Exhibit 4.21


 


BLACK HILLS POWER, INC.


 


 


TO


 


 


THE BANK OF NEW YORK MELLON,


 


 


As Trustee


 


 






 


 


SECOND


 


SUPPLEMENTAL INDENTURE


 


 


Dated as of October 27,
2009


 


 






 


Supplemental to Restated and Amended


Indenture of Mortgage and Deed of Trust


Dated as of September 1, 1999


 


 


First Mortgage Bonds, 6.125%


Series AF Due 2039


 

















 


SECOND SUPPLEMENTAL INDENTURE, dated as of
the 27th day of October, 2009, between Black Hills
Power, Inc. (formerly known as Black Hills Corporation), a corporation
duly organized and existing under the laws of the State of South Dakota (the “Company”)
and THE BANK OF NEW YORK MELLON, a corporation organized and existing under the
laws of the State of New York, as Trustee under the Indenture hereinafter
mentioned (the “Trustee”).


 


WHEREAS, in order to secure an authorized
issue of First Mortgage Bonds of the Company, the Company has executed and
delivered a Restated and Amended Indenture of Mortgage and Deed of Trust to
JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as Trustee
(the successor of which is The Bank of New York Mellon), dated as of September 1,
1999, as supplemented and amended by a First Supplemental Indenture, dated as
of August 13, 2002 (as so amended the “Indenture”).


 


WHEREAS, pursuant to the provisions of the
Indenture, First Mortgage Bonds are presently outstanding and continue to be
secured by the Indenture as follows:


 


	
  Series

  	
   

  	
  Principal Amount

  Outstanding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Series Y, 9.49%, due June 15,
  2018

  	
   

  	
  $

  	
  2,520,000

  	
   

  
	
  Series Z, 9.35%, due May 29, 2021

  	
   

  	
  19,980,000

  	
   

  
	
  Series AC, 8.06%, due February 1,
  2010

  	
   

  	
  30,000,000

  	
   

  
	
  Series AE, 7.23% due August 15,
  2032

  	
   

  	
  75,000,000

  	
   

  
	
   

  	
   

  	
  $

  	
  127,500,000

  	
   

  



 


; and


 


WHEREAS, as permitted by the Indenture, the
Company, by resolutions of its Board of Directors duly adopted, has determined
to create a new series of bonds to be known as its “First Mortgage Bonds,
6.125% Series AF Due 2039” (herein called the “Series AF Bonds”), to
be initially authenticated and delivered in the aggregate principal amount of
$180,000,000 in the form, having the characteristics and being entitled to the
benefits as in the Indenture or as in this Supplemental Indenture provided; and


 


WHEREAS, the Company, in exercise of the
powers and authority conferred upon and reserved to it under and by virtue of
the provisions of the Indenture, and particularly the provisions contained in
Articles Two and Sixteen thereof, and pursuant to appropriate resolutions of
its Board of Directors, has duly resolved and determined to make, execute and
deliver to the Trustee a Second Supplemental Indenture in the form hereof
(herein sometimes referred to as “this Supplemental Indenture”) for the
purposes herein provided; and


 


WHEREAS, all conditions and requirements
necessary to make this Supplemental Indenture a valid, binding and legal
instrument in accordance with its terms have been done, performed and
fulfilled, and the execution and delivery hereof have been in all respects duly
authorized;


 

















 


NOW THEREFORE, in consideration of the
premises and of one dollar to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, and of other good and valuable consideration, in order to
establish the terms of the Series AF Bonds, the Company hereby further
covenants and agrees to and with the Trustee and its successors in the trust
under the Indenture for the benefit of all those who shall from time to time
hold the Series AF Bonds as follows:


 


The Company does hereby ratify and confirm its Mortgage and Pledge to
the Trustee of all property described in the Indenture and does hereby grant,
bargain, sell, release, convey, assign, transfer, mortgage, pledge and set over
unto the Trustee, and to its successors and assigns forever, the property
described in Annex A to this Supplemental Indenture acquired by the Company and
not specifically described under the Indenture which property shall be
incorporated into the terms of Exhibit A to the Indenture as if more fully
set forth therein.


 


ARTICLE ONE


 


DEFINITIONS


 


SECTION 1.01.              General.  For all purposes of this Supplemental
Indenture:


 


(a)       capitalized
terms used herein without definition shall have the meanings specified in the
Indenture;


 


(b)       all
references herein to Articles and Sections, unless otherwise specified, refer
to the corresponding Articles and Sections of this Supplemental Indenture;


 


(c)       the
terms “herein,” “hereof,” “hereunder” and other words of similar import refer
to this Supplemental Indenture; and


 


(d)       in
the event of a conflict between any definition set forth in the Indenture and
any definition set forth in this Supplemental Indenture, the definition set
forth in this Supplemental Indenture shall control.


 


SECTION 1.02.              Definitions.  The following definitions shall apply
to this Supplemental Indenture:


 


“Business Day” means any day other than a
Saturday or Sunday and other than a day on which banking institutions in Rapid
City, South Dakota, or New York, New York, are authorized or obligated by law
or executive order to close.


 


“Comparable Treasury Issue” means the United
States Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of the Series AF Bonds to be
redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Series AF
Bonds.


 

















 


“Comparable Treasury Price” means the average
of two Reference Treasury Dealer Quotations obtained with respect to any
redemption date.


 


“Depositary” means The Depository Trust
Company, a New York corporation, or any successor thereto.


 


“Global Bond” shall have the meaning set
forth in Section 2.05(a) hereof.


 


“Independent Investment Banker” means RBC
Capital Markets Corporation, RBS Securities Inc. or one of the Reference
Treasury Dealers appointed by the Company.


 


“Reference Treasury Dealer” means RBC Capital
Markets Corporation, RBS Securities Inc. and their successors; provided,
however, that if RBC Capital Markets Corporation, RBS Securities Inc. or any of
their successors shall cease to be a primary United States government
securities dealer (a “Primary Treasury Dealer”), the Company will substitute
for it another nationally recognized investment bank that is a Primary Treasury
Dealer.


 


“Reference Treasury Dealer Quotations” means,
with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Independent Investment Banker, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Independent
Investment Banker at 5:00 p.m., New York City time, on the third Business
Day preceding such redemption date.


 


“Treasury Rate” means, for any redemption
date, (i) the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently published
statistical release designated “H.15(519)” or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption “Treasury Constant Maturities,”
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the remaining term of the Series AF
Bonds, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue shall be determined and the Treasury Rate shall
be interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price. The Treasury Rate
shall be calculated on the third Business Day preceding the redemption date.


 

















 


ARTICLE TWO


 


 TERMS AND CONDITIONS OF SERIES AF BONDS


 


SECTION 2.01.              General.


 


(a)       There
is hereby created a series of Bonds, known as and entitled “First Mortgage
Bonds, 6.125% Series AF Due 2039,” and the form thereof shall be as
provided in this Supplemental Indenture.


 


(b)       The
aggregate principal amount of Series AF Bonds which may be authenticated
and delivered and outstanding under the Indenture and this Supplemental
Indenture shall be limited in aggregate principal amount to $180,000,000,
except as provided under Section 2.02 of the Indenture.  The Series AF Bonds shall bear interest
at the rate of 6.125% per annum until the principal thereof becomes due and
payable and shall bear interest on overdue principal (including any overdue
mandatory prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest at the rate of 7.125%
per annum until such overdue principal, premium or interest shall be paid.  The Series AF Bonds shall mature November 1,
2039.


 


(c)       The
Series AF Bonds shall be registered Bonds without coupons in denominations
of $100,000 and any multiples of $1,000 which may be executed by the Company
and delivered to the Trustee for authentication and delivery.  The date of commencement of the first
interest period for the Series AF Bonds shall be the date of initial
authentication and delivery thereof.  The
Series AF Bonds shall be dated as provided in Section 2.06 of the
Indenture.  All Series AF Bonds
shall bear interest from their respective issue dates.  The principal and interest shall be due and
payable as provided in the Bond form set forth in Section 2.02 of this
Supplemental Indenture.  The principal
of, premium, if any, and interest on the Series AF Bonds shall be payable
at the principal corporate trust office of the Trustee, in the Borough of
Manhattan, The City of New York, in any coin or currency of the United States
of America which at the time of payment shall be legal tender for the payment
of public and private debts.  The Series AF
Bonds shall be subject to redemption only as provided in Section 2.03 of
this Supplemental Indenture and Section 8.08 of the Indenture.


 


(d)       Without
limiting the other indemnities provided to the Trustee, the Company shall
indemnify and save the Trustee harmless from any liabilities and costs incurred
by the Trustee arising out of the making of the final payment when due of the
principal owing on any of the Series AF Bonds without the surrender of
such Bond to the Trustee.


 


(e)       The
Trustee is hereby appointed Registrar in respect of the Series AF Bonds,
and the principal corporate trust office of the Trustee in the Borough of Manhattan,
The City of New York, is hereby designated as the office or agency of the
Company in said Borough where notices or demands in respect of Series AF
Bonds may be served.


 


SECTION 2.02.              Form of Bonds.  The text of the Series AF Bonds, and the
certificate of authentication of the Trustee to be executed thereon, are to be
substantially in the following forms, respectively:


 

















 


[FORM OF GLOBAL BOND]


 


Unless this Bond is presented by an authorized representative of The
Depository Trust Company, a New York corporation (“DTC”), to the issuer or its
agent for registration of transfer, exchange or payment, and any Bond issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.


 


Unless and until it is exchanged in whole or in part for Bonds in
definitive registered form, this Bond may not be transferred except as a whole
by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.


 


	
  No.                           

  	
  $180,000,000

  
	
  CUSIP No. 092114 AB3

  	
   

  



 


BLACK HILLS POWER, INC.


 


FIRST MORTGAGE BOND, 6.125%


SERIES AF DUE 2039


 


BLACK HILLS POWER, INC. (hereinafter called
the “Company”), a corporation organized and existing under the laws of the
State of South Dakota, for value received, hereby promises to pay to CEDE &
CO., or registered assigns, on the 1st day of November, 2039, at the principal
corporate trust office of the Trustee, in the Borough of Manhattan, The City of
New York, ONE HUNDRED AND EIGHTY MILLION DOLLARS, in any coin or currency of
the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts, and to pay interest thereon from
the date hereof, at the rate of 6.125 percent, per annum (computed on the basis
of a 360-day year of 12 thirty-day months), payable at said principal office of
the Trustee in like coin or currency semi-annually on May 1 and November 1
in each year until the principal hereof shall have become due and payable, and
thereafter if default be made in the payment of such principal and premium, if
any, and on any overdue installment of interest, at the rate of 7.125 percent,
per annum until the overdue principal, premium or interest shall be paid.


 


This Bond shall not be valid or become
obligatory for any purpose until the certificate of authentication hereon shall
have been signed by the Trustee, or its successor as Trustee, under the
Indenture.


 

















 


This Bond is one of an authorized issue of
Bonds of the Company known as its “First Mortgage Bonds,” issued and to be
issued in one or more series under, and all 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
mentioned, may afford additional security for the Bonds of any particular
series) by a Restated and Amended Indenture of Mortgage and Deed of Trust,
dated as of September 1, 1999, executed by the Company to JPMorgan Chase
Bank, N.A. (formerly known as The Chase Manhattan Bank), as Trustee (the
successor to which is The Bank of New York Mellon), as supplemented and amended
by a First Supplemental Indenture, dated as of August 13, 2002 and as
supplemented and amended by a Second Supplemental Indenture, dated as of October 27,
2009 (said Restated Indenture as so supplemented and amended being hereinafter
collectively called the “Indenture”), to which Indenture and all further
instruments supplemental thereto reference is hereby made for a description of
the properties mortgaged and pledged, the nature and extent of the security,
the rights of the holders of said Bonds and the coupons appurtenant to coupon
Bonds, if any, and of the Trustee and of the Company in respect of such
security, and the terms and conditions upon which said Bonds are and are to be
issued and secured.


 


To the extent permitted by the Indenture and
as provided therein, with the consent of the Company and upon the written
consent or affirmative vote of at least sixty-six and two-thirds percent in
principal amount of the Bonds then outstanding and entitled to consent, and of
not less than sixty-six and two- third percent, in principal amount of the
Bonds then outstanding and entitled to consent of each series affected thereby
in case one or more but less than all of the series of Bonds issued under the
Indenture are so affected, the rights and obligations of the Company and of the
holders of Bonds and coupons appurtenant to coupon Bonds, if any, and the terms
and provisions of the Indenture and of any instrument supplemental thereto may
be modified from time to time, provided that no such modification or alteration
shall be made which would postpone the date fixed herein or in the Indenture
for the payment of the principal of, or any installment of interest on, the
Bonds, or reduce the principal of, or the rate of interest payable on, the
Bonds, or reduce the percentage of the principal amount of Bonds the consent of
which is required for the authorization of any such modification or alteration,
without the consent of all of the holders affected thereby.  The rights, duties or immunities of the
Trustee shall not be modified without the written consent of the Trustee.


 


As provided in the Indenture, said Bonds are
issuable in series which may vary as in the Indenture provided or permitted.
This Bond is one of a series of Bonds authorized by the Second Supplemental
Indenture and entitled “First Mortgage Bonds, 6.125% Series AF Due 2039”
(the “Series AF Bonds”).


 


Pursuant to the provisions of Section 8.05
of the Indenture, the Company may request the Trustee to apply moneys deposited
with the Trustee (“Trust Moneys”) for various reasons toward the redemption of
those Bonds, including payment of premium and accrued interest, selected by the
Company.  In the Second Supplemental
Indenture, the Company has covenanted that the Bonds may only be called for
redemption by the Company, as a whole at any time or in part from time to time,
at a redemption price equal to the greater of (i) 100% of the principal
amount of Series AF Bonds to be redeemed or (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon (exclusive of interest accrued to 


 

















 


the date of
redemption) discounted, at the then current Treasury Rate (as defined in the
Supplemental Indenture) plus 25 basis points, to the date of redemption on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
plus in each case, accrued and unpaid interest on the principal amount being
redeemed to the date of redemption.


 


Notice of each redemption shall be mailed to
all registered owners not less than thirty nor more than fifty days before the
redemption date.


 


Pursuant to the provisions of Section 8.08
of the Indenture, the Series AF Bonds are further subject to redemption,
in whole or in part, by the Trustee applying certain Trust Moneys which have
been held by the Trustee for a period of over two years. Any such redemption is
made pro rata among the series of Bonds then outstanding in the ratio of
principal amount.  Redemption is at 100
percent of principal, plus any premium due at the time of redemption and
accrued interest to the redemption date.


 


If this Bond or any portion thereof ($1,000
or a multiple) shall be duly called for redemption as provided in the
Indenture, this Bond or such portion thereof shall (unless the Company shall
default in the payment of the redemption price) cease to bear interest from and
after the date fixed for redemption.


 


Upon any partial redemption of this Bond,
this Bond may, at the option of the registered holder hereof, be either (a) surrendered
to the Trustee in exchange for one or more new Series AF Bonds for the
principal amount of the unredeemed portion of this Bond or (b) submitted
to the Trustee for notation hereon by the Trustee of the payment of the portion
of the principal hereof so called for redemption.


 


If an Event of Default, as defined in the
Indenture, shall occur, the principal of this Bond may become or be declared
due and payable, in the manner and with the effect provided in the Indenture.


 


A certificate in global form representing all
or a portion of the Bonds may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such Bonds or
a nominee of such successor Depositary.


 


The Series AF Bonds are issuable as
fully registered Bonds without coupons of the denominations of $100,000 and any
multiple of $1,000 which may be executed by the Company and delivered to the
Trustee for authentication and delivery. 
The Series AF Bonds, upon surrender thereof to the Trustee at its
principal corporate trust office in the Borough of Manhattan, The City of New York,
are exchangeable for other Bonds of the same series in such authorized
denomination or denominations in the same aggregate principal amount, as may be
requested by the holders surrendering the same.


 


The Company and the Trustee may deem and
treat the person in whose name this Bond is registered as the absolute owner
hereof, for the purpose of receiving payment of or on account of the principal
hereof and interest due hereon, and neither the Company nor the Trustee 


 

















 


shall be
affected by any notice to the contrary. Interest payable herein shall be paid
to the person in whose name the Bond is registered at the close of business on
the April 15 or October 15 (whether or not on a business day) next
preceding the interest payment date, except for defaulted interest and
unmatured accrued interest on the Series AF Bonds called for redemption on
a date other than an interest payment date.


 


No recourse shall be had for the payment of
the principal of or the interest on this Bond, or for any claim based hereon or
otherwise in respect hereof or of the Indenture or of any indenture
supplemental thereto, against any incorporator, stockholder, director or
officer, as such, past, present or future, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any
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 by any legal or equitable proceeding or otherwise howsoever; all such
liability being, by the acceptance hereof and as a part of the consideration
for the issuance hereof, expressly waived and released by every holder hereof,
as more fully provided in the Indenture; provided, however, that nothing herein
or in the Indenture contained shall be taken to prevent recourse to and the
enforcement of the liability, if any, of any shareholder or any stockholder or
subscriber to capital stock upon or in respect of shares of capital stock not
fully paid up.


 


IN WITNESS WHEREOF, the Company has caused
this Bond to be signed in its name by its President or one of its Vice
Presidents, and its corporate seal to be impressed or imprinted hereon and
attested by its Secretary or one of its Assistant Secretaries.


 


Dated:


 


	
   

  	
   

  	
  BLACK HILLS POWER, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  



 


(TRUSTEE’S CERTIFICATE OF AUTHENTICATION)


 


This is one of the Bonds, of the series
designated therein, described in the within mentioned Indenture.


 


	
   

  	
   

  	
  THE BANK OF NEW YORK MELLON, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  



 

















 


SECTION 2.03.              Optional Redemption.


 


(a)       Notwithstanding
the provisions of Section 8.05 of the Indenture, the Series AF Bonds,
upon the mailing of notice and in the manner provided in Section 10.03 of
the Indenture, shall be redeemable at the option of the Company, as a whole at
any time or in part from time to time, at a redemption price equal to the
greater of (i) 100% of the principal amount of Series AF Bonds to be
redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to
the date of redemption) discounted, at the then current Treasury Rate plus 25
basis points, to the date of redemption on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) plus in each case, accrued and
unpaid interest on the principal amount being redeemed to the date of
redemption.


 


(b)       Notwithstanding
the provisions of Section 10.03 of the Indenture, in case of the
redemption at any time of less than all the outstanding Series AF Bonds,
the particular Bonds or parts thereof to be redeemed shall be selected by the
Trustee from the outstanding Series AF Bonds not previously called for
redemption as nearly as practicable pro rata among the registered holders of
the Series AF Bonds according to the respective principal amounts of such
Bonds, provided that the portions of the principal of Series AF Bonds at
any time so selected for redemption in part shall be equal to $1,000 or a
multiple thereof.  In connection with any
such pro rata selection, the Trustee may make such adjustments upwards or
downwards by no more than $1,000 such that the Series AF Bonds shall be
redeemed in authorized denominations, provided, further, that notwithstanding
the foregoing provisions for pro rata selection of Series AF Bonds for
redemption, beneficial interests in the Series AF Bonds evidenced by a
Global Bond (as defined in Section 2.05(a)) may be selected for redemption
by the Depositary in accordance with its procedures therefor, which may provide
for the use of an impartial lottery.


 


(c)       Notwithstanding
that Section 8.05 of the Indenture authorizes the Company to request the
Trustee to apply Trust Moneys toward the redemption of Bonds to be selected by
the Company, the Company does hereby covenant that the Company will not request
the Trustee to apply any Trust Moneys to the redemption of the Series AF
Bonds except pursuant to Section 2.03(a) of this Supplemental
Indenture.


 


(d)       Notwithstanding
anything to the contrary contained in Section 10.03 of the Indenture, the
notice of the foregoing redemption need not set forth the redemption price but
only the manner of calculation thereof. The Company shall give the Trustee
written notice of such redemption price promptly after the calculation thereof
and the Trustee shall have no responsibility for such calculation.


 


SECTION 2.04.              No Sinking Fund. 
The Series AF Bonds are not entitled to the benefit of any sinking
fund.


 
















 


SECTION 2.05.              Bonds
to be Issued in Global Form.


 


(a)       The Series AF
Bonds will be initially represented by one or more Bonds in global form (the “Global
Bonds”).  The Company hereby designates
The Depository Trust Company as the initial Depositary for the Global
Bonds.  The Global Bonds will be
deposited with the Trustee, as custodian for the Depositary.  Unless and until it is exchanged in whole or
in part for Bonds in certificated form, the Global Bonds may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
for the Bonds or a nominee of such successor Depositary.  The Depositary may surrender the Global Bonds
in exchange in whole or in part for Bonds in certificated form on such terms as
are acceptable to the Company and the Depositary.


 


(b)       If at
any time the Depositary for the Global Bonds notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Bonds or if at
any time the Depositary for the Series AF Bonds shall no longer be
eligible or in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint a
successor Depositary with respect to such Global Bonds.  If a successor Depositary for such Global
Bonds is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, the Series AF Bonds
shall no longer be represented by Global Bonds and, subject to Section 2.07
of the Indenture, the Company will execute, and the Trustee, upon receipt of a
Written Order of the Company for the authentication and delivery of individual
Bonds in exchange for such Global Bonds, will authenticate and deliver
individual Bonds of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Bonds in exchange
for such Global Bonds.


 


(c)       Subject
to the procedures of the Depositary, the Company may at any time and in its
sole discretion determine that the Series AF Bonds issued or issuable in
the form of one or more Global Bonds shall no longer be represented by such Global
Bond or Bonds.  In such event, subject to
Section 2.07 of the Indenture and to such procedures, the Company will
execute, and the Trustee, upon receipt of a Written Order of the Company for
the authentication and delivery of individual Bonds in exchange in whole or in
part for such Global Bonds, will authenticate and deliver individual Bonds of
like tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Bonds in exchange for such Global Bonds.


 


(d)       In any
exchange provided for in Section 2.05(b) or (c), the Company will
execute and the Trustee will authenticate and deliver individual Bonds in
definitive registered form in authorized denominations. Upon the exchange of
Global Bonds for individual Bonds, such Global Bonds shall be canceled by the
Trustee.  Series AF Bonds issued in
exchange for Global Bonds pursuant to this Section 2.05 shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Bonds, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee.  The Trustee shall deliver such Bonds to the
Persons in whose names such Bonds are so registered.


 


(e)       Neither
the Company, the Trustee nor any agent of the Company or the Trustee shall have
any responsibility or liability for any aspect of the records relating to or
payments 


 

















 


made on account of beneficial ownership interests in a Global
Bond or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.


 


ARTICLE THREE


 


MISCELLANEOUS


 


SECTION 3.01.              Outstanding
Bonds.  The aggregate principal
amount of Bonds which, immediately after the authentication and delivery of the
Series AF Bonds to be issued under this Supplemental Indenture, will be
outstanding under the provisions of, and secured by, the Indenture, as amended
by this Supplemental Indenture, will be $307,500,000, consisting of
$127,500,000 aggregate principal amount of the Bonds of Series Y, Z, AC
and AE hereinbefore set forth in the second recital of this Supplemental
Indenture and $180,000,000 aggregate principal amount of Series AF Bonds
hereby created.


 


SECTION 3.02.              Receipt
of Supplemental Indenture.  The
Company, by the execution hereof, acknowledges that a true copy of this
Supplemental Indenture has been delivered to and received by it.


 


SECTION 3.03.              Ratification
of Indenture.  Except as amended by
this Supplemental Indenture, all the provisions, terms and conditions of the
Indenture shall continue in full force and effect.  The Company does hereby ratify and confirm
its mortgage and pledge to the Trustee of that property, real, personal and
mixed described in the Indenture as being subject to the Lien of the Indenture.


 


SECTION 3.04.              Sufficiency
of Supplemental Indenture.  The
Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.


 


SECTION 3.05.              Counterparts.  This Supplemental Indenture may be executed
in several counterparts, all or any of which may be treated for all purposes as
one original and shall constitute and be one and the same instrument.


 


SECTION 3.06.              Governing
Law. This Supplemental Indenture and each Series AF Bond shall be
governed by and construed in accordance with the laws of the State of South
Dakota without regard to the choice of law principles thereof.  Notwithstanding the foregoing, the immunities
and standard of care of the Trustee, Registrar and paying agent in connection
with the administration of trusts and duties hereunder shall be governed by and
construed in accordance with the laws of the State of New York.


 


IN WITNESS WHEREOF, BLACK HILLS POWER, INC. has
caused this Supplemental Indenture to be executed on its behalf by its Chairman
of the Board or its President or one of its Vice Presidents and its corporate
seal to be hereto affixed and to be attested by its Secretary or an Assistant
Secretary, and THE BANK OF NEW YORK MELLON, in evidence of its acceptance of
the trust hereby created, has caused this Supplemental Indenture to be executed
on its behalf by one of its Vice Presidents or Assistant Vice Presidents and
its corporate seal to be hereto affixed and to be attested by one of its Vice
Presidents, all as of the day and year first above written.


 

















 


	
   

  	
   

  	
  BLACK
  HILLS POWER, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David R. Emery

  
	
   

  	
   

  	
   

  	
  Name:
  David R. Emery

  
	
   

  	
   

  	
   

  	
  Title:
  Chairman & CEO

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Roxann R. Basham

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed,
  sealed and delivered by

  	
   

  	
   

  
	
  BLACK
  HILLS POWER, INC.

  	
   

  	
   

  
	
  in
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  LeeAnn Steckler

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Leslie Hartwell

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Laurence J. O’Brien

  
	
   

  	
   

  	
   

  	
  Name:
  Laurence J. O’Brien

  
	
   

  	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Christopher Greene, Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed,
  sealed and delivered by

  	
   

  	
   

  
	
  THE
  BANK OF NEW YORK MELLON, as Trustee

  	
   

  	
   

  
	
  in
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Illegible

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Illegible

  	
   

  	
   

  



 

















 


	
  STATE
  OF SOUTH DAKOTA

  	
  )

  
	
   

  	
  )
  ss.:

  
	
  COUNTY
  OF PENNINGTON

  	
  )

  



 


On this 27th day of October, 2009, before me, LeeAnn
Steckler, the undersigned officer, personally appeared David R. Emery, to me
personally known, who acknowledged himself to be, and being by me duly sworn,
did say that he is Chairman and Chief Executive Officer of BLACK HILLS POWER,
INC., a corporation, and that the seal affixed to the foregoing instrument is
the corporate seal of said corporation and that said instrument was executed
by, and signed in the name of, the corporation, by him, as such Chairman and
Chief Executive Officer and sealed on behalf of the corporation by authority of
its Board of Directors for the purposes therein contained, and the said David
R. Emery acknowledged the same as the free act and deed of said corporation.


 


IN WITNESS WHEREOF, I hereunto set my hand and
official seal.


 


[Notarial Seal]


 


	
   

  	
  /s/
  LeeAnn Steckler

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My Commission expires 06-23-2011

  



 


	
  STATE
  OF NEW YORK

  	
  )

  
	
   

  	
  )
  ss.:

  
	
  COUNTY
  OF NEW YORK

  	
  )

  



 


On this 27th day of October, 2009, before me, Carlos
Luciano, the undersigned officer, personally appeared Laurence J. O’Brien, to
me personally known, who acknowledged himself to be, and being by me duly
sworn, did say that he is Vice President of THE BANK OF NEW YORK MELLON, a
corporation, and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation and that said instrument was executed by,
and signed in the name of, the corporation, by him, as such Vice President, and
sealed on behalf of the corporation by authority of its Board of Directors for
the purposes therein contained, and the said Laurence J. O’Brien acknowledged
the same as the free act and deed of said corporation.


 


IN WITNESS WHEREOF, I hereunto set my hand and
official seal.


 


[Notarial Seal]


 


	
   

  	
  /s/
  Carlos Luciano

  
	
   

  	
  Notary
  Public

  
	
   

  	
  Commission
  expires April 30, 2010

  



 
















 


ANNEX
A TO SECOND


SUPPLEMENTAL
INDENTURE


 


LEGAL
DESCRIPTIONS OF REAL PROPERTY


 


LANDS
IN PENNINGTON COUNTY, SOUTH DAKOTA


 


1.             That portion of the
Northwest Quarter of the Southwest Quarter (NW1/4SW 1/4) of Section 24 in
Township 1 North of Range 7 East of the Black Hills Meridian, in the City of
Rapid City, Pennington County, South Dakota, lying south of Lot H1, as shown on
the plat filed in Highway Plat Book 6, Page 11; and


 


2.             The Southwest Quarter of the
Southwest Quarter (SW1/4SW1/4) of Section 24 in Township 1 North of Range
7 East of the Black Hills Meridian, in the City of Rapid City, Pennington
County, South Dakota; EXCEPTING therefrom Highway 16 Bypass; ALSO EXCEPTING
therefrom Lot H1, as shown on the plat filed in Highway Plat Book 6, Page 22;
AND EXCEPTING therefrom Lot H2, as shown on the plat filed in Highway Plat Book
11, Page 129.


 


LANDS
IN MEADE COUNTY, SOUTH DAKOTA


 


1.             B.H.P. & L. Utility
Lot, formerly a portion of Lot 4 of the NE1/4SE1/4 of Section 36 in Township
5 North of Range 5 East of the Black Hills Meridian, Meade County, South Dakota,
as shown on the plat filed in Plat Book 20, Page 243.


 


2.             Piedmont Valley Substation
Lot, a portion of Lot 8, Blk 1, Cooper’s Subdivision, located in the
(NW1/4NE1/4) of section 15 in Township 3 North of Range 6 East of the Black Hills
Meridian, Meade County, South Dakota, as shown on the plat filed in Plat Book 20,
Page 53.


 


3.             Lot B of Lot 3 Lot MK-4
Brink Addition to the City of Sturgis, located in the SW1/4SE1/4 of Section 5
in Township 5 North of Range 5 East of the Black Hills Meridian, Meade County,
South Dakota, as shown by the plat filed in Plat Book 20, Page 175.


 


LANDS
IN BUTTE COUNTY, SOUTH DAKOTA


 


1.             Tract C, Tract D and Tract
E, located in the Southeast Quarter (SE 1/4) of Section 10, Township 8
North, Range 2 East of the Black Hills Meridian, City of Belle Fourche, Butte
County, South Dakota, as shown on the plat recorded in Plat Book 5, page 18;


 

















 


EXCEPTING therefrom that
part of Tract C and Tract D deeded to Floyd Cooper in instrument recorded December 22,
1949, in Book 137, Page 137; AND EXCEPTING therefrom that part of Tract C
deeded to Alber W. Turbiville and Alice L. Turbiville in instrument recorded October 24,
1961, in Book 156, Page 585.


 


LANDS
IN FALL RIVER COUNTY, SOUTH DAKOTA


 


1.             Tract Minnekahta Substation,
together with a private access easement, located in the Northeast Quarter
(NE1/4) of Section 18 Township 7 South Range 4 East of the Black Hills
Meridian, Fall River County, South Dakota, as shown on the plat recorded in
Book 22 of Plats, Page 83.


 


LANDS
IN WESTON COUNTY, WYOMING


 


1.             A Tract of land which lays
in the SWNE of Section 29, Township 45 North, Range 61 West in Weston
County, Wyoming, Tax Parcel ID 2856, more particularly described as follows:
commencing at the NW corner of Block 11, original City of Newcastle; thence South
60o 53’ 15” West for a distance of 680 ft to the railroad property boundary,
thence North 29o 06’ 45” West for a distance of 20 ft, thence North 00o 07’ 25”
West for 92.11 ft to the North side of West Main Street, thence North 60o 53’
15” East for 227.03 ft to the Southeast corner of the B.H.P. & L. Co.
tract; thence North 29o 06’ 45” West for 50.00 ft to the true point of
beginning; thence North 60o 53’ 15” East for 39.50 ft to a point; thence North
29o 06’ 45” West for 49.00 ft to an aluminum capped rebar; thence North 60o 53’
15” East for a distance of 61.50 ft to an aluminum capped rebar; thence North 29o
06’ 45” West for 160.00 ft to an aluminum capped rebar; thence South 60o 53’ 15”
West for 101.00 ft to an aluminum capped rebar; thence South 32o 31’ 59”
West for 58.98 ft to an aluminum capped rebar on East boundary of West
Railroad Avenue; thence South 00o 07’ 25” East along said East boundary of West
Railroad Avenue for 110.00 ft to an aluminum capped rebar on North boundary of
B.H.P.& L. tract; thence North 60o 53’ 15” East for 105.63 ft to an
aluminum capped rebar, at the most Northerly corner of B.H.P.& L. tract;
thence South 29o 06’ 45” East for a distance of 85.00 ft to an “x” in concrete
drain & the point of beginning. Said tract contains 0.606 acres, more
or less.


 

















 


RIGHT
OF WAY EASEMENTS OVER


LANDS
IN CAMPBELL COUNTY, WYOMING


 


[See
attachment.]


 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 





 
















 


RIGHT
OF WAY EASEMENTS OVER


LANDS
IN CONVERSE COUNTY, WYOMING


 


[See attachment.]