Document:

Exhibit

EXHIBIT 4.1

Southern Indiana Gas and Electric Company

with

Deutsche Bank Trust Company Americas,
as Trustee
_______________
Supplemental Indenture
Relating to the
First Mortgage Bonds

Series 2015 (Mount Vernon) due 2055
Series 2015 (Warrick) due 2055

Dated as of September 1, 2015

EXHIBIT 4.1

Supplemental Indenture, dated as of September 1, 2015 (this “Supplemental Indenture”), between Southern Indiana Gas and Electric Company, a corporation organized and existing under the laws of the State of Indiana (hereinafter called the “Company”), party of the first part, and Deutsche Bank Trust Company Americas, a corporation organized and existing under the laws of the State of New York, formerly known as Bankers Trust Company, as Trustee under the Mortgage hereinafter referred to, party of the second part.
Whereas, the Company heretofore executed and delivered to Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as trustee (hereinafter called the “Trustee”), a certain Indenture of Mortgage and Deed of Trust dated as of April 1, 1932, to secure an issue of bonds of the Company, issued and to be issued in series, from time to time, in the manner and subject to the conditions set forth in the said Indenture, and the said Indenture has been amended and supplemented by Supplemental Indentures dated as of August 31, 1936, October 1, 1937, March 22, 1939, July 1, 1948, June 1, 1949, October 1, 1949, January 1, 1951, April 1, 1954, March 1, 1957, October 1, 1965, September 1, 1966, August 1, 1968, May 1, 1970, August 1, 1971, April 1, 1972, October 1, 1973, April 1, 1975, January 15, 1977, April 1, 1978, June 4, 1981, January 20, 1983, November 1, 1983, March 1, 1984, June 1, 1984, November 1, 1984, July 1, 1985, November 1, 1985, June 1, 1986, November 15, 1986, January 15, 1987, December 15, 1987, December 13, 1990, April 1, 1993, May 1, 1993, June 1, 1993, July 1, 1999, March 1, 2000, August 1, 2004, October 1, 2004, April 1, 2005, March 1, 2006, December 1, 2007, August 1, 2009, April 1, 2013 and September 1, 2014, which Indenture as so amended and supplemented is hereinafter referred to as the “Mortgage” and as further supplemented by this Supplemental Indenture is hereinafter referred to as the “Indenture”; and
Whereas, Section 108 of the Mortgage provides that the Company and the Trustee may, from time to time, enter into such indentures supplemental to the Mortgage as shall be deemed by them necessary or desirable; and
Whereas, the Company has entered into (i) a Loan Agreement dated as of September 1, 2015 (the “Mount Vernon 2015 Loan Agreement”), with the City of Mount Vernon, Indiana (the “City”), pursuant to which the City issued $23,000,000 aggregate principal amount of its Environmental Improvement Revenue Bonds, Series 2015 (Southern Indiana Gas and Electric Company Project) (the “Mount Vernon 2015 Bonds”), pursuant to and in accordance with the terms of an Indenture dated as of September 1, 2015 (the “Mount Vernon 2015 Indenture”), between the City and Wells Fargo Bank, National Association, as trustee (the “Issuer Trustee”), at the request of and for the benefit of the Company, in order to provide funds to loan to the Company for the purpose of (a) financing a portion of the costs of acquisition, construction, installation and equipping of certain solid waste disposal facilities described in Exhibit A to the Mount Vernon 2015 Loan Agreement and (b) paying certain costs of issuance relating to the Mount Vernon 2015 Bonds; and (ii) a Loan Agreement dated as of September 1, 2015 (the “Warrick 2015 Loan Agreement”), with Warrick County, Indiana (the “County”), pursuant to which the County issued $15,200,000 aggregate principal amount of its Environmental Improvement Revenue Bonds, Series 2015 (Southern Indiana Gas and Electric Company Projects) (the “Warrick 2015 Bonds” and together with the Mount Vernon 2015 Bonds, the “Issuer Bonds”), pursuant to and in accordance with the terms of an Indenture dated as of September 1, 2015 (the “Warrick 2015 Indenture”), between the County and the Issuer Trustee in order to provide funds to loan to the Company for the purpose of (a) financing a portion of the costs of acquisition, construction, installation and equipping of certain solid waste disposal facilities described in Exhibit A to the Warrick 2015 Loan Agreement and (b) paying certain costs of issuance relating to the Warrick 2015 Bonds; and
Whereas, the Company has determined that it would be in its best interests, given the current status of the financial markets, to initially evidence and secure the Company’s obligations relating to the (i) Mount Vernon 2015 Bonds under the Mount Vernon 2015 Loan Agreement with the Company’s first mortgage bonds 

EXHIBIT 4.1

and (ii) Warrick 2015 Bonds under the Warrick 2015 Loan Agreement with the Company’s first mortgage bonds; and
Whereas, the Company by appropriate company action in conformity with the terms of the Indenture has duly determined to create (i) a new series of bonds which shall be issued under the Indenture in an aggregate principal amount of $23,000,000 and be designated as “First Mortgage Bonds, Series 2015 (Mount Vernon) due 2055” (hereinafter sometimes referred to as “Bonds of the Fifty-third Series”), the bonds of which series are to bear interest at the rate from time to time borne by the Mount Vernon 2015 Bonds and are subject to certain optional and mandatory redemption rights and obligations set forth herein and (ii) a new series of bonds which shall be issued under the Indenture in an aggregate principal amount of $15,200,000 and be designated as “First Mortgage Bonds, Series 2015 (Warrick) due 2055” (hereinafter sometimes referred to as “Bonds of the Fifty-fourth Series”), the bonds of which series are to bear interest at the rate from time to time borne by the Warrick 2015 Bonds and are subject to certain optional and mandatory redemption rights and obligations set forth herein; and
Whereas, all things necessary to make the Bonds of the Fifty-third Series and the Bonds of the Fifty-fourth Series when authenticated by the Trustee and issued as in the Indenture provided, the valid, binding and legal obligations of the Company, entitled in all respects to the security of the Indenture, have been done and performed, and the creation, execution and delivery of this Supplemental Indenture has in all respects been duly authorized; and
 Whereas, the Company and the Trustee deem it advisable to enter into this Supplemental Indenture for the purposes above stated and for the purpose of describing the Bonds of the Fifty-third Series and the Bonds of the Fifty-fourth Series and of providing the terms and conditions of redemption of each such Series;
Now, Therefore, This Supplemental Indenture Witnesseth:  That Southern Indiana Gas and Electric Company, in consideration of the premises and of one dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and of the purchase and acceptance of the bonds issued or to be issued hereunder by the holders or registered owners thereof, and in order to secure the payment of the principal, premium, if any, and interest of all bonds at any time issued and outstanding under the Indenture, according to their tenor and effect, and the performance of all of the provisions hereof and of said bonds, hath granted, bargained, sold, released, conveyed, assigned, transferred, pledged, set over and confirmed and by these presents doth grant, bargain, sell, release, convey, assign, transfer, pledge, set over and confirm unto Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as Trustee, and to its successor or successors in said trust, and to its and their assigns forever, all the properties, real, personal and mixed, tangible and intangible of the character described in the granting clauses of the aforesaid Indenture of Mortgage and Deed of Trust dated as of April 1, 1932 or in any indenture supplemental thereto acquired by the Company on or after the date of the execution and delivery of said Indenture of Mortgage and Deed of Trust (except any in said Indenture of Mortgage and Deed of Trust or in any indenture supplemental thereto expressly excepted) and does hereby confirm that the Company will not cause or consent to a partition, either voluntary or through legal proceedings, of property, whether herein described or heretofore or hereafter acquired, in which its ownership shall be as a tenant in common, except as permitted by and in conformity with the provisions of the Indenture and particularly of Article X thereof.
Together with all and singular the tenements, hereditaments and appurtenances belonging or in any wise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Article X of the Indenture), the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title, interest and claim whatsoever, 

EXHIBIT 4.1

at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof.
To Have and to Hold all such properties, real, personal and mixed, mortgaged, pledged or conveyed by the Company as aforesaid, or intended so to be, unto the Trustee and its successors and assigns forever.
In Trust, Nevertheless, upon the terms and trusts of the Indenture, for those who shall hold the bonds and coupons issued and to be issued thereunder, or any of them, without preference, priority or distinction as to lien of any of said bonds and coupons over any others thereof by reason of priority in the time of the issue or negotiation thereof, or otherwise howsoever, subject, however, to the provisions in reference to extended, transferred or pledged coupons and claims for interest set forth in the Indenture (and subject to any sinking funds that may be created for the benefit of any particular series).
Provided, However, and these presents are upon the condition that, if the Company, its successors or assigns, shall pay or cause to be paid, the principal of, premium, if any, and interest on said bonds, at the times and in the manner stipulated therein and herein, and shall keep, perform and observe all and singular the covenants and promises in said bonds and in the Indenture expressed to be kept, performed and observed by or on the part of the Company, then this Supplemental Indenture and the estate and rights hereby granted shall cease, determine and be void, otherwise to be and remain in full force and effect.
It Is Hereby Covenanted, Declared and Agreed, by the Company, that all such bonds and coupons are to be issued, authenticated and delivered, and that all property subject or to become subject hereto is to be held, subject to the further covenants, conditions, uses and trusts in the Indenture set forth, and the Company, for itself and its successors and assigns, does hereby covenant and agree to and with the Trustee and its successor or successors in such trust, for the benefit of those who shall hold said bonds and interest coupons, or any of them, as follows:

EXHIBIT 4.1

Part IA

Form of Bonds of the Fifty-third Series
The form of the definitive registered bond without coupons of the Bonds of the Fifty-third Series and the Trustee’s certificate of authentication to be borne by such bonds are to be substantially in the following forms, respectively:
“[form of fully registered Bond of the Fifty-third Series]
[form of face of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2015 (Mount Vernon) due 2055
No. _____                            $23,000,000
Southern Indiana Gas and Electric Company, a corporation of the State of Indiana (hereinafter called the “Company”), for value received, hereby promises to pay to Wells Fargo Bank, National Association, as trustee under the Issuer Indenture hereinafter referred to, or registered assigns Twenty-Three Million dollars, on September 1, 2055 at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered owner hereof interest thereon at the same rate or rates of interest as the Environmental Improvement Revenue Bonds, Series 2015 (Southern Indiana Gas and Electric Company Project) (the “Issuer Bonds”) due September 1, 2055 and issued by the City of Mount Vernon, Indiana (the “Issuer”), under the Indenture dated as of September 1, 2015, as the same may be supplemented and amended from time to time in accordance with its terms (the “Issuer Indenture”), between the Issuer and Wells Fargo Bank, National Association, as trustee (the “Issuer Trustee”) (as determined in accordance with the Issuer Indenture); provided, however, that in no event shall the rate of interest borne by the bonds of this series exceed 12% per annum.  Such interest, in like coin or currency, payable at said office or agency on the same dates as interest on the Issuer Bonds, or if this bond shall be duly called for redemption, until the redemption date, or if the Company shall default in the payment of the principal hereof, until the Company’s obligation to pay principal shall be discharged as provided in the hereinafter defined Mortgage, is paid until the principal sum is paid in full discharge under the Mortgage.
The Company has agreed to pay the principal of, premium, if any, and interest on the Issuer Bonds pursuant to a Loan Agreement dated as of September 1, 2015, as the same may be supplemented and amended from time to time in 

EXHIBIT 4.1

accordance with its terms (the “Agreement”) between the Company and the Issuer.  Pursuant to the granting clause of the Issuer Indenture, this bond is issued to the Issuer Trustee to secure any and all obligations of the Company under the Agreement with respect to payment of the Issuer Bonds.  Payment of principal of, premium, if any, or interest on, the Issuer Bonds shall constitute payments on this bond as further provided herein and in the Issuer Indenture, pursuant to which this bond has been authorized.
Upon any payment of the principal of, premium, if any, and interest on, all or any portion of the Issuer Bonds, whether at maturity or otherwise or upon provision for the payment thereof having been made in accordance with Section 10.1 of the Issuer Indenture, a principal amount of this bond equal to the principal amount of such Issuer Bonds shall, to the extent of such payment of principal, premium, if any, and interest, be deemed paid and the obligation of the Company thereunder to make such payment shall be discharged to such extent and, in the case of the payment of principal, such bonds shall be surrendered to the Trustee for cancellation as provided in Section 10.1 of the Issuer Indenture.  The Trustee (as hereinafter defined) may at any time and all times conclusively assume that the obligation of the Company to make payments under the Agreement with respect to the principal of, premium, if any, and interest on, the Issuer Bonds, so far as such payments at the time have become due, has been fully satisfied and discharged pursuant to the foregoing sentence unless and until the Trustee shall have received a written notice from the Issuer Trustee signed by one of its officers stating (i) that timely payment of principal of, or interest on, the Issuer Bonds has not been made, (ii) that the Company is in arrears as to the payments required to be made by it to the Issuer Trustee pursuant to the Agreement, and (iii) the amount of the arrearage.
The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.
This bond shall not become obligatory until Deutsche Bank Trust Company Americas, the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon.

EXHIBIT 4.1

In Witness Whereof, Southern Indiana Gas and Electric Company has caused this bond to be signed in its name by its President or a Vice President, by his signature or a facsimile thereof, and a facsimile of its corporate seal to be imprinted hereon, attested by its Secretary or an Assistant Secretary, by his signature or a facsimile thereof.
Dated: __________, 2015

Southern Indiana Gas and Electric Company
By:                        
Vice President and Treasurer
Attest:
                    
Assistant Secretary

EXHIBIT 4.1

[Form of Trustee’s Certificate]
This bond is one of the bonds of the series designated therein, described in the within‐mentioned Mortgage.

Deutsche Bank Trust Company Americas, by Deutsche Bank National Trust Company, as Trustee

By:                        
Authorized Officer
[form of reverse of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2015 (Mount Vernon) due 2055
This bond is one of an issue of First Mortgage Bonds of the Company, issuable in series, and is one of the series designated in the title hereof, all issued and to be issued under and equally secured (except as to any sinking fund established in accordance with the provisions of the Mortgage hereinafter mentioned for the bonds of any particular series) by an Indenture of Mortgage and Deed of Trust, dated as of April 1, 1932, executed by the Company to Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as Trustee (the “Trustee”), as amended and supplemented by indentures supplemental thereto (herein referred to as the “Mortgage”), to which reference is made for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds are secured.
The bonds of this series are issued and to be issued in order to evidence and secure a loan made by the Issuer to the Company pursuant to the Agreement.  In order to provide moneys to fund such loan, the Issuer has issued the Issuer Bonds under and pursuant to the Issuer Indenture.  Payments made by the Company of principal, premium, if any, and interest on the bonds of this series are intended to be sufficient to permit payments of principal, premium, if any, and interest to be made on the Issuer Bonds.  Upon certain terms and conditions, moneys held under and pursuant to the Issuer Indenture, including moneys so held from the proceeds of the sale of the Issuer Bonds or earnings on the investment of such proceeds, or redemption of the Issuer Bonds shall be credited to or used for the payment of the bonds of this series and to the extent so credited or used shall satisfy a like amount otherwise due hereunder.
The bonds of this series are subject to optional and mandatory redemption, in whole or in part, as the case may be, on each date that Issuer Bonds are to be redeemed.  The principal amount of the bonds of this series to be redeemed 

EXHIBIT 4.1

on any such date shall be equal to the principal amount of Issuer Bonds called for redemption on that date.  All redemptions of bonds of this series shall be at the redemption prices that correspond to the redemption prices for the Issuer Bonds.
If and whenever the Trustee or the Company is notified that an event of default has occurred and is continuing under Section 7.1(D) of the Issuer Indenture or Section 6.1(a) or Section 6.1(b) of the Agreement, and provided that the principal of all Issuer Bonds then outstanding and the interest thereon shall have been declared immediately due and payable, then not later than two business days following the occurrence of the foregoing events, the Company shall, upon not less than 30 days’ and not more than 45 days’ prior written notice given in the manner provided in the Mortgage, call for redemption on a redemption date selected by it not later than 45 days following the date of such notice, all of the bonds of this series then outstanding, and shall on such redemption date redeem the same at a price equal to 100% of the principal amount thereof together with accrued interest thereon to the redemption date, except that such requirement or redemption shall be deemed to be waived if, prior to the date fixed for such redemption of the bonds of this series, such event of default is waived or cured.
In case a completed default, as defined in the Mortgage, shall occur, the principal of this bond and all other bonds of the Company at any such time outstanding under the Mortgage may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Mortgage.  The Mortgage provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the bonds entitled to vote then outstanding.
This bond, subject to the limitations with regard thereto contained in the Issuer Indenture, is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., upon surrender and cancellation of this bond, and thereupon, a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange thereof as provided in the Mortgage, and upon payment, if the Company shall require it, of the charges therein prescribed.  The Company and the Trustee may deem and treat the person in whose name this bond is registered as the absolute owner for the purpose of receiving payment of or on account of the principal and interest due hereon and for all other purposes.
As provided in Section 5.9 of the Issuer Indenture, from and after the Release Date (as defined in the Issuer Indenture), the obligations of the Company with respect to this bond shall be deemed to be satisfied and discharged, this bond shall cease to secure in any manner the Company’s obligations under the Agreement with respect to the payment of any Issuer Bonds outstanding under the Issuer Indenture, and, pursuant to Section 5.9 of the Issuer Indenture, the Issuer Trustee shall forthwith deliver this bond to the Trustee for cancellation.

EXHIBIT 4.1

The bonds of this series are issuable as registered bonds without coupons in denominations of $1,000 and authorized multiples thereof.  In the manner and upon payment of the charges prescribed in the Mortgage, registered bonds without coupons of this series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof, for cancellation, to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.
No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage.
[end of form of bond]”

EXHIBIT 4.1

Part IB

Form of Bonds of the Fifty-fourth Series
The form of the definitive registered bond without coupons of the Bonds of the Fifty-fourth Series and the Trustee’s certificate of authentication to be borne by such bonds are to be substantially in the following forms, respectively:
“[form of fully registered Bond of the Fifty-fourth Series]
[form of face of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2015 (Warrick) due 2055
No. _____                            $15,200,000
Southern Indiana Gas and Electric Company, a corporation of the State of Indiana (hereinafter called the “Company”), for value received, hereby promises to pay to Wells Fargo Bank, National Association, as trustee under the Issuer Indenture hereinafter referred to, or registered assigns Fifteen Million Two Hundred Thousand dollars, on September 1, 2055 at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered owner hereof interest thereon at the same rate or rates of interest as the Environmental Improvement Revenue Bonds, Series 2015 (Southern Indiana Gas and Electric Company Projects) (the “Issuer Bonds”) due September 1, 2055 and issued by Warrick County, Indiana (the “Issuer”), under the Indenture dated as of September 1, 2015, as the same may be supplemented and amended from time to time in accordance with its terms (the “Issuer Indenture”), between the Issuer and Wells Fargo Bank, National Association, as trustee (the “Issuer Trustee”) (as determined in accordance with the Issuer Indenture); provided, however, that in no event shall the rate of interest borne by the bonds of this series exceed 12% per annum.  Such interest, in like coin or currency, payable at said office or agency on the same dates as interest on the Issuer Bonds, or if this bond shall be duly called for redemption, until the redemption date, or if the Company shall default in the payment of the principal hereof, until the Company’s obligation to pay principal shall be discharged as provided in the hereinafter defined Mortgage, is paid until the principal sum is paid in full discharge under the Mortgage.
The Company has agreed to pay the principal of, premium, if any, and interest on the Issuer Bonds pursuant to a Loan Agreement dated as of September 1, 2015, as the same may be supplemented and amended from time to time in 

EXHIBIT 4.1

accordance with its terms (the “Agreement”) between the Company and the Issuer.  Pursuant to the granting clause of the Issuer Indenture, this bond is issued to the Issuer Trustee to secure any and all obligations of the Company under the Agreement with respect to payment of the Issuer Bonds.  Payment of principal of, premium, if any, or interest on, the Issuer Bonds shall constitute payments on this bond as further provided herein and in the Issuer Indenture, pursuant to which this bond has been authorized.
Upon any payment of the principal of, premium, if any, and interest on, all or any portion of the Issuer Bonds, whether at maturity or otherwise or upon provision for the payment thereof having been made in accordance with Section 10.1 of the Issuer Indenture, a principal amount of this bond equal to the principal amount of such Issuer Bonds shall, to the extent of such payment of principal, premium, if any, and interest, be deemed paid and the obligation of the Company thereunder to make such payment shall be discharged to such extent and, in the case of the payment of principal, such bonds shall be surrendered to the Trustee for cancellation as provided in Section 10.1 of the Issuer Indenture.  The Trustee (as hereinafter defined) may at any time and all times conclusively assume that the obligation of the Company to make payments under the Agreement with respect to the principal of, premium, if any, and interest on, the Issuer Bonds, so far as such payments at the time have become due, has been fully satisfied and discharged pursuant to the foregoing sentence unless and until the Trustee shall have received a written notice from the Issuer Trustee signed by one of its officers stating (i) that timely payment of principal of, or interest on, the Issuer Bonds has not been made, (ii) that the Company is in arrears as to the payments required to be made by it to the Issuer Trustee pursuant to the Agreement, and (iii) the amount of the arrearage.
The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.
This bond shall not become obligatory until Deutsche Bank Trust Company Americas, the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon.

EXHIBIT 4.1

In Witness Whereof, Southern Indiana Gas and Electric Company has caused this bond to be signed in its name by its President or a Vice President, by his signature or a facsimile thereof, and a facsimile of its corporate seal to be imprinted hereon, attested by its Secretary or an Assistant Secretary, by his signature or a facsimile thereof.
Dated: __________, 2015

Southern Indiana Gas and Electric Company
By:                        
Vice President and Treasurer
Attest:

                    
Assistant Secretary

[Form of Trustee’s Certificate]
This bond is one of the bonds of the series designated therein, described in the within‐mentioned Mortgage.

Deutsche Bank Trust Company Americas, by Deutsche Bank National Trust Company, as Trustee

By:                        
Authorized Officer

EXHIBIT 4.1

[form of reverse of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2015 (Warrick) due 2055
This bond is one of an issue of First Mortgage Bonds of the Company, issuable in series, and is one of the series designated in the title hereof, all issued and to be issued under and equally secured (except as to any sinking fund established in accordance with the provisions of the Mortgage hereinafter mentioned for the bonds of any particular series) by an Indenture of Mortgage and Deed of Trust, dated as of April 1, 1932, executed by the Company to Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as Trustee (the “Trustee”), as amended and supplemented by indentures supplemental thereto (herein referred to as the “Mortgage”), to which reference is made for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds are secured.
The bonds of this series are issued and to be issued in order to evidence and secure a loan made by the Issuer to the Company pursuant to the Agreement.  In order to provide moneys to fund such loan, the Issuer has issued the Issuer Bonds under and pursuant to the Issuer Indenture.  Payments made by the Company of principal, premium, if any, and interest on the bonds of this series are intended to be sufficient to permit payments of principal, premium, if any, and interest to be made on the Issuer Bonds.  Upon certain terms and conditions, moneys held under and pursuant to the Issuer Indenture, including moneys so held from the proceeds of the sale of the Issuer Bonds or earnings on the investment of such proceeds, or redemption of the Issuer Bonds shall be credited to or used for the payment of the bonds of this series and to the extent so credited or used shall satisfy a like amount otherwise due hereunder.
The bonds of this series are subject to optional and mandatory redemption, in whole or in part, as the case may be, on each date that Issuer Bonds are to be redeemed.  The principal amount of the bonds of this series to be redeemed on any such date shall be equal to the principal amount of Issuer Bonds called for redemption on that date.  All redemptions of bonds of this series shall be at the redemption prices that correspond to the redemption prices for the Issuer Bonds.
If and whenever the Trustee or the Company is notified that an event of default has occurred and is continuing under Section 7.1(D) of the Issuer Indenture or Section 6.1(a) or Section 6.1(b) of the Agreement, and provided that the principal of all Issuer Bonds then outstanding and the interest thereon shall have been declared immediately due and payable, then not later than two business days following the occurrence of the foregoing events, the Company shall, upon not less than 30 days’ and not more than 45 days’ prior written notice given in the manner provided in the Mortgage, call for redemption on a redemption date selected by it not later than 45 days following the date of 

EXHIBIT 4.1

such notice, all of the bonds of this series then outstanding, and shall on such redemption date redeem the same at a price equal to 100% of the principal amount thereof together with accrued interest thereon to the redemption date, except that such requirement or redemption shall be deemed to be waived if, prior to the date fixed for such redemption of the bonds of this series, such event of default is waived or cured.
In case a completed default, as defined in the Mortgage, shall occur, the principal of this bond and all other bonds of the Company at any such time outstanding under the Mortgage may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Mortgage.  The Mortgage provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the bonds entitled to vote then outstanding.
This bond, subject to the limitations with regard thereto contained in the Issuer Indenture, is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., upon surrender and cancellation of this bond, and thereupon, a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange thereof as provided in the Mortgage, and upon payment, if the Company shall require it, of the charges therein prescribed.  The Company and the Trustee may deem and treat the person in whose name this bond is registered as the absolute owner for the purpose of receiving payment of or on account of the principal and interest due hereon and for all other purposes.
As provided in Section 5.9 of the Issuer Indenture, from and after the Release Date (as defined in the Issuer Indenture), the obligations of the Company with respect to this bond shall be deemed to be satisfied and discharged, this bond shall cease to secure in any manner the Company’s obligations under the Agreement with respect to the payment of any Issuer Bonds outstanding under the Issuer Indenture, and, pursuant to Section 5.9 of the Issuer Indenture, the Issuer Trustee shall forthwith deliver this bond to the Trustee for cancellation.
The bonds of this series are issuable as registered bonds without coupons in denominations of $1,000 and authorized multiples thereof.  In the manner and upon payment of the charges prescribed in the Mortgage, registered bonds without coupons of this series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof, for cancellation, to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.
No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, either directly or through the Company 

EXHIBIT 4.1

or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage.
[end of form of bond]”

EXHIBIT 4.1

Part IIA

Description of Bonds of the Fifty-third Series
Bonds of the Fifty-third Series shall mature, subject to prior redemption, on the date set forth in the form of bond relating hereto hereinbefore set forth, and shall bear interest at the rate from time to time borne by the Mount Vernon 2015 Bonds; provided, however, that in no event shall the rate of interest borne by the Bonds of the Fifty-third Series exceed 12% per annum.  Such interest shall be payable on the same dates as interest on the Mount Vernon 2015 Bonds, and all bonds of said series shall be designated as hereinbefore in the fifth Whereas clause set forth.  Principal of, premium, if any, and interest on said bonds shall be payable, to the extent specified in the form of bond hereinabove set forth, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y.  Definitive bonds of said series may be issued, originally or otherwise, only as registered bonds without coupons; and they and the Trustee’s certificate of authentication shall be substantially in the forms hereinbefore recited, respectively.  Definitive registered Bonds of the Fifty-third Series may be issued in the denomination of $1,000 and in such other denominations (in multiples of $1,000) as the Board of Directors of the Company shall approve, and execution and delivery to the Trustee for authentication shall be conclusive evidence of such approval.  In the manner and upon payment of the charges prescribed in the Indenture, registered bonds without coupons of said series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof for cancellation to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.  However, notwithstanding the provisions of Section 12 of the Indenture, no charge shall be made upon any transfer or exchange of bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company.  The form of the temporary bonds of said series shall be in substantially the form of the form of registered bond hereinbefore recited with such appropriate changes therein as are required on account of the temporary nature thereof.  Said temporary bonds of said series shall be in registered form without coupons, registrable as to principal, and shall be exchangeable for definitive bonds of said series when prepared.
The person in whose name any registered bond without coupons of the Fifty-third Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such bond is registered either at the close of business on the day preceding the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided.  A subsequent record date may be established by or on behalf of the Company by notice mailed to the holders of bonds not less than ten days preceding such record date, which record date shall be not more than 30 days prior to the subsequent interest payment date.  The term “record date” as used in this Section with respect to any regular interest payment date shall mean the Interest Payment Date (as defined in the Mount Vernon 2015 Indenture).
Except as provided in this Section, every registered bond without coupons of the Fifty-third Series shall be dated and shall bear interest as provided in Section 10 of the Indenture; provided, however, that so long as there is no existing default in the payment of interest on the bonds, the holder of any bond authenticated 

EXHIBIT 4.1

by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; and provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such bond shall bear interest from the interest payment date to which interest has been paid.
Upon any payment of the principal of, premium, if any, and interest on, all or any portion of the Mount Vernon 2015 Bonds, whether at maturity or otherwise or upon provision for the payment thereof having been made in accordance with Section 10.1 of the Mount Vernon 2015 Indenture, the Bonds of the Fifty-third Series in a principal amount equal to the principal amount of such Mount Vernon 2015 Bonds shall, to the extent of such payment of principal, premium, if any, and interest, be deemed paid and the obligation of the Company thereunder to make such payment shall be discharged to such extent and, in the case of the payment of principal, such Bonds of the Fifty-third Series shall be surrendered to the Trustee for cancellation as provided in and subject to the terms of Section 10.1 of the Mount Vernon 2015 Indenture.  The Trustee may at any time and all times conclusively assume that the obligation of the Company under the Mount Vernon 2015 Loan Agreement to make payments with respect to the principal of, premium, if any, and interest on the Mount Vernon 2015 Bonds, so far as such payments at the time have become due, has been fully satisfied and discharged pursuant to the foregoing sentence unless and until the Trustee shall have received a written notice from the Issuer Trustee signed by one of its officers stating (i) that timely payment of principal of, premium, if any, or interest on, the Mount Vernon 2015 Bonds has not been made, (ii) that the Company is in arrears as to the payments required to be made by it to the Issuer Trustee pursuant to the Mount Vernon 2015 Loan Agreement, and (iii) the amount of the arrearage.

EXHIBIT 4.1

Part IIB

Description of Bonds of the Fifty-fourth Series
Bonds of the Fifty-fourth Series shall mature, subject to prior redemption, on the date set forth in the form of bond relating hereto hereinbefore set forth, and shall bear interest at the rate from time to time borne by the Warrick 2015 Bonds; provided, however, that in no event shall the rate of interest borne by the Bonds of the Fifty-fourth Series exceed 12% per annum.  Such interest shall be payable on the same dates as interest on the Warrick 2015 Bonds, and all bonds of said series shall be designated as hereinbefore in the fifth Whereas clause set forth.  Principal of, premium, if any, and interest on said bonds shall be payable, to the extent specified in the form of bond hereinabove set forth, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y.  Definitive bonds of said series may be issued, originally or otherwise, only as registered bonds without coupons; and they and the Trustee’s certificate of authentication shall be substantially in the forms hereinbefore recited, respectively.  Definitive registered Bonds of the Fifty-fourth Series may be issued in the denomination of $1,000 and in such other denominations (in multiples of $1,000) as the Board of Directors of the Company shall approve, and execution and delivery to the Trustee for authentication shall be conclusive evidence of such approval.  In the manner and upon payment of the charges prescribed in the Indenture, registered bonds without coupons of said series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof for cancellation to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.  However, notwithstanding the provisions of Section 12 of the Indenture, no charge shall be made upon any transfer or exchange of bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company.  The form of the temporary bonds of said series shall be in substantially the form of the form of registered bond hereinbefore recited with such appropriate changes therein as are required on account of the temporary nature thereof.  Said temporary bonds of said series shall be in registered form without coupons, registrable as to principal, and shall be exchangeable for definitive bonds of said series when prepared.
The person in whose name any registered bond without coupons of the Fifty-fourth Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such bond is registered either at the close of business on the day preceding the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided.  A subsequent record date may be established by or on behalf of the Company by notice mailed to the holders of bonds not less than ten days preceding such record date, which record date shall be not more than 30 days prior to the subsequent interest payment date.  The term “record date” as used in this Section with respect to any regular interest payment date shall mean the Interest Payment Date (as defined in the Warrick 2015 Indenture).
Except as provided in this Section, every registered bond without coupons of the Fifty-fourth Series shall be dated and shall bear interest as provided in Section 10 of the Indenture; provided, however, that so long as there is no existing default in the payment of interest on the bonds, the holder of any bond authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim 

EXHIBIT 4.1

against the Company with respect thereto; and provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such bond shall bear interest from the interest payment date to which interest has been paid.
Upon any payment of the principal of, premium, if any, and interest on, all or any portion of the Warrick 2015 Bonds, whether at maturity or otherwise or upon provision for the payment thereof having been made in accordance with Section 10.1 of the Warrick 2015 Indenture, the Bonds of the Fifty-fourth Series in a principal amount equal to the principal amount of such Warrick 2015 Bonds shall, to the extent of such payment of principal, premium, if any, and interest, be deemed paid and the obligation of the Company thereunder to make such payment shall be discharged to such extent and, in the case of the payment of principal, such Bonds of the Fifty-fourth Series shall be surrendered to the Trustee for cancellation as provided in and subject to the terms of Section 10.1 of the Warrick 2015 Indenture.  The Trustee may at any time and all times conclusively assume that the obligation of the Company under the Warrick 2015 Loan Agreement to make payments with respect to the principal of, premium, if any, and interest on the Warrick 2015 Bonds, so far as such payments at the time have become due, has been fully satisfied and discharged pursuant to the foregoing sentence unless and until the Trustee shall have received a written notice from the Issuer Trustee signed by one of its officers stating (i) that timely payment of principal of, premium, if any, or interest on, the Warrick 2015 Bonds has not been made, (ii) that the Company is in arrears as to the payments required to be made by it to the Issuer Trustee pursuant to the Warrick 2015 Loan Agreement, and (iii) the amount of the arrearage.

EXHIBIT 4.1

Part IIIA

Redemption Provisions
Section 1.    The Bonds of the Fifty-third Series shall be subject to redemption by the Company prior to maturity in the events and in the manner and at the redemption prices set forth in the form of Bond contained in Part IA hereof and not otherwise.
Section 2.    In the manner provided by the provisions of Article IX of the Indenture, notice of redemption shall be mailed not less than 30 days and not more than 45 days prior to the date of redemption, to the registered owner of the Bonds of the Fifty-third Series, at the address thereof as the same shall appear on the transfer register of the Company; provided, however, that the owners of all of the Bonds of the Fifty-third Series may agree in writing with the Company to a shorter notice period with respect to their respective series, and such agreement, if filed with the Trustee, shall be binding on the Company.

Part IIIB
Redemption Provisions
Section 1.    The Bonds of the Fifty-fourth Series shall be subject to redemption by the Company prior to maturity in the events and in the manner and at the redemption prices set forth in the form of Bond contained in Part IB hereof and not otherwise.
Section 2.    In the manner provided by the provisions of Article IX of the Indenture, notice of redemption shall be mailed not less than 30 days and not more than 45 days prior to the date of redemption, to the registered owner of the Bonds of the Fifty-fourth Series, at the address thereof as the same shall appear on the transfer register of the Company; provided, however, that the owners of all of the Bonds of the Fifty-fourth Series may agree in writing with the Company to a shorter notice period with respect to their respective series, and such agreement, if filed with the Trustee, shall be binding on the Company.

Part IV
Miscellaneous
Section 1.    The Company covenants that the provisions of Section 36A of the Indenture and of Section 1.02 of the Supplemental Indenture dated as of July 1, 1948, which are to remain in effect so long as any bonds of the series referred to in said Section shall be outstanding under the Indenture, shall remain in full force and effect so long as any Bonds of the Fifty-third Series or Bonds of the Fifty-fourth Series shall be outstanding under the Indenture.
Section 2.    Except as herein otherwise expressly provided, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture, other than as set forth in the Mortgage.  The Trustee shall not be responsible for the recitals herein or in the bonds (except the Trustee’s certificate of authentication), all of which are made by the Company solely.

EXHIBIT 4.1

Section 3.    As supplemented and amended by this Supplemental Indenture, the Mortgage is in all respects ratified and confirmed, and the Mortgage and this Supplemental Indenture shall be read, taken and construed as one and the same instrument.
Section 4.    This Supplemental Indenture may be executed in several counterparts and all such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument.

EXHIBIT 4.1

In Witness Whereof, Southern Indiana Gas and Electric Company, party of the first part hereto, and Deutsche Bank Trust Company Americas, party of the second part hereto, have caused these presents to be executed in their respective names by their respective Presidents or one or more of their Vice Presidents, Assistant Vice Presidents or Associates and their respective seals to be hereunto affixed and attested by their respective Secretaries or one of their Assistant Secretaries, Vice Presidents, Assistant Vice Presidents or Associates, all as of the day and year first above written.
(Seal)
Southern Indiana Gas and Electric Company

		
	By
	                 /s/ M. Naveed Mughal_______

M. Naveed Mughal
Vice President and Treasurer
Attest:

                   /s/ Robert E. Heidorn_________
Robert E. Heidorn
Senior Vice President, Chief Compliance 
Officer and Assistant Secretary

EXHIBIT 4.1

State of Indiana        )
)  SS
County of Vanderburgh    )

On this 28th day of August, 2015, before me, the undersigned, a notary public in and for the county and state aforesaid, personally came M. Naveed Mughal, to me known, who being by me duly sworn, did depose and say that he is Vice President and Treasurer of Southern Indiana Gas and Electric Company, one of the corporations described in and which executed the foregoing instrument; that Southern Indiana Gas and Electric Company has an address of One Vectren Square, Evansville, Indiana  47708; that he knows the seal of the said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation and that he signed his name thereto by like order; and the said M. Naveed Mughal acknowledged the execution of the foregoing instrument on behalf of the said corporation as the voluntary act and deed of the said corporation for the uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and seal the day and year first above written.

                     /s/ Mary L. Jernigan____________
Notary Public
(Seal)

EXHIBIT 4.1

(Seal)
Deutsche Bank Trust Company Americas, 
by Deutsche Bank National Trust Company

By                 /s/ Jeffrey Schoenfeld_________
JEFFREY SCHOENFELD
Vice President
By                          /s/ Chris Niesz__________
CHRIS NIESZ
Assistant Vice President
Attest:

                 /s/ Kenneth Ring III    
KENNETH RING III
Vice President

EXHIBIT 4.1

State of New Jersey    )
)  SS
County of Hudson    )

On this 25th day of August, 2015, before me, the undersigned, a notary public in and for the county and state aforesaid, personally came Jeffrey Schoenfeld, to me known, who being by me duly sworn, did depose and say that he resides at 103 Bowne Court, Matawan, NJ  07747 and personally came Chris Niesz, to me known, who being by me duly sworn, did depose and say that he resides at 359 2nd Street, Apt. 4E, Hoboken, NJ  07030; that each is, respectively, an Vice President and an Assistant Vice President of Deutsche Bank National Trust Company, and duly authorized to sign on behalf of Deutsche Bank Trust Company Americas, one of the corporations described in and which executed the foregoing instrument; that each knows the seal of the said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation and that each signed his or her name thereto by like order; and the said Jeffrey Schoenfeld and the said Chris Niesz acknowledged the execution of the foregoing instrument on behalf of the said corporation as the voluntary act and deed of the said corporation for the uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and seal the day and year first above written.

		
	                     
	  /s/ Kathryn Fischer_______

Notary Public
(Seal)

My Commission Expires:  

My County of Residence is:                    Richmond_________
_________________________

EXHIBIT 4.1

This instrument was prepared by William M. Libit.
I, William M. Libit, affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law.

      /s/ William M. Libit        

Prepared by and upon
recordation return to:
William M. Libit
Chapman and Cutler LLP
111 West Monroe Street
Chicago, Illinois  60603exhibit101.htm

AMENDMENT NO.  3 AND WAIVER TO

CREDIT AGREEMENT

 

AMENDMENT NO.  3 AND WAIVER, dated as of September 4, 2015 (this "Amendment and Waiver") to the CREDIT AGREEMENT dated as of August 5, 2011, by and between CVD EQUIPMENT CORPORATION, a New York corporation (the “Company”) and HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association (the “Bank”) (as amended, restated, supplemented or otherwise modified, from time to time, the "Credit Agreement").

 

RECITALS

 

The Company has requested that the Bank, and the Bank has agreed to amend, and waive compliance with, certain provisions of the Credit Agreement, subject to the terms and conditions of this Amendment and Waiver.

 

Accordingly, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

 

1.           Amendments.

 

                      (a)   The definition of the term “Revolving Credit Commitment Termination Date” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

 

         "Revolving Credit Commitment Termination Date” shall mean September 1, 2018.

 

(b)     The definition “Fixed Charge Coverage Ratio” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

 

“Fixed Charge Coverage Ratio” shall mean the ratio of (a) EBITDA minus Unfunded Capital Expenditures minus dividends and/or distributions minus cash taxes plus (i) beginning with the fiscal year ended 12/31/14 and continuing with respect to the four fiscal quarters ending 3/31/15, 6/30/15 and 9/30/15 only, the sum of $4,925,000 relating to the settlement with Taiwan Glass Industrial Corp plus (ii) with respect to the fiscal quarter in which a conclusion of the Arbitration Demand and Complaint (the “Arbitration”) filed for the benefit of creditors of CM Manufacturing, Inc., f/k/a Stion Corporation, is reached and reported, provided that such Arbitration is concluded by no later than the fiscal quarter ending March 31, 2016, and for the three (3) immediately following fiscal quarters, amounts payable by the Company in connection with the Arbitration, including awards,  settlement amounts, legal fees and expenses and all other fees and expenses; provided, however,  for purposes of this clause (v) such amounts shall not exceed $8,000,000 in the aggregate to (b) the sum of (i) the Current Portion of Long Term Debt minus (ii) Cash Secured Debt plus (iii) Interest Expense, each determined on a consolidated basis for the Company and its Subsidiaries, as determined at the end of each fiscal quarter.  All of the foregoing categories shall be determined in accordance with Generally Accepted Accounting Principles applied on a consistent basis and shall be calculated (without duplication) with respect to the four fiscal quarters ending on or most recently ended prior to the date of determination thereof with the exception of the Current Portion of Long Term Debt, which shall be calculated based upon the next succeeding four fiscal quarters.

  

  

  

 

 

 

                      (c)           Article IV of the Credit Agreement is hereby amended to add a new Section 4.20 at the end thereof as follows:

 

Section 4.20.  Additional Representations.

 

(a)           None of the Company, any of its Subsidiaries, nor to the knowledge of the Company,{ } any director or officer, or any employee, agent, or Affiliate, of the Company or any of its Subsidiaries is a Person that is, or is owned or controlled by Persons that are, (i) the subject of any sanctions administered or enforced by the US Department of the Treasury’s Office of Foreign Assets Control, the US Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, the Hong Kong Monetary Authority or other relevant sanctions authority (collectively, "Sanctions"), or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions, including, without limitation, currently, Cuba, the Crimea region of Ukraine, Iran, North Korea, Sudan and Syria.

 

(b)           None of the Company or any of its Subsidiaries, nor to the knowledge of the Company, any director, officer, agent, employee, Affiliate or other person acting on behalf of the Company or any of its Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of any applicable anti-bribery law, including but not limited to, the United Kingdom Bribery Act 2010 (the "UK Bribery Act") and the U.S. Foreign Corrupt Practices Act of 1977 (the "FCPA").  Furthermore, the Company and, to the knowledge of the Company, its Affiliates have conducted their businesses in compliance with the UK Bribery Act, the FCPA and similar laws, rules or regulations and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(c)           The Company and its Subsidiaries are in compliance in all material respects with all relevant export, re-export and import laws applicable to the Company or such Subsidiary, as the case may be. None of the Company or any of its Subsidiaries have, in violation of any applicable export or re-export laws (including, without limitation, such laws and regulations promulgated or enforced by the United States Department of Treasury, United States Department of Commerce, or United States Department of State),shipped or provided (nor are they currently shipping or providing) any item for delivery or services in or to, a country, entity or individual.The Company and its Subsidiaries are not currently in violation of any export or re-export laws.

 

                      (d)           Article VI of the Credit Agreement is hereby amended to add the following new Section 6.15 at the end thereof:

 

  

2

  

 

 

Section 6.15.                      Use of Proceeds.

 

(a)           The Company will not, directly or indirectly, use the proceeds of the Loans or any Letter of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, for the purpose of facilitating the activities of any person, or in any country or territory, in violation of the applicable requirements of the U.S. Export Administration Regulations, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Agency.

 

(b)           In addition, the Company will not, directly or indirectly, use the proceeds of the Loans or any Letter of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans or Letters of Credit, whether as underwriter, advisor, investor or otherwise).  No part of the proceeds of the Loans or any Letter of Credit will be used, directly or indirectly, for any payments that could constitute a violation of any applicable anti-bribery law.

 

                      (e)           Section 7.13(a) of the Credit Agreement is hereby deleted and the text “Reserved” is inserted in place thereof.

 

2.           Waiver.  The Bank hereby waives compliance with Section 7.13(b) of the Credit Agreement, Fixed Charge Coverage Ratio, for the fiscal year ended December 31, 2014.

 

3.      Conditions of Effectiveness. This Amendment and Waiver shall become effective as of the date hereof, upon receipt by the Bank of this Amendment and Waiver, duly executed by the Company.

 

4.         Conforming Amendments and Waiver.  The Credit Agreement, the Loan Documents and all agreements, instruments and documents executed and delivered in connection with any of the foregoing, shall each be deemed to be amended, waived and supplemented hereby to the extent necessary, if any, to give effect to the provisions of this Amendment and Waiver.  The Credit Agreement and the other Loan Documents shall remain in full force and effect in accordance with their respective terms.

 

	
  

	
5.

	
Representations and Warranties.

 

The Company hereby represents and warrants to the Bank as follows:

 

(a)           After giving effect to this Amendment and Waiver (i) each of the representations and warranties set forth in Article IV of the Credit Agreement is true and correct in all material respects on and as of the date hereof as if made on and as of the date of this Amendment and Waiver except to the extent such representations or warranties relate to an earlier date in which case they shall be true and correct in all material respects as of such earlier date, and (ii) no Default or Event of Default has occurred and is continuing as of the date hereof or shall result from after giving effect to this Amendment and Waiver.

  

3

  

 

 

 

(b)           The Company has the power to execute, deliver and perform this Amendment and Waiver and each of the other agreements, instruments and documents to be executed by it in connection with this Amendment and Waiver.  No registration with or consent or approval of, or other action by, any Governmental Authority is required in connection with the execution, delivery and performance of this Amendment and Waiver and the other agreements, instruments and documents executed in connection with this Amendment and Waiver by the Company, other than registration, consents and approvals received prior to the date hereof and disclosed to the Bank and which are in full force and effect.

 

(c)           The execution, delivery and performance by the Company of this Amendment and Waiver and each of the other agreements, instruments, and documents to be executed by it in connection with this Amendment and Waiver, (i) have been duly authorized by all requisite corporate action, and (ii) will not violate  (A) any provision of law applicable to the Company, any rule or regulation of any Governmental Authority applicable to the Company or (B) the certificate of incorporation, by-laws, or other organizational documents, as applicable, of the Company.

 

                   (d)           This Amendment and Waiver has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws, now or hereafter in effect, relating to or affecting the enforcement of creditors’ rights generally and by equitable principles of general application, regardless of whether considered in a proceeding in equity or at law.

 

                   (e)           There have been no changes to the Certificate of Incorporation or Bylaws of the Company, previously delivered to the Bank on August 5, 2011, and there is no plan or proceeding for the dissolution or liquidation of the Company.

 

6.           Miscellaneous.

 

           Capitalized terms used herein and not otherwise defined herein shall have the same meanings as defined in the Credit Agreement.

 

           The amendments and waiver herein contained are limited specifically to the matters set forth above and do not constitute directly or by implication an amendment or a waiver of any other provision of the Credit Agreement or a waiver of any Default or Event of Default which may occur or may have occurred under the Credit Agreement.

 

           This Amendment and Waiver may be executed in one or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one Amendment and Waiver.

 

           THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

 

           This Amendment and Waiver shall constitute a Loan Document.

  

4

  

 

 

 

           7.           Reaffirmation.

 

The Company hereby: (a) acknowledges and confirms that, except as amended by this Amendment and Waiver, (i) all terms and provisions contained in the Credit Agreement and the other Loan Documents are, and shall remain, in full force and effect in accordance with their respective terms and (ii) the liens heretofore granted, pledged and/or assigned to the Bank as security for the Company’s Obligations under the Notes, the Credit Agreement and the other Loan Documents shall not be impaired, limited or affected in any manner whatsoever by reason of this Amendment and Waiver and the Company further acknowledges that such liens shall secure all of the Obligations of the Company; (b) reaffirms and ratifies all the representations and covenants contained in each Loan Document; and (c) represents, warrants and confirms the non-existence of any offsets, defenses, or counterclaims to its obligations under the Credit Agreement and the other Loan Documents.

 

[the next page is the signature page]

  

5

  

 

           IN WITNESS WHEREOF, the Company and the Bank have caused this Amendment and Waiver to be duly executed by their duly authorized officers, all as of the day and year first above written.

 

CVD EQUIPMENT CORPORATION

 

 

By:      /s/ Glen Charles                                               

Name:   Glen Charles

Title:     Chief Financial Officer

 

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

 

By:     /s/ Robert Kruger                                             

Name:    Robert Kruger

Title:      Vice President

 

  

6

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