Document:

Letter of Credit

 EXHIBIT 10.1 
 EXECUTION VERSION 
 $330,000,000 
 LETTER OF CREDIT AGREEMENT 
 dated as of 
 September 19, 2008 
 among 
 Duke
Energy Indiana, Inc. 
 and 
 Duke Energy Kentucky,
Inc., 
 as Borrowers, 
 The Banks Listed Herein,

 Bank of America, N.A., 
 as Administrative Agent,

 Banco Bilbao Vizcaya Argentaria, S.A. — New York Branch, 
 as Syndication Agent 
 and 
 The Bank of Tokyo-Mitsubishi UFJ, Ltd., 
 Intesa Sanpaolo S.p.A., New York Branch, 
 Mizuho Corporate Bank (USA), and 
 Wells Fargo Bank, National Association, 
 as Co-Documentation Agents 
  
  
 Banc of America Securities LLC, 

Sole Lead Arranger and 
 Bookrunner 
  
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
		  	ARTICLE 1	  	
		  	DEFINITIONS	  	
			
	 Section 1.01.
	  	Definitions	  	1
	 Section 1.02.
	  	Accounting Terms and Determinations	  	6
			
		  	ARTICLE 2	  	
		  	THE CREDITS	  	
			
	 Section 2.01.
	  	Fees	  	7
	 Section 2.02.
	  	Optional Termination or Reduction of Sublimits	  	7
	 Section 2.03.
	  	Mandatory Termination of Commitments	  	7
	 Section 2.04.
	  	General Provisions as to Payments	  	7
	 Section 2.05.
	  	Issuances of Letters of Credit.	  	7
	 Section 2.06.
	  	Increase In Commitments; Additional Banks	  	9
	 Section 2.07.
	  	Pledge of Bonds	  	10
			
		  	ARTICLE 3	  	
		  	CONDITIONS	  	
			
	 Section 3.01.
	  	Effectiveness	  	11
	 Section 3.02.
	  	Conditions to Issuance of Letters of Credit	  	11
			
		  	ARTICLE 4	  	
		  	REPRESENTATIONS AND WARRANTIES	  	
			
	 Section 4.01.
	  	Organization and Power	  	12
	 Section 4.02.
	  	Corporate and Governmental Authorization; No Contravention	  	12
	 Section 4.03.
	  	Binding Effect	  	12
	 Section 4.04.
	  	Financial Information	  	12
	 Section 4.05.
	  	Regulation U	  	13
	 Section 4.06.
	  	Litigation	  	13
	 Section 4.07.
	  	Compliance with Laws	  	13
	 Section 4.08.
	  	Taxes	  	13
			
		  	ARTICLE 5	  	
		  	COVENANTS	  	
			
	 Section 5.01.
	  	Information	  	13
	 Section 5.02.
	  	Payment of Taxes	  	14
	 Section 5.03.
	  	Maintenance of Property; Insurance	  	15
	 Section 5.04.
	  	Maintenance of Existence	  	15
	 Section 5.05.
	  	Compliance with Laws	  	15
	 Section 5.06.
	  	Books and Records	  	15
	 Section 5.07.
	  	Negative Pledge	  	15
	 Section 5.08.
	  	Consolidations, Mergers and Sales of Assets	  	16
	 Section 5.09.
	  	Use of Proceeds	  	16
	 Section 5.10.
	  	Indebtedness/Capitalization Ratio.	  	16
			
		  	ARTICLE 6	  	
		  	DEFAULTS	  	
			
	 Section 6.01.
	  	Events of Default	  	17
	 Section 6.02.
	  	Notice of Default	  	18
	 Section 6.03.
	  	Cash Cover	  	18

  

 i 

					
	 	  	 	  	Page
			
		  	ARTICLE 7	  	
		  	THE ADMINISTRATIVE AGENT	  	
			
	 Section 7.01.
	  	Appointment and Authorization	  	18
	 Section 7.02.
	  	Administrative Agent and Affiliates.	  	18
	 Section 7.03.
	  	Action by Administrative Agent	  	18
	 Section 7.04.
	  	Consultation with Experts	  	18
	 Section 7.05.
	  	Liability of Administrative Agent	  	19
	 Section 7.06.
	  	Indemnification	  	19
	 Section 7.07.
	  	Credit Decision	  	19
	 Section 7.08.
	  	Successor Administrative Agent	  	19
	 Section 7.09.
	  	Administrative Agent’s Fee	  	20
	 Section 7.10.
	  	Other Agents	  	20
			
		  	ARTICLE 8	  	
		  	CHANGE IN CIRCUMSTANCES	  	
			
	 Section 8.01.
	  	Increased Cost and Reduced Return	  	20
	 Section 8.02.
	  	Taxes	  	20
	 Section 8.03.
	  	Substitution of Bank; Termination Option	  	22
			
		  	ARTICLE 9	  	
		  	MISCELLANEOUS	  	
			
	 Section 9.01.
	  	Notices	  	22
	 Section 9.02.
	  	No Waivers	  	23
	 Section 9.03.
	  	Expenses; Indemnification	  	23
	 Section 9.04.
	  	Sharing of Set-offs	  	23
	 Section 9.05.
	  	Amendments and Waivers	  	23
	 Section 9.06.
	  	Successors and Assigns	  	23
	 Section 9.07.
	  	Collateral	  	24
	 Section 9.08.
	  	Confidentiality	  	24
	 Section 9.09.
	  	Governing Law; Submission to Jurisdiction	  	24
	 Section 9.10.
	  	Counterparts; Integration	  	25
	 Section 9.11.
	  	WAIVER OF JURY TRIAL	  	25
	 Section 9.12.
	  	USA Patriot Act	  	25
	 Section 9.13.
	  	No Advisory or Fiduciary Responsibility	  	25
		
	 COMMITMENT SCHEDULE
	  	
	 PRICING SCHEDULE
	  	
			
	 EXHIBIT A-1 -
	  	Opinion of Internal Counsel of the Borrower	  	
	 EXHIBIT A-2 -
	  	Opinion of Special Counsel for the Borrower	  	
	 EXHIBIT B -
	  	Opinion of Davis Polk & Wardwell, Special Counsel for the Agents	  	
	 EXHIBIT C -
	  	Assignment and Assumption Agreement	  	
	 EXHIBIT D -
	  	Notice of Issuance	  	

  

 ii 

 LETTER OF CREDIT AGREEMENT 
 AGREEMENT dated as of September 19, 2008 among DUKE ENERGY INDIANA, INC. and DUKE ENERGY KENTUCKY, INC., as Borrowers, the BANKS listed on the signature pages hereof, BANK OF AMERICA, N.A., as Administrative Agent, and
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. – NEW YORK BRANCH, as Syndication Agent, and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., INTESA SANPAOLO S.P.A., NEW YORK BRANCH, MIZUHO CORPORATE BANK (USA) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Co-Documentation Agents. 
 The parties hereto agree as follows: 
 ARTICLE 1 
 DEFINITIONS 
 Section 1.01. Definitions. The following terms, as used herein, have the following meanings: 
 “Additional Bank”
means any financial institution that becomes a Bank for purposes hereof pursuant to Section 2.06 or 8.03. 
 “Administrative
Agent” means Bank of America in its capacity as administrative agent for the Banks hereunder, and its successors in such capacity. 
 “Administrative Questionnaire” means, with respect to each Bank, the administrative questionnaire in the form submitted to such Bank by the Administrative Agent and submitted to the Administrative Agent (with a copy to each
Borrower) duly completed by such Bank. 
 “Affiliate” means, as to any Person (the “specified Person”), (i) any
Person that directly, or indirectly through one or more intermediaries, controls the specified Person (a “Controlling Person”) or (ii) any Person (other than the specified Person or a Subsidiary of the specified Person) which
is controlled by or is under common control with a Controlling Person. As used herein, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or otherwise. 
 “Agent” means any of the Administrative
Agent, the Syndication Agent or the Co-Documentation Agents. 
 “Agent Parties” has the meaning set forth in Section 9.01(b).

 “Aggregate Exposure” means, with respect to any Bank at any time, the aggregate amount of its Borrower Exposures to all Borrowers
at such time. 
 “Agreement” means this Agreement as the same may be amended from time to time. 
 “Applicable Rate” means, from time to time, the applicable percentage rate per annum, determined in accordance with the Pricing Schedule.

 “Appropriate Share” has the meaning set forth in Section 8.01(d). 
 “Approved Fund” means any Fund that is administered or managed by (i) a Bank, (ii) an Affiliate of a Bank or (iii) an entity or an
Affiliate of an entity that administers or manages a Bank. 
 “Approved Officer” means the president, the chief financial officer, a
vice president, the treasurer, an assistant treasurer or the controller of the Borrower or such other representative of the Borrower as may be designated by any one of the foregoing with the consent of the Administrative Agent. 
 “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager. 
 “Assignee” has the meaning set forth in Section 9.06(c). 
 “Availability Percentage” means, with respect to each Borrower at any time, the percentage which such Borrower’s Sublimit bears to the aggregate amount of the Commitments, all determined as of such time.

 “Bank” means each bank or other financial institution listed on the signature pages hereof, each
Additional Bank, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective successors. Each reference herein to a “Bank” shall, unless the context otherwise requires, include each Issuing Bank in such
capacity. 
 “Bank Bonds” has the meaning set forth in Section 2.07(a). 
 “Bank of America” means Bank of America, N.A. 
 “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to
time by the Administrative Agent as its “prime rate.” The “prime rate” is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by the Administrative Agent shall take effect at the opening of
business on the day specified in the public announcement of such change. 
 “Bonds” means any tax-exempt variable rate demand bonds
issued or to be issued by the Borrowers and supported by a Letter of Credit. 
 “Borrower” means each of Duke Energy Indiana and Duke
Energy Kentucky. References herein to “the Borrower” in connection with any Letter of Credit hereunder are to the particular Borrower for whose account such Letter of Credit is issued or proposed to be issued. 
 “Borrower Exposure” means, with respect to any Bank and any Borrower at any time, (i) an amount equal to the product of such Bank’s
Percentage and such Borrower’s Sublimit (whether used or unused) at such time or (ii) if such Bank’s Commitment shall have terminated, either generally or with respect to such Borrower, or if such Borrower’s Sublimit shall have
been reduced to zero, the aggregate amount of its Letter of Credit Liabilities in respect of such Borrower. 
 “Borrower Materials”
has the meaning set forth in Section 5.01. 
 “Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City or in the State of North Carolina are authorized by law to close. 
 “Co-Documentation Agent” means
each of The Bank of Tokyo-Mitsubishi UFJ, Ltd., Intesa Sanpaolo S.p.A., New York Branch, Mizuho Corporate Bank (USA) and Wells Fargo Bank, National Association, in its capacity as documentation agent in respect of this Agreement. 
 “Commitment” means (i) with respect to any Bank listed on the signature pages hereof, the amount set forth opposite its name on the
Commitment Schedule as its Commitment and (ii) with respect to each Additional Bank or Assignee which becomes a Bank pursuant to Sections 2.06, 8.03 and 9.06(c), the amount of the Commitment thereby assumed by it, in each case as such amount
may from time to time be reduced pursuant to Sections 2.02, 2.03, 8.03 or 9.06(c) or increased pursuant to Sections 2.06, 8.03 or 9.06(c). 
 “Commitment Schedule” means the Commitment Schedule attached hereto. 
 “Consolidated Capitalization” means,
with respect to any Borrower, the sum, without duplication, of (i) Consolidated Indebtedness of such Borrower, (ii) consolidated common equityholders’ equity as would appear on a consolidated balance sheet of such Borrower and its
Consolidated Subsidiaries prepared in accordance with generally accepted accounting principles, (iii) the aggregate liquidation preference of preferred or priority equity interests (other than preferred or priority equity interests subject to
mandatory redemption or repurchase) of such Borrower and its Consolidated Subsidiaries upon involuntary liquidation, (iv) the aggregate outstanding amount of all Equity Preferred Securities of such Borrower and (v) minority interests as
would appear on a consolidated balance sheet of such Borrower and its Consolidated Subsidiaries prepared in accordance with generally accepted accounting principles. 
 “Consolidated Indebtedness” means, at any date, with respect to any Borrower, all Indebtedness of such Borrower and its Consolidated Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles; provided that Consolidated Indebtedness shall exclude, to the extent otherwise reflected therein, Equity Preferred Securities of such Borrower and its Consolidated Subsidiaries up to a maximum excluded amount
equal to 15% of Consolidated Capitalization of such Borrower. 
  

 2 

 “Consolidated Subsidiary” means, for any Person, at any date any Subsidiary or other entity the
accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date. 
 “DEC” means Duke Energy Corporation, a Delaware corporation. 
 “Default” means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. 
 “Defaulted Obligations” has the meaning set forth in Section 2.07(b). 
 “Duke Energy Indiana” means
Duke Energy Indiana, Inc., an Indiana corporation. 
 “Duke Energy Kentucky” means Duke Energy Kentucky, Inc., a Kentucky corporation.

 “Effective Date” means the date this Agreement becomes effective in accordance with Section 3.01. 
 “Endowment” means the Duke Endowment, a charitable common law trust established by James B. Duke by Indenture dated December 11, 1924.

 “Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes. 
 “Equity Preferred
Securities” means, with respect to any Borrower, any trust preferred securities or deferrable interest subordinated debt securities issued by such Borrower or any Subsidiary or other financing vehicle of such Borrower that (i) have an
original maturity of at least twenty years and (ii) require no repayments or prepayments and no mandatory redemptions or repurchases, in each case, prior to the first anniversary of the Termination Date. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 
 “ERISA Group” means, with respect to any Borrower, such Borrower and all other members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control which, together with such Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code. 
 “Event of Default” has the meaning set forth in Section 6.01. 
 “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to Bank of America on such day on such transactions as determined by the Administrative Agent. 
 “Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary
course of its business. 
 “Hedging Agreement” means for any Person, any and all agreements, devices or arrangements designed to
protect such Person or any of its Subsidiaries from the fluctuations of interest rates, exchange rates applicable to such party’s assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, commodity swap agreements, forward rate currency or interest rate options, puts and warrants. Notwithstanding anything herein
to the contrary, “Hedging Agreements” shall also include fixed-for-floating interest rate swap agreements and similar instruments. 
  

 3 

 “Increased Commitments” has the meaning set forth in Section 2.06. 
 “Indebtedness” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all
indebtedness of such Person for the deferred purchase price of property or services purchased (excluding current accounts payable incurred in the ordinary course of business), (iii) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired, (iv) all indebtedness under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases in respect of
which such Person is liable as lessee, (v) the face amount of all outstanding letters of credit issued for the account of such Person (other than letters of credit relating to indebtedness included in Indebtedness of such Person pursuant to
another clause of this definition) and, without duplication, the unreimbursed amount of all drafts drawn thereunder, (vi) indebtedness secured by any Lien on property or assets of such Person, whether or not assumed (but in any event not
exceeding the fair market value of the property or asset), (vii) all direct guarantees of Indebtedness referred to above of another Person, (viii) all amounts payable in connection with mandatory redemptions or repurchases of preferred
stock or member interests or other preferred or priority equity interests and (ix) any obligations of such Person (in the nature of principal or interest) in respect of acceptances or similar obligations issued or created for the account of
such Person. 
 “Initial Sublimit” means, with respect to each Borrower, the amount set forth opposite its name in the table below:

  

				
	 Borrower
	  	Initial Sublimit
	 Duke Energy Indiana
	  	$	278,640,000
	 Duke Energy Kentucky
	  	$	51,360,000

 “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, or any
successor statute. 
 “Investment Grade Status” exists as to any Person at any date if all senior long-term unsecured debt securities
of such Person outstanding at such date which had been rated by S&P or Moody’s are rated BBB- or higher by S&P or Baa3 or higher by Moody’s, as the case may be, or if such Person does not have a rating of its long-term
unsecured debt securities, then if the corporate credit rating of such Person, if any exists, from S&P is BBB- or higher or the issuer rating of such Person, if any exists, from Moody’s is Baa3 or higher. 
 “Issuer Documents” means with respect to any Letter of Credit, any Notice of Issuance, and any other document, agreement and instrument entered
into by an Issuing Bank and a Borrower or in favor of an Issuing Bank and relating to such Letter of Credit. 
 “Issuing Bank” means
(i) each of Bank of America and Wells Fargo and (ii) any other Bank that may agree to issue letters of credit hereunder, in each case as issuer of a Letter of Credit hereunder. No Issuing Bank shall be obligated to issue any Letter of
Credit hereunder if, after giving effect thereto, the aggregate Letter of Credit Liabilities in respect of all Letters of Credit issued by such Issuing Bank hereunder would exceed (i) in the case of Bank of America, $278,640,000 (as such amount
may be modified from time to time by agreement between the Borrowers and Bank of America), (ii) in the case of Wells Fargo, $51,360,000 (as such amount may be modified from time to time by agreement between the Borrowers and such Issuing Bank)
or (iii) with respect to any other Issuing Bank, such amount (if any) as may be agreed for this purpose from time to time by such Issuing Bank and the Borrowers. For avoidance of doubt, the limitations in the preceding sentence are for the
exclusive benefit of the respective Issuing Banks, are incremental to the other limitations specified herein on the availability of Letters of Credit and do not affect such other limitations. 
 “Letter of Credit” means a letter of credit to be issued hereunder by an Issuing Bank in accordance with Section 2.05. 
 “Letter of Credit Liabilities” means, for any Bank and at any time, such Bank’s ratable participation in the sum of (x) the amounts then
owing by all Borrowers in respect of amounts drawn under Letters of Credit and (y) the aggregate amount then available for drawing under all Letters of Credit. 
 “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, any Borrower or any of its
Subsidiaries shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such
asset. 
 “Loan Documents” means this Agreement, each Issuer Document and the fee letter agreement, dated as of August 26, 2008,
among the Borrowers, the Administrative Agent and the Arranger. 
  

 4 

 “Material Debt” means, with respect to any Borrower, Indebtedness of such Borrower or any of its
Material Subsidiaries in an aggregate principal amount exceeding $150,000,000. 
 “Material Plan” has the meaning set forth in
Section 6.01(i). 
 “Material Subsidiary” means at any time, with respect to any Borrower, any Subsidiary of such Borrower that
is a “significant subsidiary” (as such term is defined on the Effective Date in Regulation S-X of the Securities and Exchange Commission (17 CFR 210.1-02(w)), but treating all references therein to the “registrant” as references
to such Borrower). 
 “Moody’s” means Moody’s Investors Service, Inc. 
 “Mortgage Indenture” means, in the case of each of Duke Energy Indiana and Duke Energy Kentucky, the PSI Energy First Mortgage Trust Indenture or
ULH&P First Mortgage Trust Indenture, respectively. 
 “Notice of Issuance” has the meaning set forth in Section 2.05(b).

 “Obligations” has the meaning set forth in Section 2.07(a). 
 “Parent” means, with respect to any Bank, any Person controlling such Bank. 
 “Participant” has the meaning set forth in Section 9.06(b). 
 “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. 
 “Percentage” means, with respect to any Bank at any time, the percentage which the amount of its Commitment at such time represents of the aggregate amount of all the Commitments at such time. 
 “Person” means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof. 
 “Plan” means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and is either (i) maintained by a member of the ERISA Group for employees of a member of the ERISA Group or
(ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions. 
 “Platform” has the meaning set forth in
Section 5.01. 
 “Pricing Schedule” means the Pricing Schedule attached hereto. 
 “PSI Energy First Mortgage Trust Indenture” means the first mortgage trust indenture, dated as of September 1, 1939, between Duke Energy
Indiana and LaSalle Bank National Association (formerly known as LaSalle National Bank Company and successor, as trustee, to First National Bank of Chicago), as trustee, as amended, modified or supplemented from time to time, and any successor or
replacement mortgage trust indenture. 
 “Quarterly Payment Date” means the first Business Day of each January, April, July and
October. 
 “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 “Reimbursement Obligation” means, at any time, the obligation of the Borrower then outstanding under Section 2.05 to reimburse
the Issuing Bank for amounts paid by the Issuing Bank in respect of any one or more drawings under a Letter of Credit. 
 “Required
Banks” means, at any time, Banks having at least 51% in aggregate amount of the Aggregate Exposures at such time. 
 “S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. 
  

 5 

 “Subsidiary” means, as to any Person, any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person; unless otherwise specified,
“Subsidiary” means a Subsidiary of a Borrower. 
 “Substantial Assets” means, with respect to any Borrower, assets sold or
otherwise disposed of in a single transaction or a series of related transactions representing 25% or more of the consolidated assets of such Borrower and its Consolidated Subsidiaries, taken as a whole. 
 “Sublimit” means, with respect to each Borrower, its Initial Sublimit, as the same may be modified from time to time pursuant to Sections 2.02 and
2.06. 
 “Syndication Agent” means Banco Bilbao Vizcaya Argentaria, S.A. – New York Branch, in its capacity as syndication agent
in respect of this Agreement. 
 “Termination Date” means September 19, 2011. 
 “Trust” means The Doris Duke Trust, a trust established by James B. Duke by Indenture dated December 11, 1924 for the benefit of certain
relatives. 
 “ULH&P First Mortgage Trust Indenture” means the first mortgage trust indenture, dated as of February 1, 1949,
between Duke Energy Kentucky and The Bank of New York (successor to Irving Trust Company), as trustee, as amended, modified or supplemented from time to time, and any successor or replacement mortgage trust indenture. 
 “Unfunded Vested Liabilities” means, with respect to any Plan at any time, the amount (if any) by which (i) the present value of all benefits
under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability
of a member of the ERISA Group to the PBGC or the Plan under Title IV of ERISA. 
 “United States” means the United States of America,
including the States and the District of Columbia, but excluding its territories and possessions. 
 “Utilization Limits” means the
requirements that (i) for any Bank, the aggregate amount of its Letter of Credit Liabilities shall at no time exceed the amount of its Commitment and (ii) for any Borrower, the aggregate amount of Letter of Credit Liabilities in respect of
Letters of Credit issued for its account shall at no time exceed its Sublimit. 
 “Wells Fargo” means Wells Fargo Bank, National
Association. 
 Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to
time, applied on a basis consistent (except for changes concurred in by the relevant Borrower’s independent public accountants) with the most recent audited consolidated financial statements of such Borrower and its Consolidated Subsidiaries
delivered to the Banks. 
  

 6 

 ARTICLE 2 
 THE CREDITS 
 Section 2.01. Fees. (a) Unused Commitment Fee. Each Borrower shall pay to
the Administrative Agent, for the account of the Banks ratably in proportion to their Percentages, an unused commitment fee on the unused amounts of the Commitments for such Borrower (with such unused amounts calculated as the difference between
(i) the Sublimit for such Borrower and (ii) the Letter of Credit Liabilities of such Borrower at a rate per annum equal to the Applicable Rate for such Borrower. Such unused commitment fee shall accrue for each day from and including the
Effective Date but excluding the day on which the Commitments have terminated, either generally or with respect to such Borrower or when such Borrower’s Sublimit shall have been reduced to zero, calculated on the basis of the actual number of
days elapsed in a year of 365 days. 
 (b) Utilization Fee and Fronting Fee. Each Borrower shall pay to the Administrative Agent (i) for
the account of the Banks ratably a letter of credit fee accruing daily on the aggregate amount then available for drawing under all outstanding Letters of Credit that are issued upon the request of such Borrower at a rate per annum equal to the
Applicable Rate for such Borrower, calculated on the basis of the actual number of days elapsed in a year of 360 days, and (ii) for the account of each Issuing Bank a letter of credit fronting fee accruing daily on the aggregate amount then
available for drawing under all Letters of Credit that are issued upon the request of such Borrower issued by such Issuing Bank at a rate per annum of 0.125%, calculated on the basis of the actual number of days elapsed in a year of 360 days (or
such other rate as may be mutually agreed from time to time by the Borrower and such Issuing Bank). 
 (c) Payments. Accrued fees under this
Section for the account of any Bank shall be payable quarterly in arrears on each Quarterly Payment Date and upon the Termination Date. 
 Section 2.02. Optional Termination or Reduction of Sublimits. Each Borrower may, upon at least three Business Days’ notice to the Administrative Agent, reduce its Sublimit (i) to zero, if no Letter of Credit
Liabilities for its account are outstanding or (ii) by an amount of $1,000,000 or any larger multiple of $1,000,000 so long as, after giving effect to such reduction, its Sublimit is not less than the aggregate Letter of Credit Liabilities
outstanding for its account. Upon any reduction in the Sublimit of a Borrower to zero pursuant to this Section 2.02, such Borrower shall cease to be a Borrower hereunder. The aggregate amount of the Commitments will be automatically and
simultaneously reduced by the amount of each reduction in any Sublimit pursuant to this Section 2.02 or pursuant to Section 6.01. 
 Section 2.03. Mandatory Termination of Commitments. The Commitment of each Bank shall terminate on the Termination Date. 
 Section 2.04. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, Letter of Credit Liabilities and of fees payable hereunder not later than 1:00 P.M. (Eastern
time) on the date when due, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.01(a) and without reduction by reason of any set-off, counterclaim or deduction of
any kind. The Administrative Agent will promptly distribute to each Bank in like funds its ratable share of each such payment received by the Administrative Agent for the account of the Banks. Whenever any payment of principal of, or interest on,
Letter of Credit Liabilities or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law
or otherwise, interest thereon shall be payable for such extended time. 
 (b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays
such amount to the Administrative Agent, at the Federal Funds Rate. 
 Section 2.05. Issuances of Letters of Credit. 
 (a) Subject to the terms and conditions hereof, each Issuing Bank agrees to issue Letters of Credit hereunder from time to time before the tenth Business Day prior
to the Termination Date upon the request and for the account of any Borrower; provided that, immediately after each Letter of Credit is issued, the Utilization Limits shall not be exceeded. 

  

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Upon the date of issuance by the Issuing Bank of a Letter of Credit, the Issuing Bank shall be deemed, without further action by any party hereto, to have sold to each
Bank, and each Bank shall be deemed, without further action by any party hereto, to have purchased from the Issuing Bank, a participation to the extent of its Percentage in such Letter of Credit and the related Letter of Credit Liabilities.

 (b) The Borrower shall give the Issuing Bank notice at least three Business Days prior to the requested issuance of a Letter of Credit, specifying
the date such Letter of Credit is to be issued and describing the terms of such Letter of Credit (such notice, including any such notice given in connection with the extension of a Letter of Credit, a “Notice of Issuance”),
substantially in the form of Exhibit D, appropriately completed. Upon receipt of a Notice of Issuance, the Issuing Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Bank of the contents
thereof and of the amount of such Bank’s participation in such Letter of Credit. The issuance by the Issuing Bank of each Letter of Credit shall, in addition to the conditions precedent set forth in Article 3, be subject to the conditions
precedent that such Letter of Credit shall be denominated in U.S. dollars and shall be in such form and contain such terms as shall be reasonably satisfactory to the Issuing Bank. Unless otherwise notified by the Administrative Agent, the Issuing
Bank may, but shall not be required to, conclusively presume that all conditions precedent set forth in Article 3 have been satisfied. The Borrower shall also pay to each Issuing Bank for its own account issuance, drawing, amendment and extension
charges in the amounts and at the times as agreed between the Borrower and such Issuing Bank. Except for non-substantive amendments to any Letter of Credit for the purpose of correcting errors or ambiguities or to allow for administrative
convenience (which amendments each Issuing Bank may make in its discretion with the consent of the Borrower), the amendment, extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit. If any Letter
of Credit contains a provision pursuant to which it is deemed to be automatically renewed unless notice of termination is given by the Issuing Bank of such Letter of Credit, the Issuing Bank shall timely give notice of termination if (i) as of
close of business on the seventeenth day prior to the last day upon which the Issuing Bank’s notice of termination may be given to the beneficiaries of such Letter of Credit, the Issuing Bank has received a notice of termination from the
Borrower or a notice from the Administrative Agent that the conditions to issuance of such Letter of Credit cannot be satisfied on the day such Letter of Credit is to be renewed or (ii) the renewed Letter of Credit would have a term not
permitted by subsection (c) below. 
 (c) No Letter of Credit shall have a term extending beyond the fifth Business Day prior to the Termination
Date. 
 (d) Upon receipt from the beneficiary of any applicable Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing
Bank shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Bank as to the amount to be paid as a result of such demand or drawing and the payment date. The Borrower shall be irrevocably
and unconditionally obligated forthwith to reimburse the Issuing Bank within two (2) Business Days for any amounts paid by the Issuing Bank upon any drawing under any Letter of Credit without presentment, demand, protest or other formalities of
any kind. All such amounts paid by the Issuing Bank and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the Base Rate for such day plus, if such amount remains unpaid for
more than two Business Days, 1%. In addition, each Bank will pay to the Administrative Agent, for the account of the applicable Issuing Bank, immediately upon such Issuing Bank’s demand at any time during the period commencing after such
drawing until reimbursement therefor in full by the Borrower, an amount equal to such Bank’s ratable share of such drawing (in proportion to its participation therein), together with interest on such amount for each day from the date of the
Issuing Bank’s demand for such payment (or, if such demand is made after 12:00 Noon (Eastern time) on such date, from the next succeeding Business Day) to the date of payment by such Bank of such amount at a rate of interest per annum equal to
the Federal Funds Rate and, if such amount remains unpaid for more than five Business Days after the Issuing Bank’s demand for such payment, at a rate of interest per annum equal to the Base Rate plus 1%. The Issuing Bank will pay to each Bank
ratably all amounts received from the Borrower for application in payment of its reimbursement obligations in respect of any Letter of Credit, but only to the extent such Bank has made payment to the Issuing Bank in respect of such Letter of Credit
pursuant hereto. 
 (e) The obligations of the Borrower and each Bank under subsection 2.05(d) above shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances: 
 (i) the use which may be made of the Letter of Credit by, or any acts or omission of, a beneficiary of a Letter of Credit (or any Person for whom
the beneficiary may be acting); 
 (ii) the existence of any claim, set-off, defense or other rights that the Borrower may have at any
time against a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting), the Banks (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document
related hereto or thereto or any unrelated transaction; 
  

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 (iii) any statement or any other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; 
 (iv) payment
under a Letter of Credit to the beneficiary of such Letter of Credit against presentation to the Issuing Bank of a draft or certificate that does not comply with the terms of the Letter of Credit; provided that the determination by the
Issuing Bank to make such payment shall not have been the result of its willful misconduct or gross negligence; or 
 (v) any other act
or omission to act or delay of any kind by any Bank (including the Issuing Bank), the Administrative Agent or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this subsection (v), constitute a
legal or equitable discharge of the Borrower’s or the Bank’s obligations hereunder. 
 (f) The Borrower hereby indemnifies and holds harmless
each Bank (including the Issuing Bank) and the Administrative Agent from and against any and all claims, damages, losses, liabilities, costs or expenses which such Bank or the Administrative Agent may incur (including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the Issuing Bank may incur by reason of or in connection with (i) the failure of any other Bank to fulfill or comply with its obligations to such Issuing Bank hereunder (but nothing
herein contained shall affect any rights the Borrower may have against such defaulting Bank) or (ii) any litigation arising with respect to this Agreement (whether or not the Issuing Bank shall prevail in such litigation)), and none of the
Banks (including the Issuing Bank) nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by reason of or in connection with the execution and delivery or transfer of or payment or
failure to pay under any Letter of Credit, including without limitation any of the circumstances enumerated in subsection 2.05(e) above, as well as (i) any error, omission, interruption or delay in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, (ii) any loss or delay in the transmission of any document required in order to make a drawing under a Letter of Credit and (iii) any consequences arising from causes beyond the control of the
Issuing Bank, including, without limitation, any government acts or any other circumstances whatsoever, in making or failing to make payment under such Letter of Credit; provided that the Borrower shall not be required to indemnify the
Issuing Bank for any claims, damages, losses, liabilities, costs or expenses, and the Borrower shall have a claim for direct (but not consequential) damage suffered by it, to the extent found by a court of competent jurisdiction to have been caused
by (x) the willful misconduct or gross negligence of the Issuing Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Bank’s failure to pay
under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit. Nothing in this subsection 2.05(f) is intended to limit the obligations of the Borrower under any other
provision of this Agreement. To the extent the Borrower does not indemnify the Issuing Bank as required by this subsection, the Banks agree to do so ratably in accordance with their Commitments. 
 (g) The Issuing Bank shall act on behalf of the Banks with respect to any Letters of Credit issued by it and the documents associated therewith, and the Issuing
Bank shall have all of the benefits and immunities (i) provided to the Administrative Agent in Article 7 (other than Sections 7.08 and 7.09) with respect to any acts taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article 7 included the Issuing Bank
with respect to such acts or omissions and (ii) as additionally provided herein with respect to the Issuing Bank. 
 Section 2.06.
Increase In Commitments; Additional Banks. (a) Subsequent to the Effective Date, the Borrowers may, upon at least 30 days’ notice to the Administrative Agent (which shall promptly provide a copy of such notice to the Banks), propose to
increase the aggregate amount of the Commitments, provided that after giving effect to any such increase, the total Commitments shall not exceed $450,000,000 (the amount of any such increase, the “Increased Commitments”).
Such notice by the Borrowers will set forth the amounts by which the Borrowers are proposing that the respective Sublimit of each Borrower be increased. 
 (b) The Borrowers may designate another bank or other lenders (which may be, but need not be, one or more of the existing Banks) which at the time agree to (i) in the case of any such lender that is an existing Bank, increase its
Commitment and (ii) in the case of any other such lender (an “Additional Bank”), become a party to this Agreement; provided that the consent of the Administrative Agent and of each Issuing Bank is required for an
Additional Bank to become party to this Agreement (with such consent not to be unreasonably withheld or delayed). The sum of the increases in the Commitments of the existing Banks pursuant to this subsection (b) plus the Commitments of the
Additional Banks shall not in the aggregate exceed the unsubscribed amount of the Increased Commitments. 
  

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 (c) An increase in the aggregate amount of the Commitments pursuant to this Section 2.06 shall become
effective upon the receipt by the Administrative Agent of an agreement in form and substance satisfactory to the Administrative Agent signed by the Borrowers, by each Additional Bank and by each other Bank whose Commitment is to be increased,
setting forth the new Commitments of such Banks and setting forth the agreement of each Additional Bank to become a party to this Agreement and to be bound by all the terms and provisions hereof, together with such evidence of appropriate corporate
authorization on the part of the Borrowers with respect to the Increased Commitments and such opinions of counsel for the Borrowers with respect to the Increased Commitments as the Administrative Agent may reasonably request. Upon any increase in
the aggregate amount of the Commitments pursuant to this Section 2.06, the respective Letter of Credit Liabilities of the Banks shall be redetermined as of the effective date of such increase. 
 Section 2.07. Pledge of Bonds. (a) Each of the Borrowers hereby pledges, assigns, hypothecates, transfers and delivers to the Administrative
Agent, for the account of the Banks, all of its right, title and interest to, and hereby grants to the Administrative Agent, for the account of the Banks, a first lien on, and security interest in, all right, title and interest of such Borrower in
and to the following (the “Collateral”): 
 (i) all Bonds which may from time to time have been purchased with proceeds
of drawings under a Letter of Credit (the “Bank Bonds”); 
 (ii) all income, earnings, profits, interest, premium or
other payments in whatever form in respect of the Bank Bonds; 
 (iii) upon the occurrence and during the continuance of any Event of
Default, all proceeds (cash and non-cash) arising out of the sale, exchange, collection, enforcement or other disposition of all or any portion of the Bank Bonds; 
 as collateral security for the prompt and complete payment when due of all obligations of such Borrower for (i) reimbursement of amounts drawn under such Letter of Credit, (ii) accrued interest on such amounts as
provided in Section 2.05(d) and (iii) expense reimbursement and indemnity obligations as provided in Section 9.03 relating to such Letter of Credit (the “Obligations”). The Bank Bonds shall be held by the trustee or
other custodian appointed pursuant to the definitive documentation relating to such Bank Bonds. 
 (b) Upon the occurrence of an Event of Default specified in Section 6.01(a) with respect to the Obligations of a Borrower (the “Defaulted Obligations”), the Administrative Agent shall, if requested by Banks having more
than 66- 2/3% in aggregate amount of the Letter of Credit Liabilities with respect to such Borrower, by notice to such Borrower for the
account of the Banks and without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon such Borrower or any other person (all and each of
which demands, advertisements and/or notices are hereby expressly waived), may forthwith collect, receive, appropriate and realize upon the Collateral securing the Defaulted Obligations, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase, contract to sell or otherwise dispose of and deliver said Collateral, or any part thereof, in one or more parcels at public or private sale or sales, at any exchange, broker’s board or at any of the Administrative
Agent’s offices or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk, with the right of any Bank upon any
such sale or sales, public or private, to purchase the whole or any part of said Collateral so sold, free of any right or equity of redemption in such Borrower, which right or equity is hereby expressly waived or released. The Administrative Agent
shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred therein or incidental to the care, safekeeping or otherwise of any
and all of the Collateral or in any way relating to the rights of the Administrative Agent hereunder, including reasonable attorney’s fees and legal expenses, to the payment in whole or in part of the Defaulted Obligations in such order as the
Administrative Agent may elect, such Borrower remaining liable for any deficiency remaining unpaid after such application, and, after so applying such net proceeds, the surplus, if any, to be provided to such Borrower after the payment by the
Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1) of the Uniform Commercial Code. Such Borrower agrees that the Administrative Agent need not give more than 10 days’
notice of the time and place of any public sale or of the time after which a private sale or other intended disposition is to take place and that such notice is reasonable notification of such matters. No notification need be given to any Borrower
if it has signed after default a statement renouncing or modifying any right to notification of sale or other intended disposition. In addition to the rights and remedies granted to the Administrative Agent herein and in any other instrument or
agreement securing, evidencing or relating to any of the Defaulted Obligations, the Administrative Agent, for the account of the Banks, shall have all the rights and remedies of a secured party under the Uniform Commercial Code of the State of
Indiana against Duke Energy Indiana, and shall have all the rights and remedies of a secured party under the Uniform Commercial Code of the State of Kentucky against Duke Energy Kentucky, except to the extent the remedial provisions of some other
state laws are applicable. 
  

 10 

 (c) Each Borrower covenants that the Collateral will not be subject to a prior pledge, lien, mortgage,
hypothecation, security interest, charge, option or encumbrance or to any agreement purporting to grant to any third party a security interest in the property or assets of such Borrower which would include the Collateral, except as may be created by
the documents relating to the Bank Bonds. Each Borrower covenants and agrees that it will defend the Administrative Agent’s right, title and security interest in and to the Collateral and the proceeds thereof against the claims and demands of
all persons whomsoever. 
 (d) Bank Bonds and related Collateral purchased with proceeds of drawings under a Letter of Credit shall be released from
the security interest created hereunder automatically without any further action upon satisfaction of the Obligations with respect to such Letter of Credit. 
 ARTICLE 3 
 CONDITIONS 
 Section 3.01. Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.05). 
 (a) receipt by the Administrative Agent of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Administrative Agent in form satisfactory to it of telegraphic, telecopy, telex or other written confirmation from such party of execution of a counterpart hereof by such party); 

(b) receipt by the Administrative Agent of (i) an opinion of internal counsel of each Borrower, substantially in the form of Exhibit A-1 hereto and
(ii) an opinion of Robinson, Bradshaw & Hinson, P.A., special counsel for the Borrowers, substantially in the form of Exhibit A-2 hereto, and, in each case, covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request; 
 (c) receipt by the Administrative Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agents, substantially in the form of Exhibit B hereto and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; 
 (d) receipt by the Administrative Agent of a certificate signed by a Vice President, the Treasurer, an Assistant Treasurer or the Controller of each of the
Borrowers, dated the Effective Date, to the effect set forth in clauses (c) and (d) of Section 3.02; 
 (e) receipt by the
Administrative Agent of all documents it may have reasonably requested prior to the date hereof relating to the existence of the Borrowers, the corporate authority for and the validity of this Agreement, and any other matters relevant hereto, all in
form and substance satisfactory to the Administrative Agent; 
 (f) receipt by the Administrative Agent for the account of the Banks of participation
fees as heretofore mutually agreed by the Borrowers and the Administrative Agent; 
 provided that this Agreement shall not become effective or be binding on
any party hereto unless all of the foregoing conditions are satisfied not later than September 19, 2008. The Administrative Agent shall promptly notify the Borrowers and the Banks of the Effective Date, and such notice shall be conclusive and
binding on all parties hereto. 
 Section 3.02. Conditions to Issuance of Letters of Credit. The obligation of any Issuing Bank to issue
(or renew or extend the term of) any Letter of Credit at the request of any Borrower is subject to the satisfaction of the following conditions: 
 (a)
receipt by the Issuing Bank of a Notice of Issuance as required by Section 2.05(b); 
 (b) the fact that, immediately after issuance of such
Letter of Credit, the Utilization Limits shall not be exceeded; 
 (c) the fact that, immediately after issuance of such Letter of Credit, no Default
with respect to such Borrower shall have occurred and be continuing; and 
  

 11 

 (d) the fact that the representations and warranties of such Borrower contained in this Agreement (except the
representations and warranties set forth in Sections 4.04(c) and 4.06) shall be true on and as of the date of issuance of such Letter of Credit. 
 Each issuance of a
Letter of Credit hereunder shall be deemed to be a representation and warranty by such Borrower on the date of such issuance as to the facts specified in clauses (b), (c) and (d) of this Section. 
 ARTICLE 4 
 REPRESENTATIONS AND
WARRANTIES 
 Each Borrower, severally but not jointly, represents and warrants that: 
 Section 4.01. Organization and Power. Such Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and is duly qualified to do business in each jurisdiction where such
qualification is required, except where the failure so to qualify would not have a material adverse effect on the business, financial position or results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole.

 Section 4.02. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by such Borrower of
this Agreement are within such Borrower’s powers, have been duly authorized by all necessary company action, require no action by or in respect of, or filing with, any governmental body, agency or official (except for consents, authorizations
or filings which have been obtained or made, as the case may be, and are in full force and effect) and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the articles of incorporation, by-laws,
certificate of formation or the limited liability company agreement of such Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Borrower or result in the creation or imposition of any Lien on any
asset of such Borrower or any of its Material Subsidiaries. 
 Section 4.03. Binding Effect. This Agreement constitutes a valid and binding
agreement of such Borrower, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and by general principles of equity. 
 Section 4.04. Financial Information. (a) The consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as of
December 31, 2007 and the related consolidated statements of income, cash flows, capitalization and retained earnings for the fiscal year then ended, reported on by Deloitte & Touche, copies of which have been delivered to each of the
Banks by using such Borrower’s IntraLinks site or otherwise made available, fairly present, in conformity with generally accepted accounting principles, the consolidated financial position of such Borrower and its Consolidated Subsidiaries as
of such date and their consolidated results of operations and cash flows for such fiscal year, except with respect to the following: Duke Energy Indiana’s financial statements contain an error relating to the actuarially-computed Other
Post Employee Benefits (OPEB) liability. Retiree medical and dental care costs comprise the majority of OPEB liability. These costs have been accrued each year based on studies by the actuarial firm of Hewitt and Associates. Past
calculations of OPEB incorporated incorrect assumptions regarding benefits paid to retiree’s spouses. The impact of the error at Duke Energy Indiana is a reduction of OPEB liability of $19 million as of June 30, 2008 and $18 million
as of December 31, 2007. 
 (b) The unaudited consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as of June 30,
2008 and the related unaudited consolidated statements of income and cash flows for the six month period then ended, copies of which have been delivered to each of the Banks by using such Borrower’s IntraLinks site or otherwise made available,
fairly present, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in subsection (a) of this Section, the consolidated financial position of such Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of operations and changes in financial position for such six-month period (subject to normal year-end adjustments and the absence of footnotes), except with respect to the
following: Duke Energy Indiana’s financial statements contain an error relating to the actuarially-computed Other Post Employee Benefits (OPEB) liability. Retiree medical and dental care costs comprise the majority of OPEB
liability. These costs have been accrued each year based on studies by the actuarial firm of Hewitt and Associates. Past calculations of OPEB incorporated incorrect assumptions regarding benefits paid to retiree’s spouses. The
impact of the error at Duke Energy Indiana is a reduction of OPEB liability of $19 million as of June 30, 2008 and $18 million as of December 31, 2007. 
  

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 (c) Since December 31, 2007, there has been no material adverse change in the business, financial position or
results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, except that each of the Borrowers incurred significant windstorm damage to its utility system on September 14, 2008. The Borrowers’
preliminary estimates of the amount of such damages are still being developed but the Borrowers do not expect such amount to cause a material adverse change to the Borrowers’ respective financial positions. 
 Section 4.05. Regulation U. Such Borrower and its Material Subsidiaries are not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) and no issuance of Letters of Credit for the account of such Borrower will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. Not more than 25% of the value of the assets of such Borrower and its Material Subsidiaries is represented by margin stock. 
 Section 4.06. Litigation. Except as disclosed in the Borrower’s annual report on Form 10-K for the fiscal year ended December 31, 2007, its
quarterly report on Form 10-Q for the period ended March 31, 2008 and its quarterly report on Form 10-Q for the period ended June 30, 2008, there is no action, suit or proceeding pending against, or to the knowledge of such Borrower
threatened against or affecting, such Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official which would be likely to be decided adversely to such Borrower or such Subsidiary and, as a result,
have a material adverse effect upon the business, consolidated financial position or results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, or which in any manner draws into question the validity of this
Agreement. 
 Section 4.07. Compliance with Laws. Such Borrower and each of its Material Subsidiaries is in compliance in all material
respects with all applicable laws, ordinances, rules, regulations and requirements of governmental authorities (including, without limitation, ERISA and Environmental Laws) except where (i) non-compliance would not have a material adverse
effect on the business, financial position or results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, or (ii) the necessity of compliance therewith is contested in good faith by appropriate proceedings.

 Section 4.08. Taxes. Such Borrower and its Material Subsidiaries have filed all United States Federal income tax returns and all other
material tax returns which are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by such Borrower or any such Material Subsidiary except (i) where nonpayment would not have
a material adverse effect on the business, financial position or results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, or (ii) where the same are contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of such Borrower and its Material Subsidiaries in respect of taxes or other governmental charges are, in the opinion of such Borrower, adequate. 
 ARTICLE 5 
 COVENANTS 
 Each Borrower, severally but not jointly, agrees that, so long as any Bank has any Commitment hereunder with respect to such Borrower or any amount payable
hereunder remains unpaid by such Borrower or any Letter of Credit Liabilities remain outstanding: 
 Section 5.01. Information. Such
Borrower will deliver to each of the Banks: 
 (a) as soon as available and in any event within 120 days after the end of each fiscal year of such
Borrower, a consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, cash flows, capitalization and retained earnings for such fiscal year,
setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner consistent with past practice and with applicable requirements of the Securities and Exchange Commission by Deloitte &
Touche or other independent public accountants of nationally recognized standing; 
 (b) as soon as available (and in any event within 60 days in the
case of Duke Energy Indiana and 75 days in the case of Duke Energy Kentucky) after the end of each of the first three quarters of each fiscal year of such Borrower, a consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and cash flows for such quarter and for the portion of such Borrower’s fiscal year ended at the end of such quarter, setting forth in each case in comparative form the
figures for the corresponding 

  

 13 

 
quarter and the corresponding portion of such Borrower’s previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by an Approved Officer of such Borrower; 
 (c) within the maximum time period
specified for the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of an Approved Officer of such Borrower (i) setting forth in reasonable detail the calculations required to
establish whether such Borrower was in compliance with the requirements of Section 5.10 on the date of such financial statements and (ii) stating whether any Default exists on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which such Borrower is taking or proposes to take with respect thereto; 
 (d) within five days after
any officer of such Borrower with responsibility relating thereto obtains knowledge of any Default, if such Default is then continuing, a certificate of an Approved Officer of such Borrower setting forth the details thereof and the action which such
Borrower is taking or proposes to take with respect thereto; 
 (e) promptly upon the filing thereof, copies of all registration statements (other than
the exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which such Borrower shall have filed with the Securities and Exchange Commission; 
 (f) if and when any member of such Borrower’s ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event”
(as defined in Section 4043 of ERISA) with respect to any Material Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Material Plan has given or is required to
give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any
Material Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose material liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv)applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Material Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Material Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Material Plan or makes any amendment to any Material Plan which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of such Borrower setting forth details as to such occurrence and action, if any, which such Borrower or applicable member of the ERISA Group is
required or proposes to take; 
 (g) promptly, notice of any change in the ratings of such Borrower referred to in the Pricing Schedule; and

 (h) from time to time such additional information regarding the financial position or business of such Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request. 
 Information required to be delivered pursuant to these Sections 5.01(a),
5.01(b) and 5.01(e) shall be deemed to have been delivered on the date on which such information has been posted on the Securities and Exchange Commission website on the Internet at sec.gov/edaux/searches.htm, on such Borrower’s IntraLinks or
Syndtrak site or at another website identified in a notice from such Borrower to the Banks and accessible by the Banks without charge; provided that (i) a certificate delivered pursuant to Section 5.01(c) shall also be deemed to
have been delivered upon being posted to such Borrower’s IntraLinks or Syndtrak site and (ii) such Borrower shall deliver paper copies of the information referred to in Sections 5.01(a), 5.01(b) and 5.01(e) to any Bank which requests such
delivery. 
 Each Borrower hereby acknowledges that the Administrative Agent and/or the Arranger may make available to the Banks materials and/or
information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”). 

Section 5.02. Payment of Taxes. Such Borrower will pay and discharge, and will cause each of its Material Subsidiaries to pay and discharge, at or
before maturity, all their tax liabilities, except where (i) nonpayment would not have a material adverse effect on the business, financial position or results of operations of such Borrower and its Consolidated Subsidiaries, considered as a
whole, or (ii) the same may be contested in good faith by appropriate proceedings, and will maintain, and will cause each of its Material Subsidiaries to maintain, in accordance with generally accepted accounting principles, appropriate
reserves for the accrual of any of the same. 
  

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 Section 5.03. Maintenance of Property; Insurance. (a) Such Borrower will keep, and will
cause each of its Material Subsidiaries to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted. 
 (b) Such Borrower will, and will cause each of its Material Subsidiaries to, maintain (either in the name of such Borrower or in such Subsidiary’s own name) with financially sound and responsible insurance companies,
insurance on all their respective properties in at least such amounts and against at least such risks (and with such risk retention) as are usually insured against by companies of established repute engaged in the same or a similar business;
provided that self-insurance by such Borrower or any such Material Subsidiary, shall not be deemed a violation of this covenant to the extent that companies engaged in similar businesses and owning similar properties self-insure; and will
furnish to the Banks, upon request from the Administrative Agent, information presented in reasonable detail as to the insurance so carried. 
 Section 5.04. Maintenance of Existence. Such Borrower will preserve, renew and keep in full force and effect, and will cause each of its Material Subsidiaries to preserve, renew and keep in full force and effect their respective
corporate or other legal existence and their respective rights, privileges and franchises material to the normal conduct of their respective businesses; provided that nothing in this Section 5.04 shall prohibit the termination of any
right, privilege or franchise of such Borrower or any such Material Subsidiary or of the corporate or other legal existence of any such Material Subsidiary, or the change in form of organization of such Borrower or any such Material Subsidiary, if
such Borrower in good faith determines that such termination or change is in the best interest of such Borrower, is not materially disadvantageous to the Banks and, in the case of a change in the form of organization of such Borrower, the
Administrative Agent has consented thereto. 
 Section 5.05. Compliance with Laws. Such Borrower will comply, and cause each of its
Material Subsidiaries to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, ERISA and Environmental Laws) except where
(i) noncompliance would not have a material adverse effect on the business, financial position or results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, or (ii) the necessity of compliance
therewith is contested in good faith by appropriate proceedings. 
 Section 5.06. Books and Records. Such Borrower will keep, and will
cause each of its Material Subsidiaries to keep, proper books of record and account in which full, true and correct entries shall be made of all financial transactions in relation to its business and activities in accordance with its customary
practices; and will permit, and will cause each such Material Subsidiary to permit, representatives of any Bank at such Bank’s expense (accompanied by a representative of such Borrower, if such Borrower so desires) to visit any of their
respective properties, to examine any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants, all upon such reasonable notice,
at such reasonable times and as often as may reasonably be desired. 
 Section 5.07. Negative Pledge. Such Borrower will not create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except: 
 (a) Liens granted by such Borrower existing as of the
Effective Date securing Indebtedness outstanding on the date of this Agreement in an aggregate principal amount not exceeding $100,000,000; 
 (b) the
Lien of such Borrower’s Mortgage Indenture (if any) securing Indebtedness outstanding on the Effective Date or issued hereafter; 
 (c) any Lien
on any asset of any Person existing at the time such Person is merged or consolidated with or into such Borrower and not created in contemplation of such event; 
 (d) any Lien existing on any asset prior to the acquisition thereof by such Borrower and not created in contemplation of such acquisition; 
 (e) any Lien on any asset securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such asset; provided that such Lien attaches to such asset concurrently with or
within 180 days after the acquisition thereof; 
  

 15 

 (f) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any
Lien permitted by any of the foregoing clauses of this Section; provided that such Indebtedness is not increased and is not secured by any additional assets; 
 (g) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with generally accepted accounting principles; 
 (h) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law, created in the ordinary course of business and for amounts not past due for more than 60 days or which are being contested in good faith by appropriate proceedings which are
sufficient to prevent imminent foreclosure of such Liens, are promptly instituted and diligently conducted and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with generally accepted
accounting principles; 
 (i) Liens incurred or deposits made in the ordinary course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of social security benefits or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness),
statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; 
 (j) easements
(including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, consents, reservations, encroachments, variations and other restrictions, charges or encumbrances (whether or not recorded) affecting
the use of real property; 
 (k) Liens with respect to judgments and attachments which do not result in an Event of Default; 
 (l) Liens, deposits or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases (permitted under the
terms of this Agreement), public or statutory obligations, surety, stay, appeal, indemnity, performance or other obligations arising in the ordinary course of business; 
 (m) other Liens including Liens imposed by Environmental Laws arising in the ordinary course of its business which (i) do not secure Indebtedness, (ii) do not secure any obligation in an amount exceeding $100,000,000
at any time at which Investment Grade Status does not exist as to such Borrower and (iii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business; 

(n) Liens securing obligations under Hedging Agreements entered into to protect against fluctuations in interest rates or exchange rates or commodity prices and
not for speculative purposes, provided that such Liens run in favor of a Bank hereunder or a Person who was, at the time of issuance, a Bank; and 
 (o) Liens not otherwise permitted by the foregoing clauses of this Section on assets of such Borrower securing obligations in an aggregate principal or face amount at any date not to exceed $150,000,000. 
 Section 5.08. Consolidations, Mergers and Sales of Assets. Such Borrower will not (i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer, directly or indirectly, Substantial Assets to any Person (other than a Subsidiary of such Borrower); provided that such Borrower may merge with another Person if such Borrower is the Person
surviving such merger and, after giving effect thereto, no Default shall have occurred and be continuing. 
 Section 5.09. Use of Proceeds.
Letters of Credit may be issued hereunder as irrevocable direct pay letters of credit to support various series of tax-exempt variable rate demand bonds issued or to be issued by the Borrowers. Letters of Credit will not be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any “margin stock” within the meaning of Regulation U. 
 Section 5.10. Indebtedness/Capitalization Ratio. The ratio of Consolidated Indebtedness of such Borrower to Consolidated Capitalization of such Borrower will at no time exceed 65%. 
  

 16 

 ARTICLE 6 
 DEFAULTS 
 Section 6.01. Events of Default. If one or more of the following events (“Events of
Default”) with respect to a particular Borrower shall have occurred and be continuing: 
 (a) such Borrower shall fail to pay when due any
principal of any Reimbursement Obligation owed by it or shall fail to pay, within five days of the due date thereof, any interest, fees or any other amount payable by it hereunder; 
 (b) such Borrower shall fail to observe or perform any covenant contained in Sections 5.04 or 5.07 through 5.10, inclusive; 
 (c) such Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to such Borrower by the Administrative Agent at the request of any Bank; 
 (d) any
representation, warranty, certification or statement made by such Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect
when made (or deemed made); 
 (e) such Borrower or any of its Material Subsidiaries shall fail to make any payment in respect of Material Debt (other
than Reimbursement Obligations of such Borrower hereunder) when due or within any applicable grace period; 
 (f) any event or condition shall occur
and shall continue beyond the applicable grace or cure period, if any, provided with respect thereto so as to result in the acceleration of the maturity of Material Debt; 
 (g) such Borrower or any of its Material Subsidiaries shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall admit in writing its inability to, or shall fail
generally to, pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; 
 (h) an involuntary case or
other proceeding shall be commenced against such Borrower or any of its Material Subsidiaries seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 90 days; or an order for relief shall be entered against such Borrower or any of its Material Subsidiaries under the federal bankruptcy laws as now or hereafter in effect; 
 (i) any member of such Borrower’s ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $25,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans of such ERISA Group having aggregate Unfunded Vested Liabilities in excess of $50,000,000 (collectively, a “Material
Plan”) shall be filed under Title IV of ERISA by any member of such ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Material Plan or a proceeding shall be instituted by a fiduciary of any such Material Plan against any member of such ERISA Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not
have been dismissed within 90 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Material Plan must be terminated; 
 (j) a judgment or other court order for the payment of money in excess of $50,000,000 shall be rendered against such Borrower or any of its Material Subsidiaries
and such judgment or order shall continue without being vacated, discharged, satisfied or stayed or bonded pending appeal for a period of 45 days; or 
 (k) any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) other than trustees and participants in employee benefit plans of DEC
and its Subsidiaries or the Endowment or Trust, shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Exchange Act) of 50% or more of the outstanding 

  

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shares of common stock of DEC; during any period of twelve consecutive calendar months, individuals who were directors of DEC on the first day of such period (together
with any successors nominated or appointed by such directors in the ordinary course) shall cease to constitute a majority of the board of directors of DEC; or in the case of any Borrower, such Borrower shall cease to be a Subsidiary of DEC;

 then, and in every such event, the Administrative Agent shall (i) if requested by Banks
having more than 66- 2/3% in aggregate amount of the Commitments, by notice to such Borrower terminate the Commitments as to such Borrower
and they shall thereupon terminate, and such Borrower shall no longer be entitled to cause Letters of Credit to be issued hereunder, and the Sublimit of such Borrower shall be reduced to zero, and (ii) if requested by Banks holding more than
66- 2/3% in aggregate principal amount of the Reimbursement Obligations of such Borrower, by notice to such Borrower declare such
Reimbursement Obligations (together with accrued interest thereon) to be, and such Reimbursement Obligations (together with accrued interest thereon) shall thereupon become, immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower; provided that in the case of any of the Events of Default specified in clause (g) or (h) above with respect to such Borrower, without any notice to such Borrower
or any other act by the Administrative Agent or the Banks, the Commitments shall thereupon terminate with respect to such Borrower and the Reimbursement Obligations of such Borrower (together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower. 
 Section 6.02. Notice of Default. The Administrative Agent shall give notice to a Borrower under Section 6.01(c) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks and the Issuing
Banks thereof. 
 Section 6.03. Cash Cover. Each Borrower agrees, in addition to the
provisions of Section 6.01 hereof, that upon the occurrence and during the continuance of any Event of Default with respect to such Borrower, it shall, if requested by the Administrative Agent upon the instruction of the Banks having at least
66 2/3% in the aggregate amount of the Commitments (or, if the Commitments shall have been terminated, holding at least 66 2/3% of the Letter of Credit Liabilities for the account of such Borrower), deposit with the Administrative Agent an amount in immediately
available funds (which funds shall be held as collateral pursuant to arrangements mutually satisfactory to the Administrative Agent and such Borrower) equal to the aggregate amount available for drawing under all Letters of Credit issued for the
account of such Borrower then outstanding at such time; provided that upon the occurrence of any Event of Default specified in Section 6.01(g) or 6.01(h) with respect to such Borrower, such Borrower shall pay such amount forthwith
without any notice or demand or any other act by the Administrative Agent or the Banks. 
 ARTICLE 7 
 THE ADMINISTRATIVE AGENT 
 Section 7.01. Appointment and Authorization. Each Bank irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. 
 Section 7.02.
Administrative Agent and Affiliates. Bank of America shall have the same rights and powers under this Agreement as any other Bank and may exercise or refrain from exercising the same as though it were not the Administrative Agent, and Bank of
America and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with any Borrower or any Subsidiary or affiliate of any Borrower as if it were not the Administrative Agent hereunder. 
 Section 7.03. Action by Administrative Agent. The obligations of the Administrative Agent hereunder are only those expressly set forth herein. Without
limiting the generality of the foregoing, the Administrative Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article 6. 
 Section 7.04. Consultation with Experts. The Administrative Agent may consult with legal counsel (who may be counsel for a Borrower), independent
public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. 
  

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 Section 7.05. Liability of Administrative Agent. Neither the Administrative Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees shall be liable to any Bank for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or
(ii) in the absence of its own gross negligence or willful misconduct. Neither the Administrative Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any issuance of a Letter of Credit hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Borrower; (iii) the satisfaction of any condition specified in Article 3, except receipt of items required to be delivered to the Administrative Agent; or (iv) the validity, effectiveness or genuineness of this Agreement
or any other instrument or writing furnished in connection herewith. The Administrative Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it in good faith to be genuine or to be signed by the proper party or parties. Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or
reflect only an administrative relationship between independent contracting parties. 
 Section 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the Administrative Agent, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrowers) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss, penalties or liability (except such as result from such indemnitees’ gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or
any action taken or omitted by such indemnitees thereunder. 
 Section 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon any Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under
this Agreement. 
 Section 7.08. Successor Administrative Agent. The Administrative Agent may resign at any time by giving notice thereof
to the Banks and the Borrowers. Upon any such resignation, (i) the Borrowers, with the consent of the Required Banks (such consent not to be unreasonably withheld or delayed), or (ii) if an Event of Default has occurred and is continuing,
then the Required Banks, shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Administrative
Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least $250,000,000; provided that if the Administrative Agent notifies the Borrowers and the Banks that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of
any collateral security held by the Administrative Agent on behalf of the Banks under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is
appointed) and (ii) all payments, communications and determinations to be made by, to or through the Administrative Agent shall instead be made by or to each Bank directly, until such time as a successor Administrative Agent is appointed
pursuant to this Section 7.08. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder; provided that if such successor Administrative Agent is appointed without the consent of the
Borrowers, such successor Administrative Agent may be replaced by the Borrowers with the consent of the Required Banks so long as no Event of Default has occurred and is continuing at the time. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent. Any resignation by Bank of America as Administrative
Agent pursuant to this Section 7.08 shall also constitute its resignation as Issuing Bank, and it shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents to issue any new Letters of Credit;
provided that it shall remain responsible, as an Issuing Bank hereunder, for the Letters of Credit, if any, issued by it and outstanding at the time of resignation. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank for all Letters of Credit issued after the time of such succession. 
  

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 Section 7.09. Administrative Agent’s Fee. The Borrowers shall pay to the Administrative Agent for
its own account fees in the amounts and at the times previously agreed upon between the Borrowers and the Administrative Agent. 
 Section 7.10. Other Agents. Neither the Syndication Agent nor any of the Co-Documentation Agents, in their respective capacities as such, shall have any duties or obligations of any kind under this Agreement. 
 ARTICLE 8 
 CHANGE IN
CIRCUMSTANCES 
 Section 8.01. Increased Cost and Reduced Return. (a) If on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (the terms “Bank” and “Issuing Bank” shall include, for purposes of this Section 8.01, the holding company of any Issuing Bank) with any request or
directive (whether or not having the force of law) issued on or after such date of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System) against assets of, deposits with or for the account of, or credit extended by, any Bank or shall impose on any Bank any other condition (other than in
respect of Taxes or Other Taxes) affecting obligations hereunder in respect of Letters of Credit and the result of any of the foregoing is to increase the cost to such Bank of issuing or participating in any Letter of Credit, or to reduce the amount
of any sum received or receivable by such Bank under this Agreement with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Administrative Agent), each Borrower shall
pay to such Bank its Appropriate Share of such additional amount or amounts as will compensate such Bank for such increased cost or reduction; provided that no such amount shall be payable with respect to any period commencing more than 90
days prior to the date such Bank first notifies the Borrowers of its intention to demand compensation therefor under this Section 8.01(a). 
 (b)
If any Bank shall have determined that, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency given or made after the date of this Agreement, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank’s
obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Administrative Agent), each Borrower shall pay to such Bank its Appropriate Share of such additional amount or amounts as will compensate such
Bank (or its Parent) for such reduction; provided that no such amount shall be payable with respect to any period commencing less than 30 days after the date such Bank first notifies the Borrowers of its intention to demand compensation under
this Section 8.01(b). 
 (c) Each Bank will promptly notify the Borrowers and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. 
 (d) The “Appropriate Share” of a Borrower with respect to any amount payable hereunder is the sum of (i) to the extent such amount is properly allocable to Letters of Credit hereunder, the portion of such amount
properly allocable to any such Letter of Credit to or for the account of such Borrower, and (ii) to the extent such amount is not properly allocable to Letters of Credit hereunder, the Appropriate Share shall be the product of the Availability
Percentage of such Borrower and such amount. 
 Section 8.02. Taxes. (a) For purposes of this Section 8.02 the following
terms have the following meanings: 
 “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, charges
or withholdings with respect to any payment by a Borrower pursuant to this Agreement, and all liabilities with respect thereto, excluding (i) in the case of each Bank and the Administrative Agent, taxes imposed on its income, net worth
or gross receipts and franchise or similar taxes imposed on it by a jurisdiction under the laws of which such Bank or the Administrative Agent (as 

  

 20 

 
the case may be) is organized or in which its principal executive office is located and (ii) in the case of each Bank, any United States withholding tax imposed
on such payments except to the extent that such Bank is subject to United States withholding tax by reason of a U.S. Tax Law Change. 
 “Other
Taxes” means any present or future stamp or documentary taxes and any other excise or property taxes, or similar charges or levies, which arise from any payment made pursuant to this Agreement or from the execution or delivery of, or
otherwise with respect to, this Agreement. 
 “U.S. Tax Law Change” means with respect to any Bank or Participant the occurrence
(x) in the case of each Bank listed on the signature pages hereof, after the date of its execution and delivery of this Agreement and (y) in the case of any other Bank, after the date such Bank shall have become a Bank hereunder, and
(z) in the case of each Participant, after the date such Participant became a Participant hereunder, of the adoption of any applicable U.S. federal law, U.S. federal rule or U.S. federal regulation relating to taxation, or any change therein,
or the entry into force, modification or revocation of any income tax convention or treaty to which the United States is a party. 
 (b) Any and all
payments by any Borrower to or for the account of any Bank or the Administrative Agent hereunder shall be made without deduction for any Taxes or Other Taxes; provided that, if any Borrower shall be required by law to deduct any Taxes or
Other Taxes from any such payments, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 8.02) such Bank or the
Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable law and (iv) such Borrower shall furnish to the Administrative Agent, at its address referred to in Section 9.01(a), the original or a certified copy of a
receipt evidencing payment thereof. 
 (c) Each Borrower agrees to indemnify each Bank and the Administrative Agent for its Appropriate Share of the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 8.02) paid by such Bank or the Administrative Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be paid within 15 days after such Bank or the Administrative Agent (as the case may be) makes demand therefor.

 (d) Each Bank organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on or prior to the date on which it becomes a Bank in the case of each other Bank, and from time to time thereafter as required by law (but only so long as such Bank remains
lawfully able to do so), shall provide the Borrowers two completed and duly executed copies of Internal Revenue Service form W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by the Internal Revenue Service, or other documentation
reasonably requested by the Borrowers, certifying that such Bank is entitled to benefits under an income tax treaty to which the United States is a party which exempts the Bank from United States withholding tax or reduces the rate of withholding
tax on payments of interest for the account of such Bank or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States. 
 (e) For any period with respect to which a Bank has failed to provide the Borrowers with the appropriate form pursuant to Section 1.01(d) (unless such failure
is due to a U.S. Tax Law Change), such Bank shall not be entitled to indemnification under Section 1.01(b) or 1.01(c) with respect to any Taxes or Other Taxes which would not have been payable had such form been so provided; provided
that if a Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrowers shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes (it being understood, however, that the Borrowers shall have no liability to such Bank in respect of such Taxes). 
 (f) If any Borrower is required to pay additional amounts to or for the account of any Bank pursuant to this Section 1.01, then such Bank will take such action as in the good faith judgment of such Bank (i) will
eliminate or reduce any such additional payment which may thereafter accrue and (ii) is not otherwise disadvantageous to such Bank. 
 (g) If any
Bank or the Administrative Agent receives a refund (including a refund in the form of a credit against taxes that are otherwise payable by the Bank or the Administrative Agent) of any Taxes or Other Taxes for which any Borrower has made a payment
under Section 1.01(b) or (c) and such refund was received from the taxing authority which originally imposed such Taxes or Other Taxes, such Bank or the Administrative Agent agrees to reimburse such Borrower to the 

  

 21 

 
extent of such refund; provided that nothing contained in this paragraph (g) shall require any Bank or the Administrative Agent to seek any such refund or
make available its tax returns (or any other information relating to its taxes which it deems to be confidential). 
 Section 8.03.
Substitution of Bank; Termination Option. If (i) any Bank has demanded compensation under Section 8.01 or 8.02 or (ii) Investment Grade Status ceases to exist as to any Bank, then: 
 (a) the Borrowers shall have the right, with the assistance of the Administrative Agent, to designate a substitute bank or banks (which may be one or more of the
Banks) mutually satisfactory to the Borrowers, the Administrative Agent, and the Issuing Banks (whose consent shall not be unreasonably withheld or delayed) to assume the Commitment and Letter of Credit Liabilities of such Bank, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit D hereto, without recourse to or warranty by, or expense to, such Bank, for a purchase price equal to the principal amount of all of such Bank’s funded Letter of Credit
Liabilities plus any accrued but unpaid interest thereon and the accrued but unpaid fees in respect of such Bank’s Commitment hereunder and all other amounts payable by the Borrowers to such Bank hereunder; and 
 (b) if at the time Investment Grade Status exists as to the Borrowers, the Borrowers may elect to terminate this Agreement as to such Bank; provided that
(i) the Borrowers notify such Bank through the Administrative Agent of such election at least three Business Days before the effective date of such termination, (ii) the Borrowers pay any accrued but unpaid fees in respect of such
Bank’s Commitment hereunder plus all other amounts payable by the Borrowers to such Bank hereunder, not later than the effective date of such termination and (iii) if at the effective date of such termination, any Letter of Credit
Liabilities are outstanding, the conditions specified in Section 3.02 would be satisfied (after giving effect to such termination) were the related Letters of Credit issued on such date. Upon satisfaction of the foregoing conditions, the
Commitment of such Bank shall terminate on the effective date specified in such notice, its participation in any outstanding Letters of Credit shall terminate on such effective date and the participations of the other Banks therein shall be
redetermined as of such date as if such Letters of Credit had been issued on such date. 
 ARTICLE 9 
 MISCELLANEOUS 
 Section 9.01. Notices.
(a) All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (w) in the case of any Borrower, at
its address or telecopy or telex number set forth on the signature pages hereof, (x) in the case of the Administrative Agent, for notices regarding payments and requests for credit extensions, at Bank of America N.A., Mail Code: TX1-492-14-11,
Bank of America Plaza, 901 Main Street, Dallas, TX 75202-3714, Attention: Mary Porter, Fax: (214) 290-9674 and, for all other communications, at Bank of America, N.A., Mail Code: NC1-001-15-14, One Independence Center, 101 N Tryon St.,
Charlotte, NC 28255-0001, Attention: Kimberly D. (Kim) Williams, Fax: (704) 409-0650, (y) in the case of any Bank, at its address or telecopy or telex number set forth in its Administrative Questionnaire or (z) in the case of any
party, such other address or telecopy or telex number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrowers. Each such notice, request or other communication shall be effective (i) if given
by telecopy or telex, when such telecopy or telex is transmitted to the telecopy or telex number specified in this Section and the appropriate answerback or confirmation slip, as the case may be, is received or (ii) if given by any other means,
when delivered at the address specified in this Section; provided that notices to the Administrative Agent or any Issuing Bank under Article 2 or Article 8 shall not be effective until delivered. 
 (b) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent,
any of its Affiliates or any of their partners, directors, officers, employees, agents, trustees and advisors (collectively, the “Agent Parties”) have any liability to the Borrowers, any Bank or any other Person for losses, claims,
damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrowers’ or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such
losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent
Party have any liability to the Borrowers, any Bank or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages). 
  

 22 

 Section 9.02. No Waivers. No failure or delay by the Administrative Agent or any Bank in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 
 Section 9.03. Expenses; Indemnification.
(a) Each Borrower shall pay (i) its Appropriate Share of all reasonable out-of-pocket expenses of the Administrative Agent, including reasonable fees and disbursements of special counsel for the Agents, in connection with the
preparation of this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default with respect to such Borrower hereunder and (ii) if an Event of Default with respect to such Borrower occurs, all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any Bank, including reasonable fees and disbursements of counsel, in connection with such Event of Default and collection and other enforcement proceedings resulting
therefrom. 
 (b) Each Borrower agrees to indemnify each Agent and each Bank, their respective affiliates and the respective directors, officers,
agents and employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from and against any and all liabilities, losses, penalties, damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) relating to or
arising out of this Agreement, in each case to the extent of such Borrower’s Appropriate Share; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee’s own gross negligence or willful
misconduct as determined by a court of competent jurisdiction. 
 Section 9.04. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount then due with respect to the Letter of Credit Liabilities held by it which is greater than the proportion received by any other
Bank in respect of the aggregate amount then due with respect to the Letter of Credit Liabilities held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Letter of Credit Liabilities
held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments with respect to the Letter of Credit Liabilities held by the Banks shall be shared by the Banks pro rata; provided that nothing in
this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of a Borrower other than its indebtedness under this
Agreement. 
 Section 9.05. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by each Borrower, the Administrative Agent and the Required Banks (and, if the rights or duties of any Agent or any Issuing Bank are affected thereby, by such Person); provided that no such
amendment or waiver shall (x) unless signed by each affected Bank, (i) increase the Commitment of any Bank or subject any Bank to any additional obligation, (ii) reduce the amount to be reimbursed in respect of any Letter of Credit or
any interest thereon or any fees hereunder or (iii) postpone the date fixed for reimbursement in respect of any Letter of Credit or interest thereon or any fees hereunder or for termination of any Commitment or (y) unless signed by all
Banks, (i) change the definition of Required Banks or the provisions of this Section 9.05 or (ii) change the provisions of Section 2.04. 
 Section 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and each Indemnitee, except
that no Borrower may assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks. 
 (b) Any
Bank may, with the consent (unless an Event of Default then exists) of the Borrowers (such consent not to be unreasonably withheld or delayed), at any time grant to one or more banks or other institutions (each a “Participant”)
participating interests in its Commitment or any or all of its Letter of Credit Liabilities; provided that any Bank may, without the consent of any Borrower, at any time grant participating interests in its Commitment or any or all of its
Letter of Credit Liabilities to another Bank, an Approved Fund or an Affiliate of such transferor Bank. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Administrative Agent,
such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrowers, the Issuing Banks and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank’s
rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrowers
hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (x) (i), (ii) or (iii) of Section 9.05 without the consent of the 

  

 23 

 
Participant. Each Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article 8 with
respect to its participating interest, subject to the performance by such Participant of the obligations of a Bank thereunder. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). 
 (c) Any Bank may at any
time assign to one or more banks or other financial institutions (each an “Assignee”) all, or a proportionate part (equivalent to an initial Commitment of not less than $10,000,000 (unless the Borrowers and the Administrative Agent
shall otherwise agree)) of all, of its rights and obligations under this Agreement, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit C hereto executed
by such Assignee and such transferor Bank, with (and only with and subject to) the prior written consent of the Issuing Banks, the Administrative Agent (which shall not be unreasonably withheld or delayed) and, so long as no Event of Default has
occurred and is continuing, the Borrowers (which shall not be unreasonably withheld or delayed); provided that unless such assignment is of the entire right, title and interest of the transferor Bank hereunder, after making any such
assignment such transferor Bank shall have a Commitment of at least $10,000,000 (unless the Borrowers and the Administrative Agent shall otherwise agree). Each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Bank’s rights and obligations under this Agreement. Upon execution and delivery of such instrument of assumption and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. If the Assignee is not incorporated under the laws of the United States of America or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its account, deliver to the Borrowers and the Administrative Agent certification as to exemption from deduction or withholding of any United States federal income taxes in
accordance with Section 8.02. All assignments (other than assignments to Affiliates) shall be subject to a transaction fee established by, and payable by the transferor Bank to, the Administrative Agent for its own account (which shall not
exceed $5,000). 
 (d) Any Bank may at any time assign all or any portion of its rights under this Agreement to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder or modify any such obligations. 
 (e) No Assignee, Participant or other
transferee of any Bank’s rights shall be entitled to receive any greater payment under Section 8.01 or 1.01 than such Bank would have been entitled to receive with respect to the rights transferred. 
 Section 9.07. Collateral. Each of the Banks represents to the Administrative Agent and each of the other Banks that it in good faith is not relying
upon any “margin stock” (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. 
 Section 9.08. Confidentiality. Each Agent and each Bank agrees to keep any information delivered or made available by any Borrower pursuant to this Agreement confidential from anyone other than persons employed or
retained by such Bank and its affiliates who are engaged in evaluating, approving, structuring or administering the credit facility contemplated hereby; provided that nothing herein shall prevent any Bank from disclosing such information
(a) to any other Bank or any Agent, (b) to any other Person if reasonably incidental to the administration of the credit facility contemplated hereby, (c) upon the order of any court or administrative agency, (d) upon the request
or demand of any regulatory agency or authority, (e) which had been publicly disclosed other than as a result of a disclosure by any Agent or any Bank prohibited by this Agreement, (f) in connection with any litigation to which any Agent,
any Bank or its subsidiaries or Parent may be a party, (g) to the extent necessary in connection with the exercise of any remedy hereunder, (h) to such Bank’s or any Agent’s legal counsel and independent auditors,
(i) subject to provisions substantially similar to those contained in this Section 2.08, to any actual or proposed Participant or Assignee, (j) to any direct, indirect, actual or prospective counterparty (and its advisor) to any swap,
derivative or securitization transaction related to the obligations under this Agreement and (k) as required by law, regulation or legal process. 
 Section 9.09. Governing Law; Submission to Jurisdiction. This Agreement shall be construed in accordance with and governed by the law of the State of New York. Each Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby.
Each Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum. 
  

 24 

 Section 9.10. Counterparts; Integration. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject matter hereof. 
 Section 9.11. WAIVER OF JURY TRIAL. EACH OF
THE BORROWERS, THE AGENTS, THE ISSUING BANKS AND THE BANKS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
 Section 9.12. USA Patriot Act. Each Bank hereby notifies each Borrower that pursuant
to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), it is required to obtain, verify and record information that identifies such Borrower, which information
includes the name and address of such Borrower and other information that will allow such Bank to identify such Borrower in accordance with the Act. 
 Section 9.13. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan
Document), each Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arranger are arm’s-length commercial transactions between the
Borrowers, on the one hand, and the Administrative Agent and the Arranger, on the other hand, (B) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each
Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent and the Arranger each is and has
been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrowers or any of their Affiliates, or any other Person
and (B) neither the Administrative Agent nor the Arranger has any obligation to the Borrowers or any of their Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other
Loan Documents; and (iii) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their Affiliates, and neither
the Administrative Agent nor the Arranger has any obligation to disclose any of such interests to the Borrowers or any of their Affiliates. To the fullest extent permitted by law, each Borrower hereby waives and releases any claims that it may have
against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby, except as expressly agreed in writing by the relevant
parties. 
  

 25 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written. 
  

					
	 DUKE ENERGY INDIANA, INC.

		
	By:	 	  

		 	Title:	 	Assistant Treasurer
		 	Address:	 	 526 South Church Street
 Charlotte, NC
28202-1904

		 	Attention:	 	M. Allen Carrick
		 	Telecopy number:	 	704-382-3288
		 	Taxpayer ID:	 	35-0594457

  

					
	 DUKE ENERGY KENTUCKY, INC.

		
	By:	 	  

		 	Title:	 	Assistant Treasurer
		 	Address:	 	 526 South Church Street
 Charlotte, NC 28202-1904

		 	Attention:	 	M. Allen Carrick
		 	Telecopy number:	 	704-382-3288
		 	Taxpayer ID:	 	31-0473080

					
	 BANK OF AMERICA, N.A., as
Administrative Agent and as a Bank

		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 2 

					
	 WELLS FARGO BANK,
NATIONAL ASSOCIATION, as
Co-Documentation Agent and as a Bank

		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 3 

					
	 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as
Co-Documentation Agent and as a Bank

		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 4 

					
	 BANCO BILBAO VIZCAYA ARGENTARIA,
S.A. – NEW YORK BRANCH, as
Syndication Agent and as a Bank

		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 5 

					
	 MIZUHO CORPORATE BANK (USA), as
Co-Documentation Agent and as a Bank

		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 6 

					
	 INTESA SANPAOLO S.P.A.,
NEW YORK BRANCH, as
Co-Documentation Agent and as a Bank

		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 7 

 COMMITMENT SCHEDULE 
  

				
	 Bank
	  	Commitment
	 Banco Bilbao Vizcaya Argentaria, S.A. – New York Branch
	  	$	110,000,000
		
	 Mizuho Corporate Bank (USA)
	  	$	60,000,000
		
	 Bank of America, N.A.
	  	$	45,000,000
		
	 The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	  	$	45,000,000
		
	 Intesa Sanpaolo S.p.A., New York Branch
	  	$	45,000,000
		
	 Wells Fargo Bank, National Association
	  	$	25,000,000
		  	 	 
	 Total:
	  	$	330,000,000.00

  

 8 

 Pricing Schedule 
 “Applicable Rate” means, for purposes of each of Section 2.01(a) and Section 2.01(b) and for any date, the rate set forth below in the applicable row and column corresponding to the credit rating of the applicable
Borrower that exists on such date: 
 (basis points per annum) 
  

													
	 Borrower’s Credit Rating
	  	at least A
by S&P or
A2 by
Moody’s	  	at least A-
by S&P or
A3 by
Moody’s	  	at least
BBB+ by
S&P or
Baa1 by
Moody’s	  	at least
BBB by
S&P or
Baa2 by
Moody’s	  	at least
BBB- by
S&P or
Baa3 by
Moody’s	  	less than BBB-
by S&P and
less than Baa3
by Moody’s
	 Applicable Rate for Section 2.01(a) (Unused Commitment Fee)
	  	10.0	  	12.5	  	15.0	  	17.5	  	20.0	  	25.0
	 Applicable Rate for Section 2.01(b) (Utilization Fee)
	  	65.0	  	70.0	  	75.0	  	87.5	  	125.0	  	175.0

 Each Borrower must obtain a long-term unsecured credit rating from two leading rating agencies, to include
at a minimum either Standard & Poor’s, a division of the McGraw-Hill Companies, together with its successors (“S&P”), or Moody’s Investors Service (“Moody’s”), or if such a credit rating
is not available, then a corporate credit rating from S&P or an issuer rating from Moody’s, and formally notify the Administrative Agent of the current ratings. The Applicable Rates applicable to each Borrower will be based upon such
Borrower’s credit rating. The ratings in effect for any day are those in effect at the close of business on such day. A change in credit rating will result in an immediate change in the applicable pricing. In the case of split ratings from
S&P and Moody’s, the rating to be used to determine the applicable pricing will be the higher of the two; provided that if the rating differential is more than one notch, the applicable pricing will be based on a rating one notch
lower than the higher of the two. 

 EXHIBIT A-1 
 OPINION OF INTERNAL COUNSEL OF THE BORROWER 
 [Effective Date] 
 To the Banks and the Administrative Agent 
 Referred to Below 
 c/o Bank of America, N.A. 
 as Administrative Agent 
 One
Independence Center 
 101 N Tryon St. 
 Charlotte, NC 28255-0001 
 Ladies and Gentlemen: 
 I am [title of internal counsel] of [Duke Energy Indiana,
Inc.] [Duke Energy Kentucky, Inc.] (the “Borrower”) and have acted as its counsel in connection with the Letter of Credit Agreement (the “Credit Agreement”), dated as of September 19, 2008, among Duke Energy
Indiana, Inc., Duke Energy Kentucky, Inc. (the “Borrowers”), the banks listed on the signature pages thereof, Bank of America, N.A., as Administrative Agent, and the other Agents party thereto. Capitalized terms defined in the
Credit Agreement are used herein as therein defined. This opinion letter is being delivered pursuant to Section 3.01(b) of the Credit Agreement. 
 In such capacity, I or attorneys under my direct supervision have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. 
 Upon
the basis of the foregoing, I am of the opinion that: 
 1. The Borrower is [an Indiana corporation] [a Kentucky corporation], validly existing and in
good standing under the laws of [Indiana] [Kentucky]. 
 2. The execution, delivery and performance by the Borrower of the Credit Agreement are within
the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official (except for [list exceptions], which have been
obtained or made, as the case may be, and are in full force and effect) and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the articles of incorporation or by-laws of the Borrower or, to my
knowledge, of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or, to my knowledge, result in the creation or imposition of any Lien on any asset of the Borrower or any of its Material Subsidiaries.

 3. The Credit Agreement has been duly executed and delivered by the Borrower. 
 4. Except as disclosed in the Borrower’s annual report on Form 10-K for the fiscal year ended December 31, 2007 and its quarterly reports on Form 10-Q
for the periods ended March 31, 2008 and June 30, 2008, to my knowledge (but without independent investigation), there is no action, suit or proceeding pending or threatened against or affecting, the Borrower or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency or official, which would be likely to be decided adversely to the Borrower or such Subsidiary and, as a result, to have a material adverse effect upon the business, consolidated
financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole, or which in any manner draws into question the validity of the Credit Agreement. 
 The phrase “to my knowledge”, as used in the foregoing opinion, refers to my actual knowledge without any independent investigation as to any such
matters. 
 I am a member of the Bar of the State of [Indiana] [Kentucky] and do not express any opinion herein concerning any law other than the law
of the State of [Indiana] [Kentucky] and the federal law of the United States of America. 
  

 2 

 The opinions expressed herein are limited to the matters expressly stated herein, and no opinion is to be inferred
or may be implied beyond the matters expressly so stated. This opinion is rendered to you in connection with the above-referenced matter and may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other Person,
firm or corporation without my prior written consent, except for Additional Banks and Assignees. My opinions expressed herein are as of the date hereof, and I undertake no obligation to advise you of any changes of applicable law or any other
matters that may come to my attention after the date hereof that may affect my opinions expressed herein. 
 Very truly yours,

  

 3 

 EXHIBIT A-2 
 OPINION OF 
 ROBINSON, BRADSHAW & HINSON, P.A., 
 SPECIAL COUNSEL FOR THE BORROWER 
 [Effective Date] 
 To the Banks and the Administrative Agent 
 Referred to Below 
 c/o Bank of America, N.A. 
 as Administrative Agent 
 One Independence Center 
 101 N Tryon St. 
 Charlotte, NC 28255-0001

 Ladies and Gentlemen: 
 We have acted as counsel to [Duke Energy
Indiana, Inc., an Indiana corporation] [Duke Energy Kentucky, Inc., a Kentucky corporation] (the “Borrower”), in connection with the Letter of Credit Agreement (the “Credit Agreement”), dated as of
September 19, 2008, among Duke Energy Indiana, Inc., Duke Energy Kentucky, Inc. (the “Borrowers”), the banks listed on the signature pages thereof, Bank of America, N.A., as Administrative Agent, and the other Agents party
thereto. Capitalized terms used herein and not defined shall have the meanings given to them in the Credit Agreement. This opinion letter is being delivered pursuant to Section 3.01(b) of the Credit Agreement. 
 In connection with this opinion, we also examined originals, or copies identified to our satisfaction, of such other documents and considered such matters of law
and fact as we, in our professional judgment, have deemed appropriate to render the opinions contained herein. Where we have considered it appropriate, as to certain facts we have relied, without investigation or analysis of any underlying data
contained therein, upon certificates or other comparable documents of public officials and officers or other appropriate representatives of the Borrower. 
 In rendering the opinions contained herein, we have assumed, among other things, that the Credit Agreement (i) is within the Borrower’s corporate powers, (ii) has been duly authorized by all necessary corporate action,
(iii) has been duly executed and delivered, (iv) requires no action by or in respect of, or filing with, any governmental body, agency of official and (v) does not contravene, or constitute a default under, any provision of applicable
law or regulation or of the Borrower’s certificate of incorporation or by-laws or any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or result in the creation or imposition of any Lien on any asset
of the Borrower. In addition, we have assumed that the Credit Agreement fully states the agreement between the Borrower and the Banks with respect to the matters addressed therein, and that the Credit Agreement constitutes a legal, valid and binding
obligation of each Bank, enforceable in accordance with its respective terms. 
 The opinions set forth herein are limited to matters governed by the
laws of the State of North Carolina and the federal laws of the United States, and no opinion is expressed herein as to the laws of any other jurisdiction. For purposes of our opinions, we have disregarded the choice of law provisions in the Credit
Agreement and, instead, have assumed with your permission that the Credit Agreement is governed exclusively by the internal, substantive laws and judicial interpretations of the State of North Carolina. We express no opinion concerning any matter
respecting or affected by any laws other than laws that a lawyer in North Carolina exercising customary professional diligence would reasonably recognize as being directly applicable to the Borrower. 
 Based upon and subject to the foregoing and the further limitations and qualifications hereinafter expressed, it is our opinion that the Credit Agreement
constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms. 
 The opinions
expressed above are subject to the following qualifications and limitations: 
 1. Enforcement of the Credit Agreement is subject to the effect of
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting the enforcement of creditors’ rights generally. 
 2. Enforcement of the Credit Agreement is subject to the effect of general principles of equity (regardless of whether considered in a proceeding in equity or at law) by which a court with proper jurisdiction may deny rights of
specific performance, injunction, self-help, possessory remedies or other remedies. 

 3. We do not express any opinion as to the enforceability of any provisions contained in the Credit Agreement that
(i) purport to excuse a party for liability for its own acts, (ii) purport to make void any act done in contravention thereof, (iii) purport to authorize a party to act in its sole discretion, (iv) require waivers or amendments
to be made only in writing, (v) purport to effect waivers of constitutional, statutory or equitable rights or the effect of applicable laws, (vi) impose liquidated damages, penalties or forfeiture, or (vii) purport to indemnify a
party for its own negligence or willful misconduct. Indemnification provisions in the Credit Agreement are subject to and may be rendered unenforceable by applicable law or public policy, including applicable securities law. 
 4. We do not express any opinion as to the enforceability of any provisions contained in the Credit Agreement purporting to require a party thereto to pay or
reimburse attorneys’ fees incurred by another party, or to indemnify another party therefor, which may be limited by applicable statutes and decisions relating to the collection and award of attorneys’ fees, including but not limited to
North Carolina General Statutes § 6-21.2. 
 5. We do not express any opinion as to the enforceability of any provisions contained in the
Credit Agreement purporting to waive the right of jury trial. Under North Carolina General Statutes § 22B-10, a provision for the waiver of the right to a jury trial is unconscionable and unenforceable. 
 6. We do not express any opinion as to the enforceability of any provisions contained in the Credit Agreement concerning choice of forum or consent to the
jurisdiction of courts, venue of actions or means of service of process. 
 7. It is likely that North Carolina courts will enforce the provisions of
the Credit Agreement providing for interest at a higher rate resulting from a Default or Event of Default (a “Default Rate”) which rate is higher than the rate otherwise stipulated in the Credit Agreement. The law, however,
disfavors penalties, and it is possible that interest at the Default Rate may be held to be an unenforceable penalty, to the extent such rate exceeds the rate applicable prior to a default under the Credit Agreement. Also, since North Carolina
General Statutes § 24-10.1 expressly provides for late charges, it is possible that North Carolina courts, when faced specifically with the issue, might rule that this statutory late charge preempts any other charge (such as default
interest) by a bank for delinquent payments. The only North Carolina case which we have found that addresses this issue is a 1978 Court of Appeals decision, which in our opinion is of limited precedential value, North Carolina National Bank v.
Burnette, 38 N.C. App. 120, 247 S.E.2d 648 (1978), rev’d on other grounds, 297 N.C. 524, 256 S.E.2d 388 (1979). While the court in that case did allow interest after default (commencing with the date requested in the complaint) at a
rate six percent in excess of pre-default interest, we are unable to determine from the opinion that any question was raised as to this being penal in nature, nor does the court address the possible question of the statutory late charge preempting a
default interest surcharge. Therefore, since the North Carolina Supreme Court has not ruled in a properly presented case raising issues of its possible penal nature and those of North Carolina General Statutes § 24-10.1, we are unwilling
to express an unqualified opinion that the Default Rate of interest prescribed in the Credit Agreement is enforceable. 
 8. We do not express any
opinion as to the enforceability of any provisions contained in the Credit Agreement relating to evidentiary standards or other standards by which the Credit Agreement are to be construed. 
 This opinion letter is delivered solely for your benefit in connection with the Credit Agreement and, except for any Additional Bank or any Assignee which becomes
a Bank pursuant to Section 2.06 or 2.06(c) of the Credit Agreement, may not be used or relied upon by any other Person or for any other purpose without our prior written consent in each instance. Our opinions expressed herein are as of the date
hereof, and we undertake no obligation to advise you of any changes of applicable law or any other matters that may come to our attention after the date hereof that may affect our opinions expressed herein. 
 Very truly yours, 
  

 2 

 EXHIBIT B 
 OPINION OF 
 DAVIS POLK & WARDWELL, SPECIAL COUNSEL 
 FOR THE AGENTS
 [Effective Date] 
 To
the Banks and the Administrative Agent 
         Referred to Below 
 c/o Bank of America, N.A. 
         as Administrative
Agent 
 One Independence Center 
 101 N Tryon St. 
 Charlotte, NC 28255-0001 
 Dear Sirs: 
 We have participated in the preparation of the Letter of Credit Agreement (the “Credit Agreement”) dated as of September 19, 2008 among Duke
Energy Indiana, Inc., an Indiana corporation and Duke Energy Kentucky, Inc., a Kentucky corporation (the “Borrowers”, each individually, a “Borrower”), the banks listed on the signature pages thereof (the
“Banks”), Bank of America, N.A., as Administrative Agent (the “Administrative Agent”), and the other Agents party thereto, and have acted as special counsel for the Agents for the purpose of rendering this opinion
pursuant to Section 3.01(c)of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined. 
 We have examined
originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion. 
 In rendering the opinion contained herein, we have assumed, among other things, that the Credit
Agreement (i) is within each Borrower’s corporate powers, (ii) has been duly authorized by all necessary corporate action, (iii) has been duly executed and delivered, (iv) requires no action by or in respect of, or filing
with, any governmental body, agency of official and (v) does not contravene, or constitute a default under, any provision of applicable law or regulation or of any Borrower’s certificate of incorporation or by-laws or any agreement,
judgment, injunction, order, decree or other instrument binding upon any Borrower or result in the creation or imposition of any Lien on any asset of any Borrower. 
 Upon the basis of the foregoing, we are of the opinion that the Credit Agreement constitutes a valid and binding agreement of each Borrower, except as the same may be limited by bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and by general principles of equity. 
 In giving the foregoing opinion, we express no opinion as to the effect (if
any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. 
 This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person, firm or corporation without our
prior written consent, except for Additional Banks and all Participants. 
 Very truly yours, 

 EXHIBIT C 
 ASSIGNMENT AND ASSUMPTION AGREEMENT 
 This Assignment and Assumption Agreement (the “Assignment and Assumption”) is
dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] hereunder are several and not joint.] Capitalized terms used but not defined herein shall have the meanings given to them in
the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. Attached is an Administrative Questionnaire duly completed by the Assignee. 
 For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby
irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as
contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Bank][their respective capacities as Banks] under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage interest identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the
Assignor (in its capacity as a Bank)][the respective Assignors (in their respective capacities as Banks)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as
[the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

  

			
	 1. Assignor[s]:
	 	  

		
		 	  

		
	2. Assignee[s]:    	 	  

		
		 	  

 [for each Assignee, indicate [Affiliate][Approved Fund] of [identify Bank]] 
  

	3.	Borrowers: Duke Energy Indiana, Inc. and Duke Energy Kentucky, Inc. 

  

	4.	Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement 

  

	5.	Credit Agreement: Credit Agreement, dated as of September 19, 2008, among Duke Energy Indiana, Inc. and Duke Energy Kentucky, Inc., the Banks from time to time party thereto, and
Bank of America, N.A., as Administrative Agent 

  

	6.	Assigned Interest[s]: 

  

														
	 Assignor[s]
	 	 Assignee[s]
	  	Aggregate
Amount of
Commitment
for all Banks	  	Amount of
Commitment	  	Percentage
Assigned of
Commitment	 	 	CUSIP
Number
						
		 		  	$	            	  	$	            	  	            	%	 	
						
		 		  	$	 	  	$	 	  	            	%	 	
						
		 		  	$	 	  	$	 	  	            	%	 	

 Effective
Date:                            , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] 

 The terms set forth in this Assignment and Assumption are hereby agreed to: 
  

			
	 [ASSIGNOR]

		
	 By:
	 	  

		 	Title:
	
	 [ASSIGNEE]

		
	 By:
	 	  

		 	Title:
	
	 [DUKE ENERGY KENTUCKY, INC.]

		
	 By:
	 	  

		 	Title:
	
	 [DUKE ENERGY INDIANA, INC.]

		
	 By:
	 	  

		 	Title:
	
	 BANK OF AMERICA, N.A., as Administrative Agent

		
	 By:
	 	  

		 	Title:

  

 2 

 ANNEX 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT 
 STANDARD TERMS AND CONDITIONS FOR 
 ASSIGNMENT AND ASSUMPTION

 1. Representations and Warranties. 
 1.1.
Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance
or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the
performance or observance by the Borrowers, any of their Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document. 
 1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Bank under the Credit Agreement, (ii) it meets any requirements to be an assignee under Section 9.06 of the Credit Agreement (subject to such consents, if any, as may be
required), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Bank thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Bank thereunder,
(iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to
Section 5.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest and
(vi) it has, independently and without reliance upon the Administrative Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment
and Assumption and to purchase [the][such] Assigned Interest; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Bank. 
 2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to
[the][the relevant] Assignee for amounts which have accrued from and after the Effective Date. 
 3. General Provisions. This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption
shall be governed by, and construed in accordance with, the law of the State of New York. 
  

 3 

 EXHIBIT D 
 NOTICE OF ISSUANCE 
 Date:  

			
	To:	  	Bank of America, N.A., as Administrative Agent                 , as Issuing Bank
		
	From:	  	[Duke Energy Indiana, Inc.] [Duke Energy Kentucky, Inc.]

  

	Re:	Letter of Credit Agreement dated as of September 19, 2008 (as amended from time to time, the “Credit Agreement”) among Duke Energy Indiana, Inc., Duke Energy Kentucky,
Inc. (the “Borrowers”, each individually, a “Borrower”), the Banks party thereto, Bank of America, N.A., as Administrative Agent and the other Agents party thereto 

 [Duke Energy Indiana, Inc.] [Duke Energy Kentucky, Inc.] hereby gives notice pursuant to Section 2.05(b) of the Credit Agreement that it requests the
above-named Issuing Bank to issue on or before             a Letter of Credit containing the terms attached hereto as Schedule I (the “Requested Letter of Credit”).

 The Requested Letter of Credit will be subject to [UCP 500] [ISP98]. 
 [Duke Energy Indiana, Inc.] [Duke Energy Kentucky, Inc.] hereby represents and warrants to the Issuing Bank, the Administrative Agent and the Banks that: 
  

	 	(a)	immediately after the issuance of the Requested Letter of Credit, the Utilization Limits are not exceeded; 

  

	 	(b)	immediately after the issuance of the Requested Letter of Credit, no Default shall have occurred and be continuing; and 

  

	 	(c)	the representations and warranties contained in the Credit Agreement (except the representations and warranties set forth in Section 4.04(c) and 4.06 of the Credit Agreement) shall be
true on and as of the date of issuance of the Requested Letter of Credit. 

 [Duke Energy Indiana, Inc.] [Duke Energy Kentucky, Inc.]
hereby authorizes the Issuing Bank to issue the Requested Letter of Credit with such variations from the above terms as the Issuing Bank may, in its discretion, determine are necessary and are not materially inconsistent with this Notice of
Issuance. The opening of the Requested Letter of Credit and [Duke Energy Indiana, Inc.] [Duke Energy Kentucky, Inc.]’s responsibilities with respect thereto are subject to [UCP 500] [ISP98] as indicated above and the terms and conditions set
forth in the Credit Agreement. 
 Terms used herein and not otherwise defined herein have the meanings assigned to them in the Credit Agreement.

  

			
	[DUKE ENERGY INDIANA, INC.]
	
	[DUKE ENERGY KENTUCKY, INC.]
		
	 By:
	 	  

	 Title:
	 	  

 SCHEDULE I 
 Application and Agreement for 
 Irrevocable Standby Letter of Credit 
 To:
                                         
        (“Bank”) 
 Please TYPE information in the fields below. We reserve the right to return
illegible applications for clarification. 
  

					
	Date:	  	 	  	 The undersigned Applicant hereby
requests Bank to issue and transmit by:
 q Overnight
Carrier    q Teletransmission    q Mail    q Other:
  

	  
 L/C No.
	  	 (Bank Use Only)
  
	  	 Explain:
  
 an Irrevocable Standby Letter of Credit (the “Credit”) substantially as set forth below. In issuing
the Credit, Bank is expressly authorized to make such changes from the terms herein below set forth as it, in its sole discretion, may deem advisable.
  

  

			
	Applicant (Full name & address)	 	Advising Bank (Designate name & address only, if desired)
	 	 	 
	Beneficiary (Full name & address)	 	 Currency and amount in figures:

  

	 	 	 Currency and amount in words:
  

	 	 	 Expiration Date:
  

	Charges: the Bank’s charges are for our account; all other banking charges are to be paid by
beneficiary.

  

	
	 
	 Credit to be
available for payment against Beneficiary’s draft(s) at sight drawn on Bank or its correspondent at Bank’s option accompanied by the following documents:
  
  ̈     Statement, purportedly signed by the Beneficiary, reading as follows (please state below exact wording to appear on the statement):
  
  

	  ̈     Other Documents
  
  

	  ̈     Special Conditions (including, if Applicant has a preference, selection of UCP as herein defined or ISP98 as herein defined).
  
  

	
	  ̈ Issue substantially in form of attached specimen. (Specimen must also be signed by applicant.)
  
  
  

  

	
	 Complete only when the Beneficiary (Foreign Bank, or other Financial Institution) is to
issue its undertaking based on this Credit.
  ̈
Request Beneficiary to issue and deliver their (specify type of undertaking)                     in favor
of                     for an amount not exceeding the amount specified above, effective immediately relative to (specify contract number or other
pertinent reference) to expire on                     . (This date must be at least 15 days prior to expiry date indicated above.) It is understood
that if the Credit is issued in favor of any bank or other financial or commercial entity which has issued or is to issue an undertaking on behalf of the Applicant of the Credit in connection with the Credit, the Applicant hereby agrees to remain
liable under this Application and Agreement in respect of the Credit (even after its stated expiry date) until Bank is released by such bank or entity.

 Each Applicant signing below affirms that it has fully read and agrees to this Application. (Note: If a
bank, trust company, or other financial institution signs as Applicant or joint and several co-Applicant for its customer, or if two Applicants jointly and severally apply, both parties sign below.) Documents may be forwarded to the Bank by the
beneficiary, or the negotiating bank, in one mail. Bank may forward documents to Applicant’s customhouse broker, or Applicant if specified above, in one mail. Applicant understands and agrees that this Credit will be subject to the Uniform
Customs and Practice for Documentary Credits of the International Chamber of Commerce currently in effect, and in use by Bank (“UCP”) or to the International Standby Practices of the International Chamber of Commerce, Publication 590 or
any subsequent version currently in effect and in use by Bank (“ISP98”). 
  

					
	  
 (Print or type name of Applicant)
	 		  	  
 (Print or type name of Applicant)

			
	  
 (Address)
	 		  	  
 (Address)

			
	  
 Authorized Signature (Title)
	 		  	  
 Authorized Signature (Title)

			
	  
 Authorized Signature (Title)
	 		  	  
 Authorized Signature (Title)

			
	 Customer Contact:
	 		  	 Phone:

  

									
	 BANK USE ONLY
 NOTE: Application will NOT be processed if this section is not complete.

	 Approved (Authorized Signature)
  
	 	 Date:
  

	 Approved (Print name and
title)
  
	 	 City:
  

	 Customer SIC Code:
  
	 	 Borrower Default Grade:
  
	 	 Telephone:
  

	 Charge DDA#:
  
	 	 Fee:
  
	 	RC #:  
	 	 CLAS Bank #:
  
	 	 CLAS Obligor #:

 

	 Other
(please explain):Preferred Stock and Warrant Purchase Agreement

 Exhibit 10.1 
 EXECUTION COPY 
 PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT 
 THIS PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (the “Agreement”) is entered into as of November 11, 2008, by and among NEXXUS
LIGHTING, INC., a Delaware corporation (the “Company”), with its principal executive offices located at 124 Floyd Smith Drive, Suite 300, Charlotte, North Carolina 28262, and the purchasers (collectively, the
“Purchasers” and each a “Purchaser”) set forth on Schedule 1 hereof, with regard to the following: 
 RECITALS 
 A. The Company and Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities
registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended
(the “Securities Act”). 
 B. Each Purchaser desires to purchase, upon the terms and conditions stated in this
Agreement, (a) the number of shares of the Company’s Series A Preferred Stock, $.001 par value per share (the “Preferred Stock”) set forth on the Purchaser’s signature page to this Agreement (the
“Purchaser’s Signature Page”) and (b) a Common Stock Purchase Warrant in the form attached hereto as Exhibit A (individually and collectively, the “Warrants”) to purchase the number of shares
of the Company’s Common Stock, par value $.001 per share (“Common Stock”) set forth on the Purchaser’s Signature Page. The shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants are referred
to herein as the “Warrant Shares.” The shares of Preferred Stock, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”. 
 C. This Agreement, the Certificate of Designations, Rights and Preferences of the Series A Preferred Stock (the “Certificate of
Designations”), the Warrants and any other documents or agreements executed in connection with the transactions contemplated hereunder are hereinafter referred to as the “Transaction Documents”. 

 AGREEMENTS 
 NOW, THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows: 
 ARTICLE I 
 PURCHASE AND SALE OF SHARES AND WARRANTS 
 1.1 Purchase of Shares and Warrants. Subject to the terms and conditions of this
Agreement, the issuance, sale and purchase of the shares of Preferred Stock (the “Shares”) and Warrants shall be consummated in a “Closing.” Each “Unit” shall consist of (a) one (1) Share, each
Share with an initial Stated Value (as defined in the Certificate of Designations) of $5,000 and (b) Warrants issued with respect to such Shares as hereinafter provided. The purchase price (the “Purchase Price”) per Unit shall
be equal to $5,000. The number of shares of Common Stock for which the Warrants issued as part of a Unit shall be exercisable shall equal 15% of the Purchase Price of such Unit. For purposes of example only, and not by way of limitation, for a
Purchase Price of $100,000, a Purchaser would receive twenty (20) Units, consisting of twenty (20) Shares (with a Stated Value of $5,000 per Share) and Warrants to purchase 15,000 shares of the Company’s Common Stock. The exercise
price of the Warrants shall be the market value of the Company’s Common Stock immediately preceding the entering into by the Purchaser of this Agreement plus $.05. For purposes of this Agreement and the Warrants, market value shall be
determined in accordance with applicable Nasdaq rules. 
 On the date of the Closing, subject to the satisfaction or waiver of the conditions set forth in
ARTICLES VI and VII hereof, the Company shall issue and sell to each Purchaser, and each Purchaser severally agrees to purchase from the Company, such number of Units set forth opposite the Purchaser’s name on the Purchaser’s
Signature Page. Each Purchaser’s obligation to purchase Shares and Warrants hereunder is distinct and separate from each other Purchaser’s obligation to purchase, and no Purchaser shall be required to purchase hereunder more than the
number of Units set forth on the Purchaser’s Signature Page. The obligations of the Company with respect to each Purchaser shall be separate from the obligations of the Company to each other Purchaser and shall not be conditioned as to any
Purchaser upon the performance of obligations of any other Purchaser. Payment of the Purchase Price for the Units shall be either in cash or by the delivery to the Company of, and cancellation of all principal and accrued interest as of the date of
the Closing on, the Company’s Secured Promissory Notes issued in June 2008 (the “June 2008 Notes”), with the aggregate amount of principal and interest on such cancelled June 2008 Notes being applied against the Purchase Price
dollar for dollar. 
 1.2. Closing Fee. The Purchaser acknowledges that the Company has engaged Great American Investors, Inc. as the
exclusive placement agent (the “Placement Agent”) in connection with the offering of the Units (the “Offering”) and, as consideration for its services, has agreed to pay to the Placement Agent at the Closing a
commission equal to the sum of (a) five percent (5%) of the gross proceeds received by the Company in cash from the sale of Units in the Offering and (b) two and one-half percent (2.5%) of the gross proceeds received by the
Company for the sale of Units in the Offering in the form of cancelled principal and interest on the June 2008 

  

 2 

 
Notes. The fee shall be paid by issuing to the Placement Agent and/or its designees at the Closing such number of Units having a Purchase Price equal to the
aggregate amount of the fee. At or before the Closing, the Company will also reimburse the Placement Agent for expenses incurred by such Placement Agent in connection with the Offering, subject to any limitations set forth in any agreements between
the Company and the Placement Agent. The Company hereby agrees to indemnify and hold harmless the Placement Agent and its officers, directors, employees, agents and shareholders, individually and collectively (“Placement Agent Indemnified
Person(s)”) from and against any and all claims, liabilities, losses, damages, costs and reasonable expenses incurred by any Placement Agent Indemnified Person (including reasonable fees and disbursements of counsel) which are related to or
arising out of: (i) any untrue statement of any material fact made by the Company; or (ii) any omission of material fact necessary to make any statement not misleading, made by the Company. The Company will not however, be responsible for
any claims, liabilities, losses, damages, or expenses, which resulted directly or indirectly from the Placement Agent’s gross negligence or willful misconduct. 
 1.3 Closing Date. Subject to the satisfaction (or waiver) of the conditions set forth in ARTICLES VI and VII below, the date and time of the issuance, sale and purchase of the Shares and Warrants pursuant
to this Agreement shall be on or before 5:00 p.m. Charlotte, North Carolina time, on November 12, 2008. 
 ARTICLE II 
 PURCHASER’S REPRESENTATIONS AND WARRANTIES 
 Each Purchaser represents and warrants to the Company, as of the date hereof and as of the Closing, severally and not jointly, with respect to itself and its purchase hereunder and not with respect to any other Purchaser or the purchase
hereunder by any other Purchaser, that the following statements are true and correct: 
 2.1 Investment Purpose. Purchaser understands
that neither the Shares, Warrants or Warrant Shares are registered under the Securities Act or the securities laws of any state. Purchaser is purchasing the Shares and the Warrants for Purchaser’s own account for investment only and not with a
view toward or in connection with the public sale or distribution thereof. Purchaser will not, directly or indirectly, offer, sell, pledge or otherwise transfer its Shares, Warrants or Warrant Shares or any interest therein, except pursuant to
transactions that are exempt from the registration requirements of the Securities Act and/or sales registered under the Securities Act. Purchaser understands that Purchaser must bear the economic risk of this investment indefinitely, unless the
Securities are registered pursuant to the Securities Act and any applicable state securities laws or an exemption from such registration is available, and that the Company has no present intention of registering any such Securities. 
 2.2 Accredited Investor Status. Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

  

 3 

 2.3 Reliance on Exemptions. Purchaser understands that the Securities are being offered and sold
to Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Securities. 
 2.4 Information. The Company has made available to the Purchaser the documents publicly filed by the Company with the SEC (such documents
collectively, the “SEC Documents”). No private placement memorandum or similar document has been provided to any Purchaser in connection with the Offering. However, Purchaser has been afforded the opportunity to ask questions of the
Company, was permitted to meet with the Company’s officers and has received what the Purchaser believes to be complete and satisfactory answers to any such inquiries. Except for the SEC Documents and the answers received by Purchaser as a
result of inquiries made by Purchaser to Company officers, and except as otherwise provided in this Agreement, the Purchaser is not relying upon any information, representations or warranties of any other party. Neither such inquiries nor any other
due diligence investigation conducted by Purchaser or any of its representations shall modify, amend or affect Purchaser’s right to rely on the Company’s representations and warranties contained in ARTICLE III. Purchaser understands
that Purchaser’s investment in the Securities involves a high degree of risk, including, without limitation, the risks and uncertainties disclosed in the SEC Documents. 
 2.5 Governmental Review. Purchaser understands that no United States federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities. 
 2.6 Transfer or Resale. Purchaser understands that
(i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered, sold, pledged or otherwise transferred unless subsequently registered thereunder or an exemption from
such registration is available (which exemption the Company expressly agrees may be established as contemplated in clauses (b) and (c) of Section 5.1 hereof); (ii) any sale of such Securities made in reliance on Rule 144 under
the Securities Act (or a successor rule) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securities without registration under the
Securities Act under circumstances in which the seller may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the
SEC thereunder in order for such resale to be allowed and (iii) the Company is under no obligation to register such Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder. 
 2.7 Legends. Purchaser understands that until such time, if any, as the Warrant Shares may be sold by Purchaser
pursuant to Rule 144 (subject to and in 

  

 4 

 
accordance with the procedures specified in ARTICLE V hereof), the certificates for the Shares and Warrants, and, if the Warrants are exercised, the
certificates for the Warrant Shares, , will bear a restrictive legend (the “Legend”), which will include language in substantially the following form: 
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT
BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS. 
 2.8 Authorization; Enforcement. This Agreement has been duly and validly authorized, executed and
delivered on behalf of Purchaser and is a valid and binding agreement of Purchaser enforceable in accordance with its terms, except to the extent that such validity or enforceability may be subject to or affected by any bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights or remedies of creditors generally, or by other equitable principles of general application. 
 2.9 Residency. Purchaser is a resident of the jurisdiction set forth under Purchaser’s name on the signature page hereto executed by
Purchaser. 
 2.10 Short Sales and Confidentiality Prior To the Date Hereof. Other than the transaction contemplated hereunder, such
Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any disposition, including short sales, in the securities of the Company during the period
commencing from the time that such Purchaser first received a term sheet (written or oral) from the Company or any other person setting forth the material terms of the transactions contemplated hereunder until the date hereof. Other than to other
parties to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). 
 2.11 No General Solicitation. Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. 
 2.12 Pre-existing Relationship. Purchaser has a pre-existing relationship with the Company. Purchaser is not purchasing the Securities as a result
of or in connection with any registered public offering by the Company. 
  

 5 

 2.13 Risk Factors. Purchaser has reviewed the Risk Factors in the Company’s SEC Documents.
 
 2.14 Preemptive Rights. Purchaser acknowledges that certain investors have preemptive rights to purchase the Securities
pursuant to Section 4.5 of the Common Stock and Warrant Purchase Agreement, dated December 7, 2006, between the Company and the purchasers set forth in Schedule 1 thereto (the “2006 Preemptive Rights”). Within five
(5) days after the Closing, the Company shall offer such investors the right to acquire Securities sold pursuant to this Agreement pursuant to the 2006 Preemptive Rights. 
 2.15 Dividends and Redemption of Shares. Purchaser understands that under Delaware law, the Company may not redeem any Shares if such redemption
impairs the capital of the Company. The use of the Company funds to redeem Shares impairs the Company’s capital if such payments exceed the amount of the Company’s “surplus” as defined by Delaware law generally to mean the excess
of net assets over the par value of the Company’s stock. Dividends may be paid only out of “surplus” as defined under Delaware law, or in the case there is no surplus, out of the Company’s profits for the fiscal year in which the
dividend is declared and/or the preceding fiscal year. 
 2.16 No Assurance of Return on Investment. Purchaser realizes that the
purchase of the Securities is a highly speculative investment. Purchaser is able, without impairing Purchaser’s financial condition, to bear the economic risk of the purchase of the Securities pursuant to the terms of this Agreement and the
Certificate of Designations, to hold the Securities for an indefinite period of time and to suffer a complete loss of Purchaser’s investment. Prior to executing this Agreement, Purchaser has reviewed carefully a copy of this Agreement and each
schedule and exhibit hereto. Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the purchase of Securities pursuant to the terms of this Agreement and
protecting the Purchaser’s interests in connection therewith. THERE IS NO ASSURANCE THAT PURCHASER WILL RECOVER OR REALIZE ANY RETURN ON PURCHASER’S INVESTMENT IN THE SECURITIES OR THAT PURCHASER WILL NOT LOSE PURCHASER’S ENTIRE
INVESTMENT IN THE COMPANY. THERE IS NO ASSURANCE THAT THE COMPANY WILL ACHIEVE PROFITABILITY. PURCHASER HAS READ THE RISK FACTORS CONTAINED IN THE COMPANY’S SEC DOCUMENTS AND OTHER MATERIAL PROVIDED OR MADE AVAILABLE BY THE COMPANY CAREFULLY
AND CONSULTED WITH HIS OWN ATTORNEY OR BUSINESS ADVISOR PRIOR TO MAKING ANY INVESTMENT DECISION. PURCHASER CAN AFFORD THE RISK OF LOSS OF PURCHASER’S ENTIRE INVESTMENT IN THE COMPANY. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 The Company represents and warrants to each Purchaser as of the date hereof and as of the Closing that the following statements are true and correct,
except as set forth on the disclosure schedules indicated below and attached hereto (the “Company Disclosure Schedules”) and except as disclosed in the SEC Documents. 
  

 6 

 3.1 Organization and Qualification. Schedule 3.1 attached hereto sets forth the name,
jurisdiction of incorporation and percentage of voting securities owned by Nexxus Lighting, Inc. of all of the subsidiaries of Nexxus Lighting, Inc. Nexxus Lighting, Inc. is a corporation duly organized and existing in good standing under the laws
of the state of Delaware and has the requisite corporate power to own its properties and to carry on its business as now being conducted. Nexxus Lighting, Inc. is duly qualified as a foreign corporation to do business and is in good standing in
every jurisdiction where the failure so to qualify or be in good standing could reasonably be expected to have a Material Adverse Effect. “Material Adverse Effect” means any effect which, individually or in the aggregate with all
other effects, reasonably would be expected to be materially adverse to the business, operations, properties, financial condition, operating results or prospects of the Company taken as a whole, or on the transactions contemplated hereby.

 3.2 Authorization; Enforcement. (a) The Company has the requisite corporate power and authority to enter into and perform
under the Transaction Documents, and to issue, sell and perform its obligations with respect to the Securities in accordance with the terms hereof and thereof and in accordance with the terms and conditions of the Securities; (b) the execution,
delivery and performance of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares and the Warrants, and the reservation for
issuance of the Warrant Shares) have been duly authorized by all necessary corporate action and no further consent or authorization of the Company, its board of directors, or its stockholders or any other Person is required with respect to any of
the transactions contemplated hereby or thereby; (c) this Agreement, the Shares and the Warrants have been duly executed and delivered by the Company; and (d) this Agreement constitutes, and when issued pursuant to the terms of this
Agreement, the Shares and the Warrants will constitute, legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except (i) to the extent that such validity or enforceability
may be subject to or affected by any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights or remedies of creditors generally, or by other
equitable principles of general application, and (ii) as rights to indemnity and contribution under this Agreement may be limited by federal or state securities laws. “Person” means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated association, corporation, entity or government (whether federal, state, county, city or otherwise, including, without limitation, any instrumentality, division, agency or
department thereof). 
 3.3 Capitalization. The capitalization of the Company as of October 31, 2008 including the authorized
capital stock, the number of shares issued and outstanding, the number of shares reserved for issuance pursuant to the Company’s stock option plans, the number of shares reserved for issuance pursuant to securities (other than 

  

 7 

 
the Warrants) exercisable for, or convertible into or exchangeable for, shares of any class of the Company’s Common Stock and the number of shares to be
reserved for issuance upon exercise of the Warrants is set forth on Schedule 3.3 hereof. All of such outstanding shares of capital stock have been, or upon issuance will be, validly issued, fully paid and nonassessable. Except for the
2006 Preemptive Rights, no shares of capital stock of the Company (including Preferred Stock, Common Stock and the Warrant Shares) are subject to preemptive rights or any other similar rights of the stockholders of the Company or any liens or
encumbrances. Except as disclosed in Schedule 3.3 hereof, as of the date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company and (ii) except for the warrants to purchase Common Stock of the Company issued to certain investors in connection with the issuance and sale of the June 2008 Notes (the “June 2008
Warrants”), the issuance of the Securities will not trigger anti-dilution rights for any other outstanding or authorized securities of the Company. The Company has made available to Purchaser true and correct copies of the Company’s
Certificate of Incorporation, as amended and in effect on the date hereof (“Certificate of Incorporation”), and the Company’s By-laws, as amended and in effect on the date hereof (the “By-laws”). The Company
has set forth on Schedule 3.3 hereof all instruments and agreements (other than the Certificate of Incorporation and By-laws) governing securities convertible into or exercisable or exchangeable for any class of its Common Stock (and the
Company shall provide to Purchaser copies thereof upon the request of Purchaser). 
 3.4 No Conflicts. Except as set forth in
Schedule 3.4, the execution, delivery and performance of the Transaction Documents by the Company, and the consummation by the Company of transactions contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance, as applicable, of the Securities) do not and will not (a) result in a violation of the Certificate of Incorporation or By-laws, provided that the Bylaws must be amended to increase the size of the Company’s board
of directors in the event the Purchaser’s designate a member to the Company’s board of directors pursuant to Section 4.9 of this Agreement or (b) conflict with, or constitute a default (or an event which, with notice or lapse of time
or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including U.S. federal and state securities laws) applicable to the Company or by which any property or asset of the Company is bound or affected (except for such possible conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The Company is not in violation of its Certificate of Incorporation or other organizational documents. The
Company is not in default (and no event has occurred which has not been waived which, with notice or lapse of time or both, could reasonably be expected to put the Company in default) under, nor has there occurred any event giving others (with
notice or lapse of time or both) any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or 

  

 8 

 
instrument to which the Company is a party, except for possible violations, defaults or rights as would not, individually or in the aggregate, have a
Material Adverse Effect. The business of the Company is not being conducted, and shall not be conducted so long as a Purchaser owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity, except for
possible violations the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except (A) for the filing of a Form D with the SEC, (B) such other documents as may be required in
compliance with the state securities or Blue Sky laws of applicable jurisdictions and (C) such documents as may be required to be filed in compliance with the rules and regulations of the Financial Industry Regulatory Authority
(“FINRA”) and The NASDAQ Stock Market (“NASDAQ”) and any consent from NASDAQ and FINRA, copies of which shall be provided to any Purchaser upon the request of such Purchaser, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under this Agreement or
to perform its obligations in accordance with the terms hereof or thereof. 
 3.5 Consents. Except as set forth in Schedule
3.5, the execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency,
or official other than (i) filings that have been made pursuant to applicable state securities laws, (ii) post-sale filings pursuant to applicable state and federal securities laws, (iii) filings with FINRA and NASDAQ and
(iv) any consent, action or filing that either individually or in the aggregate would not have a Material Adverse Effect. Subject to the accuracy of the representations and warranties of each Purchaser set forth in ARTICLE II hereof, the
Company has taken all action necessary to exempt the issuance and sale of the (i) Shares, (ii) Warrants and (iii) Warrant Shares, from the provisions of any stockholder rights plan or other “poison pill” arrangement, any
anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Certificate of Incorporation or By-laws
that is or could reasonably be expected to become applicable to the Purchasers as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the
Securities by the Purchasers or the exercise of any right granted to the Purchasers pursuant to this Agreement or the other Transaction Documents. 
 3.6 SEC Documents; Financial Statements. Since January 1, 2007, the Company has timely filed the SEC Documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances 

  

 9 

 
under which they were made, not misleading. None of the statements made in any such SEC Documents which is required to be updated or amended under applicable
law has not been so updated or amended. The financial statements of the Company included in the SEC Documents have been prepared in accordance with U.S. generally accepted accounting principles, consistently applied, and the rules and regulations of
the SEC during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they do not include footnotes or are
condensed or summary statements) and present accurately and completely the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in a manner clearly evident to a sophisticated institutional investor in the financial statements or the notes thereto of the Company included in the SEC Documents, the Company
has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business consistent with past practice subsequent to the date of such financial statements and (ii) obligations under contracts and
commitments incurred in the ordinary course of business consistent with past practice and not required under generally accepted accounting principles to be reflected in such financial statements. To the extent required by the rules of the SEC
applicable thereto, the SEC Documents contain a complete and accurate list of all material undischarged written or oral contracts, agreements, leases or other instruments to which the Company is a party or by which the Company is bound or to which
any of the properties or assets of the Company is subject (each a “Contract”). None of the Company or, to the Company’s Knowledge, any of the other parties thereto, is in breach or violation of any Contract, which breach or
violation would have a Material Adverse Effect. No event, occurrence or condition exists which, with the lapse of time, the giving of notice, or both, could become a default by the Company which could reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company, after due inquiry. 
 3.7 Absence of Certain Changes. Except as set forth in Schedule 3.7, since December 31, 2007, there has been no material adverse
change and no material adverse development in the business, properties, operations, financial condition, results of operations or prospects of the Company, not clearly evident to a sophisticated institutional investor from the SEC Documents,
including, without limitation: 
 (i) any change in the assets, liabilities, financial condition or operating results of the Company from that
reflected in the financial statements included in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, except for changes in the ordinary course of business which have not and could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate; 
 (ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of any securities of the Company; 
  

 10 

 (iii) any material damage, destruction or loss, whether or not covered by insurance to any assets or
properties of the Company; 
 (iv) any waiver, not in the ordinary course of business, by the Company of a material right or of a material
debt owed to it; 
 (v) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, except
in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company (as such business is presently conducted and as it is proposed to be conducted); 
 (vi) any change or amendment to the Company’s Certificate of Incorporation or By-laws, or material change to any material contract or arrangement by
which the Company is bound or to which any of its assets or properties is subject; 
 (vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company; 
 (viii) any material transaction entered into by the Company other than in
the ordinary course of business; 
 (ix) the loss of the services of any key employee, or material change in the composition or duties of the
senior management of the Company; 
 (x) the loss or threatened loss of any customer which has had or could reasonably be expected to have a
Material Adverse Effect; or 
 (xi) any other event or condition of any character that has had or could reasonably be expected to have a
Material Adverse Effect. 
 3.8 Absence of Litigation. Except as disclosed in Schedule 3.8 hereof or as disclosed in the
Company’s SEC Documents filed by it with the SEC, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, or self-regulatory organization or body pending or, to the Company’s
Knowledge, threatened against or affecting the Company or any of its directors or officers in their capacities as such which could reasonably be expected to have a Material Adverse Effect. There are no facts known to the Company which, if known by a
potential claimant or governmental authority, could reasonably be expected to give rise to a claim or proceeding which, if asserted or conducted with results unfavorable to the Company could reasonably be expected to have a Material Adverse Effect.

 3.9 Tax Matters. Except as set forth on Schedule 3.9 attached hereto, the Company has timely prepared and filed all tax
returns required to have been filed by the Company with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it. The charges, accruals and reserves on the books of the Company in respect of taxes for all
fiscal periods are adequate in all material 

  

 11 

 
respects, and there are no material unpaid assessments against the Company nor, to the Company’s Knowledge, any basis for the assessment of any
additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company. All taxes and other assessments and levies that the Company is
required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens or claims pending or, to the Company’s Knowledge, threatened against
the Company or any of its assets or property. There are no outstanding tax sharing agreements or other such arrangements between the Company and any other corporation or entity. 
 3.10 Transactions with Affiliates. Except as disclosed in the SEC Documents, none of the officers or directors of the Company and, to the
Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company (other than as holders of stock options and/or warrants, and for services as employees, officers, consultants and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee
or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
 3.11 Internal Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles (“GAAP”) and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains and will continue to maintain a standard system of accounting established and administered in
accordance with GAAP and the applicable requirements of the Exchange Act. The Company’s officers certified to the Company’s internal controls as of the filing of the Company’s Form 10-Q for the quarter ended June 30, 2008 and
since the date of such filing, that there have been no significant changes in the Company’s internal controls (as such term is defined in Section 307(b) of Regulation S-K) or, to the Company’s Knowledge, any other facts that would
significantly affect the Company’s internal controls. The Company is required to certify its internal controls under Section 404 of the Sarbanes-Oxley Act of 2002 and has complied with such requirements in its Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2007. 
 3.12 Disclosure. No information relating to or concerning the Company set forth
in this Agreement contains an untrue statement of a material fact. No information relating to or concerning the Company set forth in any of the SEC Documents contains a statement of material fact that was untrue as of the date such SEC Document was
filed with the SEC. The Company has not omitted to state a material fact 

  

 12 

 
necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. Except for the
execution and performance of this Agreement, or as otherwise set forth herein or in the Schedule and Exhibits hereto, no material fact (within the meaning of the federal securities laws of the United States and of applicable state securities laws)
exists with respect to the Company which has not been publicly disclosed. 
 3.13 Acknowledgment Regarding Purchaser’s Purchase of
the Securities. The Company acknowledges and agrees that each Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement or the transactions contemplated hereby, that
this Agreement and the transaction contemplated hereby, and the relationship between each Purchaser and the Company, are “arms-length,” and that any statement made by a Purchaser (except as set forth in ARTICLE II), or any of its
representatives or agents, in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation, is merely incidental to Purchaser’s purchase of the Securities and has not been relied upon as such in any
way by the Company, its officers or directors. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the transactions contemplated hereby has been based solely on an independent evaluation
by the Company and its representatives. 
 3.14 No General Solicitation. Neither the Company nor to the Company’s knowledge any
distributor participating on the Company’s behalf in the transactions contemplated hereby (if any) nor any person acting for the Company, or to the Company’s knowledge any such distributor, has conducted any “general
solicitation,” as described in Rule 502(c) under Regulation D, with respect to any of the Securities being offered hereby. 
 3.15 No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any
security under circumstances that would prevent the parties hereto from consummating the transactions contemplated hereby pursuant to an exemption from registration under the Securities Act pursuant to the provisions of Regulation D. The
transactions contemplated hereby are exempt from the registration requirements of the Securities Act, assuming the accuracy of the representations and warranties herein contained of each Purchaser. 
 3.16 No Brokers. Except with respect to the Placement Agent or as set forth in Schedule 3.16, the Company has taken no action which would
give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments by Purchaser relating to this Agreement or the transactions contemplated hereby. 
 3.17 Intellectual Property. 
 (i) To
the Company’s Knowledge, all Intellectual Property of the Company is currently in compliance with all legal requirements (including timely filings, proofs and payments of fees) and is valid and enforceable, except where the failure to be

  

 13 

 
in compliance or to be valid and enforceable has not and could not reasonably be expected to have a Material Adverse Effect on the Company. No Intellectual
Property of the Company which is necessary for the conduct of Company’s business as currently conducted or as currently proposed to be conducted has been or is now involved in any cancellation, dispute or litigation, and, to the Company’s
Knowledge, no such action is threatened. No patent of the Company has been or is now involved in any interference, reissue, re-examination or opposition proceeding. “Intellectual Property” means all of the following:
(a) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (b) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing; (c) copyrights and copyrightable works; (d) registrations, applications and renewals for any of the foregoing; and (e) proprietary computer software
(including but not limited to data, data bases and documentation). 
 (ii) All of the licenses and sublicenses and consent, royalty or other
agreements concerning Intellectual Property which are necessary for the conduct of the Company’s business as currently conducted or as currently proposed to be conducted to which the Company is a party or by which any of its assets are bound
(other than generally commercially available, non-custom, off the shelf software application programs having a retail acquisition price of less than $5,000 per license) (collectively, “License Agreements”) are valid and binding
obligations of the Company and, to the Company’s Knowledge, the other parties thereto, and are enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and there exists no event or condition which will result in a material violation or breach of or constitute (with or without due
notice or lapse of time or both) a default by the Company under any such License Agreement. 
 (iii) The Company owns or has the valid right
to use all of the Intellectual Property that is necessary for the conduct of the Company’s business as currently conducted or as currently proposed to be conducted and for the ownership, maintenance and operation of the Company’s
properties and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property, other than licenses entered into in the ordinary course of the Company’s business. The Company has
a valid and enforceable right to use all third party Intellectual Property and confidential information used or held for use in the business of the Company. 
 (iv) To the Company’s Knowledge, the conduct of the Company’s business as currently conducted does not infringe or otherwise impair or conflict with (collectively, “Infringe”) any
Intellectual Property rights of any third party or any confidentiality obligation owed to a third party, and, to the Company’s Knowledge, the Intellectual Property and confidential information of the Company which are necessary for the conduct
of the Company’s business as currently conducted or as currently proposed to be conducted are not being Infringed by any third party. There is no 

  

 14 

 
litigation or order pending or outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks to limit or challenge or that concerns the
ownership, use, validity or enforceability of any Intellectual Property or confidential information of the Company and the Company’s use of any Intellectual Property or confidential information owned by a third party, and, to the Company’s
Knowledge, there is no valid basis for the same. 
 (v) The consummation of the transactions contemplated hereby will not result in the
alteration, loss, impairment of or restriction on the Company’s ownership or right to use any of the Intellectual Property or confidential information which is necessary for the conduct of Company’s business as currently conducted or as
currently proposed to be conducted. 
 (vi) The Company has taken reasonable steps to protect the Company’s rights in its Intellectual
Property. Each employee, consultant and contractor who has had access to confidential information which is necessary for the conduct of Company’s business as currently conducted or as currently proposed to be conducted has executed an agreement
to maintain the confidentiality of such confidential information and has executed appropriate agreements that are substantially consistent with the Company’s standard forms thereof. Except under confidentiality obligations, there has been no
material disclosure of any of the Company’s confidential information to any third party. 
 3.18 Environmental Matters. The
Company is not in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”). The Company does not own or operate any real property contaminated with any substance that is
subject to any Environmental Laws, is not liable for any off-site disposal or contamination pursuant to any Environmental Laws, is not subject to any claim relating to any Environmental Laws; and there is no pending or, to the Company’s
Knowledge, threatened investigation that might lead to such a claim. 
 3.19 Certificates, Authorities and Permits. The Company
possesses adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, and the Company has not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if determined adversely to the Company, could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate. 
 3.20 Key Employees. No Key Employee, to the Company’s Knowledge, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each Key Employee does not subject the
Company to any liability with respect to any of the foregoing matters. No Key Employee has, to the Company’s Knowledge, any intention to terminate his employment with, or services to, the Company. “Key Employee” means each of
Michael Bauer and John C. Oakley. 
  

 15 

 3.21 Labor Matters. 
 (i) The Company is not a party to or bound by any collective bargaining agreements or other agreements with labor organizations. The Company has not violated in any material respect any laws, regulations, orders or
contract terms, affecting the collective bargaining rights of employees, labor organizations or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and
hours. 
 (ii) (A) There are no labor disputes existing, or to the Company’s Knowledge, threatened, involving strikes, slow-downs,
work stoppages, job actions, disputes, lockouts or any other disruptions of or by the Company’s employees, (B) there are no unfair labor practices or petitions for election pending or, to the Company’s Knowledge, threatened before the
National Labor Relations Board or any other federal, state or local labor commission relating to the Company’s employees, (C) no demand for recognition or certification heretofore made by any labor organization or group of employees is
pending with respect to the Company and (D) to the Company’s Knowledge, the Company enjoys good labor and employee relations with its employees and labor organizations. 
 (iii) To the Company’s Knowledge, the Company is, and at all times has been, in full compliance in all material respects with all applicable laws
respecting employment (including laws relating to classification of employees and independent contractors) and employment practices, terms and conditions of employment, wages and hours, and immigration and naturalization. There are no claims pending
against the Company before the Equal Employment Opportunity Commission or any other administrative body or in any court asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§
1981 or 1983 or any other federal, state or local law, statute or ordinance barring discrimination in employment. 
 (iv) The Company is not
a party to, or bound by, any employment or other contract or agreement that contains any severance, termination pay or change of control liability or obligation, including, without limitation, any “excess parachute payment,” as defined in
Section 2806(b) of the Internal Revenue Code. 
 ARTICLE IV 
 COVENANTS AND AGREEMENTS 
 4.1 Reasonable Efforts. The parties shall use their commercially
reasonable efforts to timely satisfy each of the conditions described in ARTICLES VI and VII of this Agreement and to seek its Board of Directors’ approval of this Agreement. 
 4.2 Securities Laws; Disclosure; Press Release. The Company agrees to file a Form D with respect to the Securities with the SEC as required under

  

 16 

 
Regulation D. The Company shall, on or prior to the date of Closing, take such action as is necessary to sell the Securities to each Purchaser under
applicable securities laws of the states of the United States. The Company agrees to file a Form 8-K disclosing this Agreement and the transactions contemplated hereby with the SEC within four (4) Business Days (as hereinafter defined)
following the date of Closing. The Company and the Placement Agent shall consult with each other in connection with the Form 8-K disclosing this Agreement and the transactions contemplated hereby, and in issuing any press releases with respect to
the transactions contemplated hereby, and no Purchaser shall issue any such press release or otherwise make any such public statement without the prior written consent of the Company, which consent shall not unreasonably be withheld, except if such
disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. For purposes of this Agreement, “Business Day” means any day other
than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed. 
 4.3 Reporting Status. So long as any Purchaser beneficially owns any of the Securities but no longer than forty eight (48) months after the Closing Date, the Company shall use commercially reasonable efforts to timely file all
reports required to be filed with the SEC pursuant to the Exchange Act, and the Company shall not voluntarily terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination. 
 4.4 Reservation of Common Stock. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, not less than 4,800,000, or such lesser number of the shares of its authorized Common Stock sufficient for the issuance of shares of Common Stock upon conversion of all of the Shares
and the exercise of all of the Warrants and the Additional Warrants (as such term is hereinafter defined). The Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to issue the Warrant Shares pursuant to any exercise of the Warrants and shares of Common Stock pursuant to the exercise of the Additional Warrants. 
 4.5 Use of Proceeds. The Company will use the proceeds of the sale for the following purposes: (a) payment of fees and expenses in connection
with the Offering and the Closing (including expenses of the Placement Agent and fees and expenses of its counsel, subject to the limitations set forth in agreements between the Company and the Placement Agent); (b) funding of start-up needs
for Array Lighting products, including (but not limited to): operations, sales, working capital and marketing efforts for international launch; (c) payment of fees and expenses incurred in pursuing the Company’s proposed follow-on public
offering in an amount equal to approximately $350,000 and (d) general operating purposes. 
 4.6 Corporate Existence. So long as
any Purchaser beneficially owns any Securities, the Company shall maintain its corporate existence, except in the 

  

 17 

 
event of a merger, consolidation or sale of all or substantially all of the Company’s assets, as long as the surviving or successor entity in such
transaction assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith. 
 4.7 Ownership Limitation. The purchase of the Securities issuable to each Purchaser at the Closing will not result in such Purchaser (individually or together with any other person or entity with whom such purchaser has identified,
or will have identified, itself as part of a “group” in a public filing made with the SEC involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock
or voting power of the Company on a post-transaction basis that assumes that the Closing shall have occurred. Such Purchaser does not presently intend to, alone or together with others, make a public filing with the SEC to disclose that it has (or
that it together with such other persons or entities have) acquired, or obtained the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of
19.999% of the outstanding shares of Common Stock or the voting power of the Company on a post-transaction basis that assumes that the Closing shall have occurred. 
 Each Purchaser will not, alone or together with others, acquire, or obtain the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or the voting power of the Company. 
 4.8. Financial Covenants. From and after December 31, 2008, unless all of the Shares have been redeemed, or the holders of a majority of the
then outstanding Shares shall otherwise consent in writing, the Company shall comply with the following covenants (measured at the end of each fiscal quarter of the Company with respect to financial covenants, with the first such measurement date
being December 31, 2008): 
 (a) Tangible Net Worth. The Company shall maintain a tangible net worth of at least $5,000,000. For purposes
of this Agreement, tangible net worth shall mean the Company’s consolidated total assets, less all intangible assets and all liabilities. All amounts shall be determined in accordance with generally accepted accounting principles. 

(b) EBITDA. The Company shall not have EBITDA for any trailing 12-month period of less than negative ($5,500,000). For purposes of this
Section 4.8(b), EBITDA shall mean net income/loss before interest, taxes, depreciation, amortization, stock compensation expense and one-time non-cash expenses. 
 (c) No Security Interests. The Company shall not create any security interest or other lien for funded indebtedness on any asset or permit any subsidiary to create any lien for funded indebtedness on any of such
subsidiary’s assets other than (a) purchase money security interests incurred in connection with the acquisition of assets in a transaction otherwise not prohibited hereunder or (b) in the case of liens on assets of a subsidiary, all
such liens granted after the date hereof do not secure indebtedness in an aggregate amount of $50,000 or more for each such subsidiary. 
  

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 (d) Except for the Shares, the Company shall not redeem or re-purchase for cash any Common Stock or other
equity security or security (other than convertible debt) exercisable to purchase any equity security of the Company, or pay or declare any cash dividend or other cash distribution in respect thereof. 
 (e) The Company shall not enter into any loan agreement with any lender resulting in total funded indebtedness of the Company in excess of $200,000.

 (f) The Company shall not issue any equity securities which are senior to or pari passu with the Shares, except for the Shares issued and
sold pursuant to the 2006 Preemptive Rights. 
 4.9 Events of Default. An “Event of Default” shall occur if: 
 (a) any representation or warranty made by the Company in any Transaction Document or in any certificate, agreement or instrument executed and delivered
to the Purchasers by the Company or any of its subsidiaries or by its accountants or officers pursuant to any Transaction Document is false, inaccurate or misleading in any material respect on the date as of which made, and the Company receives
notice thereof from the Placement Agent, a Purchaser, or a third party; or 
 (b) the Company or any of its subsidiaries defaults in any
material respect in the performance of any material term, covenant, agreement, condition, undertaking or provision of any Transaction Document, or any financial covenants set forth in or referred to in this Agreement, and such default is not cured
or waived within ten (10) Business Days after the Company receives notice of such default from the Placement Agent or a Purchaser; or 
 (c) (i) the Company or any of its subsidiaries fails to pay any principal of or interest on any of its Material Indebtedness for a period longer than the grace period, if any, provided for such payment; or (ii) any default under
any instrument or agreement evidencing, creating, securing or otherwise relating to Material Indebtedness (including, without limitation, any guaranty or assumption agreement relating to such indebtedness) or other event occurs and continues beyond
any applicable notice and cure period (for purposes of this Agreement the term “Material Indebtedness” means indebtedness, in an amount of $50,000 or more, for borrowed money, under capitalized leases or evidenced by a bond, debenture,
note or similar instrument, and shall include, without limitation, any such indebtedness assumed or guaranteed); or 
 (d) (i) One or
more final judgments, decrees or orders shall be entered against the Company or any of its subsidiaries involving in the aggregate a liability (not fully covered by insurance other than applicable deductibles) of $50,000 or more and all such
judgments, decrees or orders shall not have been vacated, paid or discharged, dismissed, or stayed or bonded pending appeal (or other contest by appropriate proceedings) within sixty (60) days from the entry thereof; (ii) pursuant to one
(1) or more judgments, decrees, orders, or other proceedings, whether legal or equitable, any 

  

 19 

 
warrant of attachment, execution or other writ is levied upon any property or assets of the Company or any subsidiary and is not satisfied, dismissed or
stayed (or other contests by appropriate proceedings without bond or stay) within sixty (60) days; (iii) all or any substantial part of the assets or properties of the Company or any subsidiary are condemned, seized or appropriated by any
government or governmental authority; or (iv) any order is entered in any proceeding directing the winding up, dissolution or split-up of the Company or any subsidiary; or 
 (e) the Company (i) commences any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets,
or (ii) is the debtor named in any other case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains
undismissed, undischarged or unbonded for a period of sixty (60) days, or (iii) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence to, any order, adjudication or appointment of a nature referred
to in clause (i) or (ii) above, or (iv) shall generally not be paying, shall be unable to pay, or shall admit in writing its inability to pay its debts as they become due, or (e) shall make a general assignment for the benefit of
its creditors; or 
 (f) at any time there occurs a Change of Control Transaction. For purposes of this Agreement, a “Change of Control
Transaction” shall mean (i) a sale, lease or other disposition of assets or properties of the Company and it subsidiaries (calculated on a consolidated basis) having a book value of fifty-one percent (51%) or more of the book value of
all the assets and properties thereof, or (ii) any transaction in which any person shall directly or indirectly acquire from the holders thereof, by purchase or in a merger, consolidation or other transfer or exchange of outstanding capital
stock, ownership of or control over capital stock of the Company (or securities exchangeable for or convertible into such stock or interests) entitled to elect a majority of the Company’s Board of Directors or representing at least fifty-one
percent (51%) of the number of shares of Common Stock outstanding; or 
 (g) on or at any time after the Closing of this Agreement
(i) any of the Transaction Documents for any reason, other than a partial or full release in accordance with the terms thereof or otherwise in accordance with the terms of the Transaction Documents, ceases to be in full force and effect or is
declared to be null and void, or (ii) otherwise in accordance with the terms of the Transaction Documents, (x) the Company or any subsidiary of the Company contests the validity or enforceability of any Transaction Document in writing or
(y) denies that it has any further liability under any Transaction Document to which it is party, or gives notice to such effect. 
 4.9
Notice of Event of Default; Remedies. (a) Upon the occurrence of each Event of Default, the Company shall (i) notify the Purchasers of the nature of such Event 

  

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of Default as soon as practicable (but in no event later than one (1) Business Day after the Company becomes aware of such Event of Default), and
(ii) not later than ten (10) Business Days after delivering such notice to the Purchasers, unless such Event of Default has been cured or waived during such ten (10) Business Day period, issue a press release disclosing such Event of
Default and take such other actions as may be necessary to ensure that none of the Purchasers are in the possession of material, nonpublic information as a result of receiving such notice from the Company. 
 (b) In addition to all other rights of the Purchasers and the holders of the Shares contained herein, at any time that an Event of Default has occurred
and is continuing, (i) the Dividend Rate (as such term is defined in the Certificate of Designations) on the Shares shall be 16% per annum and (ii) subject to compliance with applicable Nasdaq rules, the Holders of at least a majority
of the aggregate Shares then outstanding shall have the right to designate one (1) member of the Company’s Board of Directors; provided, that any such designee shall execute a Lock-up Agreement in the form attached hereto as Exhibit E.
Notwithstanding anything contained in this Section 4.9(b), if the designation or the right to designate one member to the Company’s board of directors violates any applicable Nasdaq rules, or would require stockholder approval under such
rules, the Purchasers shall not have the right to designate any member to the Company’s Board of Directors pursuant to this Section 4.9(b). 
 4.10 Additional Warrants. 
 4.10.1 If all of the Shares are not redeemed prior to the date which is
six months after the Closing (the “First Deadline”), then within ten days after the First Deadline, the Company shall issue to the holders of the Shares, on a pro rata basis, based on the original number of Shares issued to such
holder or such holder’s transferor, warrants to purchase an aggregate number of shares of Common Stock equal to 50% of the number of shares of Common Stock which may be purchased upon exercise of the Warrants issued at the Closing. 

4.10.2 If all of the Shares are redeemed after the First Deadline but prior to the first anniversary of the Closing (the “Second
Deadline”), then within ten days after all of the Shares have been redeemed, the Company shall issue to the holders of the Shares, on a pro rata basis, based on the original number of Shares issued to such holder or such holder’s
transferor, warrants to purchase an aggregate number of shares of Common Stock equal to (A) 50% of the number of shares of Common Stock which may be purchased upon exercise of the Warrants issued at the Closing multiplied by (B) a
fraction, the numerator of which is the number of days after the First Deadline which have elapsed until all of the Shares have been redeemed by the Company and the denominator is 180. 
 4.10.3 If all of the Shares are not redeemed prior to Second Deadline, then within ten days after the Second Deadline, the Company shall issue to the
holders of the Shares, on a pro rata basis, based on the original number of Shares issued to such holder or such holder’s transferor, warrants to purchase an aggregate number of shares of Common Stock equal to 50% of the number of shares of
Common Stock which may be purchased upon exercise of the Warrants issued at the Closing. 
  

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 The warrants issuable pursuant to this Section 4.10 are hereinafter collectively referred to as the
“Additional Warrants.” All Additional Warrants shall be in the same form as the Warrants, except the exercise period shall be for three years commencing on the date of issuance thereof. 
 4.11 June 2008 Warrants. The Company and each Purchaser who owns June 2008 Warrants acknowledge and agree that pursuant to Section 4(d)
of the June 2008 Warrants if the exercise price of the Warrants at Closing is less than the exercise price of the June 2008 Warrants, the exercise price of the June 2008 Warrants shall be reduced to the exercise price of the Warrants and that under
no circumstances shall any further adjustment to the exercise price of the June 2008 Warrants be made pursuant to Section 4(d) thereof. The Company and each Purchaser who owns June 2008 Warrants further acknowledge and agree that from and after
the Closing, no additional warrants shall be issued in connection with the June 2008 Notes. 
 4.12 Dividends on Shares. If the
Company does not have sufficient surplus to permit it to lawfully pay dividends on the Shares, the directors of the Company shall take such lawful measures as may be appropriate or necessary in order to enable the Company to pay dividends on the
Shares. Except as otherwise required by applicable law, GAAP or applicable SEC rules and regulations, the directors of the Company shall not take any action to increase the capital of the Company to an amount in excess of the aggregate par value of
the capital stock issued by the Company. In no event shall the payment of dividends on the Shares be the cause of, or result in, the (i) insolvency of the Company (as defined under applicable law), (ii) impairment of the capital of the
Company (as defined under applicable law) or (iii) impairment of the Company’s ability to satisfy its obligations as they become due or continue its operations. Accordingly, the payment by the Company of dividends on the Shares shall be
accomplished on such terms and conditions as the directors of the Company in good faith determine to be feasible and so as not to result in any of the conditions described in clauses (i), (ii) or (iii) of the immediately preceding
sentence. 
 ARTICLE V 
 LEGEND
REMOVAL, TRANSFER, CERTAIN SALES, ADDITIONAL SHARES 
 5.1 Removal of Legend. The Legend shall be removed and the Company shall issue
a certificate without such Legend to the holder of any Security upon which it is stamped, and a certificate for a security shall be originally issued without the Legend, if, (a) the sale of such Security is registered under the Securities Act,
(b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions and reasonably satisfactory to the Company and its counsel (the reasonable cost of which
shall be borne by the Company if, after six months, neither an effective registration statement under the Securities Act or Rule 144 is available in connection with such sale) to the effect that a 

  

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public sale or transfer of such Security may be made without registration under the Securities Act pursuant to an exemption from such registration
requirements or (c) such Security can be sold pursuant to Rule 144 and the holder provides the Company with reasonable assurances that the Security can be so sold without restriction. The Company may not make any notation on its records or
give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Each Purchaser agrees to sell all Securities, including those represented by a certificate(s) from which the Legend has been
removed, or which were originally issued without the Legend, in compliance with an exemption from the registration requirements of the Securities Act. In the event the Legend is removed from any Security or any Security is issued without the Legend
and the Security is to be disposed of other than pursuant to a registration statement or pursuant to Rule 144, then prior to, and as a condition to, such disposition such Security shall be relegended as provided herein in connection with any
disposition if the subsequent transfer thereof would be restricted under the Securities Act. Also, in the event the Legend is removed from any Security or any Security is issued without the Legend and thereafter the effectiveness of a registration
statement covering the resale of such Security is suspended or the Company determines that a supplement or amendment thereto is required by applicable securities laws, then upon reasonable advance notice to Purchaser holding such Security, the
Company may require that the Legend be placed on any such Security that cannot then be sold pursuant to an effective registration statement or Rule 144 or with respect to which the opinion referred to in clause (b) next above has not been
rendered, which Legend shall be removed when such Security may be sold pursuant to an effective registration statement or Rule 144 or such holder provides the opinion with respect thereto described in clause (b) next above. 
 5.2 Transfer Agent Instructions. The Company agrees that at such time as such legend is no longer required under Section 5.1, it will, no
later than ten (10) days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing Warrant Shares issued with a restrictive legend (such date, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends, registered in the name of each Purchaser or its nominee for the Warrant Shares. The
Company covenants that no instruction other than such instructions referred to in this ARTICLE V, and stop transfer instructions to give effect to Section 2.6 hereof, will be given by the Company to its transfer agent and that the
Securities shall otherwise be freely transferable on the books and records of the Company. Nothing in this Section shall affect in any way each Purchaser’s obligations and agreement set forth in Section 5.1 hereof to resell the Securities
in compliance with an exemption from the registration requirements of applicable securities laws. If (a) a Purchaser provides the Company with an opinion of counsel, which opinion of counsel shall be in form, substance and scope customary for
opinions of counsel in comparable transactions and reasonably satisfactory to the Company and its counsel (the reasonable cost of which shall be borne by the Company if, after six months, neither an effective registration statement under the
Securities Act or Rule 144 is available in connection with such sale), to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from registration or (b) a Purchaser transfers
Securities to an affiliate which is an accredited investor (within the meaning of Regulation D under the 

  

 23 

 
Securities Act) and which delivers to the Company in written form the same representations, warranties and covenants made by the Purchasers hereunder or
pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Warrant Shares, promptly instruct its transfer agent to issue one or more certificates in such name and in such denomination as specified by such Purchaser.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Purchaser by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this ARTICLE V will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this ARTICLE V, that a Purchaser shall be entitled, in addition to
all other available remedies to an injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. 
 ARTICLE VI 
 CONDITIONS TO THE COMPANY’S
OBLIGATION TO SELL 
 6.1 Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and
sell the Shares and Warrants to a Purchaser at the Closing is subject to the satisfaction, as of the date of the Closing and with respect to such Purchaser, of each of the following conditions thereto, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole discretion: 
 (i) Such Purchaser shall have fully
completed, executed and delivered the Purchaser’s Signature Page; 
 (ii) Such Purchaser shall have wired its aggregate Purchase Price
set forth on Schedule 1 hereto to the Company; 
 (iii) The representations and warranties of such Purchaser shall be true and correct
as of the date when made and as of the Closing with the same force and effect as though such representations and warranties had been made on and as of the date of Closing (except for representations and warranties that speak as of a specific date),
and such Purchaser shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the applicable Purchaser at or prior to
the Closing; 
 (iv) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which restricts or prohibits the consummation of any of the
transactions contemplated by this Agreement; 
  

 24 

 (v) The Company shall have obtained all waivers, authorizations, approvals and consents needed to
consummate the transaction contemplated by this Agreement which the Company agrees to diligently procure; 
 (vi) The Company shall have
filed with NASDAQ an application for listing all shares of the Company’s Common Stock issuable upon exercise of the Warrants and the Additional Warrants; 
 (vii) Any right of first offer has been complied with, waived or will be complied with after the Closing in accordance with its terms; 
 (viii) The Company shall have paid all of the expenses described in the Company’s engagement letter, dated October 16, 2008 with the Placement Agent. 
 (ix) The Company’s counsel shall have delivered to the Purchasers a legal opinion in substantially the form attached hereto as Exhibit B.

 (x) The Company shall have duly approved and filed with the Secretary of State of the State of Delaware the Certificate of Designations in
the form attached hereto as Exhibit C. 
 (xi) There shall have occurred no material adverse change in the Company’s consolidated
business or financial condition since June 30, 2008; and 
 (xii) There shall be no injunction, restraining order or decree of any
nature of any court or governmental authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction Documents. 
 ARTICLE VII 
 CONDITIONS TO EACH
PURCHASER’S OBLIGATION TO PURCHASE 
 7.1 The obligation of each Purchaser hereunder to purchase the Shares and Warrants to be purchased
by it on the date of the Closing is subject to the satisfaction of each of the following conditions, provided that these conditions are for each Purchaser’s sole benefit and may be waived by such Purchaser at any time in such Purchaser’s
sole discretion: 
 (i) The Company shall have executed and delivered the Purchaser’s Signature Page; 
 (ii) The Company shall have delivered to the Purchaser duly issued certificates for the Shares and Warrants being so purchased by the Purchaser against
receipt of the Purchase Price therefore; 
  

 25 

 (iii) The representations and warranties of the Company shall be true and correct in all material
respects as of the date when made and as of the Closing with the same force and effect as though such representations and warranties had been made on and as of the date of Closing, and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing; 
 (iv) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court
or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement; 
 (v) The Company shall have delivered an officer’s certificate, in the form of Exhibit D attached hereto, as to the accuracy of the
Company’s representations and warranties pursuant to ARTICLE III; 
 (vi) Any right of first offer has been complied with, waived or
will be complied with after Closing in accordance with its terms; 
 (vii) There shall be no injunction, restraining order or decree of any
nature of any court or governmental authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction Documents; 
 (viii) The Company shall have received from each Purchaser a fully completed Investor Questionnaire, and must have found the contents of such
questionnaires to be satisfactory in the Company’s sole discretion; and 
 (ix) each director and officer of the Company set forth on
Schedule A thereto shall have delivered to the Purchasers a lock-up agreement in substantially the form attached hereto as Exhibit E. 
 ARTICLE VIII 
 GOVERNING LAW; MISCELLANEOUS 
 8.1 Governing Law: Jurisdiction. This Agreement shall be governed by and construed in accordance with the Delaware General Corporation Law (in respect of matters of corporation law) and the laws of the State of
Delaware (in respect of all other matters) applicable to contracts made and to be performed in the State of Delaware. The parties hereto irrevocably consent to the jurisdiction of the United States federal courts and state courts located in the
State of Delaware in any suit or proceeding based on or arising under this Agreement or the transactions contemplated hereby and irrevocably agree that all claims in respect of such suit or proceeding may be determined in such courts. The Company
and each Purchaser irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding in such forum. The 

  

 26 

 
Company and each Purchaser further agrees that service of process upon the Company or such Purchaser, as applicable, mailed by the first class mail in
accordance with Section 8.7 shall be deemed in every respect effective service of process upon the Company or such Purchaser in any suit or proceeding arising hereunder. Nothing herein shall affect the right of a party hereto to serve process
in any other manner permitted by law. The parties hereto agree that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.
The parties hereto irrevocably waive any right to a trial by jury under applicable law. 
 8.2 Costs and Expenses. Pursuant to an
engagement letter dated October 16, 2008 between the Company and the Placement Agent, at the Closing, the Company has agreed to reimburse the Placement Agent for (or pay directly) the fees and expenses of the Purchasers’ advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such Purchasers incident to the negotiation, preparation, execution, delivery and performance of this Agreement, subject to the limitations set forth in the engagement letter.
The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. 
 8.3 Counterparts. This Agreement may be executed in two or more counterparts, including, without limitation, by facsimile transmission, all of which counterparts shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other parties. In the event any signature page is delivered by facsimile transmission, the party using such means of delivery shall cause additional
original executed signature pages to be delivered to the other parties as soon as practicable thereafter. 
 8.4 Headings. The
headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 
 8.5 Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction. 
 8.6 Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties with respect to the maters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived other than by an instrument in writing signed by the party to be charged with enforcement and no provision of this Agreement
may be amended other than by an instrument in writing signed by the Company and each Purchaser. Notwithstanding anything contained in this Agreement to the contrary, Schedule 1 of this Agreement may be amended by the Company, without the consent of
any Purchaser, to add investors purchasing Units pursuant to the 2006 Preemptive Rights. 
  

 27 

 8.7 Notice. Any notice herein required or
permitted to be given shall be in writing and may be personally served or delivered by nationally-recognized overnight courier or by facsimile machine confirmed telecopy, and shall be deemed given and effective on the earliest of (a) the date
of transmission if such notice or communication is delivered by fax prior to 5:30 p.m. (Eastern Time) on a Business Day, (b) the next Business Day after the date of transmission if such notice or communication is delivered via fax on a day that
is not a Business Day or later than 5:30 p.m. (Eastern Time) on a Business Day, (c) the 2nd business day after the date of mailing if sent by
U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: 
  

			
	If to the Company:	  	 Nexxus Lighting, Inc.
 124 Floyd Smith Office Park
Drive

		  	Suite 300
		  	Charlotte, North Carolina 28262
		  	Attention: John C. Oakley, Chief Financial Officer
		  	Facsimile: 704-405-0422
		
		  	with a copy to:
		
		  	Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
		  	215 North Eola Drive
		  	Orlando, FL 32801
		  	Attention: Suzan Abramson, Esq.
		  	Facsimile: 407-843-4444
		
	If to the Purchasers:	  	See Purchaser’s Signature Page

 If to any Purchaser, to such address set forth under such Purchaser’s name on the Purchaser’s Signature
Page executed by such Purchaser. Each party shall provide notice to the other parties of any change in address in the meaning set forth in this Section 8.7. 
 8.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor any Purchaser shall assign this Agreement or
any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, each Purchaser may assign its rights and obligations hereunder to any of its “affiliates,” as that term is defined under the
Securities Act, without the consent of the Company so long as such affiliate is an accredited investor (within the meaning of Regulation D under the Securities Act) and agrees in writing to be bound by this Agreement. This provision shall not
limit each Purchaser’s right to transfer the Securities pursuant to the terms of this Agreement or to assign such Purchaser’s rights hereunder to any such transferee. In that regard, if a Purchaser sells all or part of its Securities to
someone that acquires the 

  

 28 

 
Securities subject to restrictions on transferability (other than restrictions, if any, arising out of the transferee’s status as an affiliate of the
Company), Purchaser shall be permitted to assign its rights hereunder, in whole or in part, to such transferee. 
 8.9 Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 8.10 Survival; Indemnification. The representations and warranties of the Company and the agreements and covenants shall survive the closing
hereunder notwithstanding any due diligence investigation conducted by or on behalf of Purchaser. The Company agrees to indemnify and hold harmless each Purchaser and each Purchaser’s officers, directors, employees, partners, agents and
affiliates from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees and disbursements and other expenses incurred in connection with investigating, preparing or
defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) arising as a result of or related to any breach or alleged breach by the Company of any of its
representations or covenants set forth herein, including advancement of expenses as they are incurred. The representations and warranties of the Purchasers shall survive the Closing hereunder and each Purchaser shall indemnify and hold harmless the
Company and each of its officers, directors, employees, partners, agents and affiliates from and against any and all Losses arising as a result of or related to any breach of such Purchaser’s representations and warranties contained herein.

 8.11 Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby. Each party to this Agreement shall use its best efforts to cause the Company to comply with all Nasdaq rules applicable to the transactions contemplated by this Agreement so as to enable, to the fullest extent
possible, consummation of the transactions contemplated by this Agreement without the requirement of obtaining stockholder approval thereof. In furtherance of the foregoing, each party agrees to amend the terms of this Agreement, the Certificate of
Designations and the Warrants if such amendment is required to comply with applicable Nasdaq rules in order to consummate the transactions contemplated by this Agreement without the requirement of obtaining stockholder approval thereof. 

8.12 Remedies. No provision of this Agreement providing for any remedy to a Purchaser shall limit any remedy which would otherwise be available
to such Purchaser at law or in equity. Nothing in this Agreement shall limit any rights a Purchaser may have under any applicable federal or state securities laws with respect to the investment contemplated hereby. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the remedy at law for a material breach of its obligations under this Agreement will be inadequate and agrees, in the
event of a breach or 

  

 29 

 
threatened breach by the Company of the provisions of this Agreement, that a Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate compliance, without the necessity of showing economic loss and without any bond or other security being required. 
 8.13 Final Agreement. This Agreement, when executed by the parties hereto, shall constitute the final agreement between the parties and upon such
execution Purchasers and the Company accept the terms hereof and have no cause of action against each other for prior negotiations preceding the execution of this Agreement. 
 8.14. Arm’s Length Negotiations; Counsel for the Company. Each Purchaser expressly represents and warrants to the Company that
(a) before executing this Agreement, said Purchaser has fully informed himself of the terms, contents, conditions and effects of this Agreement; (b) said Purchaser has relied solely and completely upon his own judgment in executing this
Agreement; (c) said Purchaser has had the opportunity to seek the advice of his own counsel and advisors before executing this Agreement; (d) said Purchaser has acted voluntarily and of his own free will in executing this Agreement;
(e) said Purchaser is not acting under duress, whether economic or physical, in executing this Agreement; (f) this Agreement is the result of arm’s length negotiations conducted by and among the parties; and (g) said Purchaser
acknowledges that the law firm of Lowndes, Drosdick, Doster, Kantor & Reed, P.A. has been retained by the Company to prepare this Agreement as legal counsel for the Company, that Lowndes, Drosdick, Doster, Kantor & Reed, P.A. does
not represent any Purchaser in connection with the preparation or execution of this Agreement, and that Lowndes, Drosdick, Doster, Kantor & Reed, P.A. has not given any legal, investment or tax advice to any Purchaser regarding this
Agreement. Lowndes, Drosdick, Doster, Kantor & Reed, P.A. is expressly intended as a beneficiary of the representations and warranties of the Purchasers contained in this Section 8.14. 
  

 30 

 IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this Agreement to be duly
executed as of the date first above written. 
  

			
	COMPANY:
	
	NEXXUS LIGHTING, INC.
		
	By:	 	 /s/ Michael A. Bauer

	Name:	 	Michael A. Bauer
	Title:	 	President and Chief Executive Officer
	
	PURCHASERS:
	
	See attached Signature Pages

  

 31 

 PURCHASER SIGNATURE PAGE TO PREFERRED STOCK AND WARRANT 
 PURCHASE AGREEMENT 
 1. Date:
            , 2008 
 2. Consideration:
$             in cash or by delivery of June 2008 Note (must be at least $25,000). 
 3. Number of Units:              (each Unit consists of one Share and Warrants to purchase 750 shares of Common Stock. 
 The Purchaser signing below represents that: 
  

	 	(a)	the Purchaser’s representations and warranties contained in this Agreement are complete and accurate and may be relied upon by the Company, 

  

	 	(b)	the Purchaser will notify the Company immediately of any change in any of such representations and warranties, as well as any change to the information contained in this signature
page or in the Investor Questionnaire and Accredited Investor Certification accompanying this Agreement; 

  

	 	(c)	the Purchaser hereby accepts and adopts the provisions of this Agreement and agrees to be bound thereby; and the Purchaser hereby assumes and agrees to satisfy and discharge, as
applicable, any and all obligations applicable to the Purchaser under the Agreement; and 

  

	 	(d)	the Purchaser agrees to execute such further and other assurances and to do such other acts as may reasonably be required to implement the intentions of the Agreement.

 IN WITNESS WHEREOF, the undersigned has executed this Agreement and executed the Accredited Investor Certification attached
hereto as Exhibit A on this      day of             , 2008. 
 Name of Purchaser:
                                         
                        
  

	
	Signature of Investor
	
	  

  

 32 

	
	 Taxpayer Identification or
 Social Security
Number

	
	  

  

			
	Name and Residence Address:	    	  

	(Post Office Address Not Acceptable)	    	  

		    	  

		
	 Mailing Address if Different from
Residence Address
	    	  

	(Post Office Address is Acceptable)	    	  

		    	  

 Type of Ownership (check one): 
  

			
	  
	    	Individual Ownership
	  
	    	Community Property (each spouse must sign)
	  
	    	Joint Tenants with Right of Survivorship (all sign)
	  
	    	Tenants in Common (all sign)
	  
	    	Trust
	  
	    	Corporation
	  
	    	S Corporation
	  
	    	C Corporation
	  
	    	Limited Liability Company
	  
	    	Other (please specify type of entity )

 Fax Number of Purchaser:
                                        

 E-Mail Address of Purchaser:
                                        

  

 33 

 LIST OF EXHIBITS 
  

					
	EXHIBIT A	 	-	    	FORM OF WARRANT
			
	EXHIBIT B	 	-	    	FORM OF COMPANY COUNSEL OPINION
			
	EXHIBIT C	 	-	    	CERTIFICATE OF DESIGNATIONS
			
	EXHIBIT D	 	-	    	FORM OF BRINGDOWN CERTIFICATE
			
	EXHIBIT E	 	-	    	FORM OF LOCK-UP AGREEMENT

  

 34 

 List of Schedules 
 to 
 Preferred Stock and Warrant Purchase Agreement 
  

					
	Schedule 1	 	-	    	List of Investors
			
	Schedule 3.1	 	-	    	Organization and Qualification
			
	Schedule 3.3	 	-	    	Capitalization
			
	Schedule 3.4	 	-	    	No Conflicts
			
	Schedule 3.5	 	-	    	Consents
			
	Schedule 3.8	 	-	    	Absence of Litigation
			
	Schedule 3.9	 	-	    	Tax Matters
			
	Schedule 3.16	 	-	    	No Brokers

  

 35 

 SCHEDULE 1 
 TO PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT 
 LIST OF INVESTORS 

 

									
	 Investor Name
	 	Number of Units	 	Number of Shares
of Series A
Preferred Stock
included in Units
Being Purchased at
Closing	 	Number of Warrants
to Purchase Shares
of Common Stock
included in Units
Being Purchased at
Closing	 	Purchase
Price
	 Michael Brown
	 	150.00	 	150.00	 	112,500	 	$750,000
					
	 Todd A. Tumbleson IRA
	 	125.96	 	125.96	 	94,470	 	$629,792
					
	 Tebo Capital LLC SEP IRA
	 	6.16	 	6.16	 	4,621	 	$30,794
					
	 Tebo Capital LLC
	 	71.85	 	71.85	 	53,888	 	$359,263
					
	 Joseph C. Higday
 Revocable Trust
	 	100.00	 	100.00	 	75,000	 	$500,000
					
	 J. Shawn Chalmers
 Revocable Trust
	 	205.29	 	205.29	 	153,968	 	$1,026,466
					
	 Orion Investment
 Partners I, LLC
	 	203.97	 	203.97	 	152,978	 	$1,019,849
					
	 David G. & Lisa Suzanne
 Orscheln Trust UTA 8/22/01
	 	50.00	 	50.00	 	37,500	 	$250,000
					
	 Cascoh, Inc.
	 	205.29	 	205.29	 	153,968	 	$1,026,466
					
	 XXL Investments, LLC
	 	30.00	 	30.00	 	22,500	 	$150,000
					
	 Bicknell Family Holding
 Company, LLC
	 	270.00	 	270.00	 	202,500	 	$1,350,000
					
	 Martin C. Bicknell
	 	30.00	 	30.00	 	22,500	 	$150,000
					
	 Mike Buckman
	 	5.00	 	5.00	 	3,750	 	$25,000
					
	 Cynthia M. Mason and
	 		 		 		 	
	 Robert L. Love, joint tenants
	 	10.00	 	10.00	 	7,500	 	$50,000
					
	 Daniel R. Henry
	 	29.92	 	29.92	 	22,440	 	$149,600
					
	 Ron Loew
	 	20.00	 	20.00	 	15,000	 	$100,000
		 	 	 	 	 	 	 	 
	 Total
	 	1,513.44	 	1,513.44	 	1,135,083	 	$7,567,230

  

 36

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