at the time Outstanding; and, if all of such facts are present, such part of said repairs, restorations or replacements shall be separately described, and it shall be stated that an Independent Engineer's Certificate as to the fair value to the Corporation of such separately described repairs, restorations or replacements will be furnished under the following Subsection (b) of this Section. (5) That no Default or Event of Default exists hereunder. (6) That no part of such Trust Moneys has been, or is required to be, set aside under Section 17.08. (7) That all conditions precedent herein provided for relating to such withdrawal and payment have been compiled with. (b) In case any part of such repairs, restorations or replacements is separately described pursuant to the foregoing Paragraph (4) of Subsection (a) of this Section, an Independent Engineer's Certificate stating the fair value to the Corporation, -78- in such Engineer's opinion of such separately described repairs, restorations or replacements at the date of the acquisition thereof by the Corporation. (c) An Opinion of Counsel dated not more than ten days prior to such proposed withdrawal stating: (1) that the instruments that have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, and that, upon the basis of such Corporation Order and the accompanying documents specified in this Section, all conditions precedent herein provided or relating to such withdrawal and payment have been complied with, and the Trust Moneys whose withdrawal is then requested may be lawfully paid over under this Section; (2) that the Corporation has acquired title to said repairs, restorations and replacements, and that the same and every part thereof are free and clear of all mortgages, liens, charges or encumbrances prior to the lien of this Indenture, except (i) Permitted Encumbrances, (ii) easements and other similar encumbrances that, in the opinion of such counsel, do not materially impair the use of such repairs, restorations or replacements in the operation of the business of the Corporation, and (iii) any other prior liens, charges or encumbrances to which the property so destroyed or damaged shall have been subject at the time of such destruction or damage; and (3) that all of the Corporation's right, title and interest in and to said repairs, restorations or replacements, or combination thereof, are then subject to the lien of this Indenture. Upon compliance with the foregoing provisions of this Section the Trustee shall pay on Corporation Order an amount of Trust Moneys of the character aforesaid equal to the amount of the expenditures stated in the Officer's Certificate required by Paragraph (1) of Subsection (a) of this Section, or the fair value to the Corporation of such repairs, restorations and replacements stated in such Officer's Certificate (and in such Independent Engineer's Certificate, if required by Subsection (b) of this Section) whichever is less. Section 17.05. Powers Exercisable Notwithstanding Event of Default. In case Default or Event of Default shall have occurred and shall not have been cured, the Corporation, while in possession of the Mortgaged Property (other than cash, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder or with the trustee, mortgagee or other holder of a prior lien or Permitted Encumbrance) may do any of the things enumerated in Section 17.02 to 17.04, inclusive, if the Trustee in its discretion, or the holders of a majority in principal amount of the Bonds then Outstanding, by appropriate action of such Bondholders, shall consent to such action, in which event any Certificate filed -79- under any of such Sections shall omit the statement to the effect that no Default or Event of Default has occurred. This Section shall not apply, however, during the continuance of an Event of Default of the type specified in Subsections (a), (b) or (c) of Section 8.01. Section 17.06. Powers Exercisable by Trustee or Receiver. In case the Mortgaged Property (other than cash, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder or with the trustee, mortgagee or other holder of a prior lien or Permitted Encumbrance) shall be in the possession of a receiver or trustee lawfully appointed, the powers hereinbefore in this Article conferred upon the Corporation with respect to the withdrawal or application of Trust Moneys may be exercised by such receiver or trustee (subject to Section 17.05), in which case a written request or order signed by such receiver or trustee shall be deemed the equivalent of any Board Resolution or Corporation Request or Order required by this Article, and a certificate signed by such receiver or trustee shall be deemed the equivalent of any Officer's Certificate required by this Indenture. If the Trustee shall be in possession of the Mortgaged Property under Section 8.03, such powers may be exercised by the Trustee in its discretion. Section 17.07. Disposition of Bonds Retired. All Bonds received by the trustee and on the basis of which Trust Moneys are paid over or for whose payment or redemption Trust Moneys are applied under this Article shall be cancelled by the Trustee as provided in Article Fifteen this Indenture. Section 17.08. Condemnation of All Mortgaged Property. In the event that all or substantially all of the Mortgaged Property (other than any cash, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder or with the trustee, mortgagee or other holder of a prior lien or Permitted Encumbrance) shall be taken by eminent domain, the Corporation shall be deemed to have elected, and shall be entitled, by virtue of this Section, to redeem all the Bonds hereby secured of all series on a date determined by the Trustee in its discretion to be the earliest practical redemption date after receipt by the Trustee of all cash that the Trustee is entitled to receive on account of such taking. The redemption price of Bonds redeemed under this Section shall be the principal amount thereof plus the unmatured interest accrued thereon to the date fixed for redemption, without premium. Notice of such redemption shall be given by the Corporation or by the Trustee in the name of the Corporation. If the cash so received by the Trustee, together with all other cash then held by the Trustee as a part of the Mortgaged Property, is not sufficient to pay the redemption price of all the Bonds hereby secured and to pay all amount payable to the Trustee under this Indenture (including fees and expenses incurred and to be incurred by the Trustee in connection with such redemption), the Corporation will, within ten days after receipt by the Trustee of -80- all cash that the Trustee is entitled to receive as aforesaid on account of such taking, deposit with the Trustee for such purpose cash in an amount sufficient to make up such deficiency. To the extent that any or all such cash shall be required for the purpose of redeeming Bonds under this Section, the Trustee shall apply the same for such purpose, and the balance, if any, after payment of all amount payable to the Trustee, shall be paid upon Corporation Order. If the Corporation fails to deposit with the Trustee the cash necessary to make good such deficiency, the money received by the Trustee from such taking and all other cash then held by the Trustee as a part of the Mortgaged Property shall be set aside and thereafter no part of the cash so set aside may be withdrawn or paid over under Section 17.02 to 17.06, inclusive, but shall be applicable only to the purposes specified in, and in accordance with, Section 8.05, as if all Outstanding Bonds were then due and payable. Section 17.09. Investment of Trust Moneys. All or any part of any Trust Moneys held by the Trustee hereunder (except such as may be held for account of any particular Bonds) shall from time to time at the written request of the Corporation, signed by the Treasurer or an Assistant Treasurer of the Corporation, be invested or reinvested by the Trustee in any Bonds or other obligations of the United States of America designated by the Corporation, which as to principal and interest constitute direct obligations of the United States of America and will mature or become payable at the election of the holder within one year after acquisition by the Trustee. Until one or more of the Events of Default specified in Section 8.01 shall happen and be continuing, any interest or increment on such investments (in excess of any accrued interest paid at the time of purchase) which may be received by the Trustee shall be forthwith paid to the Corporation. Such investments shall be held by the Trustee as a part of the trust estate, subject to the same provisions hereof as the cash used by it to purchase such investments; but upon a like request of the Corporation, the Trustee shall sell all or any designated part of the same and the proceeds of such sale shall be held by the Trustee subject to the same provisions hereof as the cash used by it to purchase the investments so sold. If under the provisions of this Indenture any Trust Moneys held by the Trustee and so invested or reinvested shall be required to be applied to the redemption of Bonds, the Trustee shall forthwith sell such investments in an amount equivalent to the Trust Moneys so to be applied. In case the net proceeds (exclusive of interest) realized upon any such sale shall amount to less than the amount invested by the Trustee in the purchase of the investments so sold (after appropriate adjustment on account of any accrued interest paid at the time of purchase), the Trustee shall within five days after such sale notify the Corporation in writing thereof and within five days thereafter the Corporation shall pay to the Trustee the amount of the difference between such purchase price and the amount so realized, and the amount so paid shall be held by the Trustee in -81- like manner and subject to the same conditions as the proceeds realized upon such sale. Whenever application is made by the Corporation under any provision of this Indenture to withdraw all or any part of the Trust Moneys deposited or held by the Trustee, the Corporation shall accept investments held by the Trustee as a part of the Mortgaged Property pursuant to this Section 17.09 to the extent that such investments shall be tendered to it by the Trustee in lieu of such cash; and such investments shall be accepted in lieu of such cash at the net cost thereof (exclusive of accrued interest) to the trust estate. The Trustee shall not be liable or responsible for any loss resulting from any investment or reinvestment pursuant to this Section 17.09. ARTICLE EIGHTEEN Immunity of Incorporators, Stockholders, Officers, and Directors No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Bond or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past present, or future, of the Corporation or of any predecessor or successor corporation, either directly or through the Corporation or any such predecessor or successor corporation, 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 that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers, or directors of the Corporation or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any other Bonds or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Bonds or implied therefrom, is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Bonds. Notwithstanding any language of this Article Eighteen, or of any other provision of this Indenture or of the Bonds to the contrary, no such waiver, release, or exemption from individual liability of any incorporator, stockholder, officer or director, past present or future, of the -82- corporation, or of any predecessor or successor corporation, shall apply with respect to any claim based on fraud, misrepresentation or gross negligence. ARTICLE NINETEEN Definition Section 19.01. General. For all purposes of this Indenture (except as in this Indenture otherwise expressly provided or unless the context otherwise requires) the terms defined in this Article Nineteen shall have the respective meanings specified in this Section 19.01 and in Section 19.02. All references in this instrument to designated Articles, Sections or other subdivisions are to the designated Articles, Section and other subdivisions of this instrument as originally executed. The words herein, hereof and hereunder and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, either directly or by reference therein to the Securities Act of 1933, as amended, shall have the meanings assigned to such terms therein. Section 19.02. Specific Definitions. (a) Accounting Requirements means generally accepted accounting principles consistently applied or such other system of accounts prescribed by the Colorado Public Utilities Commission or the Corporation Commission of the State of Kansas (to the extent each such Commission has jurisdiction over the Corporation) at the time in effect or any substitute system of account prescribed by any successor commission or commissions empowered to regulate the rates and charges of the Corporation for the transmission and distribution of natural gas. (b) Affiliate means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock or otherwise. (c) Appraiser means a Person engaged in the business of appraising real or personal property whether or not employed by or in an way affiliated with the Corporation. (d) Authorized Newspaper means The Wall Street Journal (all United States editions) or if the Wall Street -83- Journal ceases publication, any newspaper printed in the English language, nationally known in the United States, and customarily published on each business day of the year, whether or not such newspaper is published on Saturdays, Sundays and legal holidays. (e) Board of Directors means the Board of Directors of the Corporation. (f) Board Resolution means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Corporation to have been duly adopted by the Board of Directors and to be in full force and effect, and delivered to the trustee. (g) Bond or Bonds means any Bond or Bonds that may be issued and delivered under this Indenture and supplements hereto. (h) Bondholder or holder of Bonds, or other similar term, when used with respect to any Bond, means the person in whose name such Bond is registered in the Bond Register. (i) Bond Register and Bond Registrar shall have the respective meanings stated in Section 4.09. The term Bond Registrar shall include any co-registrar of the Bonds named pursuant to such Section and the term Bond Register shall include any duplicate kept by such co-registrar as required by such Section. (j) Commission means the Securities and Exchange Commission, as from time to time constituted, or if at any time hereafter such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act of 1939, then the body performing such duties on such date. (k) Corporation means Greeley Gas Company, a Colorado corporation, and, subject to the provisions of Article Thirteen shall also include its successors and assigns. (l) Corporation Order and Corporation Request mean, respectively, any written order or request signed in the name of the Corporation by its President or a Vice President and by its Secretary or an Assistant Secretary or its Treasurer or an Assistant Treasurer or its Controller or an Assistant Controller. (m) Default means any event or condition, the occurrence of which would, with the lapse of time or the giving of notice, or both, constitute an Event of Default as defined in Section 8.01. (n) Engineer means any Person engaged in the engineering profession whether or not employed by, or in any way affiliated with, the Corporation. (o) Event of Default has the meaning stated in Section 8.01. -84- (p) Funded Property shall mean (i) all property owned by the Corporation on June 30, 1983 and (ii) all Property Additions which shall have been made the basis for the authentication and delivery of Bonds or the withdrawal of cash or the release of property or cash or the acquisition of property pursuant to Section 6.06(b)(3) hereof. (q) Income Available for Charges for any period shall mean the Net Income for such period plus, to the extent deducted in computing Net Income, an amount equal to the aggregate or such period of (1) Interest Charges, and (2) taxes on income or measured by income. If the net non-operating revenues included in the foregoing calculation of Net Income for the purpose of this definition of Income Available for Interest Charges shall exceed 10% of the Net Income as so calculated, then there shall be deducted from such Net Income a sufficient part of such non-operating revenues so that the remaining non-operating revenues included in the result figure shall not exceed 10% of such resultant figure, and such resultant figure shall be deemed to be the Income Available for Interest Charges of the Corporation. (r) Indenture shall mean the Original Indenture and all supplemental indentures. (s) Independent when used with respect to any specified Person means such a Person, who, or firm or corporation that, (1) is in fact independent, (2) does not have any direct financial interest or any material indirect financial interest in the Corporation or in any other obligor upon the Bonds or in any Affiliate or the Corporation or of such other obligor, and (3) is not connected with the Corporation or such other obligor or any Affiliate of the Corporation or of such other obligor, as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that the opinion or certificate of any Independent Person shall be furnished to the Trustee, such Person shall be appointed by a Corporation Order and approved by the Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof. (t) Mortgaged Property means all property and rights subject to the lien of the Indenture. (u) Net Bondable Property Additions shall mean the amount obtained by deducting from Property Additions an amount equal to the sum of Funded Property plus Net Retirements computed as set forth in the Net Bondable Property Additions Certificate provided for in Section 5.01. (v) Net Income shall mean net income of the Corporation after all taxes based on income, determined in accordance with generally accepted accounting principles. In making computation, however, there shall be excluded (i) any gain -85- or loss or other addition or deduction arising by reason of the issue, purchase, sale, conversion or retirement by the Corporation of any its securities, or arising by reason of any purchase, sale write-up, write-down, increase or decrease in book value or other transaction or change in respect of capital assets, tangible or intangible (and the deduction for income taxes shall be adjusted by giving effect to any change in the amount thereof resulting from the elimination of any of the capital transactions or changes referred to above), (ii) proceeds derived from life insurance and (iii) losses sustained from, and proceeds derived from insurance in connection with, the damage to or destruction of real estate. (w) Officer's Certificate shall mean a certificate signed by the President or a Vice President and by the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of the Corporation. (x) Opinion of Counsel shall mean an opinion in writing signed by legal counsel, who must be satisfactory to the Trustee, and who may be of counsel for the Corporation. (y) Outstanding when used with respect to Bonds means, as of the date of determination, all Bonds theretofore authenticated and delivered under this Indenture, except: (1) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation and those portions of the principal of Bonds that have been paid; (2) Bonds for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the holders of such Bonds; provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (3) Bonds alleged to have been destroyed, lost or stolen that have been replaced as provided in Section 4.12; provided, however, that in determining whether the holders of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Bonds owned by the Corporation or any other obligor upon the Bonds or any Affiliate of the Corporation or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that the Trustee knows to be owned shall be disregarded. Bonds so owned that have been pledged in good faith may be regarded as -86- Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Corporation or any other obligor upon the Bonds or any affiliate of the Corporation or such other obligor. (z) Paying Agent means any Person authorized by Board Resolution to pay the principal of (and premium, if any) or interest on any Bonds on behalf of the Corporation. (aa) Permitted Encumbrance means any of the following: (1) The lien of the Indenture. (2) Liens for taxes and assessments for the then current year and taxes and assessments not due or payable. (3) Defects in the title to lands traversed by easements or rights-of-way, or liens on such lands securing indebtedness issued by others than the Corporation, not assumed by the Corporation and on which the Corporation does not customarily pay interest, provided, in any of the above cases, that, in the opinion of counsel for the Corporation, the power under eminent domain or similar statutes is available to the Corporation to condemn or acquire easements or rights-of-way sufficient for its purposes over the land traversed by such easements or rights-of-way or over other lands adjacent thereto. (4) Liens of judgments (i) the execution of which has been stayed, or (ii) with respect to which the time for appeal shall not have expired, or (iii) that shall be in the course of appeal, or (iv) the payment of which, in the opinion of counsel, has been adequately secured otherwise than by such liens, or (v) that do not aggregate more than $50,000. (5) Undetermined liens or charges incidental to construction so long as the Corporation has no actual notice that any action has been taken in or before any court to perfect such liens and changes. (6) Rights reserved to or vested in any municipality or public authority by the terms of any franchise, grant, license or permit or by a provision of law to purchase or recapture or to designate a purchaser of any property of the Corporation. -87- (7) Easements or reservations in any property of the Corporation for the purpose of roads, railroads, pipe, sewer, ditches (irrigation or otherwise), telephone, telegraph, electric and power lines and other like purposes that do not impair the use of such property in the operation of the business of the Corporation. (8) Rights reserved to or vested in any municipality or public authority to use or control or regulate any property of the Corporation, including zoning laws and ordinances. (9) If the Corporation shall have acquired any property subject to terms, conditions, agreements, leases, covenants, exceptions, restrictions or reservations (including but not limited to oil, gas, coal or other mineral interests and the leasing or assignment thereof) that do not secure any obligation and that do not materially impair the use of such property in the operation of the business of the Corporation, any such term, condition, agreement, lease, covenant, exception, restriction or reservation. (10) Liens, the validity of which is being contested or disputed in good faith by the Corporation and in respect of which the Corporation has set aside adequate reserves. (11) Any liens in respect of which cash sufficient to pay or redeem all obligations secured thereby shall be held in trust for the purpose by the Trustee. (12) Any landlord's liens, liens for workmen's compensation awards and other statutory liens. (13) Irregularities or deficiencies in the record evidence of title to real property that (i) in the opinion of counsel for the Corporation are inconsequential or (ii) exist with respect to real property of which the Corporation has been in possession for a sufficient period of time to have acquired title thereto by adverse possession under applicable law. In determining, for the purpose of any opinion to be delivered under this Indenture, whether any of the encumbrances referred to in Paragraphs (7) and (9) above impair the use of the property subject thereto in the operation of the business of the Corporation, counsel giving such opinion may relay on an Officer's Certificate. -88- Any cash deposited with the Trustee in accordance with Paragraph (11) above shall be held by the Trustee and applied by it to the discharge of the lien in respect of which it was deposited when and if such lien shall have been finally determined by a court of competent jurisdiction or when so directed by the Corporation prior to such adjudication. Any cash so deposited remaining after the discharge of such lien shall be returned to the Corporation. The Trustee may rely upon an Opinion of Counsel as to any such adjudication and as to the discharge of such lien. Any cash deposited with the Trustee pursuant to this Paragraph (aa) held at the date of discharge of this Indenture shall be repaid to the Corporation upon Corporation Order. (bb) Person shall mean an individual, partnership, corporation, trust or unincorporated organization, and a governmental or agency or political subdivision thereof. (cc) Property Additions shall mean all property properly chargeable to plant account, of the character described in the Granting clauses hereof, excluding property excepted from the lien of the Indenture, constructed or acquired by the Corporation after June 30, 1983, and used or useful in the business of selling, transmitting and distributing natural gas and free from all liens or encumbrances other than Permitted Encumbrances, and the term Property Additions shall include all property of the character hereinabove in this paragraph (cc) described in process of construction to the extent that the Corporation has incurred a liability therefor, and proper charges for overhead in accordance with Accounting Requirements. (dd) Pro Forma Interest Charges shall mean as of the date of any determination thereof Interest Charges on all Bonds to be outstanding, after giving effect to the issuance of any Bonds then proposed to be issued. (ee) Responsible Officer, when used with respect to the Trustee, shall mean any Trust Department Vice President or any officer in the Corporate Trust Department. (ff) Retirements shall mean (1) all Mortgaged Property which shall have been released from the lien of this Indenture, (2) all Mortgaged Property which shall have been worn- out, retired or abandoned or which has otherwise permanently ceased to be used or useful in the gas transmission and distribution business of the Corporation and (3) all Mortgaged Property which has been destroyed. The amount of Retirements shown in any Net Bondable Property Additions Certificate shall be computed as follows: A. As to any part of Mortgaged Property existing on June 30, 1983, the amount at which such property was carried on -89- the books of the Corporation on such date, estimated, if necessary, as to particular property; and B. As to Property Additions, the cost to the Corporation or the fair value thereof (whichever is less), as certified to the Trustee at the time said Property Additions became Mortgaged Property, estimated, if necessary, as to particular property, or, if not so certified, then the cost of such Property Additions. No reduction in book values of property recorded in the Corporation's plant or property account nor the transfer of any amount appearing in any such account to intangible or adjustment accounts, required or arising from any reclassification required to be made by any regulatory body, or otherwise, nor the elimination of any amount so transferred, otherwise than in connection with the actual retirement of physical property, shall be taken into account in determining the amount of retirements. (gg) Retirements Credits shall mean the following credits, which may be applied against Retirements: (1) the amount of cash or other consideration received by the Trustee in connection with the release of any Funded Property and (2) the amount of insurance money paid to the Trustee on account of the destruction of any Funded Property; but in each case only to the extent that the same have not previously been used as a Retirements Credit. (hh) Trustee means Central Bank of Denver, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean such successor Trustee. (ii) Trust Indenture Act shall mean the Trust Indenture Act of 1939 as in force at the date of execution of this Indenture, or, if this Indenture is first qualified under the Trust Indenture Act after such date of execution, as in force at the date of such qualification. (jj) Trust Moneys has the meaning stated in Section 17.01. ARTICLE TWENTY Miscellaneous Provisions Section 20.01 Certain Assignments of Bonds. In the event that a holder of a Bond of any series shall assign such Bond without transferring ownership thereof on the Bond Register in accordance with Section 4.10 hereof, this Indenture shall secure payment of such Bond for the benefit of such registered holder, equally and ratably with all present and future holders -90- of Bonds issued hereunder, and not for the benefit of any such assignee. Section 20.02 Successors and Assigns. All the covenants and agreements in this Indenture contained by or in behalf of the Corporation shall bind its successors and assigns, whether so expressed or not. Section 20.03. Board and Other Action. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee, or officer of the Corporation shall and may be done and performed with like force and effect by the corresponding board, committee, or officer of any corporation that shall at the time be the lawful sole successor of the Corporation. Section 20.04. Surrender of Powers. The Corporation by Board Resolution may surrender any of the powers reserved to the Corporation and thereupon such power so surrendered shall terminate both as to the Corporation and as to any successor corporation. Section 20.05. Service of Notices. Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by any Bondholder to or on the Corporation shall be sufficiently given if mailed, first-class postage prepaid, addressed (until another address is filed in writing by the Corporation with the Trustee), as follows: Greeley Gas Company, Suite 400, 1500 Grant Street, Denver, Colorado 80203, Attention: President. Any notice, election, request or demand by the Corporation or any Bondholder to or upon the Trustee, shall be sufficiently given or made, for all purposes, if given or made in writing at the principal office of the Trustee, addressed as follows: Central Bank of Denver, 1515 Arapahoe Street, P.O. Box 5548 T.A., Denver, Colorado 80292, or to such other address as at the time may be the principal office of the Trustee. Section 20.06. Colorado Law Applicable. This Seventh Supplemental Indenture and each Bond shall be governed by and construed in accordance with the laws of the State of Colorado. Section 20.07. Certificates to Trustee. Upon any application or demand by the Corporation to the Trustee to take any action under any of the provisions of this Indenture, the Corporation shall furnish to the Trustee an Officer's Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel, based on such application and the accompanying documents and other items required by this Indenture, all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this -91- Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. Each certificate or opinion provided for in this Indenture including certificates of any Engineer or Appraiser, and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include: (1) a statement that each person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion whether such covenant or condition has been complied with; and (4) a statement whether, in the opinion of such person, such condition or covenant has been complied with. Section 20.08. Payments Coming Due on Saturday, Sunday or Legal Holiday. In any case where the date of maturity of interest or principal of the Bonds or the date of redemption of any Bond shall be a Saturday or a Sunday or a legal holiday in Denver, Colorado, or a day on which banking institutions in such city are authorized by law to close, then payment of interest or principal (and premium, if any) may be made in such city on the next succeeding day not a Saturday, Sunday or a legal holiday or a date on which banking institutions are authorized by law to close, with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date. Section 20.09. Trust Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture that is required to be included in this Indenture by any of Sections 310 through 317, inclusive, of the Trust Indenture Act, such required provision shall control. Section 20.10. Publication of Notice. If for any reason it shall be impossible to make publication of any notice required by this Indenture in an Authorized Newspaper as herein provided, then such publication or other notice in lieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice. Section 20.11. Counterparts. This Seventh Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 20.12. Effect of Headings and Table of Contents. The Article, Section and Subsection headings contained in this Indenture and the Table of Contents are for convenience -92- only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. Section 20.13. Acceptance of Trust by Trustee. The Trustee hereby accepts the trust in this Seventh Supplemental Indenture declared and provided, upon the terms and conditions hereinabove set forth. Section 20.14. Separability of Provisions. In case any one or more of the provisions contained in this Seventh Supplemental Indenture or if the Bonds shall for any reason be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired in any way. IN WITNESS WHEREOF, Greeley Gas Company has caused this Indenture to be signed in its corporate name by its President or a Vice-President and its corporate seal to be hereunto affixed and attested by its Assistant Secretary, and Central Bank of Denver, as Trustee, has caused this Seventh Supplemental Indenture to be signed in its corporate name by its Trust Officer and its corporate seal to be hereunto affixed and attested by its Cashier as of the day and year first above written. GREELEY GAS COMPANY (Corporate Seal) By /s/ Lee E. Schlessman ---------------------------- President ATTEST: /s/ Velma A. Wellman - - ---------------------- Assistant Secretary Witnesses: /s/ Janis D. Rhode - - ----------------------- /s/ Marla S. Petrini - - ----------------------- CENTRAL BANK OF DENVER Trustee (Corporate Seal) By /s/ Daniel A. Rich -------------------- Trust Officer -93- ATTEST: /s/ Emily L . Fohn - - ----------------------- Assistant Secretary Witnesses: /s/ S. A. Hawkins - - ----------------------- /s/ M. Margaret Walker - - ----------------------- STATE OF COLORADO ) ) SS. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this 13th day of October, 1983, by Lee E. Schlessman as President, and Velma A. Wellman, as Assistant Secretary, of Greeley Gas Company, a corporation. Witness my hand and official seal. My commission expires: March 21, 1987 /s/ Brenda K. Johnson ----------------- Notary Public STATE OF COLORADO ) ) SS. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this 14 day of October, 1983, by Daniel A. Rich as Trust Officer, and Emily L. Fohn, as Assistant Secretary, of Central Bank of Denver. Witness my hand and official seal. My commission expires: 1-4-84 /s/ Kathleen M. Narey ----------------- Notary Public -94- EXHIBIT A [FORM OF BOND] GREELEY GAS COMPANY First Mortgage Bond, % Series due No. $_______ FOR VALUE RECEIVED, GREELEY GAS COMPANY, a corporation organized and existing under the laws of the State of Colorado (hereinafter called the Corporation, which term shall include any successor corporation as defined in the Indenture hereinafter referred to), hereby promises to pay to or registered assigns, on the ___ day of ___ , ___ the sum of ___ Dollars ($ ) in coin or currency of the United States of America that at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered owner hereof interest thereon from the date hereof, at the rate of ___ per cent (___%) per annum, in like coin or currency, payable semiannually on ___ and ___ in each year, until the principal hereof shall be paid. Payments of both principal and interest are to be made at the principal office of the Trustee in Denver, Colorado. This Bond is one of an authorized issue of Bonds of the Corporation known as its First Mortgage Bonds, not limited in aggregate principal amount except as provided in the Indenture hereinafter mentioned, all issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement, renewal or other analogous fund, established in accordance with the provisions of the Indenture hereinafter referred to, may afford additional security for the Bonds of any particular series) by an Indenture of Mortgage and Deed of Trust (hereinafter called the Original Indenture) executed by the Corporation to The Central Bank and Trust Company (now named Central Bank of Denver), Denver, Colorado (herein called the Trustee) dated March 1, 1957, as supplemented and amended by seven Supplemental Indentures, (the Original Indenture, as so supplemented and amended, is hereinafter referred to as the Indenture) to which Indenture reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the Bonds are and are to be secured and the rights of the holders or registered owners thereof and of the Trustee in respect of such security. As provided in the Indenture, such Bonds may be issued in series, A-1 for various principal sums, may bear different dates and mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided or permitted. This Bond is one of the Bonds described in the Indenture and designated therein as the First Mortgage Bonds, ___% Series ___ due ___ (hereinafter referred to as the Series ___ Bonds). [The Series ___ Bonds are _____ to the benefits of, and are subject to redemption by operation of, the sinking fund for the Series ___ Bonds (hereinafter called the Sinking Fund) provided for in the Indenture and pursuant to which the Corporation is obligated to retire on ___ of each year, beginning ___, 19___, $ ___ aggregate principal amount of Series ___ Bonds at 100% of the principal amount thereof, plus accrued interest. [Provisions for double sinking fund payments, if any]] Subject to the provisions of the Indenture, all Series ___ Bonds (other than those redeemed for the Sinking Fund above referred to) are subject to redemption at the option of the Corporation, as a whole or in part at any time or from time to time [on or after ___, 19___] at the following percentages of the principal amount thereof: If redeemed during the 12-month Period ending The redemption price is - - -------------------------- ----------------------- together in any case with interest accrued thereon to the date of redemption [prohibitions, if any, on refunding]. If this Bond is called for redemption and payment duly provided, this Bond shall cease to bear interest from and after the date fixed for such redemption. Upon any partial redemption of this Bond, at the option of the registered holder hereof this Bond may be either (a) surrendered to the Trustee in exchange or one or more new Series ___ Bonds, of authorized denominations, registered in the name of such holder, in an aggregate principal amount equal to the principal amount remaining unpaid upon this Bond, or (b) submitted to the Trustee for notation hereon of the payment of the portion of the principal hereof paid upon such redemption. As provided in the Indenture, (a) if and to the extent authorized by the consent (evidenced as provided in the Indenture) of the holders of not less than 66-2/3% in aggregate principal amount of all Bonds then Outstanding that are adversely affected thereby, such changes in, additions to or eliminations from the Indenture as such holders and the Corporation may deem necessary or advisable may be made by supplemental indenture; provided that no such change shall be made without the consent of the holder of each outstanding bond that is adversely affected that would (i) extend the stated maturity of the principal of, or A-2 any installment of interest on, any Bond, or (ii) reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or (iii) extend the time or reduce the amount of any sinking fund payment in respect thereof, or (iv) reduce the percentage of the principal amount of Bonds the consent of the holders of which is required for the authorization of any such change, addition or elimination, or (v) modify certain other provisions of the Indenture. In case an Event of Default (as defined in the Indenture) shall occur and be continuing, the principal of all the Bonds outstanding may be declared and may become due and payable in the manner and with the effect provided in the Indenture. This Bond is a registered Bond without coupons and is transferable by the registered holder thereof in person or by the duly authorized attorney of such holder on the Bond Register to be kept for the purpose at the principal office of the Trustee as Bond Registrar and transfer agent for the Bonds, in Denver, Colorado. Upon surrender of this Bond accompanied by written instruments of transfer in form approved by the Trustee, duly executed by the registered holder in person or by such attorney, and upon cancellation hereof, one or more new Bonds of the same series and maturity, in authorized denominations, in an aggregate principal amount equal to the principal amount remaining unpaid upon this Bond, shall be issued to the transferee in exchange herefor, as provided in the Indenture. The Corporation and the Trustee may deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner hereof (whether or not this Bond shall be overdue) for the purpose or receiving payment hereon, and on account hereof and for all other purposes. No recourse shall be had for the payment of the principal of or interest on this Bond, or in respect of this Bond or the Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Corporation or of any predecessor or successor corporation, either directly or through the Corporation, by virtue of any constitution, statute or rule of law or by enforcement of any assessment or penalty or otherwise, any and all such liability of incorporators, stockholders, officers and directors being released by the holder hereof by the acceptance of this Bond and being likewise waived and released by the terms of the Indenture. This Bond shall not be valid or become obligatory for any purpose until the certificate endorsed hereon shall be signed by the Trustee under the Indenture. IN WITNESS WHEREOF, GREELEY GAS COMPANY has caused these presents to be signed in its name by its President or a Vice President, and its corporate seal to be affixed hereto and attested by its Secretary or an Assistant Secretary. A-3 Dated: GREELEY GAS COMPANY By ------------------------ President Attest: - - --------------------- Secretary [TRUSTEE'S CERTIFICATE TO BE ENDORSED ON ALL BONDS] TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. CENTRAL BANK OF DENVER, as Trustee By ---------------------------- Authorized Officer A-4 EXHIBIT B GREELEY GAS COMPANY AVAILABLE INCOME CERTIFICATE The undersigned officers of Greeley Gas Company (the Corporation) hereby certify to Central Bank of Denver, as Trustee under the Corporation's Indenture of Mortgage and Deed of Trust, dated as of March 1, 1957 as supplemented and amended by a Seventh Supplemental Indenture, that each of the undersigned (i) have reviewed Subsection (c) of Section 5.01 of the Seventh Supplemental Indenture, (ii) has examined the books of account of the Corporation and made inquiries of officers or employees of the Corporation directly responsible for maintaining such accounts, (iii) is of the opinion that such examination is sufficient to enable him to make this certificate, and (iv) is of the opinion that the requirements of Subsection (c) of such Section 5.01 have been complied with, as is reflected in the following computation, which is true and correct: 1. The Corporation's Net Income for the twelve consecutive months ended ___, 19 . . . . . . . . . . . . . . . . $ 2. The Corporation's Interest Charges for the 12-month period referred to in paragraph I above . . . . . . . $ 3. The Federal and state taxes on income or measured by income of the Corporation for the 12-month period referred to in paragraph I above . . . . . . . . . . $ Then Determine Income Available for Interest Charges by adding 1, 2 and 3 above to produce 4: 4. Income Available for Interest Charges . . . . . . . . $ 5. The interest requirements on Bonds for the 12-month period immediately succeeding the date hereof less interest requirements on indebtedness to be retired from the proceeds of the Additional Bonds now applied for . . . . . . . . . . . . . . . . . . . . . . . . . $ Which is the Amount of Pro Forma Interest Charges: 6. The amount shown in 4 above exceed two times the amount shown in 5 above and the amount of such excess is . . $ The undersigned further certify that the terms used herein that are defined in the Seventh Supplemental Indenture are used herein as defined herein. Dated: B-1 ------------------------------ President (or Vice President) ------------------------------ Treasurer (or other appropriate officer) B-2 Schedule 1 to EXHIBIT B GREELEY GAS COMPANY STATEMENT OF NET INCOME AVAILABLE FOR INTEREST CHARGES For Twelve Month Period Ended ___, 19___ Total Operating Revenues . . . . . . . . . . . . . . . . . . . $ Operating Expenses: Operating Expenses . . . . . . . . . . . . . . . . . . . . $ Maintenance . . . . . . . . . . . . . . . . . . . . . . . $ Depreciation & Amortization . . . . . . . . . . . . . . . $ Other . . . . . . . . . . . . . . . . . . . . . . . . . . $ Taxes, Other than Income . . . . . . . . . . . . . . . . . $ Total Operating Expenses and Taxes, Other than Income Taxes . . . . . . . . . . . . . . . . . . . . $ Net Operating Income Before Income Taxes . . . . . . . . . $ Allowance for Funds Used During Construction . . . . . . . $ Miscellaneous Income (Charges) . . . . . . . . . . . . . . $ Net Income Available for Interest Charges . . . . . . . . $ Interest Charges . . . . . . . . . . . . . . . . . . . . . . . $ Federal and State Income Taxes . . . . . . . . . . . . . . . . $ Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . $ B-3 EXHIBIT C GREELEY GAS COMPANY BONDABLE ADDITIONS CERTIFICATE (NO. ___) The undersigned officers of Greeley Gas Company (the Corporation) hereby certify to Central Bank of Denver, as Trustee under the Corporation's Indenture of Mortgage and Deed of Trust, dated as of March 1, 1957, as supplemented and amended by a Seventh Supplemental Indenture (the Original Indenture, as so supplemented and amended, is hereinafter referred to as the Indenture), that each of the undersigned (i) have reviewed Subsection (d) of Section 5.01 of the Seventh Supplemental Indenture, (ii) has examined the books of account of the Corporation and made inquiries of officers or employees of the Corporation directly responsible for maintaining such accounts, (iii) is of the opinion that such examination is sufficient to enable him to make this certificate and (iv) is of the opinion that the Requirements of Subsection (d) of such Section 5.01 have been complied with, as is reflected in the following computation, which is true and correct: 1. The balance of Bondable Additions remaining after the action applied for in the next preceding Bondable Additions Certificate (Certificate No. ) . . . . . . . . . . . . . . . . . $ Then take the new gross Property Additions as shown in 2 below: 2. Amount of Property Additions now certified, being ($ ___,) the Amount of Property Additions in the period from ___ through the date hereof, as described in Schedule I attached hereto (none of which has been certified in any previous Bondable Additions Certificate) (plus $ ___, being the excess of credits against Retirements carried forward from Certificate No. ___) . . . . . . . . . . . . . . . . . . . . . . $ Then determine the deductions for Retirements by deducting 4 below from 3 below to produce 5: 3. The aggregate amount of all Retirements from ___ through the date hereof . . . . . . . . . . . . . . . $ 4. The sum of the credits against Retirements: . . . . . $ (Specify) 5. The net amount of Retirements to deducted . . . . . . $ Then determine the Bondable Additions now being certified by deducting 5 from 2 to produce 6: C-1 6. Bondable Additions now being certified . . . . . . . $ Then add 1 and 6 to produce 7: 7. Total Bondable Additions available for the action applied for . . . . . . . . . . . . . . . . . . . . . $ 8. Amount of Bondable Additions now being used: 150% of principal amount of Additional Bonds now being applied for . . . . . . . . . . . . . . . . . . . . . . . . . $ Or 150% of amount of cash deposited pursuant to Section 5.03 to be withdrawn . . . . . . . . . . . . . . . . $ Deduct 8 from 7 to produce 9: 9. Balance of Bondable Additions to remain after the action applied for . . . . . . . . . . . . . . . . . $ The undersigned further certify that (i) the Property Additions described herein are Property Additions as defined in the Seventh Supplemental Indenture, (ii) no portion of the Property Additions included in the above computation is Excepted Property or is subject to any lien or encumbrance other than Permitted Encumbrances and (iii) the terms used herein that are defined in the Indenture are used herein as defined therein. Dated: ----------------------------- President (or Vice President) ----------------------------- Treasurer (or other appropriate officer) C-2 EX-10 3 EXHIBIT 10.2 FOR 10-Q FOR QE 6/30/94 CONFORMED COPY GREELEY GAS COMPANY TO CENTRAL BANK DENVER, NATIONAL ASSOCIATION (Formerly The Central Bank and Trust Company) TRUSTEE NINTH SUPPLEMENTAL INDENTURE Dated as of April 1, 1991 Supplementing and Amending Indenture of Mortgage and Deed of Trust dated as of March l, 1957 and creating First Mortgage Bonds, 9.40% Series J, Due May 1, 2021 TABLE OF CONTENTS Section Heading Page Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE ONE Assumption of Indenture Obligations; Mortgage of Property Section 1.01 . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE TWO Series J Bonds and Provisions Applicable Thereto Section 2.01. Series J Bonds . . . . . . . . . . . . . . . . 2 Section 2.02. Place and Form of Payment on Series J Bonds . . . . . . . . . . . . . . 4 Section 2.03. Form of Bonds . . . . . . . . . . . . . . . . . 4 Section 2.04. Authentication of Series J Bonds . . . . . . . 4 ARTICLE THREE Miscellaneous Provisions Section 3.01. Consolidation, Merger or Sale . . . . . . . . . 4 Section 3.02. Counterparts . . . . . . . . . . . . . . . . . 4 Section 3.03. Defined Terms . . . . . . . . . . . . . . . . . 4 Section 3.04. Effect of Headings and Table of Contents . . . 4 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Attachments: Exhibit A - Form of Series J Bond Schedule 1- Property Description -i- This is a NINTH SUPPLEMENTAL INDENTURE, dated as of April 1, 1991, between GREELEY GAS COMPANY, a corporation organi- zed and existing under the laws of the State of Delaware (the "Corporation") having its principal place of business in Denver, Colorado, party of the first part, and CENTRAL BANK DENVER, NATIONAL ASSOCIATION (formerly named The Central Bank and Trust Company), organized and existing under the laws of the United States (the "Trustee"), as Trustee, party of the second part. R E C I T A L S The background of this Ninth Supplemental Indenture is: A. Greeley Gas Company, a Colorado corporation ("GGC") heretofore executed and delivered to the Trustee its Indenture of Mortgage and Deed of Trust dated as of March 1, 1957 (the "Original Indenture") to secure the payment of the principal of, premium, if any, and interest on, all Bonds at any time issued and outstanding thereunder, and to establish and declare the terms and conditions upon which Bonds are to be issued and secured thereunder. B. GGC thereafter executed and delivered to the Trustee eight Supplemental Indentures respectively dated as of November 1, 1957, October 1, 1959, March 1, 1961, June 1, 1965, March 1, 1973, March 2, 1973, October 1, 1983 and October 1, 1985 (the Original Indenture and all Supplemental Indentures being hereinafter sometimes collectively referred to as the "Inden- ture"), for the various purposes of creating and authorizing additional series of Bonds to be secured by the Indenture, con- veying to the Trustee certain additional property, amending the Original Indenture and correcting the description of certain property. C. Effective October 9, 1990 GGC and Standard Gas Supply Corporation, a Colorado corporation, merged into the Corporation (the "Merger") and as the survivor of the Merger the Corporation (i) succeeded to all rights, privileges, powers and franchises of GGC including all property, real, personal and mixed owned by GGC and (ii) assumed all debts of GGC including but not limited to all obligations of GGC under the Indenture. D. The Corporation proposes (1) to create and issue an additional series of bonds to be designated "First Mortgage Bonds, 9.40% Series J, due May 1, 2021", limited in aggregate principal amount to $17,000,000 (the "Series J Bonds"), and (2) to apply the proceeds from the sale of the Series J Bonds to retire $7,250,000 of long term debt, reduce short-term debt, finance current construction projects and for general corporate purposes. E. All acts and things necessary to make the Series J Bonds, when executed by the Company and authenticated and delivered by the Trustee, the valid, binding and legal obliga- tions of the Corporation, and to constitute these presents a valid indenture and agreement according to its terms, have been done and performed, and the execution of this Ninth Supplemental Indenture and the issue of the Series J Bonds in all respects been duly authorized, and the Corporation, in the exercise of the legal right and power vested in it, executes this Ninth Supple- mental Indenture. NOW, THEREFORE, in consideration of the premises and of the sum of One Dollar to the Corporation duly paid by the Trustee at or before the ensiling and delivery hereof and for other good and valuable considerations, the receipt whereof is hereby acknowledged, the Corporation hereby covenants to and with the Trustee and its successors in the trusts under the Indenture, for the equal and pro rata benefit of all present and future holders of all Bonds issued and to be issued under the Indenture, without any preference, priority or distinction whatsoever, as follows: ARTICLE ONE Assumption of Indenture Obligations; Mortgage of Property Section 1.01. Effective October 9, 1990 the Corporation, as succes- sor to GGC, assumes the due and punctual payment of the principal of (and premium, if any) and interest on all the Bonds and the performance of every covenant and condition of the Indenture to be performed or observed by the Corporation. The Corporation in order to better secure the principal of and interest (and pre- mium, if any) on all Bonds of the Corporation at any time out- standing under the Indenture according to their tenor and effect and the performance of and compliance with the covenants and conditions in the Indenture contained, does hereby mortgage, assign, grant, bargain, sell and convey unto the Trustee, and to its successors in said trust, forever, all of the property, rights and franchises now or hereafter acquired or constructed by the Corporation including, without limitation, the properties described in Schedule 1 attached hereto and made a part hereof, except property of the character specifically excepted from the lien of the Original Indenture. In trust, nevertheless, for the same purposes and upon the same conditions as are set forth in the Original Indenture. ARTICLE TWO Series J Bonds and Provisions Applicable Thereto Section 2.01. Series J Bonds. (a) There is hereby created under the Indenture a series of Bonds entitled First Mortgage Bonds, 9.40% Series J, due May l, 2021 (the "Series J Bonds"). The aggregate principal amount of Series J Bonds that may be issued shall be limited to $17,000,000, exclusive of Series J Bonds issued in exchange or -2- substitution for other Series J Bonds. The Series J Bonds shall be registered Bonds without coupons numbered RJ-1 and upward. The Series J Bonds shall be dated and shall bear interest as provided in Section 4.08 of the Indenture, except that the Series J Bonds issued before November 1, 1991 (the first interest payment date for the Series J Bonds) shall be dated as of and shall bear interest from the date of initial issuance thereof. The Series J Bonds shall be due May 1, 2021 and shall bear interest on their unpaid principal amounts from their dates until due and payable at the rate of 9.40% per annum (computed on the basis of a 360-day year of twelve 30-day months) payable semi-annually on May 1 and November 1 in each year, and at the rate of 10.40% per annum on any overdue principal, premium, if any, and (to the extent legally enforceable) on any overdue installment of interest. (b) The Series J Bonds shall be redeemable at the option of the Corporation at any time, either as a whole or in part in multiples of $1,000 at a redemption price equal to 100% of the principal amount of the Bonds being redeemed plus interest accrued thereon to the date of redemption, plus a premium equal to the Make-Whole Premium, defined below, which shall be deter- mined three (3) business days prior to the date of such redemp- tion. The Corporation will furnish notice to the Trustee and each holder of the Series J Bonds (by telecopy or other same-day written communication confirmed by the recipient, on a date at least two (2) business days prior to the date fixed for redemp- tion of the Series J Bonds) of the premium, if applicable to such redemption and the calculations, in reasonable detail, used to determine the amount of any such premium. "Make-Whole Premium" shall mean, in connection with any redemption, the excess, if any, of (i) the aggregate present value as of the date of such redemption of each dollar of princi- pal being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of such dollar if such redemption had not been made, determined by discounting such amounts at the Reinvestment Rate from the respective dates on which they would have been payable, over (ii) 100% of the principal amount of the outstand- ing Series J Bonds being redeemed. If the Reinvestment Rate is equal to or higher than 9.40% the Make-Whole Premium shall be zero. "Reinvestment Rate" shall mean the sum of (i) 0.50% plus (ii) the arithmetic mean of the yields under the respective headings "This Week" and "Last Week" published in the Statistical Release under the caption "Treasury Constant Maturities" for the maturity corresponding to the remaining term of the Series J Bonds (rounded to the nearest month). If no maturity exactly corresponds to such remaining term of the Series J Bonds, yields for the two published maturities most closely corresponding to such remaining term of the Series J Bonds shall be calculated pursuant to the immediately preceding sentence and the Reinvest- -3- ment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the premium hereunder shall be used. "Statistical Release" shall mean the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded U.S. Government Securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination hereunder, then such other reasonably comparable index which shall be designated by the holders of sixty-six and two-thirds per cent (66-2/3%) in aggregate principal amount of the outstanding Series J Bonds. (c) There shall be no sinking fund for the Series J Bonds. Section 2.02. Place and Form of Payment on Series J Bonds. The principal of and premium (if any) and interest on Series J Bonds (subject to any agreement entered into pursuant to Section 6.01 of the Indenture) shall be payable at the operations center of the Trustee at First Trust, N.A., St. Paul, Minnesota, in coin or currency of the United States of America that at the time of such payment is legal tender for the payment of public and private debts. Section 2.03. Forms of Bonds The Series J Bonds shall be substantially in the form attached hereto as Exhibit A. Section 2.04. Authentication of Series J Bonds After the execution and delivery of this Ninth Supple- mental Indenture, the Corporation may execute and deliver to the Trustee, and the Trustee shall authenticate and deliver as di- rected by Corporation Order, Series J Bonds in aggregate princi- pal amount not exceeding $17,000,000, in accordance with the provisions of Article Three hereof. ARTICLE THREE Miscellaneous Provisions Section 3.01. Consolidation, Merger or Sale. The Corporation covenants that so long as any Series J Bonds remain outstanding it will not without the consent of the holders of all the Series J Bonds consolidate or merge with, or sell all or substantially all of its assets to, any corporation -4- unless the surviving corporation after such consolidation or merger, or the corporation to which all such assets are sold, will have immediately thereafter a net worth not less than the net worth of the Corporation immediately prior to such transac- tion. Net worth means total assets less total liabilities. Section 3.02. Counterparts. This Ninth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 3.03. Defined Terms. The capitalized terms used herein which are defined in the Indenture have the meaning therein set forth. Section 3.04. Effect of Headings and Table of Contents. The Article, Section and Subsection headings contained in this Ninth Supplemental Indenture and the Table of Contents are for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. -5- EXHIBIT A [FORM OF SERIES J BOND] GREELEY GAS COMPANY First Mortgage Bond, 9.40% Series J, due May 1, 2021 No. $________ FOR VALUE RECEIVED, GREELEY GAS COMPANY, a corporation organized and existing under the laws of the State of Delaware (hereinafter called the Corporation, which term shall include any successor corporation as defined in the Indenture hereinafter referred to), hereby promises to pay to or registered assigns, on the first day of May, 2021 the sum of Dollars ($ ) in coin or currency of the United States of America that at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered owner hereof interest thereon from the date hereof, at the rate of 9.40% per annum, in like coin or currency, payable semi-annually on May 1 and Novem- ber 1 in each year, until the principal hereof shall be due and payable and at the rate of 10.40% per annum on any overdue prin- cipal, premium, if any, and (to the extent legally enforceable) on any overdue installment of interest. Payments of both princi- pal, premium, if any, and interest are to be made at the opera- tions office of the Trustee at First Trust, N.A., St. Paul, Minnesota except as otherwise provided in an agreement which is executed pursuant to Section 6.01 of the Indenture. This Bond is one of an authorized issue of Bonds of the Corporation known as its First Mortgage Bonds, not limited in aggregate principal amount except as provided in the Indenture hereinafter mentioned, all issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement, renewal or other analogous fund, established in accordance with the provisions of the Inden- ture hereinafter referred to, may afford additional security for the Bonds of any particular series) by an Indenture of Mortgage and Deed of Trust (hereinafter called the Original Indenture) executed by the Corporation to The Central Bank and Trust Company (now named Central Bank Denver, National Association), Denver, Colorado (herein called the Trustee) dated March 1, 1957, as supplemented and amended by nine Supplemental Indentures, (the Original Indenture, as so supplemented and amended, is hereinaf- ter referred to as the Indenture) to which Indenture reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the Bonds are and are to be secured and the rights of the holders or registered owners thereof and of the Trustee in respect of such security. As provided in the Inden- ture, such Bonds may be issued in series, for various principal sums, may bear different dates and mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided or permitted. This Bond is one of the Bonds described in the Inden- ture and designated therein as the First Mortgage Bonds, 9.40% Series J due May 1, 2021 (hereinafter referred to as the Series J Bonds). The Series J Bonds shall be redeemable at the _________ of the Corporation at any time either as a whole or in part as multiples of $1,000 at a redemption price equal to 100% of the principal amount of the Bonds being redeemed plus interest ac- crued thereon to the date of redemption, plus a premium equal to the Make-Whole Premium, which shall be determined three (3) business days prior to the date of such redemption. Upon any partial redemption of this Bond, at the option of the registered holder hereof this Bond may be either (a) surrendered to the Trustee in exchange for one or more new Series J Bonds, of authorized denominations, registered in the name of such holder, in an aggregate principal amount equal to the principal amount remaining unpaid upon this Bond, or (b) submitted to the Trustee for notation hereon of the payment of the portion of the principal hereof paid upon such redemption. As provided in the Indenture, (a) if and to the extent authorized by the consent (evidenced as provided in the Inden- ture) of the holders of not less than 66-2/3% in aggregate prin- cipal amount of all Bonds then Outstanding that are adversely affected thereby, such changes in, additions to or eliminations from the Indenture as such holders and the Corporation may deem necessary or advisable may be made by supplemental indenture; provided that no such change shall be made without the consent of the holder of each outstanding bond that is adversely affected that would (i) extend the stated maturity of the principal of, or any installment of interest on, any Bond, or (ii) reduce the percentage of the principal amount of Bonds the consent of the holders of which is required for the authorization of any such change, addition or elimination, or (iii) modify certain other provisions of the Indenture. In case an Event of Default (as defined in the Inden- ture) shall occur and be continuing, the principal of all the Bonds outstanding may be declared and may become due and payable in the manner and with the effect provided in the Indenture. This Bond is a registered Bond without coupons and is transferable by the registered holder thereof in person or by the duly authorized attorney of such holder on the Bond Register to be kept for the purpose at the principal office of the Trustee as Bond Registrar and transfer agent for the Bonds, in Denver, A-2 Colorado. Upon surrender of this Bond accompanied by written instruments of transfer in form approved by the Trustee, duly executed by the registered holder in person or by such attorney, and upon cancellation hereof, one or more new Bonds of the same series and maturity, in authorized denominations, in an aggregate principal amount equal to the principal amount remaining unpaid upon this Bond, shall be issued to the transferee in exchange herefor, as provided in the Indenture. The Corporation and the Trustee may deem and treat the person in whose name the Bond is registered on the Bond Register as the absolute owner hereof (whether or not this Bond shall be overdue) for the purpose or receiving payment hereon, and on account hereof and for all other purposes. No recourse shall be had for the payment of the prin- cipal of or interest on this Bond, or in respect of this Bond or the Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Corporation or of any predecessor or successor corporation, either directly or through the Corporation, by virtue of any constitution, statute or rule of law or by enforcement of any assessment or penalty or otherwise, any and all such liability of incorporators, stock- holders, officers and directors being released by the holder hereof by the acceptance of this Bond and being likewise waived and released by the terms of the Indenture. This Bond shall not be valid or become obligatory for any purpose until the certificate endorsed hereon shall be signed by the Trustee under the Indenture. IN WITNESS WHEREOF, GREELEY GAS COMPANY has caused these presents to be signed in its name by its President or a Vice President, and its corporate seal to be affixed hereto and attested by its Secretary or an Assistant Secretary. Dated: GREELEY GAS COMPANY By ____________________________ ________ President Attest: _________________________ ________ Secretary A-3 [TRUSTEE'S CERTIFICATE TO BE ENDORSED ON ALL BONDS] TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. CENTRAL BANK DENVER, NATIONAL ASSOCIATION, as Trustee By ____________________________ Authorized Representative A-4 EX-10 4 EXHIBIT 10.3 FOR 10-Q 6/30/94 CONFORMED COPY GREELEY GAS COMPANY BOND PURCHASE AGREEMENT Dated as of April 1, 1991 Re: $17,000,000 First Mortgage Bonds, 9.40% Series J, Due May 1, 2021 TABLE OF CONTENTS Section Heading Page 1. Description of Bonds . . . . . . . . . . . . . . . . . . 1 2. Sale of Bonds; Closing . . . . . . . . . . . . . . . . . 1 3. Representations . . . . . . . . . . . . . . . . . . . . 2 3.1. Representations of the Company . . . . . . . . . . . 2 3.2. Representation of the Purchaser . . . . . . . . . . . 2 4. Closing Conditions . . . . . . . . . . . . . . . . . . . 2 4.1. Closing Certificate . . . . . . . . . . . . . . . . . 2 4 2. Opinions . . . . . . . . . . . . . . . . . . . . . . 2 4 3. Commission Authorization . . . . . . . . . . . . . . 3 4.4. Proceedings, Instruments, etc . . . . . . . . . . . . 3 5. Expenses and Taxes . . . . . . . . . . . . . . . . . . . 3 6. Financial Statements, etc . . . . . . . . . . . . . . . 3 6.1. Quarterly Statements . . . . . . . . . . . . . . . . 3 6.2. Annual Statements . . . . . . . . . . . . . . . . . . 3 6.3. Officer's Certificate . . . . . . . . . . . . . . . . 3 6.4. Accountant's Certificate . . . . . . . . . . . . . . 4 6.5. SEC and Other Reports . . . . . . . . . . . . . . . . 4 6.6. Audit Reports . . . . . . . . . . . . . . . . . . . . 4 6.7. Notice of Default . . . . . . . . . . . . . . . . . . 4 6.8. Requested Information . . . . . . . . . . . . . . . . 4 7. Inspection Rights . . . . . . . . . . . . . . . . . . . 4 8. Exchange of Bonds . . . . . . . . . . . . . . . . . . . 5 9. Loss, Theft, Etc., of Bonds . . . . . . . . . . . . . . 5 10. Direct Payment . . . . . . . . . . . . . . . . . . . . . 5 11. Survival of Provisions, Successors . . . . . . . . . . . 5 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . 5 13. Counterparts . . . . . . . . . . . . . . . . . . . . . . 5 14. Law Governing . . . . . . . . . . . . . . . . . . . . . 6 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 6 -i- ATTACHMENTS Schedule 1 Exhibit A - Ninth Supplemental Indenture Exhibit B - Closing Certificate Exhibit C - Legal Opinions -ii- GREELEY GAS COMPANY 1301 Pennsylvania Street, Suite 800 Denver, Colorado 80203-5015 BOND PURCHASE AGREEMENT Re: $17,000,000 First Mortgage Bonds, 9.40% Series J, Due May 1, 2021 Dated April 1, 1991 First Colony Life Insurance Company 700 Main Street Lynchburg, VA 24504 Attention: Mr J. Alden Butler Gentlemen: GREELEY GAS COMPANY, a Delaware corporation (the "Company"), agrees with you as follows: 1. Description of Bonds. The Company will autho- rize and create one issue of its First Mortgage Bonds designated as 9.40% Series J, due May 1, 2021, in the principal amount of $17,000,000 (the "Bonds"). The Bonds will be issued under and secured by an Indenture of Mortgage and Deed of Trust dated as of March 1, 1957 (the "Original Indenture"), from the Company to The Central Bank and Trust Company (now Central Bank Denver, National Association), as Trustee (the "Trustee"), as heretofore supple- mented and amended by eight supplemental indentures, and as to be further supplemented and amended by a Ninth Supplemental Inden- ture (the "Ninth Supplemental Indenture") which will be substan- tially in the form of the draft thereof attached hereto as Ex- hibit A, with such changes therein, if any, as shall be approved by you and by the Company. The Original Indenture as so amended and supplemented is herein called the "Indenture". The Bonds will be dated the date of delivery and will have the terms and provisions specified in the Ninth Supplemental Indenture. 2. Sale of Bonds; Closing. Subject to the terms and conditions and upon the basis of the representations herein set forth, the Company hereby agrees to sell to you and you hereby agree to purchase from the Company, Bonds of the Series J in the principal amount set opposite your name in Schedule 1 hereto, at a price equal to the principal amount thereof. Payment shall be made by wire transfer of Federal Funds, or other funds current and immediately available, for credit to the Company's account as directed by the Company. Delivery of the Bonds will be made on June 14, 1991 or such later date (not later than June 30, 1991) as is mutually agreeable (the date of delivery being herein called the "Closing Date"). The Bonds will be delivered at the office of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603. The Bonds will be delivered to you in the form of one fully registered Bond of the Series J being purchased by you and registered in your name or the name of such nominee as you may designate. 3. Representations. 3.1. Representations of the Company. The Company represents and warrants that all representations set forth in the form of certificate annexed herein as Exhibit B are true and correct as of the date hereof and are hereby incorporated herein by reference with the same force and effect as though herein set forth in full. 3.2. Representation of the Purchaser. You repre- sent that you are purchasing the Bonds for investment and not with a view to the resale or distribution thereof, and that you have no present intention of selling, negotiating or otherwise disposing of the Bonds, provided that the disposition of your property shall at all times be and remain within your control. You further represent either (i) that you are acquiring the Bonds for your own account and with your general corporate assets and not with the assets of any separate account in which any employee benefit plan has any interest, or (ii) that no part of the funds to be used by you to acquire such Bonds constitutes assets allocated to any separate account maintained by you such that the application of such funds constitutes a prohibited transaction under Section 406(a) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). As used in this Section, the terms "separate account" and "employee benefit plan" shall have the respective meanings assigned to them in ERISA. 4. Closing Conditions. Your obligation to pur- chase and pay for the Bonds as herein contemplated shall be subject to the performance by the Company of its agreements hereunder which by the terms hereof are to be performed at or prior to the time of delivery of the Bonds and to the following additional conditions precedent to be satisfied on or before the Closing Date. 4.1. Closing Certificate. You shall receive from the Company a certificate, dated the Closing Date, duly autho- rized, executed and delivered by the Company, substantially in the form of the certificate annexed hereto and marked Exhibit B, the truth and accuracy of which shall be conditions precedent to your obligations hereunder. 4.2. Opinions. You shall receive from Chapman and Cutler, your special counsel in connection with this transac- tion, and from William F. Skewes, counsel for the Company, their -2- respective opinions, dated the Closing Date, in form and sub- stance satisfactory to you and covering the matters set forth in Exhibit C hereto. 4.3. Commission Authorization. The Colorado Public Utilities Commission, the Kansas Corporation Commission and the Missouri Public Service Commission shall each have en- tered an appropriate order authorizing the sale of the Bonds as herein contemplated and each such order shall have become final and unappealable. 4.4. Proceedings, Instruments, etc. All proceed- ings to be taken in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be satisfactory in form and substance to you and your special coun- sel; and you shall receive copies of all documents which you may reasonably request in connection with said transactions and all corporate proceedings in connection therewith, in form and sub- stance satisfactory to you and your special counsel. 5. Expenses and Taxes. The Company agrees, whether or not any of the Bonds shall be issued and sold pursuant hereto, to bear all expenses in connection with the authoriza- tion, preparation, issuance, sale and delivery to you at your home office or such other place as you may designate of the Bonds, including, without limitation, the cost of document prepa- ration, all issuance taxes and other taxes and fees payable in connection with such transactions and the charges and disburse- ments of your special counsel for their services in connection with the subject matter of this Agreement. 6. Financial Statements, etc. The Company agrees that, so long as you shall hold any of the Bonds, it will deliver to you: 6.1. Quarterly Statements. As soon as available and in any event within 45 days after the end of each quarterly period, except the last, of each fiscal year of the Company, a balance sheet of the Company as at the end of such period and statements of income of the Company for the period beginning on the first day of such fiscal year and ending on the date of such balance sheet, in each case setting forth in comparative form the corresponding figures for the corresponding period of the preced- ing fiscal year, all in reasonable detail and certified, subject to year-end audit adjustments, and certified by the principal financial officer of the Company as complete and correct in all material respects. 6.2. Annual Statements. Within 120 days after the end of each fiscal year, a copy of its balance sheet as at the end of such year and of its income and cash flow statements for such year, together with comparable figures for the preceding fiscal year, in reasonable detail, certified and accompanied by a report thereon by Ernst & Young or other independent certified public accountants of recognized national standing selected by -3- the Company and satisfactory to you to the effect that the finan- cial statements have been prepared in accordance with generally accepted accounting principles consistently applied and present fairly, in all material respects, the financial condition of the Company and the result of its operations and its cash flows for the fiscal year then ended. 6.3. Officer's Certificates. Within the periods provided in Sections 6.1 and 6.2, a certificate signed by an authorized financial officer of the Company stating that based upon such examination or investigation as the officer signing such certificate shall have deemed necessary to enable such officer to render an informed opinion in respect thereof, in such officer's opinion, no Event of Default (as described in the Indenture) or event which would so become an Event of Default with the lapse of time or the giving of notice, or both, existed at any time during such fiscal year, except for Events of Default or Defaults, if any, described in such certificate in reasonable detail, with a statement of the Company's action with respect thereto taken or proposed. 6.4. Accountant's Certificate. Within the period provided in section 6.2 above, the written statement of such accountants that in making the examination necessary to their certification of such audit report they have obtained no knowl- edge of any Event of Default, or event which with the lapse of time or giving of notice, or both, would become an Event of Default set forth in the Indenture, or if such accountants shall have obtained knowledge of any such Event of Default or event which would so become an Event of Default, they shall disclose in such statement the Default or Defaults and the nature thereof. 6.5. SEC and Other Reports. As soon as avail- able, any proxy statements, financial statements and reports that the Company sends or makes available generally to its stockhold- ers and copies, if any, of all regular and periodic reports and of all registration statements which the Company files with the Securities and Exchange Commission or with any securities ex- change and copies of any orders in any proceedings to which the Company is a party, issued by any governmental agency, Federal or state, which would have a material adverse affect on the business of the Company. 6.6. Audit Reports. Promptly upon receipt there- of, copies of all detailed reports, if any, submitted to the Company by independent public accountants in connection with each annual or interim audit by such accountants of the books of the Company. 6.7. Notice of Default. Promptly after any officer of the Company obtains knowledge of any Event of Default under the Indenture, written notice describing such Event of Default in reasonable detail, with a statement of the Company's action with respect thereto, taken or proposed. -4- 6.8. Requested Information. Such additional information as you may reasonably request concerning the Company. 7. Inspection Rights. The Company agrees that so long as you shall hold any of the Bonds, you may from time to time, at your own expense, visit any of the offices and proper- ties of the Company and discuss in reasonable detail the affairs, finances and accounts of the Company with the officers of the Company. The Company further agrees that, so long as you shall hold any of the Bonds, all books, documents and vouchers relating to the business and affairs of the Company shall at all times be open to the inspection of such accountant or other agent (who may make copies of any or all such records) as shall from time to time be designated and compensated by you. 8. Exchange of Bonds. The Company agrees that, within reasonable time, not exceeding 90 days, after you shall have made written request therefor of the Company, it will de- liver to you at the office of the Trustee, in exchange for any or all of the Bonds delivered to you at the closing definitive registered Bonds without coupons in such authorized denominations as you shall request. The Company shall bear all expenses (in- cluding any documentary or other similar taxes but excluding any transfer or other similar taxes) and shall make no charge in connection with the preparation, issue and delivery to you of the Bonds to be delivered to you upon such exchange. The Company will pay the charges for shipping to and from your office set forth above, or such other place as you shall designate, the Bonds issued upon any aforesaid exchange. 9. Loss, Theft, Etc., of Bonds. In the event of mutilation of any Bond owned by you, upon surrender and cancella- tion of such Bond, the Company will deliver a new Bond, of like tenor, in lieu of such mutilated Bond. If you are the owner of any lost, stolen or destroyed Bond, then the affidavit of your President or a Vice President, setting forth the fact of loss, theft or destruction and of your ownership of the Bond at the time of such loss, theft or destruction shall be accepted by the Company as satisfactory evidence thereof and no indemnity shall be required as a condition to execution and delivery of a new Bond other than your written agreement to indemnify the Company and the Trustee under the Indenture. No charge will be made to you for the delivery of a new Bond pursuant to this paragraph. 10. Direct Payment. The Company agrees that it will pay to you at the address and in the manner specified for payments in Schedule 1 hereto or such other place as you may designate all partial payments of principal and all payments of interest on the Bonds owned by you without any presentation or surrender thereof at the office of the Trustee. You agree that you will not sell, transfer or otherwise dispose of any Bond unless prior to delivery thereof such Bond shall have been pre- sented to the Trustee either (a) for notation thereon of the portion of the principal amount thereof which has been paid, or (b) in exchange for a new Bond or Bonds of the same Series in -5- aggregate principal amount equal to the unpaid portion of the Bonds presented to the Trustee. 11. Survival of Provisions, Successors. The Company agrees that all of its covenants, agreements, representa- tions and warranties made herein and in any and all certificates delivered pursuant hereto shall survive the delivery to you of the Bonds and the provisions of this Agreement shall bind and shall inure to the benefit of the parties hereto and their suc- cessors and assigns. 12. Notices. All communications provided for hereunder shall be in writing, mailed or delivered, postage prepaid, at the respective addresses appearing on the first page of this Agreement, or to such other address as you or the Company may designate to the other in writing. 13. Counterparts. This Agreement may be simulta- neously executed in any number of counterparts, each of which when so executed and delivered shall be an original, but such counterparts together shall constitute but one and the same instrument. 14. Law Governing. This Agreement shall be gov- erned by the laws of the State of Colorado. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed copy of this Agreement, whereupon it shall become a binding agreement between us. GREELEY GAS COMPANY By /s/ David L. Meyer ---------------------------- Vice President ---------- The foregoing is hereby confirmed and accepted as of the date first above written. FIRST COLONY LIFE INSURANCE COMPANY By /s/ J. Alden Butler ---------------------------- Senior Vice President -6- The agreements set forth in Sections 9 and 10 of this Agreement are satisfactory to the undersigned in form and substance. CENTRAL BANK DENVER, NATIONAL ASSOCIATION as Trustee By /s/ Kenneth B. Buckius ---------------------------- Trust Officer -7- Principal Amount of Bonds Name and Address of Purchasers to be Purchased - - ------------------------------ --------------- FIRST COLONY LIFE INSURANCE $17,000,000 COMPANY 700 Main Street Lynchburg, Virginia 24504 Attention: Mr. J. Alden Butler Payments All payments on or in respect of the Bonds to be by bank wire transfer of Federal or other immediately available funds (identi- fying each payment as "Greeley Gas Company First Mortgage Bonds 9.40% Series J, due 2021, principal or interest") to: Crestar Bank Richmond, Virginia ABA #0510-0002-0 Attention: Barbara Crossman Institutional Custody for credit to First Colony Life Insurance Company's Account No. 10765400 Notices All notices and communications, including notices with respect to payments and writ- ten confirmation of each such payment, to be addressed as first provided above. Name of Nominee in which Bonds are to be issued: None. SCHEDULE 1 (to Bond Purchase Agreement) EXHIBIT B GREELEY GAS COMPANY CLOSING CERTIFICATE First Colony Life Insurance Company 700 Main Street Box 1280 Lynchburg, VA 24504 Gentlemen: This Certificate is delivered to you responsive to the re- quirements of the Bond Purchase Agreement (the "Agreement"), dated as of April 1, 1991, between you and the undersigned, GREELEY GAS COMPANY, a Delaware corporation (the "Company"), relative to your purchase this date from the Company of its First Mortgage Bonds of the Series J in the amount set forth in Schedule 1 to the Agreement (the "Bonds"), and this Certificate is delivered to you simultaneously with and as an inducement to your purchase of such Bonds from the Company. The Company hereby represents and warrants to you as follows: 1. Organization. The Company is a corporation duly incorpo- rated and validly existing and in good standing under the laws of the State of Delaware, is duly qualified and in good standing as a foreign corporation in the States of Colorado, Kansas and Missouri and has the corporate power to own its property and to carry on its business as now being conducted and as proposed to be conducted. The properties now owned and the business now transacted by the Company do not require it to be qualified as a foreign corporation in any states other than Colorado, Kansas and Missouri. The Company has no subsidiaries. 2. Business and Property. You have heretofore been fur- nished with a copy of the Private Placement Memorandum dated February, 1991 (the "Memorandum"), prepared by Smith Barney, Harris Upham & Co. Incorporated which generally sets forth the business conducted and proposed to be con- ducted by the Company. 3. Financial Statements. The Company has heretofore deliv- ered to you copies of the balance sheets of the Company as of December 31 for each of the years 1985 through 1990 and the related statements of income and retained earnings and cash flows (or changes in financial position) for the fiscal years ended on said dates certified (i) in the case of such balance sheets as of dates prior to 1989 and such statements for fiscal years ended prior to 1989, by Arthur Young & Co., independent certified public accoun- tants and (ii) in the case of such balance sheets as of dates subsequent to 1988 and such statements for fiscal years subsequent to 1988 by Ernst & Young, independent certified public accountants. The Company has also hereto- fore delivered to you the unaudited balance sheets of the Company as of March 31, 1991 and the unaudited statements of income and retained earnings and cash flows for the three month period ended on said date prepared by the Company. The financial statements referred to above (including any related schedules and notes) fairly present the financial condition of the Company at the respective dates of such balance sheets and the results of its operations throughout the respective periods involved and were prepared in accordance with generally accepted accounting principles consistently followed through- out the periods involved. Since December 31, 1990 there has been no change in the financial condition of the Company from that set forth in the balance sheet as at December 31, 1990, other than changes in the ordinary course of busi- ness, and no such changes individually or in the aggregate have been materi- ally adverse changes; and since December 31, 1990, neither the business nor the properties of the Company have been materially and adversely affected in any way as the result of any fire, explosion, windstorm, drought, accident, strike, lockout, flood, earthquake, embargo, riot, government action or act of God or of the public enemy. 4. Title to Properties; Lien of Indenture. The Company has good and marketable title to all properties described in the granting clauses of the Indenture other than than properties released from the lien thereof pursuant to the terms thereof. The Company owns interests in real property only in the states of Colorado and Kansas. There are no liens, charges or encumbrances on any of the properties or assets of the Company except the lien of the Company's Indenture (as defined in the Agreement) and encum- brances permitted thereby. The property described in said Indenture will be all of the property owned by the Company as of the Closing Date. 5. Regulatory Approval. The issuance and sale of the Bonds by the Company and the consummation of the transactions contemplated by the Agreement do not require the authorization, approval or consent of any governmental body, commission, board or agency other than the authorization of the Colorado Public Utilities Commission, the Kansas Corporation Commis- sion and the Missouri Public Service Commission, which authorizations have been obtained. 6. Franchises, etc. The Company holds such valid and subsisting certificates of convenience and necessity, grant, franchises, licenses, permits and easements, free from unduly burdensome restrictions, as are necessary to enable it to carry on the business now being conducted by it. 7. Litigation. There is no action, suit or proceeding pending or, to the knowledge of the Company, threatened, against or affecting the Company at law or in equity or before or by any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, in the opinion of the Company, involves the possibility of any judgment or liability that may result in any material adverse change in the business, properties or assets or in the condition, financial or otherwise, of the Company. 8. Burdensome Agreements. The Company is not a party to any contract, agreement, judgment, decree or order, or subject to any charter, by-laws or other like corporate restriction which materially adversely affects, or in the future may (so far as the Company can now foresee) materi- ally adversely affect, its business, properties or assets, or its condition, financial or otherwise, nor is it a party to any material management contract providing for special bonus or profit sharing arrangements. B-2 9. Conformity with Law and Other Agreements. The execution and delivery of the Agreement, the Ninth Supplemental Indenture and the Bonds and the performance of and compliance with all of the terms and provisions thereof will not violate any provision of law or of the charter or by-laws of the Company and will not conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of any charter, by-law, indenture, mortgage, deed of trust, agreement, instrument, judgment, decree or order to which the Company is subject. The Company is not in violation of any term of its charter or by-laws, or of any term of any agreement, instrument, judgment, decree, order, statute, rule or regulation applicable to it, the violation of which would materially adversely affect the business, operations, properties or financial position of the Company. 10. Taxes. All tax returns required to be filed by the Company have been filed and all taxes, assessments, fees and other governmen- tal charges upon the Company or upon any of its properties or assets which are due and payable have been paid. No controversy in respect of additional taxes is pending or, to the knowledge of the Company, threatened, that would have a materially adverse effect upon the Company if adversely determined. The provision for taxes on the books of the Company is, in the opinion of the Company, adequate for all open years and for its current fiscal period. 11. Holding Company Act Status. The Company is not a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. 12. Defaults. There is no event of default or event which with the giving of notice and/or the lapse of time would constitute an event of default under any indenture (including the Indenture), mortgage, deed of trust, agreement or instrument to which the Company is a party. 13. Private Offering. Neither the Company, directly or indirectly, nor any agent on its behalf has offered or will offer the Bonds or any similar security or has solicited or will solicit an offer to acquire the Bonds or any similar security from or has otherwise approached or negoti- ated or will approach or negotiate in respect of the Bonds or any similar security with any person other than the Purchaser and not more than 45 other institutional investors, each of whom was offered a portion of the Bonds at private sale for investment. Neither the Company, directly or indirectly, nor any agent on its behalf has offered or will offer the Bonds or any similar security or has solicited or will solicit an offer to acquire the Bonds or any similar security from any person so as to bring the issuance and sale of the Bonds within the provisions of Section 5 of the Securities Act of 1933, as amended. 14. ERISA. The consummation of the transactions provided for in the Agreements and compliance by the Company with the provisions thereof and the Bonds issued thereunder will not involve any prohibited transaction within the meaning of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended. Each "pension plan", as such term is defined in ERISA, established or maintained by the Company (a "Plan") complies in all material respects B-3 with all applicable statutes and governmental rules and regulations, and (a) no "reportable event", as such term is defined in ERISA, has occurred and is continuing with respect to any Plan, (b) the Company has not withdrawn from any Plan or instituted steps to do so, and (c) no steps have been instituted to terminate any Plan. No condition exists or event or transaction has occurred in connection with any Plan which could result in the incurrence by the Company of any material liability, fine or penalty. No Plan maintained by the Company, nor any trust created thereunder, has incurred any "accumulated funding deficiency" as defined in Section 302 of ERISA nor does the present value of all benefits vested under all Plans exceed, as of the last annual valuation date, the value of the assets of the Plans allocable to such vested benefits. The Company has no contingent liability with respect to any post-retirement "welfare benefit plan" (as such term is defined in ERISA) except as has been disclosed to you. 15. Disclosure. Neither the financial statements heretofore furnished to you in connection with the issuance of the Bonds nor any certificate or statement furnished to you by or on behalf of the Company in connection with the transaction contemplated by the Agreement contain any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements contained therein or herein not misleading. To the best of the knowledge of the Company, there is no fact which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business or pros- pects or condition (financial or otherwise) of the Company or any of its respective properties or assets which has not been set forth herein or in a certificate or statement furnished to you by the Company. 16. Use of Proceeds, Acquisition. The proceeds from the sale of the Bonds will be used to retire $7,250,000 of long term debt, reduce short-term debt, finance current construction projects and for general corporate purposes. 17. Compliance with Environmental Laws. The Company is not in violation of any applicable Federal, state, or local laws, statutes, rules, regulations or ordinances relating to public health, safety or the environment, including, without limitation, relating to releases, discharges, emissions or disposals to air, water, land or ground water, to the withdrawal or use of ground water, to the use, handling or disposal of polychlorinated biphenyls, asbestos or urea formaldehyde, to the treatment, storage, disposal or management of hazardous substances (including, without limitation, petroleum, crude oil or any fraction thereof, or other hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or other controlled, prohibited or regulated substances which violation could have a material adverse effect on the business, prospects, profits, properties or condition (financial or otherwise) of the Company. The Company does not know of any liability or class of liability of the Company under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.). Dated: GREELEY GAS COMPANY B-4 By ___________________________ _______ President B-5 EXHIBIT C LEGAL OPINIONS A. The opinion of Chapman and Cutler, special counsel for the purchaser, shall be to the effect that: 1. The Company is a corporation duly incorporated and validly existing and in good standing under the laws of the State of Delaware, is duly qualified and in good standing as a foreign corporation under the laws of the State of Colorado, is duly qualified and in good standing as a foreign corporation under the laws of the State of Kansas, is duly qualified and in good standing as a foreign corporation under the laws of the State of Missouri, and has adequate corporate power and authority to carry on its business as now conducted. 2. The Agreement has been duly authorized by the Company and duly executed and delivered by an authorized officer of the Company and constitutes the valid and binding obligations of the Company, enforceable in accordance with their terms, except to the extent enforceability is limited by applicable bankruptcy, insolvency or other similar laws affecting creditors' rights generally. 3. The Indenture has been duly authorized by the Company and duly executed and delivered by authorized officers of the Company, creates a valid lien upon the interest of the Company in all real and personal property therein described as intended to be covered thereby, and is a valid and legally binding instrument of the Company enforceable in accordance with its terms except as they may be limited by the laws of the States of Colorado, Kansas and Missouri, wherein the property subject to the lien thereof is located, with respect to or affecting the remedies to enforce the security provided by the Indenture, which laws do not, in the opinion of such counsel, make inadequate the remedies necessary for the realization of the benefits of such security, or by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally. 4. The Bonds have been duly authorized by the Company, have been duly executed and delivered by authorized officers of the Company and duly authenticated by the Trustee, and have been duly issued, and (subject to the qualifications expressed in paragraph 2 above), are legally valid and binding obligations of the Company, enforceable in accordance with their terms, and are entitled to the benefits and security afforded by the Indenture. 5. The issue and sale of the Bonds and the execution and delivery of the Ninth Supplemental Indenture have, to the extent required by law, been duly authorized by separate orders of the Colorado Public Utilities Commission, the Kansas Corporation Commission and the Missouri Public Service Commission and each such order is not subject to any appeal or modification which would affect the validity or terms of the Bonds. No other approval or consent of any governmental authority is required for the issuance and sale of the Bonds as contemplated by the Agreement and the execution and delivery of the Ninth Supplemental Indenture. 6. The offering, sale and delivery of the Bonds under the circumstances contemplated by the Agreement constitute an exempted transaction which does not require registration under the Securities Act of 1933, or qualification of the Indenture under the Trust Indenture Act of 1939. 7. The legal opinion of William F. Skewes, counsel for the Company, delivered pursuant to the Agreement is satisfactory in scope and form and in our opinion you are justified in relying thereon. The opinion of such counsel shall also cover such other matters incident to the transactions contemplated by this Agreement as you may request. In giving the foregoing opinions Chapman and Cutler may rely on the opinion of William F. Skewes, as to the authorization, execution and validity of the Original Indenture and the first six supplemental indentures, the title of the Company to its properties, the recording of the Indenture, the lien created thereby and matters of the laws of the States of Colorado, Kansas and Missouri. B. The opinion of Wllliam F. Skewes, counsel for the Company, shall cover the matters set forth in paragraphs 1 through 6 above and shall be to the further effect that: (i) The Company has good and marketable fee title to all of the real property described in the Indenture and now owned by the Company, subject to no lien prior to, or on a parity with, the lien of the Indenture except as otherwise expressly stated therein, and except permitted encumbrances as defined in the Indenture, mechanics', materialmen's or other statutory liens not of record when the Ninth Supplemental Indenture was recorded, rights of parties in possession not shown of record and matters which would be revealed by a current survey; and the Company has acquired all other property in a manner consistent with the practices generally employed in the industry and has title or other possessory rights thereto sufficient for the ownership, maintenance and operation of its public utility systems. (ii) The Indenture has been duly recorded as a mortgage of real property and filed by way of financing statements as a security interest in personal property in the proper offices in the States of Colorado, Kansas and Missouri in which the Company owns property described in the Indenture, and the Indenture constitutes a valid, direct first mortgage lien upon the real property described therein and now owned by the Company and a valid, direct perfected security interest upon all other properties owned or held by the Company which are described or referred to therein as being subject to the lien thereof, subject to permitted encumbrances and the other matters to which the Indenture permits title to be subject, mechanics', materialmen's or other statutory liens not of record, rights of parties in possession not shown of record, and matters which would be revealed by a current survey; the descriptions contained in the granting clauses of the Indenture of the real property are in all respects sufficient descriptions of such property to subject such property to the direct and valid first lien of the Indenture and for all the purposes of the Indenture. C-2 (iii) All fees and taxes payable in connection with the execution, delivery, filing or recordation of the Ninth Supplemental Indenture and filing of related financing statements or the execution, authentication, issue or delivery of the Bonds have been paid. (iv) The franchises, licenses, permits and certificates of convenience and necessity held by the Company are validly held by the Company in all material respects and give to the Company all necessary authority for the operation and maintenance of its systems and of its business and property. In rendering his opinion Company counsel may, to the extent that he considers advisable and proper (and state in his opinion), rely on the opinions of other Colorado, Kansas and Missouri counsel delivered in connection with previous bond issues by the Company, upon searches for Uniform Commercial Code filings and upon certificates of officers of the Company with respect to titles to property, the recording and lien of the Indenture and the adoption and validity of local franchises, and upon the opinion of Kansas and Missouri counsel as to all matters of Kansas and Missouri law, provided (i) copies of such opinions and certificates are supplied to the purchaser and (ii) such Kansas and Missouri counsel shall be acceptable to the purchasers and its special counsel. C-3 EX-10 5 EXHIBIT 10.4 FOR 10-Q 6/30/94 ATMOS ENERGY CORPORATION To COLORADO NATIONAL BANK (Formerly Central Bank Denver, N.A.) TRUSTEE TENTH SUPPLEMENTAL INDENTURE Dated as of December 1, 1993 Supplementing and Amending Indenture of Mortgage and Deed of Trust dated as of March 1, 1957 TABLE OF CONTENTS SECTION HEADING PAGE Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE ONE SUBSTITUTION OF SUCCESSOR CORPORATION . . . 2 Section 1.01. Assumption of Indenture Obligations . . . 2 Section 1.02. Mortgage of Property . . . . . . . . . . . 2 ARTICLE TWO AMENDMENTS TO ARTICLES SIX, SEVEN AND EIGHT . . . . . . . . . . . . . . . . . 3 Section 2.01. Amendments to Article Six . . . . . . . . 3 Section 2.02. Amendments to Article Seven . . . . . . . 7 Section 2.03. Amendments to Article Eight . . . . . . . 8 ARTICLE THREE MISCELLANEOUS AMENDMENTS TO THE SEVENTH SUPPLEMENTAL INDENTURE . . . . . . . . . . . 9 Section 3.01. Amendments to Other Articles and Exhibit A . . . . . . . . . . . . . . 9 ARTICLE FOUR MISCELLANEOUS PROVISIONS . . . . . . . . . 11 Section 4.01. Counterparts . . . . . . . . . . . . . . 11 Section 4.02 Defined Terms . . . . . . . . . . . . . 11 Section 4.03. Headings for Convenience . . . . . . . . 11 Signature Page . . . . . . . . . . . . . . . . . . . . . . . 12 ATTACHMENT: Schedule 1 - Property Description -i- This is a TENTH SUPPLEMENTAL INDENTURE, dated as of December 1, 1993 (the "Tenth Supplemental Indenture"), between ATMOS ENERGY CORPORATION, a corporation organized and existing under the laws of the State of Texas (the "Corporation"), having its principal place of business in Dallas, Texas, party of the first part, and COLORADO NATIONAL BANK (formerly named Central Bank Denver, N.A.), organized and existing under the laws of the United States (the "Trustee"), as Trustee, party of the second part. R E C I T A L S : The background of this Tenth Supplemental Indenture is: A. Greeley Gas Company, a Delaware corporation, formerly and successor by merger to Greeley Gas Company, a Colorado corporation ("Greeley"), heretofore executed and delivered to the Trustee its Indenture of Mortgage and Deed of Trust dated as of March 1, 1957 (the "Original Indenture") to secure the payment of the principal of, premium, if any, and interest on, all Bonds at any time issued and outstanding thereunder and to establish and declare the terms and conditions upon which Bonds are to be issued and secured thereunder. B. Greeley thereafter executed and delivered to the Trustee nine Supplemental Indentures respectively dated as of November 1, 1957, October 1, 1959, March 1, 1961, June 1, 1965, March 1, 1973, March 2, 1973, October 1, 1983, October 1, 1985 and April 1, 1991 (the Original Indenture and all Supplemental Indentures, including this Tenth Supplemental Indenture, being hereinafter sometimes collectively referred to as the "Inden- ture"), for the various purposes of creating and authorizing additional series of Bonds to be secured by the Indenture, conveying to the Trustee certain additional property amending the Original Indenture and correcting the description of certain property. C. Pursuant to an Agreement and Plan of Reorganization dated July 2, 1993 among the Corporation, Greeley and Greeley Gas Acquisition Corporation, a Colorado Corporation (the "Acquisition Corp.") which is a wholly owned subsidiary of the Corporation, Greeley will be merged into Acquisition Corp. with Acquisition Corp. as the surviving corporation (the "Greeley Merger") and immediately upon consummation of the Greeley Merger, Acquisition Corp. will be merged into the Corporation with the Corporation as the surviving corporation (the "Acquisition Corp. Merger", the Greeley Merger and the Acquisition Corp. Merger shall be some- times hereinafter referred to collectively as the "Merger"). Effective the date of the consummation of the Merger (the "Merger Date"), the Corporation as the survivor of the Merger proposes, pursuant to the Indenture, (i) to execute and deliver a Supple- mental Indenture in order to succeed to all rights, privileges, powers and franchises of Greeley including all property, real, personal and mixed owned by Greeley which is subject to the lien of the Indenture and (ii) to assume all debts, liabilities and obligations of Greeley under the Indenture. D. In addition the Corporation proposes (1) to amend the Seventh Supplemental Indenture dated as of October 1, 1983 (the "Seventh Supplemental Indenture"), as hereinafter set forth and (2) to make certain corrections to the Seventh Supplemental Indenture as hereinafter set forth. E. The Corporation has obtained and filed with the Trustee the written consent of the holders of the requisite percentage of outstanding Bonds to the amendment herein con- tained. All acts and things necessary to constitute these presents a valid indenture and agreement according to its terms, have been done and performed, and the execution of this Tenth Supplemental Indenture has in all respects been duly authorized and the Corporation in the exercise of the legal right and power vested in it executes this Tenth Supplemental Indenture. NOW, THEREFORE, in consideration of the premises and of the sum of One Dollar to the Corporation duly paid by the Trustee at or before the ensealing and delivery hereof and for other good and valuable considerations, the receipt whereof is hereby acknowledged, the Corporation hereby covenants to and with the Trustee and its successors in the trusts under the Indenture for the equal and pro rata benefit of all present and future holders of all Bonds issued and to be issued under the Indenture without any preference, priority or distinction whatsoever, as follows: ARTICLE ONE SUBSTITUTION OF SUCCESSOR CORPORATION Section 1.01. Assumption of Indenture Obligations. Effective the Merger Date, the Corporation, as successor to Greeley, assumes the due and punctual payment of the principal of (and premium if any) and interest on all the Bonds and the performance of every covenant and condition of the Indenture to be performed or observed by the Corporation. Section 1.02. Mortgage of Property. The Corporation in order to better secure the principal of and interest (and premium, if any) on all Bonds of the Corporation at any time outstanding under the Indenture according to their tenor and effect and the performance of and compliance with the covenants and conditions in the Indenture contained, does hereby mortgage, assign, grant, bargain, sell and convey unto the Trustee, and to its successors in said trust, forever, all of the property rights and franchises owned by Greeley immediately prior to the Merger which is subject to the lien of the Indenture including the properties described in Schedule 1 attached hereto and made a part hereof (the "Mortgaged Property") and no other property rights or franchises now owned or hereafter acquired by the Corporation, provided that the Corporation does hereby mortgage assign, grant, bargain, sell and convey unto the Trustee and its successors the following properties acquired by the Corporation on or after the Merger Date to wit: -2- (1) all betterments, extensions, improvements, addi- tions, repairs, renewals, replacements, substitutions and alterations to, upon, for and of the property or fran- chises, or both, subject to the lien of the Indenture, and all property constituting appurtenances of the Mortgaged Property; (2) all property acquired or constructed with the proceeds of any insurance on any part of the Mortgaged Property or with the proceeds of any part of the Mortgaged Property released from the lien of the Indenture or a prior lien or disposed of free from any such lien, or taken by eminent domain, or purchased by a public author- ity; and (3) all property acquired in pursuance of the cove- nants herein contained to maintain and preserve and keep the Mortgaged Property in good condition, repair and working order, or in pursuance of any other covenant or agreement herein contained to be performed by the Corpora- tion; in trust, nevertheless for the same purposes and upon the same conditions as are set forth in the Original Indenture, any such acquired property which is described in clauses (1), (2) and (3) of this Section 1.03 becoming Mortgaged Property upon being so acquired. ARTICLE TWO AMENDMENTS TO ARTICLES SIX, SEVEN AND EIGHT Section 2.01. Amendments to Article Six. Sections 6.01 through 6.08, inclusive, and 6.13 are hereby restated in their entirety to read as follows: Section 6.01. Payment. The Corporation will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Bonds at the times and places and in the manner specified in the Bonds and herein. Notwithstanding the above or any other provisions of this Indenture or any Bond issued hereunder, the Corpo- ration may enter into an agreement with the holder of any Bond providing for the payment to such holder, without presentation or surrender of such Bond of the principal of (and premium, if any) and interest on such Bond or any part thereof at a place other than as designated herein or in such Bond and for the making of notation of principal payments on such Bond by such holder prior to any trans- fer, thereof. The Trustee is authorized to consent to any such agreement and shall not be liable or responsible to any such holder or to the Corporation for any act or omission on the part of the Corporation or any holder of a Bond in connection with any such agreement. The Corpora- tion covenants to deposit with the Trustee, at its princi- -3- pal office, or with a Paying Agent other than the Trustee (or, if the Corporation is acting as its own Paying Agent, segregate and hold in trust as provided in Section 6.10), an amount of money sufficient to make such payment of principal (and premium, if any) and interest on the Bonds, such deposit to be made with the Trustee or such Paying Agent, as the case may be, not later than one business day before the date such payment or payments are due. All amounts so deposited shall be held in trust for the ac- counts of the holders of the obligations due on such date and shall be applied to the payment thereof. The Corpora- tion designates itself as Paying Agent effective upon the Merger Date. Section 6.02. Taxes and Assessments. The Corporation will duly and punctually pay and discharge, or cause to be paid and discharged, all taxes, assessments and governmen- tal charges or levies imposed upon or assessed against the Corporation with respect to its business operations in the states of Colorado, Kansas or Missouri, or upon any of the Mortgaged Property, provided however, that nothing herein contained shall require the Corporation to pay any such tax, assessment, charge or levy so long as the Corporation shall in good faith contest the validity of the same by appropriate legal proceedings and stay any execution thereof and so long as adequate reserves in respect there- of have been established in accordance with generally accepted accounting principles and the Corporation's title to and right to use its property is not adversely affected thereby. Section 6.03. Maintenance of Corporate Existence and Rights; Compliance with Laws. Subject to the provisions of Article Thirteen hereof, the Corporation will do or cause to be done, at its own cost and expense, all things neces- sary to preserve, extend and renew its corporate existence under the laws of the state of its incorporation and its qualified status in the states of Colorado, Kansas and Missouri, and will use its best efforts to preserve and renew all franchises, rights of way, easements, permits and licenses now held by it or hereafter granted to or conferred upon it with respect to its business operations in the states of Colorado, Kansas or Missouri, provided, however that the Corporation shall not be required to preserve any such franchise, right, easement, permit or license if the Board of Directors shall determine that such preservation is no longer desirable in the conduct of the business of the Corporation and will comply with all valid laws, ordinances, regulations and requirements applicable to it or its property. Section 6.04. Carry on Business and Maintain Property. The Corporation will at all times endeavor to carry on and conduct its business operations in the states of Colorado, Kansas and Missouri in an efficient manner and will cause -4- the Mortgaged Property (except such property as may be disposed of or released from the lien hereof pursuant to Article Fourteen) to be maintained and preserved and kept in good repair and working order and will cause to be made all necessary repairs, renewals, replacements, and substi- tutions so that at all times the efficiency of the Mort- gaged Property shall fully be preserved and maintained in accordance with the standards generally accepted in the utility industry and by such regulatory authorities then exercising jurisdiction over the Corporation in the states of Colorado, Kansas or Missouri. Section 6.05. Insurance. The Corporation will insure and keep insured in a reasonable amount with financially sound and reputable insurance companies all property and equipment of a character usually insured by companies of relatively the same size engaged in the same or a similar business against liabilities or damages of the kind cus- tomarily insured against by such companies provided that the Corporation may at its election act as self-insurer any such system of self-insurance (including any appropri- ate reserve or reserves therefor) to be upon such terms and conditions as may be determined by the Board of Direc- tors provided that the same conforms to approved practices of similar companies maintaining systems of self-insurance or to regulations of any regulatory commission having jurisdiction over the Corporation in the states of Colo- rado, Kansas and Missouri. All policies or other contracts for such insurance upon any part of the Mortgaged Property shall provide that the proceeds of such insurance (except in the case of any particular casualty resulting in damage or destruction not exceeding $200,000 in the aggregate) shall be payable to the Trustee to be held and applied by the Trustee as a part of the Mortgaged Property; provided, however, that, with respect to any part of the Mortgaged Property that is subject to a prior lien or Permitted Encumbrance, the loss under any such insurance policy or contract may be payable also to the trustee, mortgagee or other holder of such prior lien or Permitted Encumbrance, as its interest may appear. At any time upon the request of the Trustee the Corporation will file with the Trustee an Officer's Cer- tificate containing a detailed list of the insurance in effect upon the Mortgaged Property on a date therein specified (which date shall be within 30 days of the filing of such certificate) and stating the names of the insurers with which the outstanding policies and other contracts, and specifying the property and risks covered thereby and stating that said insurance complies with this Section. Any appraisement or adjustment of any loss or damage of or to any part of the Mortgaged Property and any set- tlement in respect thereof which may be agreed upon be- -5- tween the Corporation and any insurer, as evidenced by an Officer's Certificate, shall be assented to and accepted by the Trustee. All proceeds of any insurance on any part of the Mortgaged Property not payable to the Trustee or the trustee, mortgagee or other holder of a prior lien or Permitted Encumbrance shall be applied by the Corporation to the repair, restoration or replacement of the Mortgaged Property. All proceeds of any insurance on any part of the Mortgaged Property payable to the Trustee shall be deposited with the Trustee to be held and paid over or applied by it as provided in Article Seventeen. The Corporation will maintain liability insurance against claims for personal injury or death or property damages suffered by members of the public or others in or about any property or premises owned or occupied or used by it in its business operations in the states of Colo- rado, Kansas and Missouri or occurring by reason of its ownership, maintenance, use or operation in the states of Colorado, Kansas and Missouri of any pipelines, compress- ing stations, plants, shops, machinery, automobiles, trucks or other vehicles, or airplanes or other facili- ties, provided that the Corporation may at its election act as a self-insurer, any such system of self-insurance (including an appropriate reserve or reserves therefor) to be upon such terms and conditions as may be determined by the Board of Directors provided that the same conforms to approved practices of similar companies maintaining sys- tems of self-insurance or to regulations of any regulatory commission having jurisdiction over the Corporation; and the Corporation will maintain all such workmen's compensa- tion or similar insurance as may be required under the laws of Colorado, Kansas or Missouri, as the case may be. All such liability and workmen's compensation and similar insurance shall be maintained in such amounts as are customarily carried by responsible persons engaged in the same or similar business and shall be effected under a valid and enforceable policy or policies issued by insur- ers of recognized responsibility except that the Corpora- tion may effect workmen's compensation or similar insur- ance in respect of operations in the states of Colorado, Kansas or Missouri, as the case may be, either through an insurance fund operated by such state or by causing to be maintained a system or systems of self-insurance which is in accord with applicable Federal or state laws. Section 6.06. Restrictions on Encumbrances. The Corpo- ration will not create or suffer to exist any mortgage lien security interest or encumbrance on any Mortgaged Property (other than the lien of the Indenture), except: (a) Permitted Encumbrances; and -6- (b) Any purchase money mortgage or security inter- est created to secure part of the purchase price of any property or of any mortgage on, or security inter- est in any property existing at the time of acquisi- tion thereof, whether or not assumed by the Corpora- tion, provided that: (1) such purchase money mortgage, mortgage or security interest shall extend only to the prop- erty so acquired and fixed improvements thereto; (2) at the time of acquisition thereof and after giving effect to the indebtedness secured by such outstanding purchase money mortgage, mortgage or security interest the aggregate principal amount of indebtedness secured by all such out- standing purchase money mortgages, mortgages and security interests shall not exceed 10% of the aggregate principal amount of all Outstanding Bonds; and (3) the principal amount of the indebtedness secured by any such purchase money mortgage, mortgage or security interest together with all other indebtedness secured by a lien on such property, shall not exceed 66-2/3% of the cost or fair value whichever is less of the property so acquired on the date of acquisition thereof; provided, however, if the principal amount of such indebtedness shall exceed 66-2/3% of the cost or fair value, whichever is less of such property, then the Corporation may acquire such property provided that the Corporation shall within 15 days after such acquisition furnish to the Trustee (i) a Net Bondable Property Additions Certificate in the form prescribed by Subsection (e) of Section 5.01 which shall certify Net Bondable Property Additions in an amount equal to 150% of such excess indebtedness and such Net Bondable Property Additions so certified shall thereafter constitute Funded Property, and (ii) a certificate in the form prescribed by Subsection (b) of Section 5.01, provided, however that such certificate shall refer only to Subsection (d) of Section 5.01 and that both the Net Bondable Property Additions Certificate and the Certificate shall refer to the date of acquisition of such property rather than the date of authentication and delivery of Bonds. Section 6.07. Records of Account and Certificate. The Corporation will at all times keep proper books of record and account and therein will make full true and proper entries of all dealings and transactions in relation to the Mortgaged Property and the business operations of the Corporation in the states of Colorado, Kansas and -7- Missouri; and such books shall at all reasonable times be open to inspection by the Trustee and its duly authorized agents. Such books of account shall at all times conform strictly to the Accounting Requirements. On or before January 31 of each fiscal year of the Corporation the Corporation shall file with the Trustee a balance sheet as of the end of the preceding fiscal year and a profit and loss statement for such fiscal year together with other related statements and appropriate notes, and such statements shall be reviewed by independent certified public accountants whose certificate shall accompany them and who, together with the chief financial officer of the Corporation shall further certify that such statements have been prepared strictly in accordance with the Accounting Requirements. Section 6.08. Certificate as to Compliance. On or before April 30, 1994, and on or before January 31 in each calendar year following 1994, the Corporation will deliver to the Trustee (1) an Officer's Certificate stating whether or not the Corporation is in default in the payment of the principal or interest on the Bonds or has knowledge of any Default and, if so, specifying each such Default of which the signers have knowledge, and (2) a certificate of the firm of public accountants that prepared the financial statements for the Corporation for the immediately preceding fiscal year to the effect that such firm, in making the examination in connection with its report on such financial statements has obtained no knowledge of any Default (or if knowledge of Default has been obtained, specifying each such Default), by the Corporation during such fiscal year in the observance, performance or fulfillment of any of the terms, provisions or conditions contained in this Indenture. Section 6.13. Transactions with Affiliates. Subject to applicable regulatory requirements, the Corporation will not, in connection with its business operations in the states of Colorado, Kansas or Missouri, enter into or be a party to, any transaction or arrangement with any Affiliate (including, without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any Affiliate), except in the ordinary course of and pursuant to the reasonable requirements of the Corporation's business and upon fair and reasonable terms no less favorable to the Corporation than would obtain in a comparable arm's length transaction with a Person other than an Affiliate. Section 2.02. Amendments to Article Seven. Section 7.05 is hereby restated to read as follows: Section 7.05. Opinions of Counsel to Be Filed with Trustee. The Corporation covenants and agrees: -8- (a) To file with the Trustee, promptly after execution and delivery of this Indenture, an Opinion of Counsel either stating that in the opinion of such counsel this Indenture has been properly recorded and filed so as to make effective the lien intended to be created hereby, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to make such lien effective; and (b) To file with the Trustee on or within the 10 day period immediately preceding April 30, 1994 and thereafter on or within the 10 day period immediately preceding January 31 in each year, beginning with the year 1995, an Opinion of Counsel, dated as of the date of such filing with the Trustee, either stating that in the opinion of such counsel such action has been taken with respect to the recording, filing, re-recording, and refiling of this Indenture and of each supplemental indenture or other instrument of further assurance, including, without limitation, financing statements, as is necessary to maintain the lien of this Indenture, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such lien, and in providing such opinion, the counsel rendering such opinion may rely (i) as to liens upon and/or title to property and the status of appropriate Uniform Commercial Code filings, upon title searches and/or title reports of title companies or abstract companies which are dated not earlier than 90 days prior to the issuance of such opinion and upon opinions of local counsel of current date delivered for such purpose, and (ii) as to litigation, if any, which may result in liens upon and/or may impair title to property, upon Officer Certificates addressed to such counsel and dated not earlier than five days prior to the date of such opinion stating whether any such litigation exists and, if so, a description of the same and the expectations of the Corporation with respect thereto. Section 2.03. Amendments to Article Eight. Subsections (e), (f) and (i) of Section 8.01 are hereby restated, respectively, to read as follows: (e) default on the part of the Corporation or any Subsidiary in the payment of the principal of or interest on any indebtedness of the Corporation or any Subsidiary for borrowed money (other than the Bonds) in the aggregate principal amount of $1,000,000 or more as and when the same shall become due and payable, by the lapse of time, by declaration, or call for redemption or otherwise, and such default shall continue beyond the period of grace, if any, allowed with respect thereto; or -9- (f) default on the part of the Corporation or any Subsidiary in the performance of any of the covenants or agreements on the part of the Corporation or any Subsidiary in any indenture, agreement or other instrument under which any indebtedness of the Corporation or any Subsidiary for borrowed money (other than the Bonds) in the aggregate principal amount of $1,000,000 or more may be issued and such default or event shall continue for a period of time sufficient to permit the acceleration of the maturity of any such indebtedness outstanding thereunder; or (i) if final judgment or judgments, for the payment of money in excess of $2,000,000 shall be outstanding against the Corporation or any Subsidiary or against any property or assets of either and any one of such judgments shall remain unpaid, unvacated, unbounded, or unstated by appeal or otherwise for a period of thirty days from the date of its entry; ARTICLE THREE MISCELLANEOUS AMENDMENTS TO THE SEVENTH SUPPLEMENTAL INDENTURE Section 3.01. Amendments to Other Articles and Exhibit A. The Seventh Supplemental Indenture is hereby further amended as follows: (a) The first sentence of Section 9.09 is hereby restated to read as follows: There shall at all times be a Trustee hereunder that shall be a corporation organized and doing business under the laws of any State or of the United States of America authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least Fifty Million Dollars subject tosupervision or examination by federal or state authority. (b) In Section 9.10, the second sentence of Subsection (a) is hereby changed by adding "of such" after "notice" and the word "adjusted" in Paragraph (3) of Subsection (b) is hereby changed to read "adjudged". (c) In Section 9.11, the word "returning" in the first sentence of the first paragraph is hereby changed to read "retiring". (d) In Subsection (c) of Section 14.03 and in the last paragraph of Section 14.03, the figure "$100,000" is hereby changed to read "$200,000". (e) The reference in Section 17.01 to "Article Seven" is hereby changed to "Article Eight". -10- (f) In the lead-off provisions of Section 17.02, the word "New" is hereby changed to the word "Net". (g) In Subsection (c) of Section 17.02, the reference to "Subsection (e)" is hereby changed to "Subsection (d)" and in Subsection (d) of Section 17.02 the reference to "Subsection (f)" is hereby changed to "Subsection (e)." (h) Subsection (a) of Section 19.02 is hereby restated to read as follows: (a) Accounting Requirements means generally accepted accounting principles consistently applied or such other system of accounts prescribed by the Colorado Public Utilities Commission, the Corporation Commission of the State of Kansas or any other commissions of other states in which the Corporation shall operate its properties (to the extent each such Commission has jurisdiction over the Corporation) at the time in effect or any substitute system of accounts prescribed by any successor commission or commissions empowered to regulate the rates and charges of the Corporation for the transmission and distribution of natural gas. (i) Subsection (k) of Section 19.02 is restated to read as follows: Corporation means (i) until the Merger, Greeley Gas Company, a Delaware corporation (successor to Greeley Gas Company, a Colorado corporation), and (ii) upon and after the Merger, Atmos Energy Corporation, a Texas corporation, and, subject to the provisions of Article Thirteen, shall also include its successors and assigns. (j) Subsection (m) of Section 19.02 is revised by substituting the word "or" for the word "of" where it first appears in Subsection (m). (k) Subsection (q) of Section 19.02 is revised by substituting the word "resultant" for the word "result" where it appears in the second sentence of Subsection (q). (1) The figure "$50,000" which appears in clause (v) of paragraph (4) of Subsection (aa) of Section 19.02 is hereby changed to "$200,000". (m) Subsection (hh) of Section 19.02 is hereby restated to read as follows: Trustee means Colorado National Bank, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean such successor trustee. (n) The following new Subsections (kk), (11), (mm), (nn) and (oo) are added to Section 19.02 following Subsection (jj): -11- (kk) Merger shall have the meaning set forth in Recital C to the Tenth Supplemental Indenture. (11) Merger Date shall mean the date of the consummation of the Merger. (mm) Shareholders' Equity shall mean the sum (determined in accordance with generally accepted accounting principles) of the Corporation's (i) common stock, (ii) preferred stock, (iii) retained earnings, (iv) capital surplus, and (v) paid-in capital. (nn) Subsidiary shall mean each corporation, trust, partnership or association, 50% or more of the voting securities of which are owned by the Corporation, directly or through another such corporation, trust, partnership or association. (oo) Wholly-owned Subsidiary shall mean any Subsidiary, 100% of the voting securities of which are owned directly or indirectly by the Corporation. (o) Section 20.05 is hereby restated to read as follows: Section 20.05. Service of Notices. Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by any Bondholder to or on the Corporation shall be sufficiently given if mailed, first-class postage prepaid, or delivered by overnight courier, addressed (until another address is filed in writing by the Corporation with the Trustee) as follows: Atmos Energy Corporation, 1800 Three Lincoln Centre, 5430 LBJ Freeway, Dallas, Texas 75240, Attention: Chief Financial Officer. Any notice, election, request or demand by the Corporation or any Bondholder to or upon the Trustee, shall be sufficiently given or made, for all purposes, if given or made in writing at the principal office of the Trustee, addressed as follows: Colorado National Bank, 1515 Arapahoe Street, Denver, Colorado 80217, or to such other address as at the time may be the principal office of the Trustee. (p) Exhibit A to the Seventh Supplemental Indenture shall be amended for any Bonds issued after the Merger to reflect the new name of the Corporation and the new name of the Trustee. ARTICLE FOUR MISCELLANEOUS PROVISIONS Section 4.01. Counterparts. This Tenth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 4.02 Defined Terms. The capitalized terms used herein which are defined in the Indenture have the meaning therein set forth. Section 4.03. Headings for Convenience. The Article, Section and Subsection headings contained in this Tenth Supplemental Indenture and the -12- Table of Contents are for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. IN WITNESS WHEREOF, Atmos Energy Corporation has caused this Tenth Supplemental Indenture to be signed in its corporate name by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or Assistant Secretary, and Colorado National Bank, as Trustee, has caused this Tenth Supplemental Indenture to be signed in its corporate name by its Trust Officer and its corporate seal to be hereunto affixed and attested by its Cashier as of the day and year first above written. ATMOS ENERGY CORPORATION (CORPORATE SEAL) By /s/ James F. Purser ---------------------------- Exec. Vice President ATTEST: ---------- /s/ Don E. James - - -------------------------- Secretary ------- Witnesses: /s/ Glen Blanscet - - -------------------------- /s/ Shirley A. Morgan - - -------------------------- -13- COLORADO NATIONAL BANK, as Trustee (CORPORATE SEAL) By /s/ Adam M. Dalmy ---------------------------- Trust Officer ATTEST: /s/ Will S. Johnson - - -------------------------- Assistant Secretary Witnesses: /s/ Anne Kolnes - - -------------------------- /s/ Claudia R. Barns - - -------------------------- STATE OF TEXAS ) -----------) SS. COUNTY OF DALLAS ) ---------- The foregoing instrument was acknowledged before me this 17th day of December, 1993, by James F. Purser as Exec. Vice President, and Don E. James, as Secretary, of Atmos Energy Corporation, a corporation. Witness my hand and official seal. My commission expires 8/20/97 /s/ Shirley Strother ------------------------------- Notary Public STATE OF COLORADO ) )SS. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this 20th day of December, by Adam M. Dalmy, as Trust Officer, and Will Johnson, as Assistant Secretary, of Colorado National Bank. Witness my hand and official seal. My commission expires: 7-13-96 /s/ Marlene Fortune ------------------------------- Notary Public -14- PROPERTY DESCRIPTION Bent County, Colorado: A parcel of land located in the SE 1/4 SE 1/4 SE 1/4 of Section 8, Township 22 South, Range 48, West of the 6th P.M., Bent County, Colorado, and more particularly described as follows: Commencing at the SE corner of Section 8, which is a Recovered Aluminum Cap by P. & S.S. Inc., thence S. 89 38'52"W., a distance of 267.72 feet to a Point; thence N. 00 26'25"W., a distance of 33.64 feet to a Number Four Rebar with an Aluminum Cap marked R.L.S. 11380, which is on the North Rights-of-Way line of Colorado Highway Number 196, and is the POINT OF BEGINNING; thence S. 89 33'42"W., along the North Rights-of-way line of said Highway a distance of 327.71 feet to a Number Four Rebar with an Aluminum Cap; thence N.00 18'19"W., a distance of 306.55 feet to a Number Four Rebar with an Aluminum Cap; thence N. 89 48' l5"E., a distance of 326.99 feet to a Number Four Rebar with an Aluminum Cap; thence S.00 26'25"E., a distance of 305.17 feet to a Number Four Rebar with an Aluminum Cap, which is on the North Rights-of-Way line of Colorado Highway Number 196, and the POINT OF BEGINNING. Marion County, Kansas: Lots 318, 320, and 322, Main Street, Florence, Kansas. SCHEDULE I (to Tenth Supplemental Indenture) -15- ATMOS ENERGY CORPORATION FIRST AMENDMENT TO BOND PURCHASE AGREEMENT DATED AS OF APRIL 1, 1991 Re: $17,000,000 First Mortgage Bonds, 9.40% Series J, Due May 1, 2021 First Colony Life Insurance Company 700 Main Street Dated as of Lynchburg, Virginia 24504 December 1, 1993 Gentlemen: Reference is made to the Bond Purchase Agreement dated as of April 1, 1991 (the "Bond Purchase Agreement") between you and Greeley Gas Company, a Delaware corporation, formerly and successor by merger to Greeley Gas Company, a Colorado corporation ("Greeley") pursuant to which you purchased the above referenced Bonds issued by Greeley (the "Bonds"), pursuant to the Indenture of Mortgage and Deed of Trust dated as of March 1, 1957, as supplemented from time to time (the "Indenture"). In accordance with Agreement and Plan of Reorganization dated July 2, 1993 among Greeley, Greeley Gas Acquisition Corporation (the "Acquisition Corp.") and the undersigned, Atmos Energy Corporation (the "Company"), Greeley will be merged into Acquisition Corp., with Acquisition Corp. as the surviving corporation (the "Greeley Merger") and immediately upon consummation of the Greeley Merger, Acquisition Corp. will be merged into the Company with the Company as the surviving corporation (the "Acquisition Corp. Merger", the Greeley Merger and the Acquisition Corp. Merger being collectively, the "Merger"). As a condition precedent to the consummation of the Merger, you and the Company agree as follows: ARTICLE I AMENDMENTS A. Sections 6.1 through 6.8 of the Bond Purchase Agreement are deleted and the following new Sections 6.1 through 6.7 are inserted in lieu thereof: 6.1. Quarterly Statements. As soon as available, but no later than 65 days following the end of such fiscal quarter of the Company (except the last such quarter in any fiscal year), copies of the consolidated (and, if available or with respect to Subsidiaries that are not wholly owned by the Company, consolidating) balance sheet as of the close of such quarter and the consolidated (and, if available or with respect to Subsidiaries that are not wholly owned by the Company, consolidating) statements of income and retained earnings and cash flow of the Company and the Subsidiaries for the portion of such fiscal year ending on the close of such quarter, each setting forth in comparable form the figures for the same period of the immediately preceding fiscal year, all in -16- reasonable detail and certified by the chief financial officer of the Company as having been prepared in accordance with generally accepted accounting principles consistently applied (other than changes in which the Company's independent public accountant concurs) and fairly reflecting the financial conditions of the Company and the Subsidiaries, but subject to the normal year-end adjustments; 6.2. Annual Statements. As soon as available, but no later than 100 days following the end of each fiscal year of the Company, copies of the consolidated (and, if available or with respect to Subsidiaries that are not wholly owned by the Company, consolidating) balance sheet as of the end of such fiscal year and the consolidated (and, if available or with respect to Subsidiaries that are not wholly owned by the Company, consolidating) statements of income and retained earnings and cash flow of the Company and the Subsidiaries for such fiscal year, each setting forth in comparable form the figure for the immediately preceding fiscal year, all in reasonable detail and accompanied by an opinion of a nationally recognized firm of independent public accountants to the effect that such statements have been prepared in accordance with generally accepted accounting principles consistently applied (other than changes in which such firm concurs) and fairly present the financial condition of the Company and the Subsidiaries, and the examination of the books and records of the Company and the Subsidiaries has been made in accordance with generally accepted auditing standards, including, without limitation, customary tests and other auditing procedures. 6.3. Accountants' Statements. Simultaneously with the delivery of each set of statements referred to in Section 6.2 above, a statement of the firm of independent public accountants which reports such statements to the effect that nothing has come to their attention to cause them to believe that there existed on the date of such statements any Event of Default under the Indenture or if they obtain knowledge of any such Event of Default, they shall disclose in such statement the nature thereof. 6.4. Officers' Certificates. Together with each report delivered pursuant to Sections 6.1 and 6.2 above, (i) a certificate from the president or a vice president of the Company to the effect that no condition or event exists that constitutes, or with lapse of time or the taking of any action or both would constitute, an Event of Default under the Indenture, except for such Events of Default described in such certificate in reasonable detail, with a statement of the Company's action with respect thereto taken or proposed. 6.5. SEC and Other Reports. Promptly upon their becoming available, a copy of any report, proxy statement, or other filing made by the Company or any Subsidiary with the Securities and Exchange Commission, any state securities agency, or any national stock exchange or quotation service. 6.6. Notice of Default. Immediately upon an officer of the Company obtaining knowledge of the occurrence of any Event of Default under the Indenture or condition or event which with the passing of time or the giving of notice or both would become an Event of Default under the -17- Indenture, written notice of such Event of Default, condition or event identifying the same with particularity. 6.7. Requested Information. Promptly following a request, any other data or information regarding the financial position or business of the Company or any Subsidiary you reasonably may request. B. Section 7 of the Bond Purchase Agreement is restated to read as follows: 7. Inspection Rights. The Company shall permit you or any other Person designated by you, during normal business hours and upon reasonable notice, to visit and inspect any of the offices or properties of the Company or any Subsidiaries, to examine any of their books of account, and to discuss the financial condition, operations, or business of the Company or any Subsidiary with, and to be advised as to the same by the Company's or any Subsidiary's officers and employees, and the Company's or any Subsidiary's independent public accountants, all at such reasonable intervals as you may desire; and, by its execution hereof, the Company, for itself and the Subsidiaries, hereby consents to such discussions. You and the Company shall each be responsible for the payment of your own respective expenses incident to the matters referred to in the preceding sentence. Upon and after the occurrence of an Event of Default under the Indenture, you or any other Person designated by you may, in addition to the foregoing, and at the Company's expense (including without limitation, travel expenses) conduct such visits and inspections without any requirement of prior notice and, at the Company's expense, make copies of and take extracts from such books of account. ARTICLE II MISCELLANEOUS This Amendment may be executed in any number of counterparts each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Capitalized terms which are not otherwise defined herein shall have the meaning set forth in the Indenture. This Amendment shall be governed by and construed in accordance with Colorado law. If the foregoing is acceptable to you, kindly note your acceptance in the space provided below and thereupon the Agreement shall be amended as set forth above, but all other terms and provisions of the Agreement and the Bonds shall remain unchanged and are in all respects ratified, confirmed and approved. Dated as of December 1, 1993. ATMOS ENERGY CORPORATION By /s/ James F. Purser --------------------------------- Its Executive Vice President and CFO Accepted and agreed to as of the date and year aforesaid. FIRST COLONY LIFE INSURANCE COMPANY By /s/ J. Alden Butler --------------------------------- Its Senior Vice President -18- EX-15 6 EXHIBIT 15 FOR 10-Q 6/30/94 - AUDITOR REVIEW LTR EXHIBIT 15 ---------- August 11, 1994 Board of Directors Atmos Energy Corporation We are aware of the incorporation by reference in the Registra- tion Statements (Form S-8 No. 2-89113, Form S-3 No. 33-58220, and Form S-3 No. 33-70212) of Atmos Energy Corporation of our report dated August 5, 1994, relating to the unaudited condensed consol- idated interim financial statements of Atmos Energy Corporation which is included in its Form 10-Q for the quarter ended June 30, 1994. Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part of the registration statement prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. ERNST & YOUNG LLP Dallas, Texas EX-3 7 EXHIBIT 3 FOR 10-Q 6/30/94 - BYLAWS EXHIBIT 3 --------- BYLAWS OF ATMOS ENERGY CORPORATION ------------------------- (Amended and restated as of May 11, 1994) ----- *** ----- ARTICLE I OFFICES 1.01 Registered Office. The registered office shall be located in the City of Dallas, County of Dallas, State of Texas. 1.02 Other Offices. The corporation also may have offices at such other places both within and without the State of Texas as the Board of Directors may from time to time determine or as the business of the corporation may require. ARTICLE II MEETINGS OF SHAREHOLDERS 2.01 Place of Meetings. All meetings of shareholders for the election of directors or for any other proper purposes shall be held at such place within or without the State of Texas as the Board of Directors may from time to time designate, as stated in the notice of such meeting or a duly executed waiver of notice thereof. 2.02 Annual Meeting. An annual meeting of shareholders shall be held at 11:00 a.m. on the second Wednesday of February of each year commencing in 1989, unless such day is a legal holiday, in which case such meeting shall be held at the specified time on the next full business day thereafter which is not a legal holiday. At such meeting the shareholders entitled to vote thereat shall elect a Board of Directors and may transact such other business as may properly be brought before the meeting. 2.03 Special Meetings. Special meetings of shareholders may be called by the Chairman of the Board of Directors, the President, a majority of the Board of Directors, or as otherwise provided in the Articles of Incorporation or the Texas Business Corporation Act. 2.04 Notice of Annual or of Special Meeting. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board, President, Secretary, or the officer or person calling the meeting to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. 2.05 Notice of Shareholder Proposals. At any annual meeting, only such business shall be conducted as shall have been brought before the annual meeting by or at the direction of the Board of Directors or by any shareholder who complies with the procedures set forth in this Section 2.05. Except as otherwise provided by the Articles of Incorporation, the only business which shall be conducted at any 2 annual meeting of the shareholders shall (i) have been specified in the written notice of the meeting (or any supplement thereto) given as provided in Section 2.04 of the Bylaws, (ii) be brought before the meeting at the direction of the Board of Directors or the Chairman of the meeting or (iii) have been specified in a written notice (a "Shareholder Meeting Notice") given to the corporation, in accordance with all of the following requirements, by or on behalf of any shareholder who shall have been a shareholder of record on the record date for such meeting and who shall continue to be entitled to vote thereat. Each Shareholder Meeting Notice must be delivered or mailed by first class United States mail, postage prepaid, to and received by, the Secretary of the corporation, at the principal executive offices of the corporation, not less than 50 days nor more than 75 days prior to the annual meeting; provided, however, that if less than 65 days' notice or prior public disclosure of the date of the annual meeting is given or made to shareholders, notice by the shareholder to be timely must be received by the Secretary of the corporation not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. Each Shareholder Meeting Notice shall set forth: (i) a description of each item of business proposed to be brought before the meeting; (ii) the name and address of the shareholder proposing to bring such item of business before the meeting; (iii) the class and number of shares of stock held of record, owned beneficially and represented by proxy by such shareholder as of the record date for the meeting (if such date shall then 3 have been made publicly available) and as of the date of such Shareholder Meeting Notice; and (iv) all other information which would be required to be included in a proxy statement filed with the Securities and Exchange Commission if, with respect to any such item of business, such shareholder were a participant in a solicitation subject to Section 14 of the Securities Exchange Act of 1934. No business shall be brought before any meeting of shareholders of the corporation otherwise than as provided in this paragraph or the Articles of Incorporation. 2.06 Business at Special Meeting. The business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice thereof. 2.07 Quorum of Shareholders. Unless otherwise provided in the Articles of Incorporation, the holders of a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If, however, a quorum shall not be present or represented at any meeting of the shareholders, the shareholders present in person or represented by proxy shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. 2.08 Act of Shareholders' Meeting. The vote of the holders of a majority of the shares entitled to vote and thus represented at a meeting at which a quorum is present shall be the act of the 4 shareholders' meeting, unless the vote of a greater number is required by law, the Articles of Incorporation, or these Bylaws. 2.09 Voting of Shares. Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class are limited or denied by the Articles of Incorporation or are otherwise provided by law. Cumulative voting in the election of directors or otherwise is expressly prohibited by the Articles of Incorporation. At each election for directors, every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has the right to vote. 2.10 Proxies. At any meeting of the shareholders, each shareholder having the right to vote shall be entitled to vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated by the chairman of the meeting or in the order of business for so delivering such proxies. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless otherwise made irrevocable by law. Unless required by statute or determined by the chairman of the meeting to be advisable, the vote on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by the 5 shareholder voting or by such shareholder's proxy, if there be such proxy. 2.11 Voting List. The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and number of shares held by each shareholder, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be subject to the inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any such meeting of shareholders. 2.12 Order of Business. The order of business of each meeting of the shareholders of the corporation shall be determined by the chairman of the meeting. The chairman of the meeting shall have the right and authority to prescribe such rules, regulations, and procedures and to do all such acts and things as are necessary or desirable for the conduct of the meeting, including, without limitation, the establishment of the procedures for the dismissal of business not properly presented, maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the corporation, 6 restrictions on entry to such meetings after the time prescribed for commencement thereof, and the opening and closing of the voting polls. 2.13 Action by Written Consent Without a Meeting. Any action required or permitted by law, the Articles of Incorporation or these Bylaws to be taken at a meeting of the shareholders may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the shareholders entitled to vote with respect to the subject matter thereof. Such consent shall have the same force and effect as a unanimous vote of shareholders. ARTICLE III BOARD OF DIRECTORS 3.01 Powers. The business and affairs of the corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by law, the Articles of Incorporation or these Bylaws directed or required to be exercised and done by the shareholders. 3.02 Number of Directors. The number of directors of the corporation constituting the Board of Directors shall be not less than three (3) nor more than fifteen (15). The first Board of Directors shall consist of three (3) directors; thereafter, the number of directors shall be determined in accordance with these Bylaws by resolution of the Board of Directors or of the shareholders, but no decrease shall have the effect of shortening the term of any incumbent director. 7 3.03 Election and Term. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one- third of the total number of directors constituting the entire Board of Directors. At the 1989 annual meeting of shareholders, Class I directors shall be elected for a one-year term, Class II directors for a two-year term and Class III directors for a three-year term. At each succeeding annual meeting of shareholders beginning in 1990, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. Directors shall be elected by a majority vote of the outstanding shares entitled to vote thereon. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. 3.04 Nominations of Directors. Nominations for election to the Board of Directors of the corporation at a meeting of shareholders may be made by the Board of Directors, or by any shareholder of the corporation entitled to vote for the election 8 of directors at such meeting. Such nominations, other than those made by the Board of Directors, shall be made by notice in writing delivered or mailed by first class United States mail, postage prepaid, to and received by the Secretary of the corporation, at the principal executive offices of the corporation, not less than 50 days nor more than 75 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 65 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, such nomination shall have been received by the Secretary of the corporation not later than the close of business on the tenth day following the day on which the notice of meeting was mailed or such public disclosure was made. Such notice shall set forth: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) the class and number of shares of stock held of record, owned beneficially and represented by proxy by such shareholder as of the record date for the meeting (if such date shall then have been made publicly available) and of the date of such notice; (iii) a representation that the shareholder is a holder of record of stock of the corporation entitled to vote at such meeting and that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iv) a description of all arrangements or understandings between such shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by such shareholder; (v) such other information regarding each 9 nominee proposed by such shareholder as would be required to be disclosed in solicitations for proxies for election of directors pursuant to the proxy rules of the Securities and Exchange Commission; and (vi) the consent of each nominee to serve as a director of the corporation if so elected. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. 3.05 Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors although less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by election at an annual meeting or special meeting of shareholders called for that purpose or may be filled by the board of directors for a term of office continuing only until the next election of one or more directors by the shareholders; provided, however, that the board of directors may not fill more than two such directorships during the period between any two successive annual meetings of shareholders. 3.06 Resignation and Removal. Any director may resign at any time upon giving written notice to the corporation. No director shall be removed during his term of office except for cause and by the affirmative vote of the holders of seventy-five percent (75%) of the shares then entitled to vote at an election of directors. If the shareholders of this corporation are then entitled to cumulative voting in the election of directors and if less than the entire Board is to be removed, no one of the 10 directors may be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire Board of Directors, or if there be classes of directors, at an election of the class of directors of which he is a part. 3.07 Compensation of Directors. As specifically prescribed from time to time by resolution of the Board of Directors, the directors of the corporation may be paid their expenses of attendance at each meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated salary in their capacity as directors. This provision shall not preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. ARTICLE IV MEETINGS OF THE BOARD 4.01 First Meeting. The first meeting of each newly elected Board of Directors shall be held without further notice immediately following and at the same place as the annual meeting of shareholders unless, by unanimous consent of the directors then elected and serving, such time or place shall be changed. At such meeting, the Board of Directors shall elect one of its members to be Chairman of the Board, who shall preside at all meetings of the shareholders and the Board of Directors and perform such other duties as the Board of Directors shall 11 prescribe and who shall serve as an ex-officio member of all committees of the Board. 4.02 Regular Meeting. Regular meetings of the Board of Directors may be held with or without notice at such time and at such place either within or without the State of Texas as from time to time shall be prescribed by resolution of the Board of Directors. 4.03 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or the President, and shall be called by the Chairman of the Board of Directors, the President or the Secretary on the written request of two directors. Written notice of special meetings of the Board of Directors shall be given to each director at least two (2) days before the date of the meeting. 4.04 Business at Regular or Special Meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. 4.05 Quorum of Directors. A majority of the Board of Directors shall constitute a quorum for the transaction of business, unless a greater number is required by law or the Articles of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement of the meeting, until a quorum shall be present. 4.06 Act of Directors' Meeting. The act of a majority of the directors present at a meeting at which a quorum is present 12 shall be the act of the Board of Directors unless the act of a greater number is required by law, the Articles of Incorporation, or these Bylaws. 4.07 Action by Written Consent Without a Meeting. Any action required or permitted by law, the Articles of Incorporation or these Bylaws to be taken at a meeting of the Board of Directors or any committee thereof may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all members of the Board of Directors or committee, as the case may be. Such consent shall have the same force and effect as a unanimous vote at such meeting. ARTICLE V COMMITTEES The Board of Directors, by resolution adopted by a majority of the full Board of Directors, may designate from among its members an executive committee and one or more other committees, each of which shall be comprised of one or more members and, to the extent provided in such resolution or in the Articles of Incorporation or in these Bylaws, shall have and may exercise all of the authority of the Board of Directors, except that no such committee shall have the authority of the Board of Directors in reference to amending the Articles of Incorporation, approving a plan of merger or consolidation, recommending to the shareholders the sale, lease, or exchange of all or substantially all of the property and assets of the corporation otherwise than in the usual and regular course of its business, recommending to the shareholders a voluntary dissolution of the corporation or a 13 revocation thereof, amending, altering, or repealing the Bylaws of the corporation or adopting new Bylaws for the corporation, filling vacancies in the Board of Directors or any such committee, electing or removing officers, members of the Board of directors or members of any such committee, fixing the compensation of any member of such committee, or altering or repealing any resolution of the Board of Directors which by its terms provides that it shall not be so amendable or repealable. No such committee shall have the power or authority to declare a dividend or to authorize the issuance of shares of the corporation. Vacancies in the membership of the committee shall be filled by the Board of Directors at a regular or special meeting of the Board. The executive committee shall keep regular minutes of its proceedings and report the same to the Board when required. The designation of such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or him by law. ARTICLE VI NOTICES 6.01 Methods of Giving Notice. Whenever any notice is required to be given to any shareholder or director under the provisions of any statute, the Articles of Incorporation or these Bylaws, it shall be given in writing and delivered personally or mailed to such shareholder or director at such address as appears on the books of the corporation, and such notice shall be deemed to be given at the time when the same shall be deposited in the 14 United States mail with sufficient postage thereon prepaid. Notice to directors may also be given by telegram or electronic communication, and notice given by such means shall be deemed given at the time it is delivered to the telegraph office or transmitted by means of electronic communication. 6.02 Waiver of Notice. Whenever any notice is required to be given to any shareholder or director under the provisions of any law, the Articles of Incorporation or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. 6.03 Attendance as Waiver. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE VII ACTION WITHOUT A MEETING BY USE OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT Subject to the provisions requiring or permitting notice of meeting, unless otherwise restricted by the Articles of Incorporation or these Bylaws, shareholders, members of the Board of Directors or members of any committee designated by such Board may participate in and hold a meeting of such shareholders, Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and 15 participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE VIII OFFICERS 8.01 Executive Officers. The officers of the corporation shall consist of a President, one or more Vice Presidents, a Secretary, and a Treasurer, and may also include the Chairman of the Board if so designated as an officer by the Board of Directors and such other officers as are provided for in Section 8.03 of this Article. Any Vice President of the corporation may, by the addition of a number or a word or words before or after the title "Vice President", be designated "Senior Executive", "Executive", "Senior", "Trust", "Second" or "Assistant" Vice President. Each officer of the corporation shall be elected by the Board of Directors as provided in Section 8.02 of this Article. Any two or more offices may be held by the same person. 8.02 Election and Qualification. The Board of Directors, at its first meeting after each annual meeting of shareholders, shall choose a President, one or more Vice Presidents, a Secretary, and a Treasurer, none of whom need be a member of the Board. The Board also may elect one or more Assistant Secretaries and Assistant Treasurers. 16 8.03 Other Officers and Agents. The Board of Directors may elect or appoint such other officers, assistant officers and agents as may be necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. 8.04 Salaries. The salaries of all officers and agents of the corporation shall be fixed by resolution of the Board of Directors. 8.05 Term, Removal and Vacancies. Each officer of the corporation shall hold office until his successor is chosen and qualified or until his death, resignation or removal. Any officer may resign at any time upon giving written notice to the corporation. Any officer or agent or member of a committee elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interest of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent or member of a committee shall not of itself create contract rights. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. 8.06 Chief Executive Officer. The Board of Directors shall designate whether the Chairman of the Board or the President shall be the chief executive officer of the corporation. The chief executive officer shall have all of the powers and duties as usually pertain to such position, including the power to make and sign contracts and agreements in the name of and on behalf of 17 the corporation and all other powers and duties granted by these Bylaws to the President of the corporation. In the event the Chairman of the Board is designated the chief executive officer of the corporation, the Chairman of the Board shall have supervisory powers over the President, all other officers of the corporation, and the business activities of the corporation. 8.07 President. The President shall be the chief operating officer of the corporation and shall have such powers and duties as usually pertain to such office, except as the same may be modified by the Board of Directors. The President shall have general powers of oversight, supervision and management of the business and affairs of the corporation, shall see that all orders and resolutions of the Board of Directors are carried into effect, and shall have the power to make and sign contracts and agreements in the name and on behalf of the corporation and to do or perform all other acts incident to the office of President or that are authorized or required by law. The President shall preside at meetings of the shareholders in the absence of the Chairman of the Board. If the President is also a member of the Board, he shall be ex-officio a member of all committees of the Board and shall preside, in the absence of the Chairman of the Board, at meetings of the Board. 8.08 Vice President. Unless otherwise determined by the Board of Directors, one of the Vice Presidents shall, in the absence or disability of the President, perform the duties and exercise the powers of the President. The various Vice Presidents shall perform such other duties and have such other powers as the Board of Directors shall prescribe. 18 8.09 Secretary. The Secretary shall attend all meetings of the Board of Directors and of the shareholders, record all the proceedings of the meetings of the Board of Directors and of the shareholders in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the shareholders and special meetings as may be prescribed by the Board of Directors, Chairman of the Board, or the President. He shall keep in safe custody the seal of the corporation, and, when authorized by the Board of Directors, affix the same to any instrument requiring it, and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary. 8.10 Assistant Secretaries. An Assistant Secretary, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 8.11 Treasurer. The Treasurer shall have the custody of the corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chairman of the Board (if 19 he is the chief executive officer), President, and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer, and of the financial condition of the corporation. 8.12 Assistant Treasurers. An Assistant Treasurer, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. 8.13 Officer's Bond. If required by the Board of Directors, any officer so required shall give the corporation a bond (which shall be renewed as the Board may require) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of any and all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. ARTICLE IX INDEMNIFICATION OF OFFICERS AND DIRECTORS Subject to any limitation which may be contained in the Articles of Incorporation, the corporation shall indemnify, to the fullest extent permitted by law, any person who was, is, or is threatened to be made a named defendant or respondent in any threatened, pending, or completed action, suit, or proceeding, 20 whether civil, criminal, administrative, arbitrative, or investigative, any appeal in such action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding, by reason of the fact that such person is or was a director or officer of the corporation, or, while such person was a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, against judgments, penalties (including excise and similar taxes), fines, settlements, and reasonable expenses (including attorney's fees) actually incurred by such person in connection with such action, suit, or proceeding. In addition to the foregoing, the corporation shall, upon request of any such person described above and to the fullest extent permitted by law, pay or reimburse the reasonable expenses incurred by such person in any action, suit, or proceeding described above in advance of the final disposition of such action, suit, or proceeding. ARTICLE X CERTIFICATES FOR SHARES 10.01 Certificates Representing Shares. The corporation shall deliver certificates representing all shares to which shareholders are entitled. Such certificates shall be numbered and shall be entered in the books of the corporation as they are issued, and shall be signed by the Chairman of the Board, 21 President, or a Vice President, and the Secretary or an Assistant Secretary of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. The signatures of the Chairman of the Board, President, or Vice President, and the Secretary or Assistant Secretary, upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registered by a registrar, either of which is other than the corporation itself or an employee of the corporation. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of its issuance. If the corporation is authorized to issue shares of more than one class, each certificate representing shares issued by such corporation (1) shall conspicuously set forth on the face or back of the certificate a full statement of (a) all of the designations, preferences, limitations and relative rights of the shares of each class authorized to be issued and, (b) if the corporation is authorized to issue shares of any preferred or special class in series, the variations in the relative rights and preferences of the shares of each such series to the extent the same have been fixed and determined and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series; or (2) shall conspicuously state on the face or back of the certificate that (a) such a statement is set forth in the Articles of Incorporation on file in the office of the Secretary of State of Texas and (b) the corporation will furnish a copy of 22 such statement to the record holder of the certificate without charge on written request to the corporation at its principal place of business or registered office. If the corporation has by its Articles of Incorporation limited or denied the preemptive right of shareholders to acquire unissued or treasury shares of the corporation, each certificate representing shares issued by such corporation (1) shall conspicuously set forth on the face or back of the certificate a full statement of the limitation or denial of preemptive rights contained in the Articles of Incorporation, or (2) shall conspicuously state on the face or back of the certificate that (a) such a statement is set forth in the Articles of Incorporation on file in the office of the Secretary of State of Texas and (b) the corporation will furnish a copy of such statement to the record holder of the certificate without charge on request to the corporation at its principal place of business or registered office. Each certificate representing shares shall state upon the face thereof that the corporation is organized under the laws of the State of Texas, the name of the person to whom issued, the number and class of shares and the designation of the series, if any, which such certificate represents and the par value of each share represented by such certificate or a statement that the shares are without par value. No certificate shall be issued for any share until the consideration therefor, fixed as provided by law, has been fully paid. 10.02 Restriction on Transfer of Shares. If any restriction on the transfer, or registration of the transfer, of shares shall be imposed or agreed to by the corporation, as 23 permitted by law, the Articles of Incorporation or these Bylaws, each certificate representing shares so restricted (1) shall conspicuously set forth a full or summary statement of the restrictions on the face of the certificate, or (2) shall set forth such statement on the back of the certificate and conspicuously refer to the same on the face of the certificate, or (3) shall conspicuously state on the face or back of the certificate that such a restriction exists pursuant to a specified document and (a) that the corporation will furnish to the record holder of the certificate without charge upon written request to the corporation at its principal place of business or registered office a copy of the specified document, or (b) if such document is one required or permitted to be and has been filed under applicable law, that such specified document is on file in the Office of the Secretary of State of Texas and contains a full statement of such restrictions. Unless such document was on file in the Office of the Secretary of State of Texas at the time of the request, if the corporation fails within a reasonable time to furnish the record holder of a certificate, upon such request and without charge, a copy of the specified document, the corporation shall not be permitted thereafter to enforce its rights under the restriction imposed on the shares represented by such certificate. Any restriction on the transfer, or registration of transfer, of shares of the corporation, if reasonable and noted conspicuously on the certificates representing such shares, may be enforced against the holder of the restricted shares or any successor or transferee of the holder, including an executor, administrator, 24 trustee, guardian, or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the certificates representing such shares, a restriction, even though otherwise enforceable, is ineffective except against a person with actual knowledge of the restriction. 10.03 Transfer of Shares. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books. 10.04 Lost, Stolen or Destroyed Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors, in its discretion and as a condition precedent to the issuance thereof, may require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. 25 10.05 Closing of Transfer Books and Fixing Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, sixty (60) days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than sixty (60) days and, in case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section 10.05, such determination shall apply to any adjournment thereof, except 26 where the determination has been made through the closing of stock transfer books and the stated period of closing has expired. 10.06 Registered Shareholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Texas ARTICLE XI GENERAL PROVISIONS 11.01 Dividends. The Board of Directors from time to time may declare, and the corporation may pay, dividends on its outstanding shares in cash, in property, or in its own shares, except when the corporation is insolvent or when the payment thereof would render the corporation insolvent or when the declaration or payment thereof would be contrary to any restrictions contained in the Articles of Incorporation. Such dividends may be declared at any regular or special meeting of the Board, and the declaration and payment shall be subject to all applicable provisions of law, the Articles of Incorporation and these Bylaws. 11.02 Reserves. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in 27 their absolute discretion, deem proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall deem conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. 11.03 Reports. The Board of Directors shall, when requested by the holders of at least a majority of the outstanding shares of the corporation, present full and clear written reports, not more often than quarterly, of the amount of business and the financial condition of the corporation. 11.04 Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors from time to time may designate. 11.05 Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors. 11.06 Seal. The corporation may have a corporate seal and, if the Board of Directors adopts a corporate seal, the corporate seal shall have inscribed thereon the name of the corporation and may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. ARTICLE XII AMENDMENTS The initial Bylaws of the corporation shall be adopted by the Board of Directors. The power to alter, amend, or repeal the Bylaws or adopt new Bylaws, subject to repeal or change by action 28 of the shareholders, is vested in the Board of Directors. Thus, these Bylaws may be altered, amended, or repealed or new Bylaws may be adopted at any regular or special meeting of the Board of Directors by the affirmative vote of a majority of the Board of Directors, subject to repeal or change at any regular or special meeting of shareholders at which a quorum is present or represented by the affirmative vote of seventy-five (75%) of the shares entitled to vote at such meeting and present or represented thereat provided notice of the proposed repeal or change is contained in the notice of such meeting of shareholders. The Bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the Articles of Incorporation. 29 -----END PRIVACY-ENHANCED MESSAGE-----