EXHIBIT 10.1

AMENDMENT TO AGREEMENT FOR UNIT FOUR
THIS AMENDMENT TO AGREEMENT FOR UNIT FOUR (this “Amendment”) is made and is
effective as of September 21, 2017 (the “Amendment Date”), by and between ALCOA
POWER GENERATING, INC., a Tennessee corporation (“APG”) and SOUTHERN INDIANA GAS
AND ELECTRIC COMPANY, an Indiana corporation (“Southern Indiana”). Capitalized
terms used herein which are not otherwise defined in this Amendment shall have
the meanings given to them in the Agreement (as defined below).
RECITALS
WHEREAS, Alcoa Generating Corporation, now known as the AGC Division of APG, and
Southern Indiana are parties to an Agreement For Unit Four at Alcoa Generating
Corporation’s Warrick Power Plant, dated January 30, 1968 (as the same has been
amended from time to time, the “Agreement”), under which APG operates Unit Four
of the Power Plant; and
WHEREAS, APG and Southern Indiana desire to amend the Agreement in accordance
with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and intending to be legally bound, APG and Southern Indiana
hereby agree to amend the Agreement as follows:
1.
Extension of Operating Term.

Section 5 of ARTICLE ONE of the Agreement is replaced with the following:
“Operating Term” means the period commencing at the date of commercial operation
of Unit Four and continuing until December 31, 2023 and will continue in effect
thereafter until terminated by either party by written notice given to the other
party. Notice to terminate the Operating Term effective on December 31, 2023 or
any time thereafter must be given at least nineteen (19) months in advance of
the intended date of termination, except in the event of a termination for
default under this Agreement as provided below. As such, if a party desires to
terminate the Operating Term effective on December 31, 2023, such party would be
required to provide written termination notice to the other party prior to June
1, 2022. Notwithstanding the foregoing, the Operating Term may be terminated by
either party, by notice to the other, if the other party shall fail to perform
its obligations hereunder, and such failure shall continue for a period of sixty
(60) days after notice thereof from the party not in default.
2.
Additional Amendments. Notwithstanding anything to the contrary in the
Agreement, the parties agree as follows:

A.
APG Call Option. From and after the earlier to occur of (x) December 31, 2023 or
(y) the date upon which Southern Indiana gives written notice of its intent to
terminate the Operating Term, and continuing (subject to Section 2.A.ii below)
thereafter for the remaining duration of the Operating Term (such period, the
“Option Period”), APG shall have the one-time option (the “Option”) to purchase
all of Southern Indiana’s right, title and interest in Unit Four (the “Option
Interest”), which shall be exercised by APG’s delivery of a binding and
irrevocable election to Southern Indiana in accordance with the provisions
described below.

i.
If APG desires to exercise the Option, APG shall first deliver a non-binding
notice of its intent to Southern Indiana (the “Non-Binding Option Notice”).

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EXHIBIT 10.1

ii.
APG may deliver the Non-Binding Option Notice at any time during the Option
Period; provided, that if Southern Indiana has given written notice of its
intent to terminate the Operating Term, APG must deliver the Non-Binding Option
Notice no later than thirty (30) days following the date of such termination
notice, after which time the Option shall automatically terminate and be of no
further force or effect. For sake of clarity, APG may only issue one Non-Binding
Option Notice and if, following the issuance of such Non-Binding Option Notice,
APG elects not to issue a Binding Option Notice in accordance with this Section
2.A, then the Option shall automatically terminate and be of no further force or
effect.

iii.
The price to be paid by APG for the Option Interest (the “Option Price”) shall
be an amount equal to the lesser of: (x) the then-current fair market value of
the Option Interest, (y) Southern Indiana’s book value of the Option Interest as
shown on its balance sheet, net of depreciation and amortization, calculated as
of the closing date of APG’s purchase of the Option Interest in accordance with
generally accepted accounting principles in the United States (consistently
applied and as may be modified by Federal Energy Regulatory Commission
accounting requirements), or (z) Twenty-Five Million Dollars ($25,000,000);
provided that, in no event shall the Option Price be less than Zero Dollars
($0). With regard to the calculation of the fair market value of the Option
Interest, the parties agree that the fair market value calculation will be
performed by an independent, third-party expert mutually selected by APG and
Southern Indiana and such calculation will be completed within sixty (60) days
following the date of the Non-Binding Option Notice. The costs of such
third-party expert shall be shared equally between the parties. The fair market
value of the Option Interest shall be the fair market value as between a willing
buyer and a willing seller in an arm’s length transaction occurring on the date
of valuation, taking into account all pertinent factors determinative of value
(including, unless already expressly reflected in such fair market value
calculation, a dollar-for-dollar reduction in the fair market value calculation
for any Unit Four Capital Expenditures (as defined below), net of depreciation
and amortization as of the date of valuation, made by APG on Southern Indiana’s
behalf during the Limited Capital Expenditures Period (as defined below) as
contemplated by Section 2.B below), and the assumption by a potential buyer of
Southern Indiana’s rights and obligations under this Agreement; provided, that
in no event shall such fair market value calculation be less than Zero Dollars
($0). Within five (5) days following receipt by the parties of the fair market
value calculation from the third-party expert, Southern Indiana will provide APG
in writing with its calculation of the Option Price consistent with the terms of
this Section 2.A.iii. Upon receipt of such calculation, APG shall have thirty
(30) days to make a binding and irrevocable written election to move forward
with the exercise of the Option (the “Binding Option Notice”).

iv.
Upon delivery of the Binding Option Notice, the parties shall use good faith
efforts to cause the closing of the sale of the Option Interest to occur,
subject to receipt of any required approvals of third parties or governmental
authorities, as promptly as reasonably possible following the date of the
Binding Option Notice, and in any event, effective as of any expiration or
earlier termination of the Operating Term.

v.
If the Binding Option Notice and the closing of the sale of the Option Interest
occur within the same Midcontinent Independent System Operator (“MISO”) capacity
auction year, then Southern Indiana may, at its option, delay the closing of the
sale of

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EXHIBIT 10.1

the Option Interest until expiration of such capacity auction year in order to
continue to obtain the capacity it requires to meet planning reserve margin
requirements. As part of any acquisition by APG of the Option Interest, the
parties agree that APG will receive all environmental credits related to the
existing Unit Four scrubber.
vi.
To the extent that the terms of this Section 2.A are inconsistent with the terms
of that certain Deed and Agreement made by and between APG and Southern Indiana
dated as of January 30, 1968, the parties agree that the terms of this Section
2.A shall govern.

B.
Limitation on Southern Indiana’s Contribution for Capital Expenditures. Southern
Indiana’s fifty percent (50%) share of the Unit Four Capital Expenditures (as
defined below) for the six (6) year period from January 1, 2018 through December
31, 2023 (the “Limited Capital Expenditures Period”) shall not exceed Twenty
Million Five Hundred Thousand Dollars ($20,500,000), and APG shall fund any
additional Unit Four Capital Expenditures. For clarity, APG shall own 100% of
that portion of any capital asset paid for with any such additional Unit Four
Capital Expenditures funded 100% by APG and shall be entitled to record the same
as an asset on its balance sheet. Further, if Southern Indiana does not give
notice to terminate the Operating Term prior to June 1, 2022 (which, in
accordance with Section 5 of Article One of the Agreement, shall result in the
Operating Term of the Agreement continuing beyond December 31, 2023), then
Southern Indiana shall be responsible to reimburse APG, on June 1, 2022, for
Southern Indiana’s fifty percent (50%) share (net of depreciation and
amortization) of any such additional Unit Four Capital Expenditures funded by
APG consistent with good utility practice. Upon such reimbursement, Southern
Indiana shall own its fifty-percent (50%) share of the associated capital asset
and shall be entitled to record the same as an asset on its balance sheet.
Notwithstanding the foregoing, if the total (combining both APG’s and Southern
Indiana’s share) actual and projected Unit Four Capital Expenditures required
during the Limited Capital Expenditures Period exceed Forty-Five Million One
Hundred Thousand Dollars ($45,100,000), then APG shall have the option to
terminate the Operating Term upon six (6) months’ advance written notice to
Southern Indiana (subject to Section 2.I below); provided, that, if Unit Four
has been shut down (whether or not due to an unscheduled outage) and APG has
determined that APG will not invest the capital necessary to resume operations,
then either party will have the option to terminate the Operating Term upon
thirty (30) days’ advance written notice to the other party (subject to Section
2.I below). As of the Amendment Date, the parties estimate that Southern
Indiana’s fifty percent (50%) share of Unit Four Capital Expenditures during the
Limited Capital Expenditures Period will be approximately Sixteen Million Four
Hundred Thousand Dollars ($16,400,000). Attached hereto as Exhibit 1 is a
non-binding schedule detailing such projected Unit Four Capital Expenditures.
Unit Four capital expenditures for the Limited Capital Expenditures Period
(“Unit Four Capital Expenditures”) shall include any expenditures satisfying the
criteria set forth on Exhibit 2 attached to this Amendment, which criteria will
remain valid until the expiration of the Limited Capital Expenditures Period,
except as modified by mutual agreement of the parties.

C.
Unit Four Demolition, Decommissioning and Site Remediation.

i.
The parties hereby agree that, effective upon the earlier to occur of (x) the
expiration or earlier termination of the Operating Term (whether before or after
December 31, 2023), other than termination for default by Southern Indiana under
this Agreement, or (y) the closing of any sale of the Option Interest pursuant
to Section 2.A above:

(1)
APG shall have sole responsibility for Unit Four demolition and decommissioning
obligations, including any remediation obligations required by applicable law or
regulation on the Unit Four site, inclusive of the Unit Four

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EXHIBIT 10.1

dedicated scrubber and as required by applicable law or regulation to mitigate
the impacts of any effluent from Unit Four during its operations (collectively,
the “Unit Four Decommissioning Obligations”).
(2)
APG does hereby release, and agrees to indemnify, defend and save and keep
harmless, Southern Indiana and its parents, affiliates, subsidiaries, and their
respective successors and assigns, and any of their respective agents,
employees, officers or directors (collectively, the “Southern Indiana Group”)
from and against any and all liabilities, losses, damages, claims, actions,
proceedings, suits, judgments, costs, interest, expenses and disbursements of
any kind and nature whatsoever arising under any theory of liability or law
(including attorneys’ fees and costs) (“Claims”) to the extent arising out of
the Unit Four Decommissioning Obligations or otherwise constituting the Unit
Four Decommissioning Obligations.

(3)
APG shall ensure that all of the Unit Four Decommissioning Obligations are
carried out in compliance with applicable laws and regulatory obligations.
Within the parameters of applicable law and regulation and subject to Section
2.C.ii below, the timing, means and methods of the Unit Four Decommissioning
Obligations will be at the sole discretion of APG.

ii.
APG agrees that the Unit Four Decommissioning Obligations shall be substantially
completed (other than the asbestos remediation activities, which shall be fully
completed) no later than eight (8) years after the end of commercial operations
at Unit Four, measured from the later to occur of (x) the termination of
commercial operations at Unit Four and (y) receipt by APG of all regulatory
approvals required for the termination of the Operating Term and retirement of
Unit 4. However, in the event that APG wishes to delay the completion of the
Unit Four Decommissioning Obligations beyond such eight (8) year period
(including asbestos remediation activities), then APG shall be permitted to
extend the time for completion of the Unit Four Decommissioning Obligations upon
written notice to Southern Indiana; provided, that such delay is permitted only
if and only for so long as, either (x) the Alcoa Corporation parent guaranty
issued in favor of Southern Indiana as required by Section 2.G below remains
valid and in effect and Alcoa Corporation maintains a credit rating of at least
BB- by Standard & Poor’s, a division of McGraw Hill Financial Inc., or any
successor to the rating business of such entity (“S&P”) or at least Ba3 by
Moody’s Investor Service, Inc., or any successor to the rating business of such
entity (“Moody’s”) (collectively, the “Required Credit Rating”) or (y) APG
provides a replacement guaranty in favor of Southern Indiana which secures APG’s
indemnification obligations to Southern Indiana arising under Section 2.C.i.(2)
above (related to the Unit Four Decommissioning Obligations) and is issued by an
entity which meets the Required Credit Rating, or provides other credit support
for such obligations which is acceptable to Southern Indiana in its reasonable
discretion, and such replacement guaranty or other credit support remains valid
and in effect. For purposes of clarity, APG will be entitled to offset its costs
and expenses related to the Unit Four Decommissioning Obligations by monetizing
any residual or scrap value associated with the Unit Four assets.

D.
Ash Disposal and Ash Pond Liabilities. The parties hereby agree that, effective
upon the earlier to occur of (x) the expiration or earlier termination of the
Operating Term (whether

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EXHIBIT 10.1

before or after December 31, 2023), or (y) the closing of any sale of the Option
Interest pursuant to Section 2.A above:
i.
APG shall have sole responsibility for (1) the disposal of its share of the ash
produced in the operation of Unit Four during the Operating Term (other than ash
disposed of in the Southern Indiana Ash Pond (as defined below), which ash shall
be the sole responsibility of Southern Indiana as set forth in Section 2.D.ii
below) and (2) the ash pond used by APG and located at APG’s Warrick site (the
“APG Ash Pond”), including in each case any and all liabilities and remediation
obligations related thereto (collectively, the “APG Ash Disposal Obligations”).

ii.
Southern Indiana shall have sole responsibility for (1) the disposal of its
share of the ash produced in the operation of Unit Four during the Operating
Term (other than ash disposed of in the APG Ash Pond, which ash shall be the
sole responsibility of APG as provided in Section 2.D.i above) and (2) for the
ash pond used by Southern Indiana and located at Southern Indiana’s Culley site
(the “Southern Indiana Ash Pond”), including in each case any and all
liabilities and remediation obligations related thereto (collectively, the
“Southern Indiana Ash Disposal Obligations”).

iii.
APG does hereby release, and agrees to indemnify, defend and save and keep
harmless, the Southern Indiana Group from and against any and all Claims to the
extent arising out of the APG Ash Disposal Obligations or otherwise constituting
the APG Ash Disposal Obligations, and Southern Indiana does hereby release, and
agrees to indemnify, defend and save and keep harmless, APG and its parents,
affiliates, subsidiaries, and their respective successors and assigns, and any
of their respective agents, employees, officers, or directors from and against
any and all Claims to the extent arising out of the Southern Indiana Ash
Disposal Obligations or otherwise constituting the Southern Indiana Ash Disposal
Obligations.

E.
Termination of March 3, 2017 Amendment. Except as provided in Section 2.H below,
the Amendment to the Unit Four Agreement made between the parties dated March 3,
2017 is, as of the Amendment Date, terminated and of no further force or effect.

F.
Management of Unit Four Costs During Extension of the Operating Term. The
parties agree to those certain provisions set forth below in Section 2.F.i
through Section 2.F.vii below, in accordance with the following: (x) if Southern
Indiana gives notice to terminate the Operating Term prior to June 1, 2022
(which, in accordance with Section 5 of Article One of the Agreement, shall
cause the Agreement to terminate on December 31, 2023), then the following
provisions shall apply and shall be incorporated into the Agreement from and
after the Amendment Date until December 31, 2023, on which date such provisions
shall expire and be of no further force or effect (except as expressly provided
in Section 2.F.iv below), or (y) if Southern Indiana does not give notice to
terminate the Operating Term prior to June 1, 2022 (which, in accordance with
Section 5 of Article One of the Agreement shall not cause the Agreement to
terminate on December 31, 2023), then the following provisions shall apply and
shall be incorporated into the Agreement from and after the Amendment Date until
June 1, 2022, on which date such provisions shall expire and be of no further
force or effect (except as expressly provided in Section 2.F.iv below).

i.
Southern Indiana shall not be required to contribute capital to or otherwise
fund the study of the addition of environmental projects on, or related to the
operation of, Unit Four unless agreed upon in writing prior to such investment.

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EXHIBIT 10.1

ii.
Southern Indiana shall not be required to contribute toward costs that are not
reasonably required, based on good utility operating practices, in order to
achieve reliable operation of Unit Four for the period ending December 31, 2023.

iii.
APG shall continue to operate and maintain the Unit Four assets with prudence.

iv.
APG agrees to work cooperatively with Southern Indiana to address any
significant increases in operating and maintenance costs, excluding coal costs
(“O&M Costs”) relative to the historic costs of operating and maintaining Unit
Four and the Common Facilities. On or prior to September 30 of each year during
the Operating Term, APG shall prepare and submit to Southern Indiana for
approval and adoption the proposed annual O&M Cost budget for the following year
of the Operating Term, setting forth in reasonable detail the O&M Cost budget
for Unit Four prepared on a quarterly basis (the “Annual Budget” and, in the
form approved by APG and Southern Indiana, the “Approved Annual Budget”). The
Annual Budget shall be prepared in a manner generally consistent with prior
years and in accordance with prudent utility operating standards to achieve
reliable operation of Unit Four through December 31, 2023. In the event that
Southern Indiana objects to the Annual Budget submitted by APG, Southern Indiana
shall provide such objection, along with a detailed explanation of its reasons
for such objection, to APG in writing not later than October 31 of such year.
APG and Southern Indiana shall use good faith efforts to mutually agree upon the
Approved Annual Budget, including agreeing upon any allocations contemplated by
Section 2.F.v below. If APG and Southern Indiana fail to reach agreement on an
Approved Annual Budget for any year during the Operating Term prior to the first
day of such year, then the average Approved Annual Budget during the immediately
preceding five-year period shall be deemed to be in effect, subject to a five
percent (5%) increase, until the approval of a new Approved Annual Budget in
accordance herewith. The 2018 Annual Budget will be prepared by APG and
submitted to Southern Indiana for approval on or prior to September 30, 2017 as
described above. Further, if the actual O&M Costs for Unit Four in any calendar
year exceed the O&M Costs budgeted for Unit Four in the Approved Annual Budget
for such calendar year by more than twenty percent (20%), then Southern Indiana
will not be responsible to fund its fifty percent (50%) share of any such O&M
Costs which exceed the twenty percent (20%) threshold. APG may elect to fund
Southern Indiana’s fifty percent (50%) share of such costs which exceed the
twenty percent (20%) threshold, or may decide, not later than January 31 of the
following calendar year, to issue a notice to terminate the Operating Term upon
six (6) months’ advance written notice to Southern Indiana (subject to Section
2.I below). Within thirty (30) days following APG’s delivery of such termination
notice, APG and Southern Indiana shall mutually develop and agree upon an O&M
Cost budget for the period of time from the notice of termination until the
termination of the Operating Term, setting forth in reasonable detail the O&M
Cost budget for Unit Four for such period with a shared goal of minimizing the
O&M Costs during such period (the “Approved Shutdown Budget”). Upon mutual
agreement of the Approved Shutdown Budget, the Approved Shutdown Budget shall be
deemed to replace the then-effective Approved Annual Budget and APG and Southern
Indiana shall each continue to pay its fifty percent (50%) share of O&M Costs
during the period covered by the Approved Shutdown Budget. The foregoing
sentence, and any Approved Shutdown Budget, will survive any termination of this
Section 2.F.

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EXHIBIT 10.1

v.
If Southern Indiana’s share of the O&M Costs proposed to be incurred for any
particular Unit Four project reasonably expected to be completed (x) as part of
the major outage planned for 2019 (the “2019 Outage”) or (y) in 2020 or
thereafter, are expected to exceed the applicable Review Threshold (as defined
below), Southern Indiana will only be required to pay its pro-rata share of such
costs that are reasonably required, based on good utility operating practices,
in order to achieve reliable operation of Unit Four for the period ending
December 31, 2023 (or such shorter period as may be applicable if a termination
notice has been issued), based on the expected benefit period associated with
the relevant project (measured using the number of post-outage or post-project
completion months remaining until December 31, 2023 (or such shorter period as
may be applicable if a termination notice has been issued) divided by the
expected duration - in months - of the benefits derived from the project in
question). With respect to planned projects, the parties shall agree upon any
such O&M Cost allocations as part of the process of reaching agreement on an
Approved Annual Budget. As used herein, the “Review Threshold” means (a) One
Hundred Thousand Dollars ($100,000) for any project that is reasonably expected
to be completed as part of the 2019 Outage or in 2020, 2021 or 2022, and (b)
Fifty Thousand Dollars ($50,000) for any project that is reasonably expected to
be completed in 2023 or any time thereafter. For sake of clarity, the foregoing
shall not limit the application of Section 2.B hereof and the cap on Southern
Indiana’s liability for Unit Four Capital Expenditures contained therein.

vi.
APG agrees that any Common Facilities cost increases due to increased
allocations to Unit Four resulting from the closure of one or more of the First
Three Units will not be allocated to Southern Indiana.

vii.
With respect to other material, non-routine work proposed by APG that Southern
Indiana believes, based on good utility operating practices, is not reasonably
required in order to achieve reliable operation of Unit Four for the period
ending December 31, 2023, but is instead designed to extend the life of Unit
Four beyond such date, Southern Indiana reserves the right, if it objects to the
project via the Operating Committee and APG moves ahead with the expenditure, to
oppose recovery of some or all of its share of the cost, and to either
arbitrate, pursuant to Section 4 of Article Seven of the Agreement, or file suit
against APG, regarding the right to such recovery on or before December 31,
2023.

G.
APG Parent Guaranty. Concurrently herewith, APG’s parent company, Alcoa
Corporation, has issued a parent guaranty in the form attached hereto as Exhibit
3 in favor of Southern Indiana in order to secure APG’s indemnification
obligations to Southern Indiana arising under Section 2.C.i(2) above (related to
the Unit Four Decommissioning Obligations) and Section 2.D.ii above (related to
the APG Ash Disposal Obligations).

H.
Amendment Contingent on Warrick Smelter Restart. Notwithstanding anything to the
contrary in this Amendment, in the event that (x) a restart, in whole or in
part, of Alcoa’s Warrick aluminum smelter (the “Smelter”), measured from the
date of first molten metal production from the Smelter (a “Smelter Restart”),
has not occurred by July 1, 2018, or (y) though a Smelter Restart has occurred
on or prior to July 1, 2018, molten metal production at the Smelter is
subsequently terminated by any affiliate of APG within twelve (12) months
following the initial date of such Smelter Restart for reasons other than force
majeure, then, in either case, this Amendment may be terminated immediately upon
written notice by either party. In the event of such termination of this
Amendment, the Agreement, as it existed immediately prior

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EXHIBIT 10.1

to the execution of this Amendment (including, for the sake of clarity, all
prior amendments thereto), will govern the parties’ joint ownership and
operation of Unit Four with the exception that Sections 2.A, 2.C, and 2.D above,
and the Alcoa Corporation parent guaranty provided pursuant to Section 2.G above
shall survive and continue to apply, and either party shall have a right to
terminate the Operating Term upon six (6) months’ advance written notice to the
other party (subject to Section 2.I below).
I.
Termination of the Operating Term; Survival. Notwithstanding anything to the
contrary in this Amendment, the parties agree that any termination of the
Operating Term shall be structured and scheduled in order to ensure compliance
with all then-existing MISO capacity and network resource commitments and any
regulatory requirements applicable to the termination of the Operating Term or
the retirement of Unit Four. In the event that MISO-related commitments or
regulatory requirements prevent the termination of the Operating Term or the
retirement of Unit Four within the applicable advance notification period
specified in this Amendment, the parties agree that the Operating Term shall
continue in effect until such time as it may be terminated in full compliance
with all such MISO-related commitments and applicable regulatory requirements.
Notwithstanding any expiration or earlier termination of the Operating Term or
this Amendment, other than termination for default by Southern Indiana, Sections
2.A, 2.C, and 2.D above, and the Alcoa Corporation parent guaranty provided
pursuant to Section 2.G above shall survive and continue to apply.

J.
Matters with Respect to Certain Environmental Assets. Certain Unit Four
pollution control and solid waste disposal assets (“Environmental Assets”) were
financed by Southern Indiana with tax-exempt bonds. Southern Indiana
acknowledges that if APG becomes the owner of Southern Indiana’s interest in
Unit Four, APG has total control over these Environmental Assets. In order for
Southern Indiana to continue to comply with the Internal Revenue Code and
respond to audits of that compliance, Southern Indiana respectfully requests and
APG acknowledges that if APG becomes the owner of Southern Indiana’s interest in
Unit Four, APG will (i) notify Southern Indiana within (30) days in the event
the use of any Environmental Assets is changed from their current use or any
Environmental Assets are sold, (ii) upon thirty (30) days written notice,
provide Southern Indiana access to the Environmental Assets and information
regarding the Environmental Assets, in each case as and to the extent reasonably
necessary for Southern Indiana to continue to comply with the Internal Revenue
Code and respond to audits of that compliance, and (iii) use commercially
reasonable efforts to bind these provisions to any successors or assigns of APG.
Southern Indiana shall reimburse APG for reasonable expenses associated with
complying with requests for information and access.

3.
Miscellaneous.

A.
Indemnification Procedures.

i.
Any person making a claim for indemnification hereunder (an “Indemnified Party”)
in respect of any action, lawsuit, proceeding, investigation, demand or other
claim against the Indemnified Party by a third party (a “Third Party Claim”),
shall notify the party against whom indemnification is sought (an “Indemnifying
Party”) of such Third Party Claim in writing promptly after receiving notice
thereof, describing the Third Party Claim, the amount thereof (if known and
quantifiable) and the basis thereof in reasonable detail (such written notice,
an “Indemnification Notice”); provided that the failure to so notify an
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent that (and only to the extent) that such failure
shall have caused the indemnifiable losses to be greater than such losses would

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EXHIBIT 10.1

have been had the Indemnified Party given the Indemnifying Party prompt notice
hereunder.
ii.
Any Indemnifying Party shall be entitled to participate in the defense of such
Third Party Claim at such Indemnifying Party’s expense, and at its option shall
be entitled to assume the defense thereof by appointing a reputable counsel
reasonably acceptable to the Indemnified Party to be the lead counsel in
connection with such defense; provided that, the Indemnified Party shall be
entitled to participate in the defense of such Third Party Claim and to employ
counsel of its choice for such purpose (provided that the fees and expenses of
such separate counsel shall be borne by the Indemnified Party and shall not be
recoverable from such Indemnifying Party under this Section 3.A. Notwithstanding
the foregoing, if (x) the Third Party Claim is primarily for non-monetary
damages against the Indemnified Party or seeks an injunction or other equitable
relief that, if granted, would reasonably be expected to be material to the
Indemnified Party, (y) the Indemnified Party shall have determined in good faith
that an actual or potential conflict of interest makes representation of the
Indemnifying Party and the Indemnified Party by the same counsel or the counsel
selected by the Indemnifying Party inappropriate, or (z) the Third Party Claim
is a criminal proceeding, then in each case the Indemnified Party may, upon
notice to the Indemnifying Party, assume the exclusive right to defend,
compromise and settle such Third Party Claim and the reasonable fees and
expenses of the Indemnified Party’s separate counsel shall be borne by the
Indemnifying Party to the extent the Third Party Claim is indemnifiable
hereunder. Notwithstanding anything to the contrary herein, for sake of clarity
the parties agree that the foregoing provisions shall not be construed so as to
permit the Indemnified Party to control or assume the defense of any action,
lawsuit, proceeding, investigation, demand or other claim brought against the
Indemnifying Party concurrently with or in a joint proceeding in respect of any
Third Party Claim that is the subject of an indemnification claim hereunder by
the Indemnified Party.

iii.
Upon assumption of the defense of any such Third Party Claim by the Indemnifying
Party, the Indemnified Party will not pay, or permit to be paid, any part of the
Third Party Claim, unless the Indemnifying Party consents in writing to such
payment or unless a final judgment from which no appeal may be taken by or on
behalf of the Indemnified Party is entered against the Indemnified Party for
such liability. Notwithstanding anything to the contrary herein, the
Indemnifying Party shall not compromise or settle, or admit any liability with
respect to, any Third Party Claim without the prior written consent of the
Indemnified Party, (which consent shall not be unreasonably withheld or
delayed), unless the relief consists solely of (i) money damages (all of which
the Indemnifying Party shall pay), and (ii) includes a provision whereby the
plaintiff or claimant in the matter releases the Indemnified Party from all
liability with respect thereto.

iv.
For all Third Party Claims, the Indemnified Party shall provide its reasonable
cooperation with the Indemnifying Party in defense of claims or litigation,
including by making employees, information and documentation reasonably
available. If the Indemnifying Party shall not reasonably promptly assume the
defense of any such Third Party Claim, or fails to prosecute or withdraws from
the defense of any such Third Party Claim, the Indemnified Party may defend
against such matter in a manner consistent with the above provisions regarding
conduct of the defense by the Indemnified Party.

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EXHIBIT 10.1

v.
A claim for indemnification for any matter not involving a Third Party Claim may
be asserted by notice to the party from whom indemnification is sought.

B.
Ratification of Agreement; Continuation of Electric Power Agreement. Except as
expressly amended by this Amendment, the Agreement is hereby ratified and
affirmed in all respects and shall continue in full force and effect in
accordance with its terms. Further, the parties agree that the Electric Power
Agreement between them dated May 1, 2002, as the same may have been amended from
time to time (collectively, the “EPA”) will remain in effect on its current
terms during the Operating Term; provided, however, that in the event that APG
materially increases its power exports from the First Three Units from the
current level of operations, or if a change in applicable law or regulation
materially impacts the terms or implementation of the EPA, the parties shall
negotiate in good faith to modify the EPA so as to address in a commercially
reasonable manner the impact of such changes on the parties.

C.
Governing Law. This Amendment shall be governed by and construed in accordance
with the Laws of the State of Indiana as to all matters, including matters of
validity, construction, interpretation, effect, performance and remedies,
without regard to conflicts rules that would otherwise refer the matter to the
laws of another jurisdiction.

D.
Counterparts. This Amendment may be executed in multiple counterparts, each of
which when so executed and delivered shall constitute a duplicate original and
all counterparts together shall constitute one and the same instrument.
Transmission of the executed signature page of a counterpart of this Amendment
by electronic mail shall be effective as delivery of an executed counterpart of
this Amendment.

[SIGNATURES ON FOLLOWING PAGE]

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EXHIBIT 10.1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their duly authorized representatives as of the Amendment Date.

ALCOA POWER GENERATING, INC.

By: /s/ Marc A. Pereria                    
Name: Marc A. Pereria                
Title: Vice President                    

SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

By: /s/ Jon K. Luttrell                    
Name: Jon K. Luttrell
Title: Senior Vice President - Utility Operations

[Signature Page to Amendment Agreement]

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EXHIBIT 10.1

Exhibit 1
Projected Capital Expenditures

Capex
 
 
 
 Vectren Share
Lime Injection Upgrade
 
2018
 
 $ 650,000
U4 HP Controls
 
2018
 
 $ 1,300,000
Yearly Allocation
 
2018
 
 $ 500,000
Upgradde NOX Analyzers
 
2019
 
 $ 390,000
De-Tip Fans
 
2019
 
 $ 1,300,000
Air Heaer Baskets
 
2019
 
 $ 438,750
8/8A Conveyer Upgrades
 
2019
 
 $ 162,500
Yearly Allocation
 
2019
 
 $ 500,000
Tripper Car Upgrade
 
2020
 
 $ 1,560,000
Yearly Allocation
 
2020
 
 $ 2,400,000
Yearly Allocation
 
2021
 
 $ 2,400,000
Yearly Allocation
 
2022
 
 $ 2,400,000
Yearly Allocation
 
2023
 
 $ 2,400,000
 
 
Total
 
 $ 16,401,250

--------------------------------------------------------------------------------

EXHIBIT 10.1

Exhibit 2
Capital Expenditures
Alcoa Corporation and its consolidated US entities, including APG, capitalize
the acquisition cost of all depreciable or amortizable capital assets with all
of the following attributes:
•
The asset is identifiable and controllable.

•
The asset has a physical and economic life exceeding 1 year.

•
The asset has a minimum acquisition cost that exceeds $10,000.

This policy also applies to Alcoa's consolidated non-US entities, unless the
local tax laws and/or statutory accounting rules of the host country require
capitalization of assets at a lesser amount of an equivalent non-US currency.
The cost to acquire a capital asset includes all costs, both direct and
indirect, associated with acquisition (i.e., installation, freight, set-up
costs, permitting fees and related costs such as state-required environmental
studies that must be performed before construction is allowed, as well as
related sales and use taxes), including costs determined to be necessary to
complete the asset or bring it to a state of completion so that it can perform
its intended function. Rebates received from vendors on capital projects are to
be accounted for as a reduction in the asset cost and not as a credit to profit
and loss. If the asset or project has already been capitalized and the system
will not permit the recording of a reduction in its carrying value, then a
negative asset must be established to account for the rebate. The life assigned
to the negative asset is to be consistent with the life assigned to the asset to
which the rebate relates.
It is Alcoa's policy to transfer completed capital projects to the appropriate
property, plant and equipment ledger accounts in the month of completion of the
project, or upon receipt, in the case of non-project expenditures. The term
"completion" is intended to mean the point in time when the project (or major
component thereof) or facility is substantially complete and has been turned
over to the operating department for commissioning of the project / facility. If
a project is designated as “complete” during the last ten (10) calendar days of
a month and system constraints preclude the transfer of the project to the
appropriate property, plant and equipment ledger accounts, it will be acceptable
to defer the transfer until the following month. Also refer to the standard on
Construction Work in Process.
The $10,000 minimum capitalization rule applies to the aggregate cost of the
original or normal complement of low-cost equipment items (i.e., potroom tools,
small tools for shops, molds and dies for standard production items, furniture
and equipment for offices, scrap boxes, pallets, spools). The initial group or
batch of low-cost items with an aggregate cost of $10,000 or more should be
appropriately aggregated and capitalized. This applies to brownfield as well as
greenfield sites. Replacement of these low-cost items is expensed unless the
item meets the $10,000 minimum.
Additions to assets subsequent to the initial installation are also subject to
the $10,000 minimum capitalization rule. However, this concept does not apply to
delayed costs (i.e., reallocation of construction overhead for new construction
projects) that are really part of the initial installation.
The $10,000 minimum capitalization rule also applies to costs incurred
subsequent to the acquisition of a tangible capital asset that result in an
improvement to that asset, such as extended life of the asset or increased
productivity of that asset.

--------------------------------------------------------------------------------

EXHIBIT 10.1

Exhibit 3
Form of Parent Guaranty
THIS PARENT GUARANTY (this “Guaranty”) is made as of September 21, 2017 by ALCOA
CORPORATION, a Delaware corporation (“Guarantor”), in favor of SOUTHERN INDIANA
GAS AND ELECTRIC COMPANY, an Indiana corporation (“Beneficiary”), for the
benefit of ALCOA POWER GENERATING, INC., a Tennessee corporation
(“Counterparty”).
RECITALS
WHEREAS, Counterparty is a direct or indirect subsidiary of Guarantor;
WHEREAS, Beneficiary and Counterparty are parties to an Agreement For Unit Four
at Alcoa Generating Corporation’s Warrick Power Plant, dated January 30, 1968
(as the same has been amended from time to time, including by the Amendment
(defined below), the “Unit Four Agreement”);
WHEREAS, concurrently herewith, Beneficiary and Counterparty entered into an
amendment to the Unit Four Agreement, dated September 21, 2017 (the
“Amendment”); and
WHEREAS, it is a requirement under the Amendment that Guarantor shall have
issued this Guaranty in favor of Beneficiary in order to secure certain
obligations of Counterparty under the Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and intending to be legally bound, the parties agree as
follows:
1.
Definitions. Unless defined herein, capitalized terms used herein shall have the
meanings set forth in the Amendment.

2.
Guarantee to Beneficiary. Guarantor hereby irrevocably and unconditionally
guarantees to Beneficiary the full and prompt payment and performance by
Counterparty of the Unit Four Decommissioning Obligations and the APG Ash
Disposal Obligations, in accordance with Section 2.C.ii and Section 2.D.ii,
respectively, of the Amendment (all such obligations are hereinafter
collectively referred to as the “Guaranteed Obligations”) as provided in this
Guaranty. This Guaranty is a guarantee of payment and of performance and not
merely of collection.

3.
Beneficiary Demand and Defenses. Except as expressly provided in this Guaranty,
the liability of Guarantor under this Guaranty shall not be conditional or
contingent upon any action being taken against Counterparty, any other guarantor
or person or any collateral security for the Guaranteed Obligations or any
property. If Counterparty shall fail to pay or perform in full when due all or
any part of the Guaranteed Obligations, Beneficiary shall make a demand upon
Guarantor (a “Beneficiary Demand”). A Beneficiary Demand shall be in writing and
shall reasonably and briefly specify in what manner and/or what amount
Counterparty has failed to pay or perform, as applicable, with a specific
statement that Counterparty is calling upon Guarantor to pay or perform, as
applicable, under this Guaranty. Within 10 days of Guarantor’s receipt of a
Beneficiary Demand, Guarantor shall promptly pay (including any interest accrued
thereon from the date due by Counterparty) or perform the unpaid or unperformed,
as applicable, Guaranteed Obligations set forth in the Beneficiary Demand in
accordance with the terms of the Unit Four Agreement. Notwithstanding anything
to the contrary set forth in this Guaranty and except for defenses waived by
Counterparty or arising from the lack of authority, bankruptcy, insolvency or
dissolution of Counterparty, all defenses, claims, set-offs,

--------------------------------------------------------------------------------

EXHIBIT 10.1

deductions, limitations on liability, opportunities to cure defaults and other
rights available to Counterparty under the Unit Four Agreement shall be
available to Guarantor (collectively “Defenses”). However, in determining the
extent to which Guarantor must perform or pay the Guaranteed Obligations
pursuant to this Guaranty, (a) in no event shall Guarantor be permitted to
assert any Defense greater than those provided to Counterparty under the Unit
Four Agreement and (b) to the extent that it is determined by a court of
competent jurisdiction that any Defense is unavailable to Counterparty or is
limited in its scope or nature, Guarantor shall be prohibited from raising such
Defense to the same extent as such Defense is determined by such court to be
unavailable or limited.
4.
Expenses and Fees. Guarantor agrees to pay Beneficiary all reasonable fees and
expenses (including, without limitation, reasonable attorney’s fees) incurred by
Beneficiary in enforcing this Guaranty, which payment shall be made within
twenty (20) business days following Guarantor’s receipt of written demand for
payment (including reasonable supporting documentation) from Beneficiary;
provided, however, that Guarantor is not responsible for Beneficiary’s fees and
expenses in enforcing this Guaranty if no performance or payment is required to
be made by Guarantor hereunder.

5.
Rights of Third Parties. This Guaranty shall not be construed to create any
right or to confer any benefit on any persons other than Beneficiary, Guarantor
and Counterparty.

6.
Representations and Warranties. Guarantor hereby represents and warrants that:

A.
It is a corporation, duly formed, validly existing, and in good standing under
the laws of Delaware and has full power and authority to own its property and to
carry on its business as now conducted.

B.
Guarantor has full legal right, power and authority to execute and deliver this
Guaranty and to carry out is obligations hereunder, and this Guaranty has been
duly authorized by all requisite corporate action on its part. This Guaranty has
been duly authorized, executed and delivered by Guarantor. This Guaranty
constitutes a valid and legally binding obligation of Guarantor, enforceable
against it in accordance with its terms. No consent, authorization, order or
approval of, or filing or registration with any person or entity, including any
governmental entity, is required in connection with the execution, delivery and
performance of this Guaranty.

C.
Guarantor’s execution, delivery and performance of this Guaranty and the
transactions contemplated hereby do not constitute a breach of any term or
provision of, or a default under (1) any contract or agreement to which it is a
party or by which it or its property is bound, (2) its organizational documents,
or (3) any laws, regulation, or judicial orders having applicability to it.

D.
There is no action, suit or similar proceeding, at law or in equity, before or
by any court or governmental authority, pending or, to the best of Guarantor’s
knowledge, threatened against Guarantor wherein an unfavorable decision, ruling
or finding would materially and adversely affect the validity or enforceability
of this Guaranty or any other agreement or instrument entered into by Guarantor
in connection with the transactions contemplated hereby, or which would
materially and adversely affect the performance by Guarantor of its obligations
hereunder.

7.
Continuing Guarantee.

A.
The obligations of Guarantor under this Guaranty are absolute, present,
irrevocable and unconditional, except as otherwise provided in this Guaranty,
and shall remain in full force and effect until Counterparty shall have fully
satisfied and discharged all of the Guaranteed Obligations in accordance with
this Guaranty and the Unit Four Agreement and shall not be released or
discharged by: (i) any failure, omission or delay by Beneficiary in the exercise
of any right, power or remedy conferred on it with respect to this Guaranty or
the Unit Four Agreement, or any exercise by Beneficiary of any right, power or
remedy conferred on it with respect to this Guaranty or the Unit Four Agreement,
(ii) any assignment of the Unit Four Agreement by Counterparty or any change in
the ownership, direct or indirect, of Counterparty or Beneficiary,

--------------------------------------------------------------------------------

EXHIBIT 10.1

the insolvency, bankruptcy, liquidation or dissolution of Counterparty, (iii)
any amendment or modification of any of the Guaranteed Obligations, or (iv) any
other similar circumstance which might constitute a legal or equitable discharge
or defense under applicable principles of suretyship law or laws affecting
guaranties.
B.
Notwithstanding anything to the contrary herein, in the event that either: (i)
Counterparty, while still a party to the Unit Four Agreement, ceases to be a
direct or indirect subsidiary of Guarantor, or (ii) Counterparty assigns or
otherwise transfers its interests in the Unit Four Agreement, in accordance with
the terms thereof, to another party which is not a direct or indirect subsidiary
of Guarantor (in each case, a “Transfer”), then upon the effective date of such
Transfer, this Guaranty, including without limitation Guarantor’s obligations
with respect to the Guaranteed Obligations, may not be expanded, amended or
modified without Guarantor’s express written consent.

8.
Set-Off. Guarantor shall be entitled only to those set-offs and counterclaims to
which Counterparty is entitled under the Unit Four Agreement.

9.
Waivers by Guarantor. Guarantor hereby unconditionally and irrevocably waives as
a condition to the performance or payment by Guarantor of the Guaranteed
Obligations (i) except for the Beneficiary Demand required hereby, all notices
which may be required by statute or otherwise, including notices of acceptance,
default, presentment or demand, (ii) except as expressly provided in Section
7(B) above, all suretyship defenses of every nature available under the laws of
the State of Indiana and the laws of any other state, provided, however, that
if, after the occurrence of a Transfer as contemplated by Section 7(B), the
Guaranteed Obligations are expanded, amended or modified without Guarantor’s
express written consent, Guarantor acknowledges and agrees that any suretyship
defenses that may be available to it shall not limit the applicability of this
Guaranty to the Guaranteed Obligations as they existed immediately prior such
expansion, amendment or modification thereof, and (iii) any defense based on an
election of remedies by Beneficiary. Except for the Beneficiary Demand required
hereby, Guarantor also waives any right to require Beneficiary to first proceed
against Counterparty, any other guarantor or person liable on the Guaranteed
Obligations or exhaust any other remedies available.

10.
Reinstatement of Obligations. If Beneficiary is required to refund (for any
reason, including as a result of the bankruptcy or insolvency of Counterparty)
any amount previously paid in connection with a Guaranteed Obligation, the
obligation of Guarantor under this Guaranty with respect to such amount shall
automatically be deemed to be reinstated and shall constitute a Guaranteed
Obligation (including any enforcement costs associated with defending the
receipt of such amounts originally paid in respect of such reinstated
liability).

11.
Deferral of Subrogation. Until such time as all of the Guaranteed Obligations
have been fully satisfied, Guarantor shall not by virtue of this Guaranty be
subrogated to any rights of Beneficiary or make any claim in competition with
Beneficiary against Counterparty or any other collateral or security with
respect to the Guaranteed Obligations in connection with any matter relating to
or arising from the Guaranteed Obligations or this Guaranty.

12.
Payments. All payments hereunder shall be made by wire transfer of immediately
available U.S. dollar funds to such account at such financial institution as
Beneficiary may from time to time designate in writing.

13.
Enforcement; No Waiver. This Guaranty may be enforced as to one or more breaches
either separately or cumulatively. No failure or delay on the part of
Beneficiary to exercise any right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right hereunder preclude the
exercise of any other right. This Guaranty constitutes the entire agreement
between Beneficiary and Guarantor concerning the subject matter hereof.

14.
Governing Law; Disputes. THE LAWS OF THE STATE OF INDIANA (EXCLUDING RULES
GOVERNING CONFLICTS OF LAWS) SHALL GOVERN THE INTERPRETATION,

--------------------------------------------------------------------------------

EXHIBIT 10.1

CONSTRUCTION, ENFORCEABILITY, LEGALITY AND VALIDITY OF THIS PARENT GUARANTY, AND
ALL DISPUTES ARISING HEREUNDER OR IN ANY MANNER RELATED HERETO. NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, ANY DISPUTES ARISING HEREUNDER OR IN ANY MANNER
RELATED HERETO SHALL BE RESOLVED IN ACCORDANCE WITH THE DISPUTE RESOLUTION
PROCEDURES SET FORTH IN SECTION 4 OF ARTICLE SEVEN OF THE UNIT FOUR AGREEMENT.
15.
Notices. All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand, nationally
recognized pre-paid overnight delivery service or by facsimile. Any such notice
shall be effective (i) upon delivery if delivered by hand, (ii) on the next
business day after mailing if sent by a nationally recognized pre-paid overnight
delivery service or (iii) on the date of confirmed delivery (as evidenced by a
written confirmation from the sender’s facsimile machine) if delivered by
facsimile before 5 p.m. EPT on any business day and on the next business day if
confirmed delivery by facsimile occurs after such time or on a day that is not a
business day. All notices and other communications shall be delivered to
Beneficiary at its address specified below, to Guarantor at its address set
forth below, and to Counterparty at its address specified below, or at such
other addresses as any such party shall have designated in writing to the other
parties on ten (10) days prior written notice. Beneficiary will send a courtesy
copy to Counterparty of any Beneficiary Demand under this Guaranty given to
Guarantor.

To Beneficiary:    Southern Indiana Gas and Electric Company
One Vectren Square
211 N.W. Riverside Drive
Evansville, IN 47708
Attn: Corporate Secretary
Facsimile: (812) 491-4172

To Guarantor:    Alcoa Corporation
201 Isabella Street, Suite 500
Pittsburgh, PA 15212 USA
Attn: Treasurer
Facsimile: (412) 992-5440

To Counterparty:    Alcoa Power Generating, Inc.
201 Isabella Street, Suite 500
ALC 6J15
Attn: Marc A. Pereira
Facsimile: (412) 992-5440

16.
Term of the Guaranty. This Guaranty shall become operative and it shall remain
in full force and effect from the date of execution and delivery hereof until
the performance or discharge or release of all of the Guaranteed Obligations;
provided, that in the case of a discharge resulting from the lack of authority,
bankruptcy, insolvency or dissolution of Counterparty this Guaranty shall
continue and remain in full force and effect.

17.
Successors and Assigns. This Guaranty shall be binding upon Guarantor and its
successors and permitted assigns and inure to the benefit of Beneficiary and its
successors and permitted assigns.

--------------------------------------------------------------------------------

EXHIBIT 10.1

Guarantor may not assign its obligations hereunder without the prior written
consent of Beneficiary. Beneficiary may not assign its rights and obligations
hereunder without the prior written consent of Guarantor, except that
Beneficiary may, without any prior consent of Guarantor, assign its rights and
obligations hereunder in connection with a permitted assignment by Beneficiary
of its interests in the Unit Four Agreement in accordance with the terms
thereof.
18.
Amendments. No amendment of any provision of this Guaranty shall be effective
unless it is in writing and signed by Guarantor and Beneficiary, and no waiver
of any provision of this Guaranty and no consent to any departure by Guarantor
therefrom, shall be effective unless it is in writing and signed by Beneficiary.

19.
Severability. In the event that any of the provisions, or portions or
applications thereof, of this Guaranty are held to be unenforceable or invalid
by any court of competent jurisdiction, the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected
thereby.

[SIGNATURES ON FOLLOWING PAGE]

--------------------------------------------------------------------------------

EXHIBIT 10.1

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its
authorized representative as of the date first written above.

GUARANTOR

By:    ALCOA CORPORATION

By:    /s/ Marc A. Periera    
Name:    Marc A. Pereira
Title:     Vice President, Corporate Development

[Signature Page to Parent Guaranty]