Document:

Exhibit 4.8.15

 

EXECUTION

 

 

 

SIXTY-FIRST SUPPLEMENTAL

INDENTURE

 

TO

 

INDENTURE DATED SEPTEMBER 1, 1939

 

 

DUKE ENERGY INDIANA, INC.

 

TO

 

DEUTSCHE BANK NATIONAL TRUST COMPANY

AS TRUSTEE

 

 

DATED AS OF OCTOBER 1, 2009

 

 

CREATING FIRST MORTGAGE BONDS, SERIES OOO, 4.95%, DUE OCTOBER 1, 2040

 

AND

 

OTHERWISE SUPPLEMENTING AND
AMENDING THE INDENTURE

 

 

 

 

TABLE OF CONTENTS

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  PARTIES:

  	
   

  
	
   

  	
  Company (Duke Energy
  Indiana, Inc., formerly named each of PSI Energy, Inc. and Public Service
  Company of Indiana, Inc., and successor by consolidation to Initial Mortgagor
  (Public Service Company of Indiana)), and Trustee

  	
  1

  
	
   

  	
   

  
	
  RECITALS:

  	
   

  
	
   

  	
  Indenture of the Initial Mortgagor, dated
  September 1, 1939, and First Supplemental Indenture thereto of the Initial
  Mortgagor, dated as of March 1, 1941

  	
  1

  
	
   

  	
  Consolidation of Initial Mortgagor (and four other
  companies) into the Company

  	
  1

  
	
   

  	
  Execution by Company of Second Supplemental
  Indenture to the original Indenture

  	
  1

  
	
   

  	
  Company substituted for Initial Mortgagor under
  Indenture

  	
  1

  
	
   

  	
  Execution by Company of Third through the
  Fifty-Ninth Supplemental Indentures to the original Indenture

  	
  2

  
	
   

  	
  Deutsche Bank National Trust Company appointed as
  Successor Trustee

  	
  3

  
	
   

  	
  Change of name of Company from Public Service
  Company of Indiana, Inc. to PSI Energy, Inc., and thereafter to Duke Energy
  Indiana, Inc.

  	
  3

  
	
   

  	
  Amount of bonds presently outstanding under the
  Indenture

  	
  3

  
	
   

  	
  Sixty-First Supplemental Indenture and Bonds of
  Series OOO authorized

  	
  4

  
	
   

  	
  Conditions precedent performed

  	
  4

  
	
   

  	
   

  	
   

  
	
  EXECUTING CLAUSE

  	
  5

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.

  
	
   

  
	
  FIRST MORTGAGE BONDS, SERIES OOO, 4.95%, DUE October 1, 2040.

  
	
   

  
	
  Section 1.

  	
  Creation and designation of Bonds of Series OOO 

  	
  5

  
	
  Section 2.

  	
  Bonds of Series OOO to be in registered form only 

  	
  5

  
	
   

  	
  Form
  of face of Bonds of Series OOO

  	
  6

  
	
   

  	
  Form
  of reverse of Bonds of Series OOO

  	
  8

  
	
   

  	
  Form
  of Trustee’s certificate

  	
  11

  
	
  Section
  3.

  	
  Date
  of Bonds of Series OOO

  	
  12

  
	
  Section
  4.

  	
  Maturity
  dates and interest rates of Bonds of Series OOO

  	
  12

  
	
  Section
  5.

  	
  Place
  and manner of payment of Bonds of Series OOO

  	
  12

  
	
  Section
  6.

  	
  Denominations
  and numbering of definitive Bonds of Series OOO

  	
  12

  
	
  Section
  7

  	
  Maintenance
  and Renewal Fund shall not apply to Bonds of Series OOO

  	
  12

  
	
  Section
  8.

  	
  Inspection
  requirements shall not apply to Bonds of Series OOO

  	
  13

  
	
  Section
  9.

  	
  Company’s
  right to further amend the original Indenture

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  
	
   

  
	
  ISSUANCE OF BONDS OF SERIES OOO.

  
	
   

  
	
  Aggregate principal amount of Bonds of Series OOO
  issuable at once

  	
  14

  
	
   

  	
   

  
	
  ARTICLE III.

  
	
   

  	
   

  	
   

  
	
  INDENTURE AMENDMENTS.

  
	
   

  	
   

  	
   

  
	
  Section
  1.

  	
  Amendments
  to Article I of the original Indenture

  	
  14

  
	
  Section
  2.

  	
  Amendments
  to Article VII of the original Indenture

  	
  15

  
	
  Section
  3.

  	
  No
  sinking fund for Bonds of Series OOO

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  
	
   

  	
   

  	
   

  
	
  CONCERNING THE TRUSTEE.

  
	
   

  	
   

  	
   

  
	
  Acceptance of trust by Trustee

  	
  18

  
	
  Trustee not responsible for validity or
  sufficiency of Sixty-First Supplemental Indenture, etc.

  	
  18

  
	
  Terms and conditions of Article XVII of the
  original Indenture to be applied to the Sixty-First Supplemental Indenture

  	
  18

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS PROVISIONS.

  
	
   

  
	
  Section
  1.

  	
  References in any article or section of the
  original Indenture refer to such article or section as amended by all Fifty
  Nine Supplemental Indentures thereto

  	
  18

  
	
  Section
  2.

  	
  Operation and construction of amendments to the
  original Indenture

  	
  18

  
	
  Section
  3.

  	
  All covenants, etc., for sole benefit of parties
  to the Sixty-First Supplemental Indenture and holders of bonds

  	
  18

  
	
  Section
  4.

  	
  Table of contents and headings of articles not
  part of Sixty-First Supplemental Indenture

  	
  18

  
	
  Section
  5.

  	
  Execution of Sixty-First Supplemental Indenture in
  counterparts

  	
  18

  
	
  Section
  6.

  	
  Payments Due on Legal Holidays

  	
  19

  
	
   

  	
   

  	
   

  
	
  ATTESTATION CLAUSE

  	
  20

  
	
  SIGNATURES

  	
  20

  
	
  ACKNOWLEDGMENT BY COMPANY

  	
  22

  
	
  ACKNOWLEDGMENT BY TRUSTEE

  	
  23

  

 

iii

 

SIXTY-FIRST
SUPPLEMENTAL INDENTURE dated as of the 1st day of October, 2009, made and
entered into by and between DUKE ENERGY INDIANA, INC. (hereinafter commonly
referred to as the “Company”), a corporation organized and existing under the
laws of the State of Indiana, formerly named each of PSI Energy, Inc. and
Public Service Company of Indiana, Inc., and the successor by consolidation to
Public Service Company of Indiana, an Indiana corporation, party of the first
part, and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association
organized and existing under the laws of the United States and having its
office or place of business in the City of Chicago, State of Illinois,
successor trustee to Bank of America, N.A., as successor by merger to LaSalle
Bank National Association, which was the successor trustee to The First
National Bank of Chicago (hereinafter commonly referred to as the “Trustee”),
party of the second part,

 

WITNESSETH:

 

WHEREAS,
Public Service Company of Indiana (hereinafter commonly referred to as the “Initial
Mortgagor”), prior to its consolidation with certain other corporations to form
the Company, executed and delivered to the Trustee a certain indenture of
mortgage or deed of trust (hereinafter called the “original Indenture” when
referred to as existing prior to any amendment thereto, and the “Indenture”
when referred to as heretofore, now or hereafter amended), dated September 1,
1939, and a First Supplemental Indenture thereto, dated as of March 1, 1941, to
secure the bonds of the Initial Mortgagor, its successors and assigns, issued
from time to time under the Indenture in series for the purposes of and subject
to the limitations specified in the Indenture; and

 

WHEREAS,
the Company on September 6, 1941, became, through a consolidation, the
successor of the Initial Mortgagor (and four other companies) and succeeded to
all the rights and became liable for all the obligations of the Initial
Mortgagor (and such other companies); and

 

WHEREAS,
after said consolidation, the Company executed and delivered a Second
Supplemental Indenture, dated as of November 1, 1941, to the original Indenture
for the purposes, among others, of (i) the making by the Company of an
agreement of assumption and adoption by it of the Indenture, (ii) the
assumption by the Company of the bonds (and interest and premium, if any,
thereon) issued or to be issued under the Indenture, and of all terms,
covenants and conditions binding upon it under the Indenture, and the agreeing
by the Company to pay, perform and fulfill the same, and (iii) the conveying to
the Trustee upon the trusts declared in the Indenture, but subject to any
outstanding liens and encumbrances, all the property which the Company then
owned or which it might thereafter acquire, except property of a character
similar to the property of the Initial Mortgagor which is excluded from the
lien of the Indenture; and

 

WHEREAS,
all conditions have been met and all acts and things necessary have been done
and performed to make the Indenture the valid and binding agreement of the
Company and to substitute the Company for the Initial Mortgagor under the
Indenture, and to vest the Company with each and every right and power of the
Initial Mortgagor, including the right and power to issue bonds thereunder; and

 

1

 

WHEREAS,
the Company has subsequently executed and delivered, for purposes authorized
under the Indenture, a Third Supplemental Indenture dated as of March 1, 1942,
a Fourth Supplemental Indenture dated as of May 1, 1943, a Fifth Supplemental
Indenture dated as of August 1, 1944, a Sixth Supplemental Indenture dated as
of September 1, 1945, a Seventh Supplemental Indenture dated as of November 1,
1947, an Eighth Supplemental Indenture dated as of January 1, 1949, a Ninth
Supplemental Indenture dated as of May 1, 1950, a Tenth Supplemental Indenture
dated as of July 1, 1952, an Eleventh Supplemental Indenture dated as of
January 1, 1954, a Twelfth Supplemental Indenture dated as of October 1, 1957,
a Thirteenth Supplemental Indenture dated as of February 1, 1959, a Fourteenth
Supplemental Indenture dated as of July 15, 1960, a Fifteenth Supplemental
Indenture dated as of June 15, 1964, a Sixteenth Supplemental Indenture dated
as of January 1, 1969, a Seventeenth Supplemental Indenture dated as of March
1, 1970, an Eighteenth Supplemental Indenture dated as of January 1, 1971, a Nineteenth
Supplemental Indenture dated as of January 1, 1972, a Twentieth Supplemental
Indenture dated as of February 1, 1974, a Twenty-First Supplemental Indenture
dated as of August 1, 1974, a Twenty-Second Supplemental Indenture dated as of
August 1, 1975, a Twenty-Third Supplemental Indenture dated as of January 1,
1977, a Twenty-Fourth Supplemental Indenture dated as of October 1, 1977, a
Twenty-Fifth Supplemental Indenture dated as of September 1, 1978, a
Twenty-Sixth Supplemental Indenture dated as of September 1, 1978, a
Twenty-Seventh Supplemental Indenture dated as of March 1, 1979, a
Twenty-Eighth Supplemental Indenture dated as of May 1, 1979, a Twenty-Ninth
Supplemental Indenture dated as of March 1, 1980, a Thirtieth Supplemental
Indenture dated as of August 1, 1980, a Thirty-First Supplemental Indenture
dated as of February 1, 1981, a Thirty-Second Supplemental Indenture dated as
of August 1, 1981, a Thirty-Third Supplemental Indenture dated as of December
1, 1981, a Thirty-Fourth Supplemental Indenture dated as of December 1, 1982, a
Thirty-Fifth Supplemental Indenture dated as of March 30, 1984, a Thirty-Sixth
Supplemental Indenture dated as of November 15, 1984, a Thirty-Seventh
Supplemental Indenture dated as of August 15, 1985, a Thirty-Eighth
Supplemental Indenture dated as of October 1, 1986, a Thirty-Ninth Supplemental
Indenture dated as of March 15, 1987, a Fortieth Supplemental Indenture dated
as of June 1, 1987, a Forty-First Supplemental Indenture dated as of June 15,
1988, a Forty-Second Supplemental Indenture dated as of August 1, 1988, a
Forty-Third Supplemental Indenture dated as of September 15, 1989, a
Forty-Fourth Supplemental Indenture dated as of March 15, 1990, a Forty-Fifth
Supplemental Indenture dated as of March 15, 1990, a Forty-Sixth Supplemental
Indenture dated as of June 1, 1990, a Forty-Seventh Supplemental Indenture
dated as of July 15, 1991, a Forty-Eighth Supplemental Indenture dated as of
July 15, 1992, a Forty-Ninth Supplemental Indenture dated as of February 15, 1993,
a Fiftieth Supplemental Indenture dated as of February 15, 1993, a Fifty-First
Supplemental Indenture dated as of February 1, 1994, a Fifty-Second
Supplemental Indenture dated as of April 30, 1999, a Fifty-Third Supplemental
Indenture dated as of June 15, 2001, a Fifty-Fourth Supplemental Indenture
dated as of September 1, 2002, a Fifty-Fifth Supplemental Indenture dated as of
February 15, 2003, a Fifty-Sixth Supplemental Indenture dated as of December 1,
2004, a Fifty-Seventh Supplemental Indenture dated as of August 21, 2008, a
Fifty-Eighth Supplemental Indenture dated as of December 19, 2008, a
Fifty-Ninth Supplemental Indenture dated as 

 

2

 

of
March 23, 2009, and a Sixtieth Supplemental Indenture dated as of June 1, 2009,
each supplementing and amending the Indenture; and

 

WHEREAS,
the Thirty-Fifth Supplemental Indenture authorized and appointed LaSalle Bank
National Association, a national banking association duly organized and
existing under the law of the United States of America with its principal
office in Chicago, Illinois and formerly named LaSalle National Bank, as
Successor Trustee to The First National Bank of Chicago, which appointment was
accepted, and all trust powers under the Indenture were thereby transferred
from The First National Bank of Chicago to LaSalle Bank National Association;
and

 

WHEREAS,
by an Instrument of Resignation, Appointment and Acceptance dated as of
December 15, 2008, Bank of America, N.A., as successor by merger to LaSalle
Bank National Association, resigned as trustee and the Company appointed the
Trustee as Successor Trustee thereto, which appointment was thereby accepted by
the Trustee effective as of that date, and all trust powers were thereby
transferred from Bank of America, N.A. to the Trustee; and

 

WHEREAS, the Forty-Sixth Supplemental Indenture
amended the Indenture to reflect a change in the name of the Company from
Public Service Company of Indiana, Inc. to PSI Energy, Inc. effective as of
April 20, 1990, and the Fifty-Seventh Supplemental Indenture amended the
Indenture to reflect a change in the name of the Company from PSI Energy, Inc.
to Duke Energy Indiana, Inc., effective as of October 1, 2006; and

 

WHEREAS, as of October 1, 2009, the only bonds that have been
heretofore issued under the Indenture which are now outstanding are $7,500,000
aggregate principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series
VV, Due July 15, 2026” and $28,000,000 aggregate principal amount of “PSI
Energy, Inc. First Mortgage Bonds, Series WW, Due August 15, 2027” and
$53,055,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series CCC, 8.85%, Due January 15, 2022” and $38,000,000 aggregate
principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series DDD, 8.31%,
Due September 1, 2032” and $24,600,000 aggregate principal amount of “PSI
Energy, Inc. First Mortgage Bonds, Series GGG, Due March 1, 2019” and
$35,000,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series HHH, Due April 1, 2022” and $500,000,000 aggregate principal
amount of “Duke Energy Indiana, Inc. First Mortgage Bonds, Series LLL, 6.35%,
Due August 15, 2038” and $50,000,000 aggregate principal amount of “Duke Energy
Indiana, Inc. First Mortgage Bonds, 2005A Pledge Series,  Due
July 1, 2035” and $450,000,000 aggregate principal amount of “Duke Energy
Indiana, Inc. First Mortgage Bonds, Series MMM, 6.45%, Due April 1, 2039” and
$55,000,000 aggregate principal amount of “Duke Energy Indiana, Inc. First Mortgage
Bonds, Series NNN, 6%, Due August 1, 2039”; and

 

3

 

WHEREAS,
the Indiana Finance Authority (the “IFA”) intends to issue its Environmental
Refunding Revenue Bonds, Series 2009C (Duke Energy Indiana, Inc. Project), in
the aggregate principal amount of $50,000,000 (the “IFA Bonds”), under and
pursuant to a Trust Indenture, dated as of October 1, 2009, between the IFA and
The Bank of New York Mellon Trust Company, N.A., as Trustee (the “IFA Trustee”);

 

WHEREAS,
the IFA will loan the proceeds derived from the sale of the IFA Bonds to the
Company pursuant to a Loan Agreement, dated as of October 1, 2009, between the
Company and the IFA (the “Loan Agreement”), in order to permit the refunding of
the Indiana Finance Authority Environmental Revenue Bonds, Series 2005B (PSI
Energy, Inc. Projects), in the aggregate principal amount of $50,000,000 (the “Refunded
Bonds”), the proceeds of the Refunded Bonds having been loaned to the Company
by a predecessor of the IFA in order to assist the Company in financing its
portion of the costs of the acquisition, construction and installation of
certain solid waste disposal facilities at the Company’s Gallagher, Gibson and
Cayuga Generating Stations; and

 

WHEREAS,
the Company has agreed to deliver to the IFA a series of its first mortgage
bonds in order to evidence and secure its indebtedness under the Loan Agreement
and the IFA has agreed to absolutely and irrevocably assign its interest in
such first mortgage bonds to, and cause the same to be registered in the name
of, the IFA Trustee, as security for the IFA Bonds; and

 

WHEREAS,
in accordance with the provisions of Section 1 of Article XVIII of the
Indenture, the Board of Directors has authorized the execution and delivery by the
Company of a Sixty-First Supplemental Indenture, substantially in the form of
this Sixty-First Supplemental Indenture, for the purpose of creating a sixtieth
series of bonds to be issued under the Indenture, to be known as “Duke Energy
Indiana, Inc. First Mortgage Bonds, Series OOO, 4.95%, Due October 1, 2040”
(such bonds being hereinafter referred to as the “Bonds of Series OOO”), and
prescribing the form and substance of the Bonds of Series OOO and the terms,
provisions and characteristics thereof, and for the purpose of adding to the
covenants and agreements of the Company for the protection of the bondholders
and of the trust estate, of providing the terms and conditions for the
redemption of the Bonds of Series OOO, of adding certain other covenants and
undertakings with respect to the Bonds of Series OOO and of making such changes
in the Indenture as are deemed necessary or desirable and as are permitted by
the Indenture; and

 

WHEREAS,
all conditions and requirements necessary to make this Sixty-First Supplemental
Indenture a valid, binding and legal instrument have been done, performed and
fulfilled and the execution and delivery hereof have been in all respects duly
authorized:

 

4

 

NOW,
THEREFORE, in consideration of the premises, and of the acceptance and purchase
of the Bonds of Series OOO by the holders and registered owners thereof, and of
the sum of One Dollar ($1.00) duly paid by the Trustee to the Company, the
receipt whereof is hereby acknowledged, and in accordance with and subject to
the terms and provisions of the Indenture, the Company and the Trustee,
respectively, have entered into, executed and delivered this Sixty-First
Supplemental Indenture for the uses and purposes hereinafter expressed, that is
to say:

 

ARTICLE I.

 

FIRST MORTGAGE BONDS, SERIES OOO, 4.95%, DUE OCTOBER 1, 2040

 

Section 1.  There are
hereby created a sixtieth series of bonds to be issued under and secured by the
Indenture, to be designated as “Duke Energy Indiana, Inc. First Mortgage Bonds,
Series OOO, 4.95%, Due October 1, 2040” (such series being the Bonds of Series
OOO hereinbefore referred to).

 

Section 2.  The Bonds
of Series OOO shall be issued only in the form of a separate, single,
authenticated, fully registered bond which (i) need not be in the form of a
lithographed or engraved certificate, but may be typewritten or printed on
ordinary paper or such paper as the Trustee may reasonably request, (ii) shall
represent and be denominated in a principal amount not to exceed fifty million
dollars ($50,000,000), (iii) shall be executed by the Company and authenticated
by the Trustee in accordance with the provisions of the Indenture, and (iv)
shall be registered in the name of, and delivered to, the IFA Trustee, or its permitted
assigns.

 

The
Bonds of Series OOO shall be transferable only as required to effect an
assignment thereof to a successor-in-interest of the IFA Trustee under the Loan
Agreement, provided that the Trustee shall have received notice from the
Company of such an assignment and confirmation that transfer of the Bonds of
Series OOO complies with applicable securities laws.

 

The
Bonds of Series OOO and the Trustee’s certificate to be endorsed thereon shall
be substantially in the following form:

 

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

 

5

 

(FORM OF FACE OF BOND OF SERIES OOO)

 

THE
HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO
WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET
FORTH BELOW.  IN ADDITION, THE BOND
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH
APPLICABLE SECURITIES LAWS.

 

THIS
BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TO THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., AS TRUSTEE (THE “IFA TRUSTEE”) UNDER THE TRUST INDENTURE
BETWEEN THE INDIANA FINANCE AUTHORITY AND THE IFA TRUSTEE, DATED AS OF OCTOBER
1, 2009.

 

	
  No. OOO-R-

  	
  $            

  

 

DUKE ENERGY INDIANA, INC.

FIRST MORTGAGE BOND, SERIES OOO, 4.95%

DUE OCTOBER 1, 2040

 

Duke
Energy Indiana, Inc., an Indiana corporation (hereinafter called the “Company”),
for value received, hereby promises to pay to The Bank of New York Mellon Trust
Company, N.A., as the Trustee (the “IFA Trustee”) under the Trust Indenture
between the Indiana Finance Authority (the “IFA”) and the IFA Trustee, dated as
of October 1, 2009 (the “IFA Indenture”), or its registered assigns, the
principal sum of
                                        
Dollars ($   ) on the first day of
October, 2040  and to pay interest on said sum
from the date hereof, until said principal sum is paid, at the rate of 4.95%
per annum, payable semi-annually on the first day of April and October in each
year, commencing April 1, 2010.  Both the
principal of and the interest on this bond shall be payable in any coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts at the office or agency of
the Company in Plainfield, Indiana, or, at the option of the registered owner
hereof, at the office or agency of the Company in the Borough of Manhattan, the
City of New York, State of New York, except that interest on this bond may be
paid, at the option of the Company, by check or draft mailed to the address of
the person entitled thereto as it appears on the books of the Company
maintained for that purpose.

 

REFERENCE
IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.

 

6

 

This bond shall not be valid or become obligatory
for any purpose unless and until it shall have been authenticated by the
execution by the Trustee, or its successor in trust under the Indenture, of the
certificate endorsed hereon.

 

IN WITNESS WHEREOF, Duke Energy Indiana, Inc. has
caused this bond to be executed in its name by the manual or facsimile
signature of its President or an Executive Vice President or one of its Vice
Presidents, and its corporate seal or a facsimile thereof to be hereto affixed
and attested by the manual or facsimile signature of its Secretary or one of
its Assistant Secretaries.

 

Dated
as of:

 

	
   

  	
   

  	
  DUKE
  ENERGY INDIANA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  
						

 

7

 

(FORM OF REVERSE OF BOND OF SERIES OOO)

 

This
bond is one of the bonds of the Company issued and to be issued from time to
time under and in accordance with and all secured by an indenture of mortgage
or deed of trust, dated September 1, 1939, from Public Service Company of
Indiana (predecessor of the Company) to The First National Bank of Chicago, as
Trustee, to which Deutsche Bank National Trust Company is successor trustee
(which indenture as amended by all supplemental indentures is hereinafter referred
to as the “Indenture”). Said Trustee or its successor in trust under the
Indenture is hereinafter sometimes referred to as the “Trustee.” Reference is
hereby made to the Indenture for a description of the property mortgaged and
pledged and the nature and extent of the security for said bonds. By the terms
of the Indenture, the bonds secured thereby are issuable in series which may
vary as to date, amount, dates of maturity, rate of interest and in other
respects as in the Indenture provided.

 

This bond is one of a series designated as “Duke
Energy Indiana, Inc. First Mortgage Bonds, Series OOO, 4.95%, Due October 1,
2040” (hereinafter referred to as the “Bonds of Series OOO”) of the Company
issued under and secured by the Indenture and created by a Sixty-First
Supplemental Indenture, dated as of October 1, 2009 (the “Sixty-First
Supplemental Indenture”), which also amends the Indenture.

 

This
bond evidences and secures a loan made by the IFA to the Company, pursuant to a
Loan Agreement, dated as of October 1, 2009, between the IFA and the Company
(the “Loan Agreement”). In order to obtain funds for such loan, the IFA,
contemporaneously with the issue of this bond, will issue an aggregate
principal amount of Fifty Million Dollars ($50,000,000) of its Environmental
Refunding Revenue Bonds, Series 2009C (Duke Energy Indiana, Inc. Project) (the “IFA
Bonds”) under and pursuant to the IFA Indenture. The IFA Bonds are payable from
payments made by the Company of principal of and interest on this bond and from
moneys in the bond fund created under the IFA Indenture. The obligation of the
Company to pay the principal of and interest on this bond shall be discharged
to the extent that any moneys in said bond fund are available for payments on
the IFA Bonds and are directed by the Company to be applied thereto, all as
provided in the Sixty-First Supplemental Indenture.

 

The
rights and obligations of the Company and of the bearers and registered owners
of bonds may be modified or amended with the consent of the Company by an
affirmative vote of the bearers or registered owners entitled to vote of at
least seventy-five per centum (75%) in principal amount of the bonds then
outstanding at a meeting of bondholders called for the purpose (and by an
affirmative vote of the bearers or registered owners entitled to vote of at
least seventy-five per centum (75%) in principal amount of bonds of any series
affected by such modification or amendment in case one or more, but less than
all, series of bonds are so affected), all in the manner and subject to the
limitations set forth in the Indenture, any consent by the bearer or registered
owner of any bond being conclusive and binding upon such bearer or registered
owner and upon all future bearers or registered owners of such bond, irrespective
of whether or not any notation of such consent is made on such bond; provided
that no such modification or 

 

8

 

amendment
shall, among other things, extend the maturity or reduce the amount of, or reduce
the rate of interest on, or otherwise modify the terms of the payment of the
principal of, or interest or premium (if any) on this bond, which obligations
are absolute and unconditional, or permit the creation of any lien ranking
prior to or equal with the lien of the Indenture on any of the mortgaged
property.  The Sixty-First Supplemental
Indenture provides that at any time when no bonds issued under the Indenture
prior to the issuance of the “PSI Energy, Inc. First Mortgage Bonds, Series
BBB, 8%, Due July 15, 2009” are outstanding, the Company reserves the right to
amend the Indenture, without the consent or other action by the holders of the
bonds outstanding at that time, to decrease the seventy-five per centum (75%)
vote requirement referred to above to sixty-six and two-thirds per centum
(66-2/3%).

 

The
Bonds of Series OOO are subject to redemption prior to stated maturity as
follows:

 

(A)          Optional Redemption of IFA
Bonds.  In the event that the Company
exercises its option under the Loan Agreement to direct the optional redemption
of the IFA Bonds on or after October 1, 2019, the Bonds of Series OOO shall be
subject to redemption prior to maturity, in a principal amount equal to the IFA
Bonds so redeemed and on such date as the IFA Bonds are redeemed, at a price
equal to 100% of the principal amount thereof, without premium, plus accrued
interest to the redemption date.

 

(B)           Extraordinary Optional
Redemption of IFA Bonds.  In
the event that the Company exercises its option under the Loan Agreement to
direct the extraordinary optional redemption of the IFA Bonds, the Bonds of
Series OOO shall be subject to redemption, in a principal amount equal to the
IFA Bonds so redeemed and on such date as the IFA Bonds are redeemed, at a
redemption price of 100% of the principal amount redeemed, plus accrued and
unpaid interest to the redemption date.

 

(C)           Mandatory Redemption. The Bonds of
Series OOO are subject to mandatory redemption by the Company in whole or in
part, as applicable, at a redemption price of 100% of the principal amount
redeemed, plus accrued and unpaid interest to the redemption date, upon
occurrence of any of the following events:

 

 (1)          Upon the occurrence of a
Determination of Taxability (as defined in the IFA Indenture) as to which the
IFA Trustee has been notified by the Company in writing pursuant to the Loan
Agreement, the Bonds of Series OOO are subject to mandatory redemption by the
Company, in a principal amount equal to the IFA Bonds to be redeemed in
connection therewith and on such date as the IFA Bonds are so redeemed;
provided, however, that such requirement of redemption shall be deemed waived,
if prior to the date fixed for such redemption of the Bonds of Series OOO there
shall have occurred and be continuing an event of default (as defined in the
Indenture) which affects any bond of any series outstanding under the Indenture
and which event of default has not been cured or waived prior to such
redemption date, it being the intent of such proviso that, in lieu of such
right to redemption, the holder of the Bonds of Series OOO shall be 

 

9

 

entitled
only to such rights as are available to the holders of bonds of any other
series outstanding under the Indenture in respect of any such event of default.

 

(2)           In the event that the Company is notified in writing
by the IFA Trustee that (a) an event of default under the IFA Indenture has
occurred and is continuing, and (b) the IFA Trustee has declared the principal
of all the IFA Bonds then outstanding immediately due and payable pursuant to
the IFA Indenture, the Company shall call for redemption, on a redemption date
selected by it not later than forty-five (45) days following the date on which
such notice from the IFA was received by the Company, the outstanding Bonds of
Series OOO, and shall on such redemption date redeem the same; provided,
however, that such requirement of redemption shall be deemed waived, if prior
to the date fixed for such redemption of the Bonds of Series OOO (x) such event
of default is waived or cured as set forth in the IFA Indenture, or (y) there
shall have occurred and be continuing an event of default (as defined in the
Indenture) which affects any bond of any series outstanding under the Indenture
and which event of default has not been cured or waived prior to such
redemption date, it being the intent of such proviso that, in lieu of such
right to redemption, the holder of the Bonds of Series OOO shall be entitled
only to such rights as are available to the holders of bonds of any other
series outstanding under the Indenture in respect of any such event of default;
and in case of any subsequent occurrence or continuance of the events described
in (a) and (b) of this paragraph, the Company shall have the same obligation
(subject to the same proviso) to redeem the Bonds of Series OOO.

 

To
comply with its obligations to redeem the Bonds of Series OOO in whole or in
part imposed herein, the Company shall give written notice of the date of
redemption to the Trustee and the IFA Trustee, which date shall be not less
than thirty (30) days nor more than ninety (90) days from the date the notice
is mailed.  No further notice, by
publication or otherwise, shall be required for redemption of the Bonds of
Series OOO, and the requirements of Section 2 of Article VII of the Indenture
for notice by newspaper publication shall not apply to the Bonds of Series OOO.

 

Unless
the Company defaults in payment of the redemption price, on and after any
redemption date, interest will cease to accrue on the Bonds of Series OOO or
portions thereof called for redemption.

 

In
the case of any of certain events of default specified in the Indenture, the
principal of this bond may be declared or may become due and payable prior to
the stated date of maturity hereof in the manner and with the effect provided
in the Indenture.

 

No
recourse shall be had for the payment of the principal of or interest on this
bond, or for any claim based hereon, or otherwise in respect hereof or of the
Indenture, to or against any incorporator, shareholder, officer or director,
past, present or future, of the Company or of any predecessor or successor
company, either directly or through the Company or such predecessor or
successor company, under any constitution or statute or 

 

10

 

rule
of law, or by the enforcement of any assessment or penalty, or otherwise, all
such liability of incorporators, shareholders, directors and officers being
waived and released by the registered owner hereof by the acceptance of this
bond and being likewise waived and released by the terms of the Indenture.

 

The
Bonds of Series OOO are issuable only in registered form without coupons. This
bond is nontransferable except to the IFA Trustee and successors thereto, if
any, and to the Company. To the extent that this bond is transferable, it is
transferable by the registered owner hereof, in person or by an attorney duly
authorized, at the principal office or place of business of Deutsche Bank National
Trust Company, the Trustee, or its successor in trust under the Indenture, or
at the option of the registered owner, at the office or agency of the Company
in the Borough of Manhattan, the City of New York, State of New York, upon the
surrender and cancellation of this bond, and upon any such transfer a new
registered bond or bonds of the same series and maturity date and for the same
aggregate principal amount will be issued to the transferee in exchange
herefor.

 

The Bonds of Series OOO are issuable in
denominations of $5,000 and integral multiples thereof as shall from time to
time be determined and authorized by the Board of Directors of the Company. In
the manner and subject to the limitations provided in the Indenture, Bonds of
Series OOO are exchangeable as between authorized denominations, upon
presentation thereof for such purpose by the registered owner, at the principal
office or place of business of Deutsche Bank National Trust Company, the
Trustee, or its successor in trust under the Indenture, or, at the option of
the registered owner, at the office or agency of the Company in the Borough of
Manhattan, the City of New York, State of New York.

 

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

 

(FORM OF TRUSTEE’S CERTIFICATE)

 

TRUSTEE’S CERTIFICATE

 

This bond is one of the Bonds of Series OOO
designated therein referred to and described in the within mentioned Indenture
and Sixty-First Supplemental Indenture.

 

	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST COMPANY, AS TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

11

 

Section 3.  Each Bond of
Series OOO issued prior to the first interest payment date shall be dated as of
October 1, 2009, and otherwise shall be dated as provided in Section 1 of
Article II of the Indenture.

 

Section 4.  All Bonds of
Series OOO shall be due and payable on October 1, 2040, and shall bear interest
from the date thereof at the rate of 4.95% per annum, payable semi-annually on
the first day of April and October in each year, commencing  April
1, 2010.

 

Section 5.  Both the
principal of and the interest on the Bonds of Series OOO shall be payable in any
coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts, at the office or
agency of the Company in Plainfield, Indiana, or, at the option of the holder
thereof, at the office or agency of the Company in the Borough of Manhattan,
the City of New York, State of New York, except that interest on the Bonds of
Series OOO may be paid, at the option of the Company, by check or draft mailed
to the address of the person entitled thereto as it appears on the books of the
Company maintained for that purpose.

 

Section 6.  Definitive
Bonds of Series OOO shall be issuable in denominations of $5,000 and integral
multiples thereof, numbered consecutively from “OOO-R-1” upward.

 

The
Bonds of Series OOO shall be executed on behalf of the Company by the manual or
facsimile signature of its President or an Executive Vice President or one of
its Vice Presidents and shall have affixed thereto the seal of the Company or a
facsimile thereof attested by the manual or facsimile signature of its
Secretary or one of its Assistant Secretaries and shall be authenticated by the
execution by the Trustee of the certificate endorsed on said bonds.

 

No
service charge will be made by the Company for the transfer or for the exchange
of Bonds of Series OOO except, in the case of transfer, a charge sufficient to
reimburse the Company for any tax or other governmental charge payable in
connection therewith.

 

Section 7.  Article IX
of the Indenture, “Maintenance and Renewal Fund and Sinking Fund Provisions”,
as heretofore amended or supplemented shall not apply to the “PSI Energy, Inc.
First Mortgage Bonds, Series BBB, 8%, Due July 15, 2009” (such bonds being
hereinafter referred to as the “Bonds of Series BBB”) or to any subsequently
created series of bonds (which includes the Bonds of Series OOO) from and after
the date on which no series of bonds created under the Indenture prior to the
Bonds of Series BBB are outstanding.

 

12

 

Section 8.  Section 22
of Article V of the Indenture as heretofore amended or supplemented which,
among other things, requires an inspection of the mortgaged property every two
years by an independent engineer, shall not apply to the Bonds of Series BBB or
to any subsequently created series of bonds (which includes the Bonds of Series
OOO), from and after the date on which no series of bonds created under the
Indenture prior to the Bonds of Series BBB are outstanding.

 

Section 9.  The Company
reserves the right, without consent or other action by the holders of the Bonds
of Series BBB or of any subsequently created series of bonds (which includes
the Bonds of Series OOO), to amend the Indenture, as heretofore amended or
supplemented, at any time after all bonds of any series created prior to the
Bonds of Series BBB are no longer outstanding under the Indenture, as follows:

 

(a)  by substituting for the words “in principal
amount not greater than sixty per centum (60%) of” in Section 3 of Article IV thereof
the following:

 

“in
principal amount not greater than sixty-six and two-thirds per centum (66-2/3%)
of ”.

 

(b)  by substituting for the words “shall exceed
sixty per centum (60%) of the value of bondable property so acquired” in
Section 9 of Article V thereof the following:

 

“shall
exceed sixty-six and two-thirds per centum (66-2/3%) of the value of bondable
property so acquired”.

 

(c)  by substituting for the words “shall be
deemed to be paid within the meaning of this article; provided,
that the date for the payment or redemption of such bonds shall be not more
than one (1) year after such moneys shall have been so set apart or paid.” in
the first paragraph of Article XIV thereof the following:

 

“shall
be deemed to be paid within the meaning of this article.”.

 

(d)  by substituting for the words “with the
consent of holders of at least seventy-five per centum (75%) in aggregate
principal amount of the bonds at the time outstanding;” in sub-section (a) of
Section 3 of Article XVIII thereof the following:

 

“with
the consent of holders of at least sixty-six and two-thirds per centum
(66-2/3%) in aggregate principal amount of the bonds at the time outstanding;”.

 

13

 

(e)  by substituting for the words “holders (or
persons entitled to vote the bonds) of not less than seventy-five per centum
(75%) in aggregate principal amount of the bonds entitled to be voted” in
sub-section (l) of Section 3 of Article XVIII thereof the following:

 

“holders
(or persons entitled to vote the bonds) of not less than sixty-six and
two-thirds per centum (66-2/3%) in aggregate principal amount of the bonds
entitled to be voted”.

 

(f)  by substituting for the words “holders (or
persons entitled to vote the bonds) of at least seventy-five per centum (75%)
in principal amount of the bonds outstanding” in sub-section (m) of Section 3
of Article XVIII thereof the following:

 

“holders
(or persons entitled to vote the bonds) of at least sixty-six and two-thirds
per centum (66-2/3%) in principal amount of the bonds outstanding”.

 

ARTICLE II.

 

ISSUANCE OF BONDS OF SERIES
OOO.

 

The
Bonds of Series OOO, in the aggregate principal amount not exceeding fifty
million dollars ($50,000,000), may be executed by the Company and delivered to
the Trustee for authentication, and shall be authenticated and delivered by the
Trustee to or upon the order of the Company (which authentication and delivery
may be made without awaiting the filing or recording of this Sixty-First
Supplemental Indenture), upon receipt by the Trustee of the resolutions,
certificates, orders, opinions and other instruments required by the provisions
of Section 2 of Article IV of the Indenture to be received by the Trustee as a
condition to the authentication and delivery by the Trustee of bonds pursuant
to said Section 2.

 

ARTICLE III.

 

INDENTURE AMENDMENTS.

 

Section 1.  Article I of
the Indenture, as heretofore amended, is hereby further amended (i) by adding
immediately after subdivision “(100)” thereof an additional subdivision numbered
“(101)” and reading as follows:

 

 “(101) The term ‘Sixty-First Supplemental
Indenture’ shall mean the Sixty-First Supplemental Indenture executed by the
Company and the Trustee, dated as of October 1, 2009, supplementing and
amending the Indenture; and the term ‘Bonds of Series OOO’ shall mean the ‘Duke
Energy Indiana, Inc. First Mortgage Bonds, 

 

14

 

Series
OOO, 4.95%, Due October 1, 2040’ created by the Sixty-First Supplemental
Indenture.”

 

and
(ii) by changing the numbering of the present subdivision “(101)” thereof to “(102)”.

 

Section 2.  Article VII
of the Indenture, as heretofore amended, is hereby further amended by inserting
therein immediately after Section 44 thereof, a new section designated “Section
45” and reading as follows:

 

“Section 45.

 

(A) The Bonds of Series OOO are subject to
redemption prior to stated maturity as follows:

 

(1)          Optional Redemption of IFA Bonds.  In the event that the Company exercises its
option under the Loan Agreement to direct the optional redemption of the IFA
Bonds on or after October 1, 2019, the Bonds of Series OOO shall be subject to
redemption prior to maturity, in a principal amount equal to the IFA Bonds so
redeemed and on such date as the IFA Bonds are redeemed, at a price equal to
100% of the principal amount thereof, without premium, plus accrued interest to
the redemption date.

 

(2)            Extraordinary Optional Redemption of IFA
Bonds.  In the event that the Company
exercises its option under the Loan Agreement to direct the extraordinary
optional redemption of the IFA Bonds, the Bonds of Series OOO shall be subject
to redemption, in a principal amount equal to the IFA Bonds so redeemed and on
such date as the IFA Bonds are redeemed, at a redemption price of 100% of the
principal amount redeemed, plus accrued and unpaid interest to the redemption
date.

 

(3)            Mandatory Redemption. The Bonds of
Series OOO are subject to mandatory redemption by the Company in whole or in
part, as applicable, at a redemption price of 100% of the principal amount
redeemed, plus accrued and unpaid interest to the redemption date, upon
occurrence of any of the following events:

 

 (a)         Upon the occurrence of a
Determination of Taxability (as defined in the IFA Indenture) as to which the
IFA Trustee has been notified by the Company in writing pursuant to the Loan
Agreement, the Bonds of Series OOO are subject to mandatory redemption by the
Company, in a principal amount equal to the IFA Bonds to be redeemed in
connection therewith and on such date as the IFA Bonds are so redeemed;
provided, however, that such requirement of redemption shall be deemed waived,
if prior to the date fixed for such redemption of the Bonds 

 

15

 

of Series OOO there shall have occurred and be continuing an event of
default (as defined in the Indenture) which affects any bond of any series
outstanding under the Indenture and which event of default has not been cured
or waived prior to such redemption date, it being the intent of such proviso
that, in lieu of such right to redemption, the holder of the Bonds of Series
OOO shall be entitled only to such rights as are available to the holders of
bonds of any other series outstanding under the Indenture in respect of any
such event of default.

 

(b)          In the event that the Company is notified in writing
by the IFA Trustee that (i) an event of default under the IFA Indenture has
occurred and is continuing, and (ii) the IFA Trustee has declared the principal
of all the IFA Bonds then outstanding immediately due and payable pursuant to
the IFA Indenture, the Company shall call for redemption, on a redemption date
selected by it not later than forty-five (45) days following the date on which
such notice from the IFA was received by the Company, the outstanding Bonds of
Series OOO, and shall on such redemption date redeem the same; provided,
however, that such requirement of redemption shall be deemed waived, if prior
to the date fixed for such redemption of the Bonds of Series OOO (x) such event
of default is waived or cured as set forth in the IFA Indenture, or (y) there
shall have occurred and be continuing an event of default (as defined in the
Indenture) which affects any bond of any series outstanding under the Indenture
and which event of default has not been cured or waived prior to such
redemption date, it being the intent of such proviso that, in lieu of such
right to redemption, the holder of the Bonds of Series OOO shall be entitled
only to such rights as are available to the holders of bonds of any other
series outstanding under the Indenture in respect of any such event of default;
and in case of any subsequent occurrence or continuance of the events described
in (i) and (ii) of this paragraph, the Company shall have the same obligation
(subject to the same proviso) to redeem the Bonds of Series OOO.

 

To comply with its obligations to redeem the Bonds
of Series OOO in whole or in part imposed herein, the Company shall give
written notice of the date of redemption to the Trustee and the IFA Trustee,
which date shall be not less than thirty (30) days nor more than ninety (90)
days from the date the notice is mailed. 
No further notice, by publication or otherwise, shall be required for
redemption of the Bonds of Series OOO, and the requirements of Section 2 of
Article VII of the Indenture for notice by newspaper publication shall not
apply to the Bonds of Series OOO.

 

16

 

Unless the Company defaults in payment of the
redemption price, on and after any redemption date, interest will cease to
accrue on the Bonds of Series OOO or portions thereof called for redemption.

 

(B)          Capitalized terms used in this Section 45 and not
otherwise defined in the Indenture shall have the following meanings for
purposes of this Section:

 

‘IFA’ means the Indiana Finance Authority, a body
politic and corporate, not a state agency but an independent instrumentality of
the State of Indiana, and any successor thereto.

 

‘IFA Bonds’ means the Indiana Finance Authority
Environmental Refunding Revenue Bonds, Series 2009C (Duke Energy Indiana, Inc.
Project), in an aggregate principal amount of $50,000,000, issued under and
pursuant to the IFA Indenture.

 

‘IFA Indenture’ means the Trust Indenture between
the IFA and the IFA Trustee, dated as of October 1, 2009, and any indenture
supplemental thereto or amendatory thereof, pursuant to which the IFA Bonds are
issued and secured.

 

‘IFA Trustee’ means the person, corporation or
association acting as trustee at any time under the IFA Indenture.

 

‘Loan Agreement’ means the Loan Agreement, dated as
of October 1, 2009, between the IFA and the Company, and any and all
modifications, amendments and supplements thereto.

 

(C)           The Company shall indemnify and hold harmless the
Trustee from any and all losses, costs, damages, expenses, fees (including
attorneys’ fees), court costs, judgments, penalties, obligations, suits,
disbursements and liabilities of any kind or character whatsoever which may at
any time be imposed upon, incurred by or asserted against the Trustee by reason
of or arising out of or caused, directly or indirectly by any act or omission
of the Trustee with respect to this Section 45, except for such that would
arise out of the willful misconduct or gross negligence of the Trustee and
except for costs and expenses arising in the ordinary course of the Trustee’s
business.”

 

Section 3.  The Bonds of Series OOO shall not be entitled
to the benefit of a sinking fund.

 

17

 

ARTICLE IV.

 

CONCERNING THE TRUSTEE.

 

The
Trustee hereby accepts the trusts hereby declared and agrees to perform the
same upon the terms and conditions in the Indenture and in this Sixty-First
Supplemental Indenture set forth.  The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Sixty-First Supplemental Indenture or the
due execution hereof by the Company or for or in respect of the recitals
contained herein, all of which recitals are made by the Company solely. In
general, each and every term and condition contained in Article XVII of
the Indenture shall apply to this Sixty-First Supplemental Indenture.

 

ARTICLE V.

 

MISCELLANEOUS PROVISIONS.

 

Section 1. Wherever in the original Indenture or in any
of the fifty-nine supplemental indentures thereto reference is made to any
article or section of the original Indenture, such reference shall be deemed to
refer to such article or section as amended by such supplemental indentures.

 

Section 2.  Upon
the execution and delivery hereof, the Indenture shall thereupon be deemed to
be amended as hereinabove set forth as fully and with the same effect as if the
amendments made hereby were set forth in the original Indenture and each of the
fifty-nine supplemental indentures to the Indenture shall henceforth be read,
taken and construed as one and the same instrument; but such amendments shall
not operate so as to render invalid or improper any action heretofore taken
under the original Indenture or said supplemental indentures.

 

Section 3. All the covenants, stipulations and
agreements in this Sixty-First Supplemental Indenture contained are and shall
be for the sole and exclusive benefit of the parties hereto, their successors
and assigns, and of the holders from time to time of the bonds.

 

Section 4.  The
table of contents to, and the headings of the different articles of, this
Sixty-First Supplemental Indenture are inserted for convenience of reference,
and are not to be taken to be any part of the provisions hereof, nor to control
or affect the meaning, construction or effect of the same.

 

Section 5.  This
Sixty-First Supplemental Indenture may be simultaneously executed in any number
of counterparts, and all such counterparts shall constitute but one and the
same instrument.

 

18

 

Section 6. 
Whenever a payment of principal or interest in respect of the Bonds of Series OOO
are due on any day other than a business day (as hereinafter defined), such
payment shall be payable on the first business day next following such date,
and, in the case of a principal payment, interest on such principal payment
shall accrue to the date of such principal payment. For the purposes of this Section 6
the term business day shall mean any day other than a day on which the Trustee
is authorized by law to close.

 

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

 

19

 

IN
WITNESS WHEREOF, said Duke Energy Indiana, Inc. has caused this instrument
to be executed in its corporate name by its President or one of its Vice
Presidents and to be attested by its Secretary or one of its Assistant
Secretaries and said Deutsche Bank National Trust Company has caused this
instrument to be executed in its corporate name by one of its Vice Presidents
and to be attested by one of its Vice Presidents, in several counterparts, all
as of the day and year first above written.

 

	
   

  	
   

  	
  DUKE ENERGY INDIANA, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (CORPORATE SEAL)

  	
   

  	
  By

  	
  /s/ Stephen G. De May

  
	
   

  	
   

  	
   

  	
  Stephen
  G. De May

  
	
   

  	
   

  	
   

  	
  Senior
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Robert T. Lucas III

  	
   

  	
   

  	
   

  
	
  Robert
  T. Lucas III, Assistant Secretary

  	
   

  	
   

  	
   

  

 

20

 

	
   

  	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST COMPANY, solely as Trustee and not in its individual
  capacity

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (CORPORATE SEAL)

  	
   

  	
  By

  	
  /s/ Victoria Y. Douyon

  
	
   

  	
   

  	
   

  	
  Victoria
  Y. Douyon

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  George F. Kubin

  	
   

  	
   

  	
   

  
	
  George
  F. Kubin, Vice President

  	
   

  	
   

  	
   

  

 

21

 

	
  STATE
  OF NORTH CAROLINA

  	
  )

  
	
   

  	
  )
  ss:

  
	
  COUNTY
  OF MECKLENBURG

  	
  )

  

 

BE
IT REMEMBERED, that on this 29th day of September, 2009, before me, the
undersigned, a notary public in and for the County and State aforesaid, duly
commissioned and qualified, personally appeared Stephen G. De May and
Robert T. Lucas III, personally known to me to be the same persons whose names
are subscribed to the foregoing instrument, and personally known to me to be
the Senior Vice President and Treasurer, and an Assistant Secretary,
respectively, of Duke Energy Indiana, Inc., an Indiana corporation, and
acknowledged that they signed and delivered said instrument as their free and
voluntary act as such Senior Vice President and Treasurer, and Assistant
Secretary, respectively, and as the free and voluntary act of said Duke Energy
Indiana, Inc., for the uses and purposes therein set forth; in pursuance
of the power and authority granted to them by resolution of the Board of
Directors of said Company.

 

IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my notarial seal the day and year aforesaid.

 

(NOTARIAL
SEAL)

 

 

	
   

  	
  /s/
  Phoebe P. Elliott

  
	
   

  	
  Notary Public

  
	
   

  	
  Phoebe
  P. Elliott

  
	
   

  	
  My
  Commission Expires:

  
	
   

  	
  June 26, 2011

  

 

22

 

	
  STATE
  OF ILLINOIS

  	
  )

  
	
   

  	
  )
  ss:

  
	
  COUNTY
  OF COOK

  	
  )

  

 

BE
IT REMEMBERED, that on this 30th day of September, 2009, before me, the
undersigned, a notary public in and for the County and State aforesaid, duly
commissioned and qualified, personally appeared Victoria Y. Douyon and George
F. Kubin personally known to me to be the same persons whose names are
subscribed to the foregoing instrument, and personally known to me to be Vice
Presidents of Deutsche Bank National Trust Company, a national banking
association, and acknowledged that they signed and delivered said instrument as
their free and voluntary act as such Vice Presidents, respectively, and as the
free and voluntary act of said Deutsche Bank National Trust Company, for the
uses and purposes therein set forth; in pursuance of the power and authority
granted to them by the bylaws of said association.

 

IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my notarial seal the day and year aforesaid.

 

(NOTARIAL
SEAL)

 

 

	
   

  	
  /s/
  Theresa M. Jacobson

  
	
   

  	
  Notary Public

  

 

 

This
instrument was prepared by:

 

Bradley
C. Arnett, Esq.*

Frost
Brown Todd LLC

201
E. Fifth Street, Suite 2200

Cincinnati,
Ohio  45202-4182

 

*Admitted
in Ohio; not admitted in Indiana

 

23Exhibit
4.8.17

 

 

 

 

SIXTY-THIRD SUPPLEMENTAL

INDENTURE

 

TO

 

INDENTURE DATED SEPTEMBER 1, 1939

 

 

DUKE ENERGY INDIANA, INC.

 

TO

 

DEUTSCHE BANK NATIONAL TRUST COMPANY

AS TRUSTEE

 

 

DATED AS OF SEPTEMBER 23, 2010

 

 

CREATING FIRST MORTGAGE BONDS, SERIES QQQ, 33⁄4%, DUE APRIL 1, 2022, AND
FIRST MORTGAGE BONDS, SERIES RRR, 33/8%, DUE MARCH 1, 2019

 

AND

 

OTHERWISE SUPPLEMENTING AND
AMENDING THE INDENTURE

 

 

 

 

 

TABLE OF CONTENTS

 

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  PARTIES:

  	
   

  
	
  Company (Duke Energy
  Indiana, Inc., formerly named each of PSI Energy, Inc. and Public
  Service Company of Indiana, Inc., and successor by consolidation to
  Initial Mortgagor (Public Service Company of Indiana)), and Trustee

  	
  1

  
	
   

  	
   

  
	
  RECITALS:

  	
   

  
	
  Indenture of the Initial Mortgagor, dated
  September 1, 1939, and First Supplemental Indenture thereto of the
  Initial Mortgagor, dated as of March 1, 1941

  	
  1

  
	
  Consolidation of Initial Mortgagor (and four other
  companies) into the Company

  	
  1

  
	
  Execution by Company of Second Supplemental
  Indenture to the original Indenture

  	
  1

  
	
  Company substituted for Initial Mortgagor under
  Indenture

  	
  1

  
	
  Execution by Company of Third through the
  Sixty-Second Supplemental Indentures to the original Indenture

  	
  2

  
	
  Deutsche Bank National Trust Company appointed as
  Successor Trustee

  	
  3

  
	
  Change of name of Company from Public Service
  Company of Indiana, Inc. to PSI Energy, Inc., and thereafter to Duke
  Energy Indiana, Inc.

  	
  3

  
	
  Amount of bonds presently outstanding under the
  Indenture

  	
  3

  
	
  Sixty-Third Supplemental Indenture and Bonds of
  Series QQQ and RRR authorized

  	
  4

  
	
  Conditions precedent performed

  	
  5

  
	
   

  	
   

  
	
  EXECUTING
  CLAUSE

  	
  5

  

 

i

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I.

  
	
   

  
	
  FIRST MORTGAGE BONDS,
  SERIES QQQ, 33⁄4%, DUE APRIL 1, 2022, AND FIRST MORTGAGE BONDS, SERIES RRR, 33/8%, DUE MARCH 1, 2019.

  
	
   

  
	
  Section 1.

  	
  Creation and designation of Bonds of Series QQQ and RRR

  	
  5

  
	
  Section 2.

  	
  Bonds of Series QQQ and RRR to be in registered form only

  	
  5

  
	
   

  	
  Form of
  face of Bonds of Series QQQ

  	
  7

  
	
   

  	
  Form of
  reverse of Bonds of Series QQQ

  	
  9

  
	
   

  	
  Form of
  Trustee’s certificate

  	
  12

  
	
   

  	
  Form of
  face of Bonds of Series RRR

  	
  13

  
	
   

  	
  Form of
  reverse of Bonds of Series RRR

  	
  15

  
	
   

  	
  Form of
  Trustee’s certificate

  	
  18

  
	
  Section 3.

  	
  Date
  of Bonds of Series QQQ and RRR

  	
  19

  
	
  Section 4.

  	
  Maturity
  dates and interest rates of Bonds of Series QQQ and RRR

  	
  19

  
	
  Section 5.

  	
  Place
  and manner of payment of Bonds of Series QQQ and RRR

  	
  19

  
	
  Section 6.

  	
  Denominations
  and numbering of definitive Bonds of Series QQQ and RRR

  	
  19

  
	
  Section 7

  	
  Maintenance
  and Renewal Fund shall not apply to Bonds of Series QQQ and RRR

  	
  19

  
	
  Section 8.

  	
  Inspection
  requirements shall not apply to Bonds of Series QQQ and RRR

  	
  20

  
	
  Section 9.

  	
  Company’s
  right to further amend the original Indenture

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  
	
   

  	
   

  	
   

  
	
  ISSUANCE OF BONDS OF
  SERIES QQQ AND RRR.

  
	
   

  	
   

  	
   

  
	
  Aggregate
  principal amount of Bonds of Series QQQ and RRR issuable at once

  	
  21

  
	
   

  	
   

  
	
  ARTICLE III.

  
	
   

  
	
  INDENTURE
  AMENDMENTS.

  
	
   

  
	
  Section 1.

  	
  Amendments
  to Article I of the original Indenture

  	
  21

  
	
  Section 2.

  	
  Amendments
  to Article VII of the original Indenture

  	
  22

  
	
  Section 3.

  	
  No
  sinking fund for Bonds of Series QQQ and RRR

  	
  27

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE IV.

  
	
   

  
	
  CONCERNING
  THE TRUSTEE.

  
	
   

  
	
  Acceptance of trust by Trustee

  	
  27

  
	
  Trustee not responsible for validity or
  sufficiency of Sixty-Third Supplemental Indenture, etc.

  	
  27

  
	
  Terms and conditions of Article XVII of the
  original Indenture to be applied to the Sixty-Third Supplemental Indenture

  	
  27

  
	
   

  	
   

  
	
  ARTICLE V.

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS
  PROVISIONS.

  
	
   

  	
   

  	
   

  
	
  Section 1.
  

  	
  References in any article or section of the
  original Indenture refer to such article or section as amended by all
  Sixty-Three Supplemental Indentures thereto

  	
  27

  
	
  Section 2.

  	
  Operation and construction of amendments to the
  original Indenture

  	
  27

  
	
  Section 3.

  	
  All covenants, etc., for sole benefit of
  parties to the Sixty-Third Supplemental Indenture and holders of bonds

  	
  28

  
	
  Section 4.

  	
  Table of contents and headings of articles not
  part of Sixty-Third Supplemental Indenture

  	
  28

  
	
  Section 5.

  	
  Execution of Sixty-Third Supplemental Indenture in
  counterparts

  	
  28

  
	
  Section 6.

  	
  Payments Due on Legal Holidays

  	
  28

  
	
   

  	
   

  	
   

  
	
  ATTESTATION CLAUSE

  	
  29

  
	
  SIGNATURES

  	
  29

  
	
  ACKNOWLEDGMENT BY COMPANY

  	
  31

  
	
  ACKNOWLEDGMENT BY TRUSTEE

  	
  32

  
				

 

iii

 

SIXTY-THIRD
SUPPLEMENTAL INDENTURE dated as of the 23rd day of September, 2010, made and
entered into by and between DUKE ENERGY INDIANA, INC. (hereinafter
commonly referred to as the “Company”), a corporation organized and existing
under the laws of the State of Indiana, formerly named each of PSI Energy, Inc.
and Public Service Company of Indiana, Inc., and the successor by
consolidation to Public Service Company of Indiana, an Indiana corporation,
party of the first part, and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national
banking association organized and existing under the laws of the United States
and having its office or place of business in the City of Chicago, State of
Illinois, successor trustee to Bank of America, N.A., as successor by merger to
LaSalle Bank National Association, which was the successor trustee to The First
National Bank of Chicago (hereinafter commonly referred to as the “Trustee”),
party of the second part,

 

WITNESSETH:

 

WHEREAS,
Public Service Company of Indiana (hereinafter commonly referred to as the “Initial
Mortgagor”), prior to its consolidation with certain other corporations to form
the Company, executed and delivered to the Trustee a certain indenture of
mortgage or deed of trust (hereinafter called the “original Indenture” when
referred to as existing prior to any amendment thereto, and the “Indenture”
when referred to as heretofore, now or hereafter amended), dated September 1,
1939, and a First Supplemental Indenture thereto, dated as of March 1,
1941, to secure the bonds of the Initial Mortgagor, its successors and assigns,
issued from time to time under the Indenture in series for the purposes of and
subject to the limitations specified in the Indenture; and

 

WHEREAS,
the Company on September 6, 1941, became, through a consolidation, the
successor of the Initial Mortgagor (and four other companies) and succeeded to
all the rights and became liable for all the obligations of the Initial
Mortgagor (and such other companies); and

 

WHEREAS,
after said consolidation, the Company executed and delivered a Second
Supplemental Indenture, dated as of November 1, 1941, to the original
Indenture for the purposes, among others, of (i) the making by the Company
of an agreement of assumption and adoption by it of the Indenture, (ii) the
assumption by the Company of the bonds (and interest and premium, if any, thereon)
issued or to be issued under the Indenture, and of all terms, covenants and
conditions binding upon it under the Indenture, and the agreeing by the Company
to pay, perform and fulfill the same, and (iii) the conveying to the
Trustee upon the trusts declared in the Indenture, but subject to any
outstanding liens and encumbrances, all the property which the Company then
owned or which it might thereafter acquire, except property of a character
similar to the property of the Initial Mortgagor which is excluded from the
lien of the Indenture; and

 

WHEREAS,
all conditions have been met and all acts and things necessary have been done
and performed to make the Indenture the valid and binding agreement of the
Company and to substitute the Company for the Initial Mortgagor under the
Indenture, and to vest the Company with each and every right and power of the
Initial Mortgagor, including the right and power to issue bonds thereunder; and

 

1

 

WHEREAS,
the Company has subsequently executed and delivered, for purposes authorized
under the Indenture, a Third Supplemental Indenture dated as of March 1,
1942, a Fourth Supplemental Indenture dated as of May 1, 1943, a Fifth
Supplemental Indenture dated as of August 1, 1944, a Sixth Supplemental
Indenture dated as of September 1, 1945, a Seventh Supplemental Indenture
dated as of November 1, 1947, an Eighth Supplemental Indenture dated as of
January 1, 1949, a Ninth Supplemental Indenture dated as of May 1,
1950, a Tenth Supplemental Indenture dated as of July 1, 1952, an Eleventh
Supplemental Indenture dated as of January 1, 1954, a Twelfth Supplemental
Indenture dated as of October 1, 1957, a Thirteenth Supplemental Indenture
dated as of February 1, 1959, a Fourteenth Supplemental Indenture dated as
of July 15, 1960, a Fifteenth Supplemental Indenture dated as of June 15,
1964, a Sixteenth Supplemental Indenture dated as of January 1, 1969, a
Seventeenth Supplemental Indenture dated as of March 1, 1970, an
Eighteenth Supplemental Indenture dated as of January 1, 1971, a
Nineteenth Supplemental Indenture dated as of January 1, 1972, a Twentieth
Supplemental Indenture dated as of February 1, 1974, a Twenty-First
Supplemental Indenture dated as of August 1, 1974, a Twenty-Second
Supplemental Indenture dated as of August 1, 1975, a Twenty-Third
Supplemental Indenture dated as of January 1, 1977, a Twenty-Fourth
Supplemental Indenture dated as of October 1, 1977, a Twenty-Fifth
Supplemental Indenture dated as of September 1, 1978, a Twenty-Sixth
Supplemental Indenture dated as of September 1, 1978, a Twenty-Seventh
Supplemental Indenture dated as of March 1, 1979, a Twenty-Eighth
Supplemental Indenture dated as of May 1, 1979, a Twenty-Ninth
Supplemental Indenture dated as of March 1, 1980, a Thirtieth Supplemental
Indenture dated as of August 1, 1980, a Thirty-First Supplemental
Indenture dated as of February 1, 1981, a Thirty-Second Supplemental
Indenture dated as of August 1, 1981, a Thirty-Third Supplemental
Indenture dated as of December 1, 1981, a Thirty-Fourth Supplemental
Indenture dated as of December 1, 1982, a Thirty-Fifth Supplemental
Indenture dated as of March 30, 1984, a Thirty-Sixth Supplemental
Indenture dated as of November 15, 1984, a Thirty-Seventh Supplemental Indenture
dated as of August 15, 1985, a Thirty-Eighth Supplemental Indenture dated
as of October 1, 1986, a Thirty-Ninth Supplemental Indenture dated as of March 15,
1987, a Fortieth Supplemental Indenture dated as of June 1, 1987, a
Forty-First Supplemental Indenture dated as of June 15, 1988, a
Forty-Second Supplemental Indenture dated as of August 1, 1988, a
Forty-Third Supplemental Indenture dated as of September 15, 1989, a
Forty-Fourth Supplemental Indenture dated as of March 15, 1990, a
Forty-Fifth Supplemental Indenture dated as of March 15, 1990, a
Forty-Sixth Supplemental Indenture dated as of June 1, 1990, a
Forty-Seventh Supplemental Indenture dated as of July 15, 1991, a
Forty-Eighth Supplemental Indenture dated as of July 15, 1992, a Forty-Ninth
Supplemental Indenture dated as of February 15, 1993, a Fiftieth
Supplemental Indenture dated as of February 15, 1993, a Fifty-First
Supplemental Indenture dated as of February 1, 1994, a Fifty-Second
Supplemental Indenture dated as of April 30, 1999, a Fifty-Third
Supplemental Indenture dated as of June 15, 2001, a Fifty-Fourth
Supplemental Indenture dated as of September 1, 2002, a Fifty-Fifth
Supplemental Indenture dated as of February 15, 2003, a Fifty-Sixth
Supplemental Indenture dated as of December 1, 2004, a Fifty-Seventh
Supplemental Indenture dated as of August 21, 2008, a Fifty-Eighth
Supplemental Indenture dated as of December 19, 2008, a Fifty-Ninth
Supplemental Indenture dated as

 

2

 

of
March 23, 2009, a Sixtieth Supplemental Indenture dated as of June 1,
2009, a Sixty-First Supplemental Indenture dated as of October 1, 2009,
and a Sixty-Second Supplemental Indenture dated as of July 9, 2010, each
supplementing and amending the Indenture; and

 

WHEREAS,
the Thirty-Fifth Supplemental Indenture authorized and appointed LaSalle Bank
National Association, a national banking association duly organized and
existing under the law of the United States of America with its principal
office in Chicago, Illinois and formerly named LaSalle National Bank, as
Successor Trustee to The First National Bank of Chicago, which appointment was
accepted, and all trust powers under the Indenture were thereby transferred
from The First National Bank of Chicago to LaSalle Bank National Association;
and

 

WHEREAS,
by an Instrument of Resignation, Appointment and Acceptance dated as of December 15,
2008, Bank of America, N.A., as successor by merger to LaSalle Bank National
Association, resigned as trustee and the Company appointed the Trustee as
Successor Trustee thereto, which appointment was thereby accepted by the
Trustee effective as of that date, and all trust powers were thereby
transferred from Bank of America, N.A. to the Trustee; and

 

WHEREAS, the Forty-Sixth Supplemental Indenture
amended the Indenture to reflect a change in the name of the Company from
Public Service Company of Indiana, Inc. to PSI Energy, Inc. effective
as of April 20, 1990, and the Fifty-Seventh Supplemental Indenture amended
the Indenture to reflect a change in the name of the Company from PSI Energy, Inc.
to Duke Energy Indiana, Inc., effective as of October 1, 2006; and

 

WHEREAS, as of September 23, 2010, the only bonds that have been
heretofore issued under the Indenture which are now outstanding are $7,500,000
aggregate principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series VV,
Due July 15, 2026” and $28,000,000 aggregate principal amount of “PSI
Energy, Inc. First Mortgage Bonds, Series WW, Due August 15,
2027” and $53,055,000 aggregate principal amount of “PSI Energy, Inc.
First Mortgage Bonds, Series CCC, 8.85%, Due January 15, 2022” and
$38,000,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series DDD, 8.31%, Due September 1, 2032” and $24,600,000
aggregate principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series GGG,
Due March 1, 2019” and $35,000,000 aggregate principal amount of “PSI
Energy, Inc. First Mortgage Bonds, Series HHH, Due April 1, 2022”
and $500,000,000 aggregate principal amount of “Duke Energy Indiana, Inc.
First Mortgage Bonds, Series LLL, 6.35%, Due August 15, 2038” and
$48,395,000 aggregate principal amount of “Duke Energy Indiana, Inc. First
Mortgage Bonds, 2005A Pledge Series,  Due July 1,
2035” and $450,000,000 aggregate principal amount of “Duke Energy Indiana, Inc.
First Mortgage Bonds, Series MMM, 6.45%, Due April 1, 2039” and
$55,000,000 aggregate principal amount of “Duke Energy Indiana, Inc. First
Mortgage Bonds, Series NNN, 6%, Due August 1, 2039” and $50,000,000
aggregate principal amount of “Duke Energy Indiana, Inc. First Mortgage
Bonds, Series OOO, 4.95%, Due October 1, 2040” and $500,000,000
aggregate principal 

 

3

 

amount
of “Duke Energy Indiana, Inc. First Mortgage Bonds, Series PPP,
3.75%, Due July 15, 2020”; and

 

WHEREAS,
the Indiana Finance Authority (the “IFA”) intends to issue its (i) Environmental
Refunding Revenue Bonds, Series 2010A-1 (Duke Energy Indiana, Inc.
Project), in the aggregate principal amount of $10,000,000 (the “Series A-1
IFA Bonds”), under and pursuant to a Trust Indenture, dated as of September 1,
2010, between the IFA and The Bank of New York Mellon Trust Company, N.A., as
Trustee (the “IFA Trustee”) and (ii) Environmental Refunding Revenue Bonds,
Series 2010A-2 (Duke Energy Indiana, Inc. Project), in the aggregate
principal amount of $59,600,000 (the “Series A-2 IFA Bonds” and together
with the Series A-1 IFA Bonds, the “IFA Bonds”), under and pursuant to a
Trust Indenture, dated as of September 1, 2010, between the IFA and the
IFA Trustee;

 

WHEREAS,
the IFA will loan the proceeds derived from the sale of the IFA Bonds to the
Company pursuant to two separate, but substantially identical, Loan Agreements
dated as of September 1, 2010 (each a “Loan Agreement”), between the
Company and the IFA, in order to permit the refunding of (i) the Indiana
Development Finance Authority Environmental Refunding Revenue Bonds, Series 2000B
(PSI Energy, Inc. Project), in the aggregate principal amount of $10,000,000,
(ii) the Indiana Development Finance Authority Environmental Refunding
Revenue Bonds, Series 2003 (PSI Energy, Inc. Project), in the
aggregate principal amount of $35,000,000, and (iii) the Indiana
Development Finance Authority Environmental Refunding Revenue Bonds, Series 2002B
(PSI Energy, Inc. Project), in the aggregate principal amount of
$24,600,000; and

 

WHEREAS,
the Company has agreed to deliver to the IFA a series of its first mortgage
bonds in order to evidence and secure its indebtedness under each Loan
Agreement and the IFA has agreed to absolutely and irrevocably assign its
interest in such first mortgage bonds to, and cause the same to be registered
in the name of, the IFA Trustee, as security for each issue of the IFA Bonds;
and

 

WHEREAS,
in accordance with the provisions of Section 1 of Article XVIII of
the Indenture, the Board of Directors has authorized the execution and delivery
by the Company of a Sixty-Third Supplemental Indenture, substantially in the
form of this Sixty-Third Supplemental Indenture, for the purpose of creating a
sixty-second and a sixty-third series of bonds to be issued under the
Indenture, to be known, respectively, as “Duke Energy Indiana, Inc. First
Mortgage Bonds, Series QQQ, 33⁄4%, Due April 1, 2022” (such bonds being
hereinafter referred to as the “Bonds of Series QQQ”) and “Duke Energy
Indiana, Inc. First Mortgage Bonds, Series RRR, 33/8%, Due March 1, 2019” (such bonds being
hereinafter referred to as the “Bonds of Series RRR” and, together with
the Bonds of Series QQQ, the “Bonds of Series QQQ and RRR”), and
prescribing the form and substance of the Bonds of Series QQQ and RRR and
the terms, provisions and characteristics thereof, and for the purpose of
adding to the covenants and agreements of the Company for the protection of the
bondholders and of the trust estate, of providing the terms and conditions for
the redemption of the Bonds of Series QQQ and RRR, of adding certain other
covenants and undertakings with respect to the Bonds of 

 

4

 

Series QQQ
and RRR and of making such changes in the Indenture as are deemed necessary or
desirable and as are permitted by the Indenture; and

 

WHEREAS,
all conditions and requirements necessary to make this Sixty-Third Supplemental
Indenture a valid, binding and legal instrument have been done, performed and
fulfilled and the execution and delivery hereof have been in all respects duly
authorized:

 

NOW,
THEREFORE, in consideration of the premises, and of the acceptance and purchase
of the Bonds of Series QQQ and RRR by the holders and registered owners
thereof, and of the sum of One Dollar ($1.00) duly paid by the Trustee to the
Company, the receipt whereof is hereby acknowledged, and in accordance with and
subject to the terms and provisions of the Indenture, the Company and the
Trustee, respectively, have entered into, executed and delivered this
Sixty-Third Supplemental Indenture for the uses and purposes hereinafter
expressed, that is to say:

 

ARTICLE I.

 

FIRST MORTGAGE BONDS, SERIES QQQ, 33⁄4%, DUE APRIL 1, 2022, AND FIRST
MORTGAGE BONDS, SERIES RRR, 33/8%, DUE MARCH 1,
2019

 

Section 1. 
There are hereby created a sixty-second and a sixty third series of
bonds to be issued under and secured by the Indenture, to be designated as “Duke
Energy Indiana, Inc. First Mortgage Bonds, Series QQQ, 33⁄4%, Due April 1,
2022” and “Duke Energy Indiana, Inc. First Mortgage Bonds, Series RRR,
33/8%, Due March 1, 2019,”
respectively (such series being the Bonds of Series QQQ and the Bonds of Series RRR
hereinbefore referred to).

 

Section 2.  The
Bonds of Series QQQ and the Bonds of Series RRR shall each be issued
only in the form of a separate, single, authenticated, fully registered bond
which (i) need not be in the form of a lithographed or engraved
certificate, but may be typewritten or printed on ordinary paper or such paper
as the Trustee may reasonably request, (ii) with respect to the Bonds of Series QQQ,
shall represent and be denominated in a principal amount not to exceed ten
million dollars ($10,000,000) and, with respect to the Bonds of Series RRR,
shall represent and be denominated in a principal amount not to exceed
fifty-nine million six hundred thousand dollars ($59,600,000), (iii) shall
be executed by the Company and authenticated by the Trustee in accordance with
the provisions of the Indenture, and (iv) shall be registered in the name
of, and delivered to, the IFA Trustee, or its permitted assigns.

 

The
Bonds of Series QQQ and RRR shall be transferable only as required to
effect an assignment thereof to a successor-in-interest of the IFA Trustee
under the applicable Loan Agreement, provided that the Trustee shall have
received notice from the Company of such an assignment and confirmation that
transfer of the Bonds of Series QQQ and RRR, as the case may be, complies
with applicable securities laws.

 

5

 

The
Bonds of Series QQQ and the Bonds of Series RRR and the Trustee’s
certificate of each such series to be endorsed thereon shall be substantially
in the following respective forms:

 

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

 

6

 

(FORM OF FACE OF BOND OF SERIES QQQ)

 

THE
HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO
WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET
FORTH BELOW.  IN ADDITION, THE BOND
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH
APPLICABLE SECURITIES LAWS.

 

THIS
BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TO THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., AS TRUSTEE (THE “IFA TRUSTEE”) UNDER THE TRUST INDENTURE
BETWEEN THE INDIANA FINANCE AUTHORITY AND THE IFA TRUSTEE, DATED AS OF
SEPTEMBER 1, 2010.

 

	
  No. QQQ-R-

  	
  $          

  

 

DUKE ENERGY INDIANA, INC.

FIRST MORTGAGE BOND, SERIES QQQ,

DUE APRIL 1, 2022

 

Duke
Energy Indiana, Inc., an Indiana corporation (hereinafter called the “Company”),
for value received, hereby promises to pay to The Bank of New York Mellon Trust
Company, N.A., as the Trustee (the “IFA Trustee”) under the Trust Indenture
between the Indiana Finance Authority (the “IFA”) and the IFA Trustee, dated as
of September 1, 2010 (the “IFA Indenture”), or its registered assigns, the
principal sum of
                                        
Dollars ($   ) on the first day of April,
2022  and to pay interest on said sum from
the date hereof, until said principal sum is paid, at the rate of 33⁄4% per
annum, payable semi-annually on the first day of April and October in each
year, commencing April 1, 2011.  Both the
principal of and the interest on this bond shall be payable in any coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts at the office or agency of
the Company in Plainfield, Indiana, or, at the option of the registered owner
hereof, at the office or agency of the Company in the Borough of Manhattan, the
City of New York, State of New York, except that interest on this bond may be
paid, at the option of the Company, by check or draft mailed to the address of
the person entitled thereto as it appears on the books of the Company
maintained for that purpose.

 

REFERENCE
IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.

 

7

 

This bond shall not be valid or become obligatory
for any purpose unless and until it shall have been authenticated by the
execution by the Trustee, or its successor in trust under the Indenture, of the
certificate endorsed hereon.

 

IN WITNESS WHEREOF, Duke Energy Indiana, Inc. has
caused this bond to be executed in its name by the manual or facsimile
signature of its President or an Executive Vice President or one of its Vice
Presidents, and its corporate seal or a facsimile thereof to be hereto affixed
and attested by the manual or facsimile signature of its Secretary or one of
its Assistant Secretaries.

 

Dated
as of:

 

	
   

  	
   

  	
  DUKE
  ENERGY INDIANA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  

 

8

 

(FORM OF REVERSE OF BOND OF SERIES QQQ)

 

This
bond is one of the bonds of the Company issued and to be issued from time to
time under and in accordance with and all secured by an indenture of mortgage
or deed of trust, dated September 1, 1939, from Public Service Company of
Indiana (predecessor of the Company) to The First National Bank of Chicago, as
Trustee, to which Deutsche Bank National Trust Company is successor trustee
(which indenture as amended by all supplemental indentures is hereinafter
referred to as the “Indenture”). Said Trustee or its successor in trust under
the Indenture is hereinafter sometimes referred to as the “Trustee.” Reference
is hereby made to the Indenture for a description of the property mortgaged and
pledged and the nature and extent of the security for said bonds. By the terms
of the Indenture, the bonds secured thereby are issuable in series which may
vary as to date, amount, dates of maturity, rate of interest and in other
respects as in the Indenture provided.

 

This bond is one of a series designated as “Duke
Energy Indiana, Inc. First Mortgage Bonds, Series QQQ, 33⁄4%, Due April 1, 2022”
(hereinafter referred to as the “Bonds of Series QQQ”) of the Company issued
under and secured by the Indenture and created by a Sixty-Third Supplemental
Indenture, dated as of September 23, 2010 (the “Sixty-Third Supplemental
Indenture”), which also amends the Indenture.

 

This
bond evidences and secures a loan made by the IFA to the Company, pursuant to a
Loan Agreement, dated as of September 1, 2010, between the IFA and the Company
(the “Loan Agreement”). In order to obtain funds for such loan, the IFA,
contemporaneously with the issue of this bond, will issue an aggregate
principal amount of Ten Million Dollars ($10,000,000) of its Environmental
Refunding Revenue Bonds, Series 2010A-1 (Duke Energy Indiana, Inc. Project)
(the “IFA Bonds”) under and pursuant to the IFA Indenture. The IFA Bonds are
payable from payments made by the Company of principal of and interest on this
bond and from moneys in the bond fund created under the IFA Indenture. The
obligation of the Company to pay the principal of and interest on this bond shall
be discharged to the extent that any moneys in said bond fund are available for
payments on the IFA Bonds and are directed by the Company to be applied
thereto, all as provided in the Sixty-Third Supplemental Indenture.

 

The
rights and obligations of the Company and of the bearers and registered owners
of bonds may be modified or amended with the consent of the Company by an
affirmative vote of the bearers or registered owners entitled to vote of at
least seventy-five per centum (75%) in principal amount of the bonds then
outstanding at a meeting of bondholders called for the purpose (and by an
affirmative vote of the bearers or registered owners entitled to vote of at
least seventy-five per centum (75%) in principal amount of bonds of any series
affected by such modification or amendment in case one or more, but less than
all, series of bonds are so affected), all in the manner and subject to the
limitations set forth in the Indenture, any consent by the bearer or registered
owner of any bond being conclusive and binding upon such bearer or registered
owner and upon all future bearers or registered owners of such bond,
irrespective of whether or not any notation of such consent is made on such
bond; provided that no such modification or 

 

9

 

amendment
shall, among other things, extend the maturity or reduce the amount of, or
reduce the rate of interest on, or otherwise modify the terms of the payment of
the principal of, or interest or premium (if any) on this bond, which
obligations are absolute and unconditional, or permit the creation of any lien
ranking prior to or equal with the lien of the Indenture on any of the
mortgaged property.  The Sixty-Third
Supplemental Indenture provides that at any time when no bonds issued under the
Indenture prior to the issuance of the “PSI Energy, Inc. First Mortgage Bonds,
Series BBB, 8%, Due July 15, 2009” are outstanding, the Company reserves the
right to amend the Indenture, without the consent or other action by the holders
of the bonds outstanding at that time, to decrease the seventy-five per centum
(75%) vote requirement referred to above to sixty-six and two-thirds per centum
(66-2/3%).

 

The
Bonds of Series QQQ are subject to redemption prior to stated maturity as follows:

 

(A)          Optional Redemption of IFA Bonds.  In the event that the Company exercises its
option under the Loan Agreement to direct the optional redemption of the IFA
Bonds on or after October 1, 2020, the Bonds of Series QQQ shall be subject to
redemption prior to maturity, in a principal amount equal to the IFA Bonds so
redeemed and on such date as the IFA Bonds are redeemed, at a price equal to
100% of the principal amount thereof, without premium, plus accrued interest to
the redemption date.

 

(B)           Extraordinary Optional Redemption
of IFA Bonds.  In the event that the
Company exercises its option under the Loan Agreement to direct the
extraordinary optional redemption of the IFA Bonds, the Bonds of Series QQQ
shall be subject to redemption, in a principal amount equal to the IFA Bonds so
redeemed and on such date as the IFA Bonds are redeemed, at a redemption price
of 100% of the principal amount redeemed, plus accrued and unpaid interest to
the redemption date.

 

(C)           Mandatory Redemption. The
Bonds of Series QQQ are subject to mandatory redemption by the Company in whole
or in part, as applicable, at a redemption price of 100% of the principal
amount redeemed, plus accrued and unpaid interest to the redemption date, upon
occurrence of any of the following events:

 

 (1)          Upon the occurrence of a Determination
of Taxability (as defined in the IFA Indenture) as to which the IFA Trustee has
been notified by the Company in writing pursuant to the Loan Agreement, the
Bonds of Series QQQ are subject to mandatory redemption by the Company, in a
principal amount equal to the IFA Bonds to be redeemed in connection therewith
and on such date as the IFA Bonds are so redeemed; provided, however, that such
requirement of redemption shall be deemed waived, if prior to the date fixed
for such redemption of the Bonds of Series QQQ there shall have occurred and be
continuing an event of default (as defined in the Indenture) which affects any
bond of any series outstanding under the Indenture and which event of default
has not been cured or waived prior to such redemption date, it being the intent
of such proviso that, in lieu of such right to redemption, the holder of the
Bonds of Series QQQ shall be 

 

10

 

entitled
only to such rights as are available to the holders of bonds of any other
series outstanding under the Indenture in respect of any such event of default.

 

(2)           In
the event that the Company is notified in writing by the IFA Trustee that (a)
an event of default under the IFA Indenture has occurred and is continuing, and
(b) the IFA Trustee has declared the principal of all the IFA Bonds then
outstanding immediately due and payable pursuant to the IFA Indenture, the
Company shall call for redemption, on a redemption date selected by it not
later than forty-five (45) days following the date on which such notice from
the IFA was received by the Company, the outstanding Bonds of Series QQQ, and
shall on such redemption date redeem the same; provided, however, that such
requirement of redemption shall be deemed waived, if prior to the date fixed
for such redemption of the Bonds of Series QQQ (x) such event of default is
waived or cured as set forth in the IFA Indenture, or (y) there shall have
occurred and be continuing an event of default (as defined in the Indenture)
which affects any bond of any series outstanding under the Indenture and which
event of default has not been cured or waived prior to such redemption date, it
being the intent of such proviso that, in lieu of such right to redemption, the
holder of the Bonds of Series QQQ shall be entitled only to such rights as are
available to the holders of bonds of any other series outstanding under the
Indenture in respect of any such event of default; and in case of any subsequent
occurrence or continuance of the events described in (a) and (b) of this
paragraph, the Company shall have the same obligation (subject to the same
proviso) to redeem the Bonds of Series QQQ.

 

To
comply with its obligations to redeem the Bonds of Series QQQ in whole or in
part imposed herein, the Company shall give written notice of the date of
redemption to the Trustee and the IFA Trustee, which date shall be not less
than thirty (30) days nor more than ninety (90) days from the date the notice
is mailed.  No further notice, by
publication or otherwise, shall be required for redemption of the Bonds of
Series QQQ, and the requirements of Section 2 of Article VII of the Indenture
for notice by newspaper publication shall not apply to the Bonds of Series QQQ.

 

Unless
the Company defaults in payment of the redemption price, on and after any
redemption date, interest will cease to accrue on the Bonds of Series QQQ or
portions thereof called for redemption.

 

In
the case of any of certain events of default specified in the Indenture, the
principal of this bond may be declared or may become due and payable prior to
the stated date of maturity hereof in the manner and with the effect provided
in the Indenture.

 

No
recourse shall be had for the payment of the principal of or interest on this
bond, or for any claim based hereon, or otherwise in respect hereof or of the
Indenture, to or against any incorporator, shareholder, officer or director,
past, present or future, of the Company or of any predecessor or successor company,
either directly or through the Company or such predecessor or successor
company, under any constitution or statute or 

 

11

 

rule
of law, or by the enforcement of any assessment or penalty, or otherwise, all
such liability of incorporators, shareholders, directors and officers being
waived and released by the registered owner hereof by the acceptance of this
bond and being likewise waived and released by the terms of the Indenture.

 

The
Bonds of Series QQQ are issuable only in registered form without coupons. This
bond is nontransferable except to the IFA Trustee and successors thereto, if
any, and to the Company. To the extent that this bond is transferable, it is
transferable by the registered owner hereof, in person or by an attorney duly
authorized, at the principal office or place of business of Deutsche Bank
National Trust Company, the Trustee, or its successor in trust under the
Indenture, or at the option of the registered owner, at the office or agency of
the Company in the Borough of Manhattan, the City of New York, State of New
York, upon the surrender and cancellation of this bond, and upon any such
transfer a new registered bond or bonds of the same series and maturity date
and for the same aggregate principal amount will be issued to the transferee in
exchange herefor.

 

The Bonds of Series QQQ are issuable in
denominations of $5,000 and integral multiples thereof as shall from time to
time be determined and authorized by the Board of Directors of the Company. In
the manner and subject to the limitations provided in the Indenture, Bonds of
Series QQQ are exchangeable as between authorized denominations, upon
presentation thereof for such purpose by the registered owner, at the principal
office or place of business of Deutsche Bank National Trust Company, the
Trustee, or its successor in trust under the Indenture, or, at the option of
the registered owner, at the office or agency of the Company in the Borough of
Manhattan, the City of New York, State of New York.

 

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

 

(FORM OF TRUSTEE’S CERTIFICATE)

 

TRUSTEE’S CERTIFICATE

 

This bond is one of the Bonds of Series QQQ
designated therein referred to and described in the within mentioned Indenture
and Sixty-Third Supplemental Indenture.

 

	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST COMPANY,   AS
  TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

12

 

(FORM OF FACE OF BOND OF SERIES RRR)

 

THE
HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO
WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET
FORTH BELOW.  IN ADDITION, THE BOND
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH
APPLICABLE SECURITIES LAWS.

 

THIS
BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TO THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., AS TRUSTEE (THE “IFA TRUSTEE”) UNDER THE TRUST INDENTURE
BETWEEN THE INDIANA FINANCE AUTHORITY AND THE IFA TRUSTEE, DATED AS OF
SEPTEMBER 1, 2010.

 

	
  No. RRR-R-

  	
  $           

  

 

DUKE ENERGY INDIANA, INC.

FIRST MORTGAGE BOND, SERIES RRR,

DUE MARCH 1, 2019

 

Duke
Energy Indiana, Inc., an Indiana corporation (hereinafter called the “Company”),
for value received, hereby promises to pay to The Bank of New York Mellon Trust
Company, N.A., as the Trustee (the “IFA Trustee”) under the Trust Indenture
between the Indiana Finance Authority (the “IFA”) and the IFA Trustee, dated as
of September 1, 2010 (the “IFA Indenture”), or its registered assigns, the
principal sum of
                                        
Dollars ($   ) on the first day of March,
2019  and to pay interest on said sum from
the date hereof, until said principal sum is paid, at the rate of 33/8% per annum, payable semi-annually on the first day
of March and September in each year, commencing March 1, 2011.  Both the principal of and the interest on
this bond shall be payable in any coin or currency of the United States of
America which at the time of payment is legal tender for the payment of public
and private debts at the office or agency of the Company in Plainfield,
Indiana, or, at the option of the registered owner hereof, at the office or
agency of the Company in the Borough of Manhattan, the City of New York, State
of New York, except that interest on this bond may be paid, at the option of
the Company, by check or draft mailed to the address of the person entitled
thereto as it appears on the books of the Company maintained for that purpose.

 

REFERENCE
IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.

 

13

 

This bond shall not be valid or become obligatory
for any purpose unless and until it shall have been authenticated by the
execution by the Trustee, or its successor in trust under the Indenture, of the
certificate endorsed hereon.

 

IN WITNESS WHEREOF, Duke Energy Indiana, Inc. has
caused this bond to be executed in its name by the manual or facsimile
signature of its President or an Executive Vice President or one of its Vice
Presidents, and its corporate seal or a facsimile thereof to be hereto affixed
and attested by the manual or facsimile signature of its Secretary or one of
its Assistant Secretaries.

 

Dated
as of:

 

 

	
   

  	
   

  	
  DUKE
  ENERGY INDIANA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  

 

14

 

(FORM OF REVERSE OF BOND OF SERIES RRR)

 

This
bond is one of the bonds of the Company issued and to be issued from time to
time under and in accordance with and all secured by an indenture of mortgage
or deed of trust, dated September 1, 1939, from Public Service Company of
Indiana (predecessor of the Company) to The First National Bank of Chicago, as
Trustee, to which Deutsche Bank National Trust Company is successor trustee
(which indenture as amended by all supplemental indentures is hereinafter
referred to as the “Indenture”). Said Trustee or its successor in trust under
the Indenture is hereinafter sometimes referred to as the “Trustee.” Reference
is hereby made to the Indenture for a description of the property mortgaged and
pledged and the nature and extent of the security for said bonds. By the terms
of the Indenture, the bonds secured thereby are issuable in series which may
vary as to date, amount, dates of maturity, rate of interest and in other
respects as in the Indenture provided.

 

This bond is one of a series designated as “Duke
Energy Indiana, Inc. First Mortgage Bonds, Series RRR, 33/8%, Due March 1, 2019” (hereinafter referred to as
the “Bonds of Series RRR”) of the Company issued under and secured by the
Indenture and created by a Sixty-Third Supplemental Indenture, dated as of
September 23, 2010 (the “Sixty-Third Supplemental Indenture”), which also
amends the Indenture.

 

This
bond evidences and secures a loan made by the IFA to the Company, pursuant to a
Loan Agreement, dated as of September 1, 2010, between the IFA and the Company
(the “Loan Agreement”). In order to obtain funds for such loan, the IFA,
contemporaneously with the issue of this bond, will issue an aggregate
principal amount of Fifty-Nine Million Six Hundred Thousand Dollars
($59,600,000) of its Environmental Refunding Revenue Bonds, Series 2010A-2
(Duke Energy Indiana, Inc. Project) (the “IFA Bonds”) under and pursuant to the
IFA Indenture. The IFA Bonds are payable from payments made by the Company of
principal of and interest on this bond and from moneys in the bond fund created
under the IFA Indenture. The obligation of the Company to pay the principal of
and interest on this bond shall be discharged to the extent that any moneys in
said bond fund are available for payments on the IFA Bonds and are directed by
the Company to be applied thereto, all as provided in the Sixty-Third
Supplemental Indenture.

 

The
rights and obligations of the Company and of the bearers and registered owners
of bonds may be modified or amended with the consent of the Company by an
affirmative vote of the bearers or registered owners entitled to vote of at
least seventy-five per centum (75%) in principal amount of the bonds then
outstanding at a meeting of bondholders called for the purpose (and by an
affirmative vote of the bearers or registered owners entitled to vote of at
least seventy-five per centum (75%) in principal amount of bonds of any series
affected by such modification or amendment in case one or more, but less than
all, series of bonds are so affected), all in the manner and subject to the
limitations set forth in the Indenture, any consent by the bearer or registered
owner of any bond being conclusive and binding upon such bearer or registered
owner and upon all future bearers or registered owners of such bond,
irrespective of whether or not any 

 

15

 

notation
of such consent is made on such bond; provided that no such modification or
amendment shall, among other things, extend the maturity or reduce the amount
of, or reduce the rate of interest on, or otherwise modify the terms of the
payment of the principal of, or interest or premium (if any) on this bond,
which obligations are absolute and unconditional, or permit the creation of any
lien ranking prior to or equal with the lien of the Indenture on any of the
mortgaged property.  The Sixty-Third
Supplemental Indenture provides that at any time when no bonds issued under the
Indenture prior to the issuance of the “PSI Energy, Inc. First Mortgage Bonds,
Series BBB, 8%, Due July 15, 2009” are outstanding, the Company reserves the
right to amend the Indenture, without the consent or other action by the
holders of the bonds outstanding at that time, to decrease the seventy-five per
centum (75%) vote requirement referred to above to sixty-six and two-thirds per
centum (66-2/3%).

 

The
Bonds of Series RRR are subject to redemption prior to stated maturity as
follows:

 

(A)          Extraordinary Optional Redemption
of IFA Bonds.  In the event that the
Company exercises its option under the Loan Agreement to direct the extraordinary
optional redemption of the IFA Bonds, the Bonds of Series RRR shall be subject
to redemption, in a principal amount equal to the IFA Bonds so redeemed and on
such date as the IFA Bonds are redeemed, at a redemption price of 100% of the
principal amount redeemed, plus accrued and unpaid interest to the redemption
date.

 

(B)           Mandatory Redemption. The
Bonds of Series RRR are subject to mandatory redemption by the Company in whole
or in part, as applicable, at a redemption price of 100% of the principal amount
redeemed, plus accrued and unpaid interest to the redemption date, upon
occurrence of any of the following events:

 

(1)           Upon
the occurrence of a Determination of Taxability (as defined in the IFA
Indenture) as to which the IFA Trustee has been notified by the Company in
writing pursuant to the Loan Agreement, the Bonds of Series RRR are subject to
mandatory redemption by the Company, in a principal amount equal to the IFA
Bonds to be redeemed in connection therewith and on such date as the IFA Bonds are
so redeemed; provided, however, that such requirement of redemption shall be
deemed waived, if prior to the date fixed for such redemption of the Bonds of
Series RRR there shall have occurred and be continuing an event of default (as
defined in the Indenture) which affects any bond of any series outstanding
under the Indenture and which event of default has not been cured or waived
prior to such redemption date, it being the intent of such proviso that, in
lieu of such right to redemption, the holder of the Bonds of Series RRR shall
be entitled only to such rights as are available to the holders of bonds of any
other series outstanding under the Indenture in respect of any such event of
default.

 

(2)           In
the event that the Company is notified in writing by the IFA Trustee that (a)
an event of default under the IFA Indenture has occurred and is continuing, and
(b) the IFA Trustee has declared the principal of all the IFA

 

16

 

Bonds
then outstanding immediately due and payable pursuant to the IFA Indenture, the
Company shall call for redemption, on a redemption date selected by it not
later than forty-five (45) days following the date on which such notice from
the IFA was received by the Company, the outstanding Bonds of Series RRR,
and shall on such redemption date redeem the same; provided, however, that such
requirement of redemption shall be deemed waived, if prior to the date fixed
for such redemption of the Bonds of Series RRR (x) such event of
default is waived or cured as set forth in the IFA Indenture, or (y) there
shall have occurred and be continuing an event of default (as defined in the
Indenture) which affects any bond of any series outstanding under the Indenture
and which event of default has not been cured or waived prior to such
redemption date, it being the intent of such proviso that, in lieu of such
right to redemption, the holder of the Bonds of Series RRR shall be
entitled only to such rights as are available to the holders of bonds of any
other series outstanding under the Indenture in respect of any such event of
default; and in case of any subsequent occurrence or continuance of the events
described in (a) and (b) of this paragraph, the Company shall have the
same obligation (subject to the same proviso) to redeem the Bonds of Series RRR.

 

To
comply with its obligations to redeem the Bonds of Series RRR in whole or
in part imposed herein, the Company shall give written notice of the date of
redemption to the Trustee and the IFA Trustee, which date shall be not less
than thirty (30) days nor more than ninety (90) days from the date the notice
is mailed.  No further notice, by
publication or otherwise, shall be required for redemption of the Bonds of Series RRR,
and the requirements of Section 2 of Article VII of the Indenture for
notice by newspaper publication shall not apply to the Bonds of Series RRR.

 

Unless
the Company defaults in payment of the redemption price, on and after any
redemption date, interest will cease to accrue on the Bonds of Series RRR
or portions thereof called for redemption.

 

In
the case of any of certain events of default specified in the Indenture, the
principal of this bond may be declared or may become due and payable prior to
the stated date of maturity hereof in the manner and with the effect provided
in the Indenture.

 

No
recourse shall be had for the payment of the principal of or interest on this
bond, or for any claim based hereon, or otherwise in respect hereof or of the
Indenture, to or against any incorporator, shareholder, officer or director,
past, present or future, of the Company or of any predecessor or successor
company, either directly or through the Company or such predecessor or
successor company, under any constitution or statute or rule of law, or by
the enforcement of any assessment or penalty, or otherwise, all such liability
of incorporators, shareholders, directors and officers being waived and
released by the registered owner hereof by the acceptance of this bond and
being likewise waived and released by the terms of the Indenture.

 

17

 

The
Bonds of Series RRR are issuable only in registered form without coupons.
This bond is nontransferable except to the IFA Trustee and successors thereto,
if any, and to the Company. To the extent that this bond is transferable, it is
transferable by the registered owner hereof, in person or by an attorney duly
authorized, at the principal office or place of business of Deutsche Bank
National Trust Company, the Trustee, or its successor in trust under the
Indenture, or at the option of the registered owner, at the office or agency of
the Company in the Borough of Manhattan, the City of New York, State of New
York, upon the surrender and cancellation of this bond, and upon any such
transfer a new registered bond or bonds of the same series and maturity date
and for the same aggregate principal amount will be issued to the transferee in
exchange herefor.

 

The Bonds of Series RRR are issuable in
denominations of $5,000 and integral multiples thereof as shall from time to
time be determined and authorized by the Board of Directors of the Company. In
the manner and subject to the limitations provided in the Indenture, Bonds of Series RRR
are exchangeable as between authorized denominations, upon presentation thereof
for such purpose by the registered owner, at the principal office or place of
business of Deutsche Bank National Trust Company, the Trustee, or its successor
in trust under the Indenture, or, at the option of the registered owner, at the
office or agency of the Company in the Borough of Manhattan, the City of New
York, State of New York.

 

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

 

(FORM OF TRUSTEE’S CERTIFICATE)

 

TRUSTEE’S CERTIFICATE

 

This bond is one of the Bonds of Series RRR
designated therein referred to and described in the within mentioned Indenture
and Sixty-Third Supplemental Indenture.

 

	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST COMPANY, AS TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

18

 

Section 3.  Each
Bond of Series QQQ and RRR issued prior to the first interest payment date
shall be dated as of September 23, 2010, and otherwise shall be dated as
provided in Section 1 of Article II of the Indenture.

 

Section 4.  All
Bonds of Series QQQ shall be due and payable on April 1, 2022, and
shall bear interest from the date thereof at the rate of 33⁄4% per annum, payable
semi-annually on the first day of April and October in each year,
commencing  April 1, 2011.  All Bonds of Series RRR shall be due and
payable on March 1, 2019, and shall bear interest from the date thereof at
the rate of 33/8% per annum, payable
semi-annually on the first day of March and September in each year,
commencing March 1, 2011.

 

Section 5.  Both
the principal of and the interest on the Bonds of Series QQQ and RRR shall
be payable in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private debts, at
the office or agency of the Company in Plainfield, Indiana, or, at the
option of the holder thereof, at the office or agency of the Company in the
Borough of Manhattan, the City of New York, State of New York, except that
interest on the Bonds of Series QQQ and RRR may be paid, at the option of
the Company, by check or draft mailed to the address of the person entitled
thereto as it appears on the books of the Company maintained for that purpose.

 

Section 6. 
Definitive Bonds of Series QQQ and Bonds of Series RRR shall
be issuable in denominations of $5,000 and integral multiples thereof, numbered
consecutively from “QQQ-R-1” and “RRR-R-1,” respectively, upward.

 

The
Bonds of Series QQQ and RRR shall be executed on behalf of the Company by
the manual or facsimile signature of its President or an Executive Vice
President or one of its Vice Presidents and shall have affixed thereto the seal
of the Company or a facsimile thereof attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries and shall be
authenticated by the execution by the Trustee of the certificate endorsed on
said bonds.

 

No
service charge will be made by the Company for the transfer or for the exchange
of Bonds of Series QQQ and RRR except, in the case of transfer, a charge
sufficient to reimburse the Company for any tax or other governmental charge
payable in connection therewith.

 

Section 7.  Article IX
of the Indenture, “Maintenance and Renewal Fund and Sinking Fund Provisions”,
as heretofore amended or supplemented shall not apply to the “PSI Energy, Inc.
First Mortgage Bonds, Series BBB, 8%, Due July 15, 2009” (such bonds
being hereinafter referred to as the “Bonds of Series BBB”) or to any
subsequently created series of bonds (which includes the Bonds of Series QQQ
and RRR) from and after the date on which no series of bonds created under the
Indenture prior to the Bonds of Series BBB are outstanding.

 

19

 

Section 8.  Section 22
of Article V of the Indenture as heretofore amended or supplemented which,
among other things, requires an inspection of the mortgaged property every two
years by an independent engineer, shall not apply to the Bonds of Series BBB
or to any subsequently created series of bonds (which includes the Bonds of Series QQQ
and RRR), from and after the date on which no series of bonds created under the
Indenture prior to the Bonds of Series BBB are outstanding.

 

Section 9.  The
Company reserves the right, without consent or other action by the holders of
the Bonds of Series BBB or of any subsequently created series of bonds
(which includes the Bonds of Series QQQ and RRR), to amend the Indenture,
as heretofore amended or supplemented, at any time after all bonds of any
series created prior to the Bonds of Series BBB are no longer outstanding
under the Indenture, as follows:

 

(a) 
by substituting for the words “in principal amount not greater than sixty per
centum (60%) of” in Section 3 of Article IV thereof the following:

 

“in
principal amount not greater than sixty-six and two-thirds per centum (66-2/3%)
of ”.

 

(b) 
by substituting for the words “shall exceed sixty per centum (60%) of the value
of bondable property so acquired” in Section 9 of Article V thereof
the following:

 

“shall
exceed sixty-six and two-thirds per centum (66-2/3%) of the value of bondable
property so acquired”.

 

(c) 
by substituting for the words “shall be deemed to be paid within the meaning of
this article; provided, that the date for the
payment or redemption of such bonds shall be not more than one (1) year
after such moneys shall have been so set apart or paid.” in the first paragraph
of Article XIV thereof the following:

 

“shall
be deemed to be paid within the meaning of this article.”.

 

(d) 
by substituting for the words “with the consent of holders of at least
seventy-five per centum (75%) in aggregate principal amount of the bonds at the
time outstanding;” in sub-section (a) of Section 3 of Article XVIII
thereof the following:

 

“with
the consent of holders of at least sixty-six and two-thirds per centum
(66-2/3%) in aggregate principal amount of the bonds at the time outstanding;”.

 

20

 

(e) 
by substituting for the words “holders (or persons entitled to vote the bonds)
of not less than seventy-five per centum (75%) in aggregate principal amount of
the bonds entitled to be voted” in sub-section (l) of Section 3 of Article XVIII
thereof the following:

 

“holders
(or persons entitled to vote the bonds) of not less than sixty-six and
two-thirds per centum (66-2/3%) in aggregate principal amount of the bonds
entitled to be voted”.

 

(f) 
by substituting for the words “holders (or persons entitled to vote the bonds)
of at least seventy-five per centum (75%) in principal amount of the bonds
outstanding” in sub-section (m) of Section 3 of Article XVIII
thereof the following:

 

“holders
(or persons entitled to vote the bonds) of at least sixty-six and two-thirds
per centum (66-2/3%) in principal amount of the bonds outstanding”.

 

ARTICLE II.

 

ISSUANCE OF BONDS OF SERIES
QQQ AND RRR.

 

The
Bonds of Series QQQ, in the aggregate principal amount not exceeding ten
million dollars ($10,000,000), and the Bonds of Series RRR, in the
aggregate principal amount not exceeding fifty-nine million six hundred
thousand dollars ($59,600,000), may be executed by the Company and delivered to
the Trustee for authentication, and shall be authenticated and delivered by the
Trustee to or upon the order of the Company (which authentication and delivery
may be made without awaiting the filing or recording of this Sixty-Third
Supplemental Indenture), upon receipt by the Trustee of the resolutions,
certificates, orders, opinions and other instruments required by the provisions
of Section 2 of Article IV of the Indenture to be received by the
Trustee as a condition to the authentication and delivery by the Trustee of
bonds pursuant to said Section 2.

 

ARTICLE III.

 

INDENTURE AMENDMENTS.

 

Section 1.  Article I
of the Indenture, as heretofore amended, is hereby further amended (i) by
adding immediately after subdivision “(102)” thereof an additional subdivision
numbered “(103)” and reading as follows:

 

“(103) The term ‘Sixty-Third Supplemental Indenture’
shall mean the Sixty-Third Supplemental Indenture executed by the Company and
the Trustee, dated as of September 23, 2010, supplementing and amending
the Indenture; and the terms

 

21

 

‘Bonds
of Series QQQ’ shall mean the ‘Duke Energy Indiana, Inc. First
Mortgage Bonds, Series QQQ, 33⁄4%, Due April 1, 2022’ and ‘Bonds of Series RRR’
shall mean the ‘Duke Energy Indiana, Inc. First Mortgage Bonds, Series RRR,
33/8%, Due March 1, 2019’
created by the Sixty-Third Supplemental Indenture.”

 

and
(ii) by changing the numbering of the present subdivision “(103)” thereof
to “(104)”.

 

Section 2.  Article VII
of the Indenture, as heretofore amended, is hereby further amended by inserting
therein immediately after Section 45 thereof, new sections designated “Section 46”
and “Section 47” and reading as follows:

 

“Section 46.

 

(A) The Bonds of Series QQQ are subject to
redemption prior to stated maturity as follows:

 

(1)          Optional
Redemption of IFA Bonds.  In the
event that the Company exercises its option under the Loan Agreement to direct
the optional redemption of the IFA Bonds on or after October 1, 2020, the
Bonds of Series QQQ shall be subject to redemption prior to maturity, in a
principal amount equal to the IFA Bonds so redeemed and on such date as the IFA
Bonds are redeemed, at a price equal to 100% of the principal amount thereof,
without premium, plus accrued interest to the redemption date.

 

(2)            Extraordinary
Optional Redemption of IFA Bonds.  In
the event that the Company exercises its option under the Loan Agreement to
direct the extraordinary optional redemption of the IFA Bonds, the Bonds of Series QQQ
shall be subject to redemption, in a principal amount equal to the IFA Bonds so
redeemed and on such date as the IFA Bonds are redeemed, at a redemption price
of 100% of the principal amount redeemed, plus accrued and unpaid interest to
the redemption date.

 

(3)            Mandatory
Redemption. The Bonds of Series QQQ are subject to mandatory
redemption by the Company in whole or in part, as applicable, at a redemption
price of 100% of the principal amount redeemed, plus accrued and unpaid
interest to the redemption date, upon occurrence of any of the following
events:

 

(a)         Upon
the occurrence of a Determination of Taxability (as defined in the IFA
Indenture) as to which the IFA Trustee has been notified by the Company in
writing pursuant to the Loan Agreement, the Bonds of Series QQQ are
subject to mandatory redemption by the Company, in a principal amount equal to
the IFA Bonds to be redeemed in connection therewith and on such date as the
IFA Bonds are so redeemed; provided,

 

22

 

however, that such requirement of redemption shall be deemed waived, if
prior to the date fixed for such redemption of the Bonds of Series QQQ
there shall have occurred and be continuing an event of default (as defined in
the Indenture) which affects any bond of any series outstanding under the
Indenture and which event of default has not been cured or waived prior to such
redemption date, it being the intent of such proviso that, in lieu of such
right to redemption, the holder of the Bonds of Series QQQ shall be
entitled only to such rights as are available to the holders of bonds of any
other series outstanding under the Indenture in respect of any such event of
default.

 

(b)          In
the event that the Company is notified in writing by the IFA Trustee that (i) an
event of default under the IFA Indenture has occurred and is continuing, and (ii) the
IFA Trustee has declared the principal of all the IFA Bonds then outstanding
immediately due and payable pursuant to the IFA Indenture, the Company shall
call for redemption, on a redemption date selected by it not later than
forty-five (45) days following the date on which such notice from the IFA was
received by the Company, the outstanding Bonds of Series QQQ, and shall on
such redemption date redeem the same; provided, however, that such requirement
of redemption shall be deemed waived, if prior to the date fixed for such
redemption of the Bonds of Series QQQ (x) such event of default is
waived or cured as set forth in the IFA Indenture, or (y) there shall have
occurred and be continuing an event of default (as defined in the Indenture)
which affects any bond of any series outstanding under the Indenture and which
event of default has not been cured or waived prior to such redemption date, it
being the intent of such proviso that, in lieu of such right to redemption, the
holder of the Bonds of Series QQQ shall be entitled only to such rights as
are available to the holders of bonds of any other series outstanding under the
Indenture in respect of any such event of default; and in case of any
subsequent occurrence or continuance of the events described in (i) and (ii) of
this paragraph, the Company shall have the same obligation (subject to the same
proviso) to redeem the Bonds of Series QQQ.

 

To comply with its obligations to redeem the Bonds
of Series QQQ in whole or in part imposed herein, the Company shall give
written notice of the date of redemption to the Trustee and the IFA Trustee,
which date shall be not less than thirty (30) days nor more than ninety (90)
days from the date the notice is mailed. 
No further notice, by publication or otherwise, shall be required for
redemption of the Bonds of Series QQQ, and the requirements of Section 2
of Article VII of the Indenture for notice by newspaper publication shall
not apply to the Bonds of Series QQQ.

 

23

 

Unless the Company defaults in payment of the
redemption price, on and after any redemption date, interest will cease to
accrue on the Bonds of Series QQQ or portions thereof called for
redemption.

 

(B)          Capitalized
terms used in this Section 46 and not otherwise defined in the Indenture
shall have the following meanings for purposes of this Section:

 

‘IFA’ means the Indiana Finance Authority, a body
politic and corporate, not a state agency but an independent instrumentality of
the State of Indiana, and any successor thereto.

 

‘IFA Bonds’ means the Indiana Finance Authority
Environmental Refunding Revenue Bonds, Series 2010A-1 (Duke Energy Indiana, Inc.
Project), in an aggregate principal amount of $10,000,000, issued under and
pursuant to the IFA Indenture.

 

‘IFA Indenture’ means the Trust Indenture between
the IFA and the IFA Trustee, dated as of September 1, 2010, and any
indenture supplemental thereto or amendatory thereof, pursuant to which the IFA
Bonds are issued and secured.

 

‘IFA Trustee’ means the person, corporation or
association acting as trustee at any time under the IFA Indenture.

 

‘Loan Agreement’ means the Loan Agreement, dated as
of September 1, 2010, between the IFA and the Company, and any and all
modifications, amendments and supplements thereto.

 

(C)         The
Company shall indemnify and hold harmless the Trustee from any and all losses,
costs, damages, expenses, fees (including attorneys’ fees), court costs, judgments,
penalties, obligations, suits, disbursements and liabilities of any kind or
character whatsoever which may at any time be imposed upon, incurred by or
asserted against the Trustee by reason of or arising out of or caused, directly
or indirectly by any act or omission of the Trustee with respect to this Section 46,
except for such that would arise out of the willful misconduct or gross
negligence of the Trustee and except for costs and expenses arising in the
ordinary course of the Trustee’s business.

 

Section 47.

 

(A) The Bonds of Series RRR are subject to
redemption prior to stated maturity as follows:

 

(1)            Extraordinary
Optional Redemption of IFA Bonds.  In
the event that the Company exercises its option under the Loan Agreement to 

 

24

 

direct
the extraordinary optional redemption of the IFA Bonds, the Bonds of Series RRR
shall be subject to redemption, in a principal amount equal to the IFA Bonds so
redeemed and on such date as the IFA Bonds are redeemed, at a redemption price
of 100% of the principal amount redeemed, plus accrued and unpaid interest to
the redemption date.

 

(2)            Mandatory
Redemption. The Bonds of Series RRR are subject to mandatory
redemption by the Company in whole or in part, as applicable, at a redemption
price of 100% of the principal amount redeemed, plus accrued and unpaid
interest to the redemption date, upon occurrence of any of the following
events:

 

(a)         Upon
the occurrence of a Determination of Taxability (as defined in the IFA
Indenture) as to which the IFA Trustee has been notified by the Company in
writing pursuant to the Loan Agreement, the Bonds of Series RRR are
subject to mandatory redemption by the Company, in a principal amount equal to
the IFA Bonds to be redeemed in connection therewith and on such date as the
IFA Bonds are so redeemed; provided, however, that such requirement of
redemption shall be deemed waived, if prior to the date fixed for such
redemption of the Bonds of Series RRR there shall have occurred and be
continuing an event of default (as defined in the Indenture) which affects any
bond of any series outstanding under the Indenture and which event of default
has not been cured or waived prior to such redemption date, it being the intent
of such proviso that, in lieu of such right to redemption, the holder of the
Bonds of Series RRR shall be entitled only to such rights as are available
to the holders of bonds of any other series outstanding under the Indenture in
respect of any such event of default.

 

(b)          In
the event that the Company is notified in writing by the IFA Trustee that (i) an
event of default under the IFA Indenture has occurred and is continuing, and (ii) the
IFA Trustee has declared the principal of all the IFA Bonds then outstanding
immediately due and payable pursuant to the IFA Indenture, the Company shall
call for redemption, on a redemption date selected by it not later than
forty-five (45) days following the date on which such notice from the IFA was
received by the Company, the outstanding Bonds of Series RRR, and shall on
such redemption date redeem the same; provided, however, that such requirement
of redemption shall be deemed waived, if prior to the date fixed for such
redemption of the Bonds of Series RRR (x) such event of default is
waived or cured as set forth in the IFA Indenture, or (y) there shall have
occurred and be continuing an event of default (as defined in the Indenture)
which affects any 

 

25

 

bond of any series outstanding under the Indenture and which event of
default has not been cured or waived prior to such redemption date, it being
the intent of such proviso that, in lieu of such right to redemption, the
holder of the Bonds of Series RRR shall be entitled only to such rights as
are available to the holders of bonds of any other series outstanding under the
Indenture in respect of any such event of default; and in case of any
subsequent occurrence or continuance of the events described in (i) and (ii) of
this paragraph, the Company shall have the same obligation (subject to the same
proviso) to redeem the Bonds of Series RRR.

 

To comply with its obligations to redeem the Bonds
of Series RRR in whole or in part imposed herein, the Company shall give
written notice of the date of redemption to the Trustee and the IFA Trustee,
which date shall be not less than thirty (30) days nor more than ninety (90)
days from the date the notice is mailed. 
No further notice, by publication or otherwise, shall be required for
redemption of the Bonds of Series RRR, and the requirements of Section 2
of Article VII of the Indenture for notice by newspaper publication shall
not apply to the Bonds of Series RRR.

 

Unless the Company defaults in payment of the
redemption price, on and after any redemption date, interest will cease to
accrue on the Bonds of Series RRR or portions thereof called for
redemption.

 

(B)          Capitalized
terms used in this Section 47 and not otherwise defined in the Indenture
shall have the following meanings for purposes of this Section:

 

‘IFA’ means the Indiana Finance Authority, a body
politic and corporate, not a state agency but an independent instrumentality of
the State of Indiana, and any successor thereto.

 

‘IFA Bonds’ means the Indiana Finance Authority
Environmental Refunding Revenue Bonds, Series 2010A-2 (Duke Energy Indiana, Inc.
Project), in an aggregate principal amount of $59,600,000, issued under and
pursuant to the IFA Indenture.

 

‘IFA Indenture’ means the Trust Indenture between
the IFA and the IFA Trustee, dated as of September 1, 2010, and any
indenture supplemental thereto or amendatory thereof, pursuant to which the IFA
Bonds are issued and secured.

 

‘IFA Trustee’ means the person, corporation or
association acting as trustee at any time under the IFA Indenture.

 

26

 

‘Loan Agreement’ means the Loan Agreement, dated as
of September 1, 2010, between the IFA and the Company, and any and all
modifications, amendments and supplements thereto.

 

(C)           The
Company shall indemnify and hold harmless the Trustee from any and all losses,
costs, damages, expenses, fees (including attorneys’ fees), court costs,
judgments, penalties, obligations, suits, disbursements and liabilities of any
kind or character whatsoever which may at any time be imposed upon, incurred by
or asserted against the Trustee by reason of or arising out of or caused,
directly or indirectly by any act or omission of the Trustee with respect to
this Section 47, except for such that would arise out of the willful misconduct
or gross negligence of the Trustee and except for costs and expenses arising in
the ordinary course of the Trustee’s business.”

 

Section 3.  The Bonds of Series QQQ and RRR shall not be
entitled to the benefit of a sinking fund.

 

ARTICLE IV.

 

CONCERNING THE TRUSTEE.

 

The
Trustee hereby accepts the trusts hereby declared and agrees to perform the
same upon the terms and conditions in the Indenture and in this Sixty-Third
Supplemental Indenture set forth.  The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Sixty-Third Supplemental Indenture or the
due execution hereof by the Company or for or in respect of the recitals
contained herein, all of which recitals are made by the Company solely. In
general, each and every term and condition contained in Article XVII of the
Indenture shall apply to this Sixty-Third Supplemental Indenture.

 

ARTICLE V.

 

MISCELLANEOUS PROVISIONS.

 

Section 1. Wherever in the original Indenture or in any of the
sixty-three supplemental indentures thereto reference is made to any article or
section of the original Indenture, such reference shall be deemed to refer to
such article or section as amended by such supplemental indentures.

 

Section 2.  Upon the
execution and delivery hereof, the Indenture shall thereupon be deemed to be
amended as hereinabove set forth as fully and with the same effect as if the
amendments made hereby were set forth in the original Indenture and each of the
sixty-three supplemental indentures to the Indenture shall henceforth be read,
taken and construed as one and the same instrument; but such amendments shall
not operate so as to 

 

27

 

render
invalid or improper any action heretofore taken under the original Indenture or
said supplemental indentures.

 

Section 3. All the covenants, stipulations and agreements in
this Sixty-Third Supplemental Indenture contained are and shall be for the sole
and exclusive benefit of the parties hereto, their successors and assigns, and
of the holders from time to time of the bonds.

 

Section 4.  The table of
contents to, and the headings of the different articles of, this Sixty-Third
Supplemental Indenture are inserted for convenience of reference, and are not
to be taken to be any part of the provisions hereof, nor to control or affect
the meaning, construction or effect of the same.

 

Section 5.  This
Sixty-Third Supplemental Indenture may be simultaneously executed in any number
of counterparts, and all such counterparts shall constitute but one and the
same instrument.

 

Section 6.  Whenever a
payment of principal or interest in respect of the Bonds of Series QQQ and RRR
are due on any day other than a business day (as hereinafter defined), such
payment shall be payable on the first business day next following such date,
and, in the case of a principal payment, interest on such principal payment
shall accrue to the date of such principal payment. For the purposes of this
Section 6 the term business day shall mean any day other than a day on which
the Trustee is authorized by law to close.

 

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

 

28

 

IN
WITNESS WHEREOF, said Duke Energy Indiana, Inc. has caused this instrument to
be executed in its corporate name by its President or one of its Vice
Presidents and to be attested by its Secretary or one of its Assistant
Secretaries and said Deutsche Bank National Trust Company has caused this
instrument to be executed in its corporate name by one of its Vice Presidents
and to be attested by one of its Vice Presidents, in several counterparts, all
as of the day and year first above written.

 

	
   

  	
   

  	
  DUKE ENERGY INDIANA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (CORPORATE SEAL)

  	
   

  	
  By

  	
  /s/ Stephen G. De May

  
	
   

  	
   

  	
   

  	
  Stephen
  G. De May

  
	
   

  	
   

  	
   

  	
  Senior
  Vice President and Treasurer

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Robert T. Lucas III

  	
   

  	
   

  
	
  Robert
  T. Lucas III, Assistant Secretary

  	
   

  	
   

  

 

29

 

	
   

  	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST COMPANY, solely as Trustee and not in its individual
  capacity

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (CORPORATE SEAL)

  	
   

  	
  By

  	
  /s/ Victoria Y. Douyon

  
	
   

  	
   

  	
   

  	
  Victoria
  Y. Douyon

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Katherine Cokic

  	
   

  	
   

  
	
  Katherine
  Cokic, Vice President

  	
   

  	
   

  

 

30

 

	
  STATE
  OF NORTH CAROLINA

  	
  )

  
	
   

  	
  )
  ss:

  
	
  COUNTY
  OF MECKLENBURG

  	
  )

  

 

BE
IT REMEMBERED, that on this 23rd day of September, 2010, before me, the
undersigned, a notary public in and for the County and State aforesaid, duly
commissioned and qualified, personally appeared Stephen G. De May and Robert T.
Lucas III, personally known to me to be the same persons whose names are
subscribed to the foregoing instrument, and personally known to me to be the
Senior Vice President and Treasurer, and an Assistant Secretary, respectively,
of Duke Energy Indiana, Inc., an Indiana corporation, and acknowledged that
they signed and delivered said instrument as their free and voluntary act as
such Senior Vice President and Treasurer, and Assistant Secretary,
respectively, and as the free and voluntary act of said Duke Energy Indiana,
Inc., for the uses and purposes therein set forth; in pursuance of the power
and authority granted to them by resolution of the Board of Directors of said
Company.

 

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my notarial seal the day and year aforesaid.

 

(NOTARIAL
SEAL)

 

	
   

  	
  /s/
  Phoebe P. Elliott

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My
  commission expires:

  
	
   

  	
  June 26, 2011

  

 

31

 

	
  STATE
  OF ILLINOIS

  	
  )

  
	
   

  	
  )
  ss:

  
	
  COUNTY
  OF COOK

  	
  )

  

 

BE
IT REMEMBERED, that on this 22nd day of September, 2010, before me, the
undersigned, a notary public in and for the County and State aforesaid, duly
commissioned and qualified, personally appeared Victoria Y. Douyon and
Katherine Cokic personally known to me to be the same persons whose names are
subscribed to the foregoing instrument, and personally known to me to be Vice
Presidents of Deutsche Bank National Trust Company, a national banking
association, and acknowledged that they signed and delivered said instrument as
their free and voluntary act as such Vice Presidents, respectively, and as the
free and voluntary act of said Deutsche Bank National Trust Company, for the
uses and purposes therein set forth; in pursuance of the power and authority
granted to them by the bylaws of said association.

 

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my notarial seal the day and year aforesaid.

 

(NOTARIAL
SEAL)

 

 

	
   

  	
  /s/
  Theresa M. Jacobson

  
	
   

  	
  Notary Public

  

 

 

This
instrument was prepared by:

 

Bradley
C. Arnett, Esq.*

Taft
Stettinius & Hollister LLP

425
Walnut Street, Suite 1800

Cincinnati,
Ohio  45202-3957

 

*Admitted
in Ohio; not admitted in Indiana

 

32

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