Document:

INDEMNITY
AGREEMENT

 

This
Indemnity Agreement (this “Agreement”) dated as of the 12th of September, 2018.

 

BETWEEN:

 

I.D.
SYSTEMS, INC., a corporation incorporated under the laws of Delaware (the “Corporation”)

 

and

 

Charles
Frumberg, an individual (the “Indemnified Party”).

 

WHEREAS,
Section 145(e) of the General Corporation Law of the State of Delaware (the “DGCL”), the Restated Certificate
of Incorporation, as amended, of the Corporation (the “Certification of Incorporation”) and the Restated By-Laws,
as amended, of the Corporation (the “Bylaws”) require the Corporation to pay all expenses, including attorney’s
fees of directors and officers of the Corporation, including the Indemnified Party, incurred in defending any civil, criminal,
administrative or investigative action, suit, proceeding, investigation, inquiry or hearing (“Proceeding”)
in advance of the final disposition of such Proceeding;

 

WHEREAS,
the Corporation desires to have the Indemnified Party serve or continue to serve as a director or officer of the Corporation free
from undue concern for unpredictable, inappropriate or unreasonable claims for damages by reason of his being, or having been,
a director or officer of the Corporation or by reason of his decisions or actions on their behalf; and

 

WHEREAS,
the Indemnified Party is willing to serve, or to continue to serve, or to take on additional service for, the Corporation in such
aforesaid capacities on the condition that he be further indemnified as provided for herein.

 

NOW
THEREFORE, IN CONSIDERATION OF the premises and mutual covenants herein contained and the Indemnified Party acting or agreeing
to continue to act as a director or officer of the Corporation, the Corporation and the Indemnified Party do hereby covenant and
agree as set forth below:

 

1.
Agreement to Serve

 

The
Indemnified Party agrees to serve or continue to serve as a director or officer of the Corporation honestly and in good faith
with a view to the best interests of the Corporation so long as he is duly elected and qualified in accordance with the provisions
of the DGCL, the Certificate of Incorporation and the Bylaws if applicable, provided, however, that: (i) the Indemnified Party
may at any time and for any reason resign from such position (subject to any contractual obligations which the Indemnified Party
shall have assumed apart from this Agreement), and (ii) the Corporation shall not have any obligation under this Agreement to
continue the Indemnified Party in any such position.

 

    	 	 	 

    	 

    

 

 

2.
Indemnification

 

		(a)	To
                                         the fullest extent allowed by law, the Corporation agrees to indemnify and save harmless
                                         the Indemnified Party, his estate, executors, administrators, legal representatives and
                                         lawful heirs, from and against any and all costs, charges or expenses (including, but
                                         not limited to, (i) any amount paid to settle any action or to satisfy any judgment,
                                         legal fees, and retainers on a solicitor and client or other basis; (ii) other professional
                                         fees, penalties, court costs, transcript costs, fees of experts, witness fees, travel
                                         expenses, duplicating costs, printing and binding costs, telephone charges, postage,
                                         and delivery service fees; (iii) any federal, state, local or foreign taxes imposed on
                                         the Indemnified Party as a result of the actual or deemed receipt of any payments under
                                         this Agreement; (iv) costs, charges or expenses incurred in connection with any appeal
                                         resulting from any Proceedings including questionings, examinations, trials, hearings
                                         and meetings, including without limitation the premium, security for, and other costs
                                         relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent;
                                         (v) costs, charges and expenses incurred by the Indemnified Party in connection with
                                         the interpretation, enforcement or defense of the Indemnified Party’s rights under
                                         this Agreement; (vi) out-of-pocket expenses for attending Proceedings including questionings,
                                         examinations, trials, hearings and meetings; and (vi) any amount for which the Indemnified
                                         Party is liable by reason of any statutory provision whether civil, criminal or otherwise)
                                         (herein referred to as “Costs, Charges and Expenses”), suffered, incurred
                                         or otherwise paid, payable or ordered to be paid by the Indemnified Party, his estate,
                                         executors, administrators, legal representatives and lawful heirs, directly or indirectly,
                                         as a result or by reason of the Indemnified Party being or having been a director or
                                         officer of the Corporation or by reason of any action taken by the Indemnified Party
                                         in his capacity as a director or officer of the Corporation.

 

		(b)	In
                                         addition and without limitation of the previous section 2(a), the Corporation agrees:

 

		(i)	except
                                         in respect of an action by or on behalf of the Corporation to procure a judgment in its
                                         favor, to the fullest extent allowed by law, to indemnify the Indemnified Party, his
                                         estate, executors, administrators, legal representatives and lawful heirs, from and against
                                         all Costs, Charges and Expenses suffered, incurred or otherwise paid, payable or to be
                                         paid by him in respect of any Proceeding to which he is made a party (including but not
                                         limited to Proceedings in which the Indemnified Party is compelled by the authorities
                                         or requested by the Corporation to participate, whether or not charges have been laid
                                         against the Corporation or Indemnified Party), by reason of being or having been a director
                                         or officer of the Corporation;

 

    	 	 	 

    	 

    

 

		(ii)	to
                                         the fullest extent allowed by law, to indemnify the Indemnified Party and his estate,
                                         executors, administrators, legal representatives and lawful heirs from and against all
                                         Costs, Charges and Expenses of any action by or on behalf of the Corporation to procure
                                         a judgment in its favor, to which he is made a party by reason of being or having been
                                         a director or officer of the Corporation;

 

		(iii)	in
                                         the event that the approval of a court of competent jurisdiction is required to effect
                                         any indemnification granted hereunder, the Corporation agrees to make application for
                                         and use its best efforts to obtain such court’s approval to such indemnification;

 

		(iv)	notwithstanding
                                         sections 2(b)(i) and (ii), to indemnify the Indemnified Party and his estate, executors,
                                         administrators, legal representatives and lawful heirs against all Costs, Charges and
                                         Expenses suffered, incurred or otherwise paid, payable or to be paid by him or them in
                                         respect of any Proceeding to which he is made a party (including Proceedings in which
                                         the Indemnified Party is compelled by the authorities or requested by the Corporation
                                         to participate, whether or not charges have been laid against the Corporation or Indemnified
                                         Party), by reason of being or having been a director or officer of the Corporation, if
                                         the Indemnified Party was substantially successful on the merits in his defense of the
                                         Proceeding; provided, that if the Indemnified Party is not substantially successful
                                         in his defense of such Proceeding but is successful, on the merits or otherwise, as to
                                         one or more claims, issues or matters, but not substantially successful on the merits
                                         in his defense of such Proceeding, the Corporation shall indemnify the Indemnified Party
                                         against all Costs, Charges and Expenses incurred by him or on his behalf in connection
                                         with or related to each substantially successfully resolved claim, issue or matter to
                                         the fullest extent permitted by law;

 

		(v)	for
                                         the purposes of this Agreement including, but not limited to, section 1 hereof, the termination
                                         of any such Proceeding by judgment, order, settlement, conviction or similar or other
                                         result, shall not, of itself, create a presumption either that the Indemnified Party
                                         did not act honestly or in good faith with a view to the best interests of the Corporation
                                         or that, in the case of a Proceeding that is enforced by a monetary penalty, the Indemnified
                                         Party did not have reasonable grounds for believing that his conduct was lawful; and

 

    	 	 	 

    	 

    

 

		(vi)	for
                                         purpose of this Agreement, including, but not limited to, Section 2 hereof, the termination
                                         of any claim, issue or matter in such Proceeding by dismissal, with or without prejudice,
                                         shall be deemed to be a successful result as to such claim, issue or matter.

 

		(c)	The
                                         intention of this Agreement is to provide the Indemnified Party indemnification to the
                                         fullest extent permitted by law and without limiting the generality of the foregoing
                                         and notwithstanding anything contained herein:

 

		(i)	nothing
                                         in this Agreement shall be interpreted, by implication or otherwise, in limitation of
                                         the scope of the indemnification provided in sections 2(а) and (b) hereof; and

 

		(ii)	section
                                         2(b) is intended to provide indemnification to the Indemnified Party that is not specifically
                                         prohibited by a court of competent jurisdiction and to the fullest extent permitted by
                                         the DGCL and, in the event that the DGCL is amended to permit a broader scope of indemnification
                                         (including, without limitation, the deletion or limiting of one or more of the provisos
                                         to the applicability of indemnification), section 2(b) shall be deemed to be amended
                                         concurrently with the amendment to the DGCL so as to provide such broader indemnification.

 

		(d)	Notwithstanding
                                         any other provision of this Agreement, to the fullest extent permitted by law and to
                                         the extent that the Indemnified Party is, as a result or by reason of the Indemnified
                                         Party being or having been a director or officer of the Corporation or by reason of any
                                         action taken by the Indemnified Party in his capacity as a director or officer of the
                                         Corporation, a witness or otherwise asked to participate in any Proceeding to which the
                                         Indemnified Party is not a party, he shall be indemnified against all Costs, Charges
                                         and Expenses incurred by him or on his behalf in connection therewith.

 

		(e)	If
                                         the Indemnified Party is entitled under any provision of this Agreement to indemnification
                                         by the Corporation for some or a portion of Costs, Charges and Expenses, but not, however,
                                         for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnified
                                         Party for the portion thereof to which the Indemnified Party is entitled.

 

    	 	 	 

    	 

    

 

		(f)	If
                                         the indemnification provided for in this Agreement for any reason is held by a court
                                         of competent jurisdiction to be unavailable to the Indemnified Party in respect of any
                                         Costs, Charges and Expenses, then the Corporation, in lieu of indemnifying the Indemnified
                                         Party hereunder, shall contribute to the amount paid or payable by the Indemnified Party
                                         as a result of such Costs, Charges and Expenses (i) in such proportion as is appropriate
                                         to reflect the relative benefits received by the Corporation and all officers, directors
                                         or employees of the Corporation, other than the Indemnified Party, who are jointly liable
                                         (or who would be jointly liable if joined in such Proceeding), on the one hand, and the
                                         Indemnified Party, on the other hand, or (ii) if the allocation provided by clause (i)
                                         above is not permitted by applicable law, in such proportion as is appropriate to reflect
                                         not only the relative benefits referred to in clause (i) above but also the relative
                                         fault of the Corporation and all officers, directors or employees of the Corporation
                                         other than the Indemnified Party who are jointly liable (or who would be jointly liable
                                         if joined in such Proceeding), on the one hand, and the Indemnified Party, on the other
                                         hand, in connection with the action or inaction that resulted in such Costs, Charges
                                         and Expenses, as well as any other relevant equitable considerations. The relative fault
                                         of the Corporation and the Indemnified Party shall be determined by reference to, among
                                         other things, whether the untrue or alleged untrue statement of a material fact or the
                                         omission or alleged omission to state a material fact relates to information supplied
                                         by the Corporation or the Indemnified Party and the parties’ relative intent, knowledge,
                                         access to information and opportunity to correct or prevent such statement or omission
                                         and the degree to which their actions were motivated by the intent to gain personal profit
                                         or advantage, the degree to which their liability is primary or secondary and the degree
                                         to which their conduct is active or passive.

 

		(g)	The
                                         indemnification and contribution provided for in this Agreement will remain in full force
                                         and effect regardless of any investigation made by or on behalf of the Indemnified Party
                                         or any officer, director, employee, agent or controlling person of the Indemnified Party.

 

		(h)	Notwithstanding
                                         anything to the contrary herein, if (i) the Indemnified Party is affiliated with one
                                         or more entities that has directly or indirectly invested in the Company (an “Affiliated
                                         Entity”), (ii) such Affiliated Entity, or any officer, director, employee, manager,
                                         partner or member thereof, is, or is threatened to be made, a party to or a participant
                                         in any Proceedings and (iii) such Affiliated Entity’s, or such officer’s,
                                         director’s, employee’s, manager’s, partner’s or member’s,
                                         involvement in such Proceedings results from any claim based on or otherwise arises out
                                         of the Indemnified Party’s service to the Company as a director or officer of the
                                         Company, such Affiliated Entity, and any officer, director, employee, manager, partner
                                         or member thereof, shall be entitled to indemnification and contribution hereunder, including
                                         for Costs, Charges and Expenses, to the same extent as the Indemnified Party, and the
                                         terms of this Agreement as they relate to indemnification (and contribution for the benefit)
                                         of the Indemnified Party and related matters, including those relating to procedures
                                         for indemnification and advancement of Costs, Charges and Expenses, shall apply to any
                                         such indemnification (and contribution for the benefit) of such Affiliated Entity or
                                         officer, director, employee, manager, partner or member.

 

    	 	 	 

    	 

    

 

3.
Per Diem Charge

 

In
addition to any other amount payable to the Indemnified Party under this Agreement, the Indemnified Party shall be entitled to
receive from the Corporation a per diem payment in an amount equal to $750 per hour (the “Per Diem Charge”)
for time spent after the date hereof involved in any Proceeding (including any threatened, pending, contemplated, continuing or
completed Proceeding whether civil, criminal, administrative or investigative and any appeal or appeals) relating to the Corporation
to which the Indemnified Party is involved by reason of the fact that the Indemnified Party is or was a director of the Corporation.
The Indemnified Party shall be considered to be “involved” in any such Proceeding if the Indemnified Party has any
participation whatsoever in such matter, including merely as a witness.

 

4.
Prepaid Expenses

 

All
Costs, Charges and Expenses suffered, incurred or otherwise paid, payable or ordered to be paid by the Indemnified Party and covered
hereunder shall, if requested by the Indemnified Party, be advanced and/or paid by the Corporation immediately. Advances shall
be unsecured and interest free. Advances shall be made without regard to the Indemnified Party’s ability to repay the Costs,
Charges and Expenses and without regard to the Indemnified Party’s ultimate entitlement to indemnification under the other
provisions of this Agreement. In accordance with Section 5(c), advances shall include any and all Costs, Charges and Expenses
incurred pursuing an action to enforce this right of advancement, including Expenses incurred, or to be incurred, preparing and
forwarding statements to the Corporation to support the advances claimed. The Indemnified Party shall qualify for advances upon
the execution and delivery to the Corporation of this Agreement, which shall constitute an undertaking providing that the Indemnified
Party undertakes to repay the amounts advanced (without interest) to the extent that it is ultimately determined that the Indemnified
Party is not entitled to be indemnified by the Corporation. No other form of undertaking shall be required other than the execution
of this Agreement.

 

5.
Other Rights and Remedies, and Presumptions

 

		(a)	Indemnification
                                         and immediate payment of incurred Costs, Charges and Expenses as provided by this Agreement
                                         shall not be deemed to derogate from or exclude any other rights to which the Indemnified
                                         Party may be entitled under any provision of the DGCL or otherwise at law, the Certificate
                                         of Incorporation, the Bylaws, the Indemnification Agreement, this Agreement, any vote
                                         of shareholders of the Corporation or otherwise, both as to matters arising out of his
                                         capacity as a director or officer of the Corporation, or as to matters arising out of
                                         another capacity with the Corporation while being a director or officer of the Corporation,
                                         and shall continue after the Indemnified Party has ceased to be a director or officer
                                         of the Corporation.

 

    	 	 	 

    	 

    

 

		(b)	In
                                         making a determination with respect to entitlement to indemnification hereunder, the
                                         court of competent jurisdiction making such determination shall, to the fullest extent
                                         not prohibited by law, presume that the Indemnified Party is entitled to indemnification
                                         under this Agreement if the Indemnified Party has submitted a written request pursuant
                                         to Section 7 of this Agreement, and the Corporation shall, to the fullest extent not
                                         prohibited by law, have the burden of proof to overcome that presumption in connection
                                         with the making by any court of competent jurisdiction of any determination contrary
                                         to that presumption.

 

		(c)	The
                                         Corporation shall, to the fullest extent not prohibited by law, be precluded from asserting
                                         in any judicial proceeding or arbitration commenced pursuant to this Agreement that the
                                         procedures and presumptions of this Agreement are not valid, binding and enforceable
                                         and shall stipulate in any such court or before any such arbitrator that the Corporation
                                         is bound by all the provisions of this Agreement. It is the intent of the Corporation
                                         that, to the fullest extent permitted by law, the Indemnified Party not be required to
                                         incur legal fees or other Costs, Charges and Expenses associated with the interpretation,
                                         enforcement or defense of the Indemnified Party’s rights under this Agreement by
                                         litigation or otherwise because the cost and expense thereof would substantially detract
                                         from the benefits intended to be extended to the Indemnified Party hereunder. The Corporation
                                         shall, to the fullest extent permitted by law, indemnify the Indemnified Party against
                                         any and all Costs, Charges and Expenses and, if requested by the Indemnified Party, shall
                                         (within 3 days after receipt by the Corporation of a written request therefor) advance,
                                         to the extent not prohibited by law, such Costs, Charges and Expenses to the Indemnified
                                         Party, which are incurred by the Indemnified Party in connection with any action brought
                                         by the Indemnified Party for indemnification, contribution or advance of Costs, Charges
                                         and Expenses from the Corporation under this Agreement or under any directors’
                                         and officers’ liability insurance policies maintained by the Corporation.

 

6.
Limitation of Actions and Release of Claims

 

No
legal action shall be brought and no cause of action shall be asserted by or on behalf of the Corporation against the Indemnified
Party, his estate, executors, administrators, legal representatives or lawful heirs after the expiration of two years from the
date the Indemnified Party ceased (for any reason) to be a director or officer of the Corporation and the Corporation agrees that
any claim or cause of action of the Corporation shall be extinguished and the Indemnified Party, his estate, executors, administrators,
legal representatives and lawful heirs deemed released therefrom absolutely unless asserted by the commencement of legal action
in a court of competent jurisdiction within such two-year period.

 

    	 	 	 

    	 

    

 

7.
Notice of Proceedings; Notice of Indemnification; Procedures

 

		(a)	The
                                         Indemnified Party agrees to give notice to the Corporation as soon as is reasonably practical
                                         after being served with any statement of claim, writ, notice of motion, indictment or
                                         other document commencing or continuing any Proceeding to which the Indemnified Party
                                         is a party, whether or not charges have been laid against the Corporation or Indemnified
                                         Party, by reason of being or having been a director or officer of the Corporation and
                                         the Corporation agrees to give notice to the Indemnified Party in writing as soon as
                                         is reasonably practical after:

 

		(i)	being
                                         served with any such statement of claim, writ, notice of motion, indictment or other
                                         document commencing or continuing any Proceeding to which the Indemnified Party is а
                                         party; whether or not charges have been laid against the Corporation or Indemnified Party,
                                         or

 

		(ii)	receiving
                                         notice of any such Proceeding to which the Indemnified Party is а party, whether
                                         or not charges have been laid against the Corporation or Indemnified Party,

 

provided,
however, that the failure of the Indemnified Party to give such notice to the Corporation shall not adversely affect the Indemnified
Party’s rights under this Agreement except to the extent, and only to such extent, that the Corporation shall have been
actually and materially prejudiced as a direct result of such failure.

 

		(b)	To
                                         obtain indemnification under this Agreement (and/or, to the extent applicable, contribution
                                         pursuant to Section 2(f)), the Indemnified Party shall submit to the Corporation a written
                                         request for such indemnification (and/or, to the extent applicable, contribution), which
                                         such written request shall generally state the amount to which the Indemnified Party
                                         is entitled pursuant to this Agreement. The omission by the Indemnified Party to notify
                                         the Corporation hereunder will not relieve the Corporation from any liability which it
                                         may have to the Indemnified Party hereunder or otherwise under this Agreement, and any
                                         delay in so notifying the Corporation shall not constitute a waiver by the Indemnified
                                         Party of any rights under this Agreement. The Secretary of the Corporation shall, promptly
                                         upon receipt of such a request, advise the Board of Directors of the Corporation in writing
                                         that the Indemnified Party has requested indemnification (and/or, to the extent applicable,
                                         contribution).

 

    	 	 	 

    	 

    

 

		(c)	Upon
                                         the written request by the Indemnified Party for indemnification (or to the extent applicable,
                                         contribution) in accordance with Section 7(b), the Corporation shall promptly (and in
                                         any event within 5 business days thereafter) pay, by wire transfer of immediately available
                                         funds to an account or accounts designated in writing by the Indemnified Party, the amount
                                         to which the Indemnified Party is entitled pursuant to this Agreement (as stated in such
                                         written request), unless there is pending an action brought by the Corporation in a court
                                         of competent jurisdiction in accordance with Section 15 challenging either (i) that the
                                         Indemnified Party is entitled to indemnification (or, to the extent applicable, contribution)
                                         under this Agreement or (ii) the amount set forth in the Indemnified Party’s written
                                         request as the amount owed to the Indemnified Party pursuant to this Agreement (a “Challenged
                                         Action”); provided, however, that with respect to the immediately preceding
                                         clause (ii), any portion of such amount that is not challenged by the Corporation in
                                         such Challenged Action shall be paid by the Corporation to the Indemnified Person in
                                         accordance hereto. Upon (but in any event within 2 business days thereafter) (x) a final
                                         non-appealable determination by a court of competent jurisdiction with respected to such
                                         Challenged Action or (y) a written agreement between the Corporation and the Indemnified
                                         Party with respect to such Challenged Action, the Corporation shall promptly (and in
                                         any event within 2 business days thereafter) pay, by wire transfer of immediately available
                                         funds to an account or accounts designated in writing by the Indemnified Party the amounts
                                         to which the Indemnified Party is entitled (if any) as determined in accordance with
                                         clause (x) or clause (y) immediately above.

 

8.
Right to Retain Counsel

 

The
Corporation agrees to promptly retain counsel who shall be satisfactory to the Indemnified Party to represent the Indemnified
Party.

 

In
any such matter the Indemnified Party shall have the right to retain other counsel to act on his behalf, provided that the fees
and disbursements of such other counsel shall be paid by the Indemnified Party unless:

 

		(a)	the
                                         Indemnified Party and the Corporation shall have mutually agreed to the retention of
                                         such other counsel;

 

		(b)	the
                                         parties to any such Proceeding (including any added third, or interpleaded parties) include
                                         the Corporation and the Indemnified Party and representation of more than one party by
                                         the same counsel would be inappropriate due to actual or potential differing interests
                                         between them (including the availability of different defenses) in which event the Corporation
                                         agrees to pay the fees and disbursements of such counsel; or

 

    	 	 	 

    	 

    

 

		(c)	the
                                         Corporation shall have failed to retain, in а reasonable period of time, counsel
                                         which is satisfactory to the Indemnified Party to represent the Indemnified Party.

 

9.
Settlement

 

The
Corporation shall not be entitled to settle any Proceeding to which the Indemnified Party is a party or for which indemnity is
sought hereunder unless:

 

		(a)	the
                                         Indemnified Party consents to the terms of such settlement;

 

		(b)	such
                                         settlement does not involve any admission of fact or law and does not create any obligation
                                         or liability of the Indemnified Party other than the payment of a monetary amount;

 

		(c)	the
                                         Indemnified Party is indemnified in full against payment of such monetary amount together
                                         with all related Costs, Charges and Expenses; and

 

		(d)	such
                                         settlement is expressly stated to be made by the Corporation on behalf of the Indemnified
                                         Party, without any admission of liability by the Indemnified Party.

 

10.
Indemnified Party to Cooperate

 

The
Indemnified Party agrees to give the Corporation such information and cooperation as the Corporation may reasonably require from
time to time in respect of all matters hereunder. Any costs or expenses (including attorneys’ fees and disbursements) incurred
by the Indemnified Party in so cooperating with the Corporation in respect of all matters hereunder, including the determination
of whether the Indemnified Party is entitled to indemnification hereunder, shall be borne by the Corporation (irrespective of
the final non-appealable determination as to the Indemnified Party’s entitlement to indemnification) and the Corporation
hereby indemnifies and agrees to hold the Indemnified Party harmless therefrom.

 

11.
Insurance

 

The
Corporation shall obtain and maintain a policy of insurance with respect to liability relating to its current and former directors
or officers which policy shall pursuant to its terms extend to the Indemnified Party in his capacity as a current or former director
or officer of the Corporation. The Corporation will include the Indemnified Party as an insured under such policy. In the event
the Indemnified Party is not named under such policy, the Corporation shall immediately provide written notice of such fact to
the Indemnified Party.

 

In
the event that the Indemnified Party is an insured under such policy and an insurable event occurs, the Indemnified Party will
be indemnified promptly as agreed hereto regardless of whether the Corporation has received the insurance proceeds. The Indemnified
Party is entitled to full indemnification as agreed hereto notwithstanding any deductible amounts or policy limits contained in
any such insurance policy.

 

    	 	 	 

    	 

    

 

12.
Effective Time

 

Notwithstanding
the date hereof, this Agreement shall be effective as and from the earlier of the first day that the Indemnified Party became
or becomes a director or officer of the Corporation.

 

13.
Notices

 

Unless
otherwise permitted by this Agreement, all notices, requests, demands and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice
or other communication shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed, (iii) mailed by reputable overnight courier and receipted for by the party
to whom said notice or other communication shall have been directed or (iv) sent by electronic mail (e-mail), with receipt of
oral confirmation that such transmission has been received:

 

		(a)	if
                                         to the Indemnified Party, at the last known address of the Indemnified Party as set forth
                                         in the minute books of the Corporation; and

 

		(b)	if
                                         to the Corporation, at its head office:

 

I.D.
Systems, Inc.

123
Tice Boulevard

Woodcliff
Lake, NJ, 07677

Attn:
Ned Mavrommatis, Chief Financial Officer

Email:
NMavrommatis@id-systems.com

 

or
to such other address as each party may from time to time notify the other of in writing.

 

If
the Corporation receives notice from any other source of any matter which the Indemnified Party would otherwise be obligated hereunder
to give notice of to the Corporation, then the Indemnified Party shall be relieved of his obligation hereunder to give notice
to the Corporation, provided the Corporation has not suffered any actual and material damage from the failure of the Indemnified
Party to give notice as herein required.

 

    	 	 	 

    	 

    

 

14.
Severability

 

If
any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

 

		(a)	the
                                         validity, legality and enforceability of the remaining provisions of this Agreement (including,
                                         without limitation, all portions of any paragraph of this Agreement containing such provisions
                                         held to be invalid, illegal or unenforceable, that are not of themselves in whole invalid,
                                         illegal or unenforceable) shall not in any way be affected or impaired thereby; and

 

		(b)	to
                                         the fullest possible extent, the provisions of this Agreement (including, without limitations,
                                         all portions of any paragraphs of this Agreement containing any such provisions held
                                         to be invalid, illegal or unenforceable, that are not of themselves in whole invalid,
                                         illegal or unenforceable) shall be construed so as to give effect to the intent manifested
                                         by the provision which is held to be invalid, illegal or unenforceable.

 

15.
Governing Law; Consent to Jurisdiction

 

The
parties hereto agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the
State of Delaware. The Corporation and the Indemnified Party each hereby irrevocably consent to the jurisdiction of the courts
of the State of Delaware for all purposes in connection with any action or proceeding that arises out of or relates to this Agreement
and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery
of the State of Delaware, which shall be the exclusive and only proper forum for adjudicating such a claim.

 

16.
Modification and Waiver

 

No
supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute а waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute а continuing waiver.

 

17.
Entire Agreement

 

Together
with the Indemnification Agreement and the relevant provisions of the Certificate of Incorporation, Bylaws and the DGCL, this
Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement, between the
parties hereto respecting the matters set forth herein, and shall constitute the entire agreement between the parties hereto in
respect of the matters set forth herein. For avoidance of doubt, this Agreement does not in any way supersede, modify, terminate
or cancel the Indemnification Agreement or any rights or remedies of the Indemnified Party thereunder.

 

    	 	 	 

    	 

    

 

18.
Successors and Assigns

 

This
Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and permitted assigns and to the
Indemnified Party, any Affiliated Entity and any officer, director, employee, manager, partner or member thereof, and his, its
or their estate, executors, administrators, legal representatives, lawful heirs, successors and assigns. Each Affiliated Entity
and any such officer, director, employee, manager, partner or member shall be a third party beneficiary hereunder.

 

19.
Successor Legislation

 

Any
references herein to any enactment shall be deemed to be references to such enactment as the same may be amended or replaced from
time to time and, in the event that the Corporation is continued, incorporated, amalgamated, arranged under or otherwise becomes
governed by an enactment other than the DGCL, then all references herein to the DGCL shall be deemed to be references to such
enactment as the same may be amended or replaced from time to time.

 

[Remainder
of the Page Intentionally Left Blank]

 

    	 	 	 

    	 

    

 

IN
WITNESS WHEREOF the parties hereto have executed and delivered this Agreement as at the date first written above.

 

	 	THE
    CORPORATION:
	 	 	 
	 	I.D.
    Systems, Inc.
	 	 	 
	 	By:
    	/s/
    Ned Mavrommatis
	 	Name:	Ned
    Mavrommatis
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	THE
    INDEMNIFIED PARTY:
	 	 	 
	 	/s/
    Charles Frumberg
	 	Name:	Charles
    FrumbergExhibit

Exhibit 4(a)

	
	
	 

SOUTHWESTERN ELECTRIC POWER COMPANY

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
AS TRUSTEE

___________________

THIRTEENTH SUPPLEMENTAL INDENTURE

Dated as of September 1, 2018

Supplemental to the Indenture
dated as of February 25, 2000

4.10% Senior Notes, Series M, due 2028

	
	
	 

THIRTEENTH SUPPLEMENTAL INDENTURE, dated as of September 1, 2018, between SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association formed under the laws of the United States, as Trustee under the Original Indenture referred to below (the “Trustee”). 

RECITALS OF THE COMPANY

The Company has heretofore executed and delivered to the Trustee an indenture dated as of February 25, 2000 (the “Original Indenture”), to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness (the “Senior Notes”), the form and terms of which are to be established as set forth in Sections 201 and 301 of the Original Indenture.

Section 901 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of the Senior Notes of any series as permitted in Sections 201 and 301 of the Original Indenture.

The Company desires to create a series of the Senior Notes in an aggregate principal amount of $575,000,000 to be designated the “4.10% Senior Notes, Series M, due 2028” (the “Series M Notes”), and all action on the part of the Company necessary to authorize the issuance of the Series M Notes under the Original Indenture and this Thirteenth Supplemental Indenture has been duly taken.

All acts and things necessary to make the Series M Notes, when executed by the Company and completed, authenticated and delivered by the Trustee as provided in the Original Indenture and this Thirteenth Supplemental Indenture, the valid and binding obligations of the Company and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed.

NOW, THEREFORE, THIS THIRTEENTH SUPPLEMENTAL INDENTURE WITNESSETH:

That in consideration of the premises and of the acceptance and purchase of the Series M Notes by the Holders thereof and of the acceptance of this trust by the Trustee, the Company covenants and agrees with the Trustee, for the equal benefit of the Holders of the Series M Notes, as follows:

1

ARTICLE ONE
Definitions

SECTION 101.    Definitions.

The use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form of the Series M Note attached hereto as Exhibit A.

ARTICLE TWO
Terms and Issuance of the Series M Notes

SECTION 201.    Issue of Series M Notes.

A series of Senior Notes which shall be designated the “4.10%  Senior Notes, Series M, due 2028” shall be executed, authenticated and delivered from time to time in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of, the Original Indenture and this Thirteenth Supplemental Indenture (including the form of Series M Note set forth in Exhibit A hereto).  The aggregate principal amount of the Series M Notes which may be authenticated and delivered under this Thirteenth Supplemental Indenture shall initially be $575,000,000, and such principal amount of the Series M Notes may be increased from time to time.  All Series M Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for the issuance of additional Series M Notes.  Any such additional Series M Notes will have the same interest rate, maturity and other terms as those initially issued (other than the date of issuance, the issue price and, in some circumstances, the initial interest accrual date and initial interest payment date).  

SECTION 202.    Form of Series M Notes; Incorporation of Terms.

The Series M Notes shall be issued initially in the form of one Global Security.  The form of the Series M Notes shall be substantially in the form of the Global Security attached hereto as Exhibit A.  The terms of such Series M Notes are herein incorporated by reference and are part of this Thirteenth Supplemental Indenture.

SECTION 203.    Depositary for Global Securities.

The Depositary for any Global Securities of the series of which this Series M Note is a part shall be The Depository Trust Company in The City of New York.

SECTION 204.    Restrictions on Liens.

The covenant contained in Section 1007 of the Original Indenture shall not be applicable to the Series M Notes.

So long as any of the Series M Notes are outstanding, the Company will not create or suffer to be created or to exist any additional mortgage, pledge, security interest, or other lien

2

(collectively “Liens”) on any of its utility properties or tangible assets now owned or hereafter acquired to secure any indebtedness for borrowed money (“Secured Debt”), without providing that the Series M Notes will be similarly secured.  This restriction does not apply to the Company's subsidiaries, nor will it prevent any of them from creating or permitting to exist Liens on their property or assets to secure any Secured Debt.  In addition, this restriction does not prevent the creation or existence of:

		
	(a)
	Liens on property existing at the time of acquisition or construction of such property (or created within one year after completion of such acquisition or construction), whether by purchase, merger, construction or otherwise, or to secure the payment of all or any part of the purchase price or construction cost thereof, including the extension of any Liens to repairs, renewals, replacements, substitutions, betterments, additions, extensions and improvements then or thereafter made on the property subject thereto;

        
		
	(b)
	Financing of the Company's accounts receivable for electric service;

        
		
	(c)
	Any extensions, renewals or replacements (or successive extensions, renewals or replacements), in whole or in part, of liens permitted by the foregoing clauses; and

        
		
	(d)
	The pledge of any bonds or other securities at any time issued under any of the Secured Debt permitted by the above clauses.

In addition to the permitted issuances above, Secured Debt not otherwise so permitted may be issued in an amount that does not exceed 15% of Net Tangible Assets as defined below.  

“Net Tangible Assets” means the total of all assets (including revaluations thereof as a result of commercial appraisals, price level restatement or otherwise) appearing on the Company’s balance sheet, net of applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets (which term shall not be construed to include such revaluations), less the aggregate of the Company’s current liabilities appearing on such balance sheet.  For purposes of this definition, the Company’s balance sheet does not include assets and liabilities of its subsidiaries.

This restriction also does not apply to or prevent the creation or existence of leases made, or existing on property acquired, in the ordinary course of business.

SECTION 205.    Place of Payment.

The Place of Payment in respect of the Series M Notes will be at the principal office or place of business of the Trustee or its successor in trust under the Indenture, which, at the date hereof, is located at 2 North LaSalle Street, Chicago, IL  60602, Attention: Corporate Trust Administration.

3

SECTION 206.    Optional Redemption.

The Series M Notes may be redeemed by the Company at its option, in whole at any time or in part from time to time, upon not less than thirty but not more than sixty days’ prior notice (either by mail or in compliance with the applicable procedures of DTC).  At any time prior to June 15, 2028 (the date that is three months prior to maturity (the “Par Call Date”)), the Series M Notes may be redeemed either in whole or in part at a redemption price equal to the greater of (1) 100% of the principal amount of the Series M Notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Series M Notes being redeemed that would be due if such Series M Notes matured on the Par Call Date (excluding the portion of any such interest accrued to but excluding the date of redemption), discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus ) 20 basis points, plus, in each case, accrued and unpaid interest thereon to, but excluding, the date of redemption.

At any time on or after the Par Call Date, the Company may redeem the Series M Notes in whole or in part at 100% of the principal amount of the Series M Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Series M Notes (assuming, for this purpose, that the Series M Notes would mature on the Par Call Date) 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 life of the Series M Notes.

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer” means a primary U.S. Government securities dealer or dealers selected by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company and notified to the Trustee, 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 Company and the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.

4

“Treasury Rate” means, with respect to any redemption, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

SECTION 207.    Sinking Funds.

Article Twelve of the Indenture shall not apply to the Series M Notes.

SECTION 208.    Regular Record Date.
March 1 or September 1, as the case may be, next preceding an interest payment date (whether or not a Business Day).
ARTICLE THREE
Miscellaneous

SECTION 301.    Execution as Supplemental Indenture.

This Thirteenth Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Thirteenth Supplemental Indenture forms a part thereof.

SECTION 302.    Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Thirteenth Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. 

SECTION 303.    Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 304.    Successors and Assigns.

All covenants and agreements by the Company in this Thirteenth Supplemental Indenture shall bind its successors and assigns, whether so expressed or not.

SECTION 305.    Separability Clause.

In case any provision in this Thirteenth Supplemental Indenture or in the Series M Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

5

SECTION 306.    Benefits of Thirteenth Supplemental Indenture.

Nothing in this Thirteenth Supplemental Indenture or in the Series M Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Thirteenth Supplemental Indenture.

SECTION 307.    Execution and Counterparts.

This Thirteenth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 308.    Certain Tax Information.  

In order to comply with applicable tax laws (inclusive of rules, regulations and interpretations promulgated by competent authorities) related to the Original Indenture, this Thirteenth Supplemental Indenture and the Series M Notes in effect from time to time (“Applicable Law”) that a foreign financial institution, issuer, trustee, paying agent or other party is or has agreed to be subject to, the Company agrees (i) to provide to the Trustee sufficient information about the parties and/or transactions (including any modification to the terms of such transactions) so the Trustee can determine whether it has tax related obligations under Applicable Law and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments to the extent necessary to comply with Applicable Law for which the Trustee shall not have any liability.

6

IN WITNESS WHEREOF, the parties hereto have caused this Thirteenth Supplemental Indenture to be duly executed and attested, all as of the day and year first above written. 
 
	
				
	 
	 
	SOUTHWESTERN ELECTRIC POWER COMPANY

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/ Renee V. Hawkins

	 
	 
	Title:
	Assistant Treasurer

	 
	 
	 
	 

	Attest:
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	/s/ Thomas G. Berkemeyer
	 
	 

	Title:
	Assistant Secretary
	 
	 

	 
	 
	 
	 

	 
	 
	THE BANK OF NEW YORK MELLON 

	 
	 
	TRUST COMPANY, N.A., as Trustee 

	 
	 
	 

	 
	 
	 

	 
	 
	By: /s/ R. Tarnas

	 
	 
	Authorized Signatory

7

EXHIBIT A

This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary.  This Security is exchangeable for Securities registered in the name of a Person other than the Depositary or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Security (other than a transfer of this Security 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) may be registered except in limited circumstances.

Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate to be issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., 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.  

No. R-1

SOUTHWESTERN ELECTRIC POWER COMPANY
4.10% Senior Notes, Series M, due 2028
 
	
			
	CUSIP/ISIN 845437 BR2/US845437 BR25
	 
	Original Issue Date:  September 13, 2018

	 
	 
	 

	Stated Maturity:  September 15, 2028
	 
	Interest Rate: 4.10%

	 
	 
	 

	Principal Amount:  $575,000,000
	 
	 

 
	
						
	Redeemable:
	Yes
	þ
	 
	No
	 ̈

	In Whole:
	Yes
	þ
	 
	No
	 ̈

	In Part:
	Yes
	þ
	 
	No
	 ̈

SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (herein referred to the as the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO. or registered assigns, the Principal Amount specified above on the Stated Maturity specified above, and to pay interest on said Principal Amount from the Original Issue Date specified above or from the most recent interest payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly provided for, semi-annually in arrears on March 15 and September 15 in each year, commencing on March 15, 2019, at the Interest Rate per annum specified above, until the Principal Amount shall have been paid or duly provided for.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, as provided in the Indenture, as hereinafter defined, shall be paid to the Person in whose name this Security (or one or more Predecessor Securities) shall have been registered at the close of business on the Regular Record Date with respect to such Interest Payment Date, which shall be the March 1 or September 1 (whether or not a Business Day) prior to such Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

If any Interest Payment Date, any redemption date or Stated Maturity is not a Business Day, then payment of the amounts due on this Note on such date will be made on the next succeeding Business Day, and no interest shall accrue on such amounts for the period from and after such Interest Payment Date, redemption date or Stated Maturity, as the case may be, with the same force and effect as if made on such date, except that if such Business Day is in the next succeeding calendar month, then payment will be made on the immediately preceding Business Day.  The payment of the principal of (and premium, if any) and the interest on this Security shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, New York, in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

This Security has initially been issued in the form of a Global Security, and the Company has initially designated The Depository Trust Company (the “Depositary”, which term shall include any successor depositary) as the depositary for this Security.  For as long as this Security or any portion hereof is issued in such form, and notwithstanding the previous paragraph, all payments of interest, principal and other amounts in respect of this Security or portion thereof shall be made to the Depositary or its nominee in accordance with the Applicable Procedures in the coin or currency specified above and as further provided herein.

This Security is one of a duly authorized issue of securities of the Company (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of February 25, 2000, as amended and supplemented from time to time (the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association formed under the laws of the United States, as Trustee (the “Trustee”, which term includes any successor trustee under the Indenture), as to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $575,000,000; provided, however, the aggregate principal 

amount hereof can be increased, without the consent of the Holder, as permitted by the provisions of the Indenture.  The provisions of this Security, together with the provisions of the Indenture, shall govern the rights, obligations, duties and immunities of the Holder, the Company and the Trustee with respect to this Security, provided that, if any provision of this Security necessarily conflicts with any provision of the Indenture, the provision of this Security shall be controlling to the fullest extent permitted under the Indenture.

The Securities of this Series may be redeemed by the Company at its option, in whole at any time or in part from time to time, upon not less than thirty but not more than sixty days’ prior notice (either by mail or in compliance with the applicable procedures of DTC).  At any time prior to June 15, 2028 (the date that is three months prior to maturity (the “Par Call Date”)), the Securities may be redeemed either in whole or in part at a redemption price equal to the greater of (1) 100% of the principal amount of the Securities being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities being redeemed that would be due if such Securities matured on the Par Call Date (excluding the portion of any such interest accrued to but excluding the date of redemption), discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 20 basis points, plus, in each case, accrued and unpaid interest thereon to, but excluding, the date of redemption.

At any time on or after the Par Call Date, the Company may redeem the Securities in whole or in part at 100% of the principal amount of the Securities being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Securities (assuming, for this purpose, that the Securities would mature on the Par Call Date) 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 life of the Securities.

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer” means a primary U.S. Government securities dealer or dealers selected by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company and notified to the Trustee, 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 Company and the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

If notice has been given as provided in the Indenture and funds for redemption of any Securities (or any portion thereof) called for redemption shall have been made available on the Redemption Date referred to in such notice, such Securities (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Securities will be to receive payment of the Redemption Price.

In the event of redemption of this Security in part only, a new Security or Securities of this Series, and of like tenor, for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Securities of this series will not be subject to any sinking fund.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class).  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each Series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

This Security shall be exchangeable for Securities registered in the names of Persons other than the Depositary with respect to such series or its nominee only as provided in the Indenture.  This Security shall be so exchangeable if (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the Exchange Act, (y) the Company executes and delivers to the Trustee an Officers’ Certificate providing that this Security shall be so exchangeable or (z) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series.  Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of a Security of the series of which this Security is a part is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this Series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of this Series are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this Series are exchangeable for a like aggregate principal amount of Securities of this Series and of like tenor of any authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

For so long as this Security is issued in the form of a Global Security, any notice to be given to the Holder of this Security shall be deemed to have been duly given to such Holder when given to the Depositary, or its nominee, in accordance with its Applicable Procedures.  Neither the Company nor the Trustee will have any responsibility with respect to those policies and procedures or for any notices or other communications among the Depositary, its direct and indirect participants and the beneficial owners of this Security in global form.

If at any time this Security is not represented by a Global Security, any notice to be given to the Holder of this Security shall be deemed to have been duly given to such Holder upon the mailing

of such notice to the Holder at such Holder’s address as it appears on the Security Register maintained by the Company or its agent as of the close of business preceding the day such notice is given.

Neither the failure to give any notice nor any defect in any notice given to the Holder of this Security or any other Security of this series will affect the sufficiency of any notice given to another Holder of any Securities of this series.

The Indenture provides that the Company, at its option, (a) will be discharged from any and all obligations in respect of the Securities (except for certain obligations to register the transfer or exchange of Securities, replace stolen, lost or mutilated Securities, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with certain restrictive covenants of the Indenture, in each case if the Company deposits, in trust, with the Trustee money or U.S. Government Obligations which, through the payment of interest thereon and principal thereof in accordance with their terms, will provide money, in an amount sufficient to pay all the principal of, and premium, if any, and interest, if any, on the Securities on the dates such payments are due in accordance with the terms of such Securities, and certain other conditions are satisfied.

No recourse shall be had for the payment of the principal of or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, organizer, member, limited partner, stockholder, officer or director, as such, past, present or future, as such of the Company or of any predecessor or successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

This Security shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of law except Section 5-1401 of the New York General Obligations Law.

All terms used in this Security which are defined in the Indenture shall have the meanings ascribed to them in the Indenture. 

Unless the certificate of authentication hereon has been executed by the Trustee referred to herein by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, Southwestern Electric Power Company has caused this instrument to be duly executed.

	
			
	 
	SOUTHWESTERN ELECTRIC POWER COMPANY

	 
	 
	 

	 
	 
	 

	 
	 
	By: ________________

	 
	 
	Renee V. Hawkins

	 
	 
	Assistant Treasurer

This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

Dated:  September 13, 2018

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

  
	
		
	By:
	________________

	 
	R. Tarnas

	 
	Authorized Signatory

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)

_______________________________________

________________________________________________________________

________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
________________________________________________________________
ASSIGNEE) the within Note and all rights thereunder, hereby
________________________________________________________________
irrevocably constituting and appointing such person attorney to 
________________________________________________________________
transfer such Note on the books of the Issuer, with full
________________________________________________________________
power of substitution in the premises.

Dated: ________________________        __________________________

NOTICE:    The signature to this assignment must correspond with the name as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and NOTICE:  Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”) or the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”).

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