Document:

exv10w10

Exhibit 10.10

LEASE

     THIS LEASE made this 1st day of February, 2008, by and between DJR Ventures, LLC,
an Indiana Limited Liability Company, Bremen, Indiana, hereinafter called “Lessor”, and
Copperfield, LLC, a Minnesota Limited Liability Company, hereinafter called “Lessee”.

W I T N E S S E T H:

RECITALS

     A. Lessor is the sole owner of the premises described below, and desires to lease the premises
to a suitable lessee for business purposes.

     B. Lessee desires to lease the premises for the purpose of warehousing and wire manufacturing.

     C. The parties desire to enter a lease agreement defining their rights, duties, and
liabilities relating to the premises.

     In consideration of the mutual covenants contained herein, the parties agree as follows:

SECTION ONE

SUBJECT

     Lessor leases the buildings and land located at 1115 West North Street, 1115 West Plymouth
Street, and 515 Copperfield Way in the Town of Bremen, Marshall County, Indiana, hereinafter, the
“Premises”, and more particularly described as follows, to-wit:

See EXHIBIT “A” attached.

SECTION TWO

TERM

     Lessor demises the above premises for a term commencing on the 1st day of February,
2008, and terminating on the 31st day of December, 2017, or sooner, as provided herein.

     This Lease supersedes and terminates Leases relating to the Premises dated January 1, 2006,
April 1, 2004 and June 1, 2002.

SECTION THREE

RENT

     The rent for the term of this lease shall be Eighty One Thousand Three Hundred Twenty Dollars
($81,320.00) per month, payable in equal monthly installments beginning on the 1st day
of February, 2008, and the 1st day of each month thereafter until the 31st
day of December, 2017.

     Subject to the terms and provisions of this Section Three, it is the intent of the parties
that the Lessee shall be fully responsible for all costs and expenses related to the

 

 

occupancy of the premises including, but not limited to, taxes, insurance, assessments,
utilities, repairs and maintenance. All taxes, charges, costs, and expenses that Lessee assumes or
agrees to pay hereunder, together with all interest and penalties that may accrue thereon in the
event of the failure of Lessee to pay those items, and all other damages, costs, expenses, and sums
that Lessor may suffer or incur, or that may become due, by reason of any default of Lessee or
failure by Lessee to comply with the terms and conditions of this lease shall be deemed to be
additional rent, and, in the event of nonpayment, Lessor shall have all the rights and remedies as
herein provided for failure to pay rent. Notwithstanding anything to the contrary contained herein,
the parties acknowledge and agree that Lessor shall be liable, at its sole cost and expense, for
any costs and expenses related to the premises arising from any act, omission, negligence or
willful misconduct of Lessor, and that Lessee shall have no liability therefor.

     Lessee shall be solely responsible for all real estate taxes and assessments, and pay all
personal property taxes assessed against the premises in a timely fashion. In no event shall taxes
payable by Lessee hereunder include any federal, state and local income, franchise, capital stock,
gift, estate succession, inheritance, sales, use, revenue or transfer tax (or any substitution
therefor) that Lessor must pay in connection with the Premises, nor shall such taxes include any
interest or penalties (or costs directly associated therewith) due for late payment of taxes by
Lessor, nor any other tax, assessment, charge or levy (or any substitution therefor) against Lessor
with respect to or because of the rent and other income derived by Lessor under this Lease, nor
shall Lessee be deemed obligated to pay any personal property, corporation, payroll, excise,
privilege or any other tax of similar nature (or any substitution therefor) which may be levied or
assessed against Lessor.

     Lessee, at its expense, shall have the right, but not the obligation, to contest or review by
legal, administrative or other proceedings the amount or validity of any such tax or assessment
imposed against the Premises. If Lessee does not pay real estate taxes when due and contests such
taxes, Lessee shall not be in default under this Lease for nonpayment of such taxes if Lessee posts
bond from an admitted surety in the amount necessary to protect the Premises from the lien of the
unpaid taxes. The amount of such bond shall be sufficient to pay the real estate taxes plus a
reasonable estimate of the interest, costs, charges and penalties which may accrue if Lessee’s
action is unsuccessful. The bond made shall be applied to the real estate taxes due, as determined
at such proceedings (or upon Tenant’s earlier payment of taxes under protest or otherwise), with
any excess being disbursed to Lessee. Lessor, at Lessee’s request, shall join in any such
proceedings, but Lessor shall not be liable for any expenses in connection therewith. The
proceedings referred to herein shall include, but shall not be limited to, appropriate appeal from
any judgments, decrees or orders made in any such proceedings. In the event of any reduction,
cancellation or discharge of such taxes or assessments as a result of such proceedings, and if
Lessee had not already paid same, then Lessee will do so forthwith as they are finally levied,
assessed or imposed. If there shall be any refund payable by the governmental authority with
respect thereto, the party paying such amount shall be entitled to receive and retain same.

SECTION FOUR

ALTERATIONS, ADDITIONS AND IMPROVEMENTS

 

 

     A. Subject to the limitation that no substantial portion of the building on the demised
premises shall be demolished or removed by Lessee without the prior written consent of Lessor.
Lessee may at any time during the lease term, subject to the conditions set forth below and at his
own expense, make any alterations, additions, or improvements in and to the demised premises and
the building. Alterations shall be performed in a workmanlike manner and shall not weaken or impair
the structural strength, or lessen the value, of the building on the premises, or change the
purposes for which the building, or any part thereof, may be used.

     B. Conditions with respect to alterations, additions, or improvements are as follows:

          1. Before commencement of any work all plans and specifications shall be filed with and
approved by all governmental departments or authorities having jurisdiction and any public utility
company having an interest therein, and all work shall be done in accordance with requirements of
local regulations. The plans and specifications for any alterations estimated to cost Twenty
Thousand Dollars ($20,000.00) or more, shall be submitted to Lessor for written approval prior to
commencing work, which approval shall not be unreasonably withheld, delayed or conditioned.

          2. Prior to commencement of any work Lessee shall pay the amount of any increase in premiums
on insurance policies provided for herein because of endorsements to be made covering the risk
during the course of work.

     C. All alterations, additions, improvements on or in the demised premises at the commencement
of the term, and that may be erected or installed during the term, shall become part of the demised
premises and the sole property of Lessor, except that all moveable trade fixtures installed by
Lessee shall be and remain the property of Lessee.

SECTION FIVE

REPAIRS

     Lessee shall, at all times during the lease and at its own cost and expense, repair, replace,
and maintain in a good, safe, and substantial condition, the demised premises, and shall use all
reasonable precaution to prevent waste, damage, or injury to the demised premises. Lessee will be
fully responsible for maintaining the common area including sweeping, snow removal, the signs
outside the building, and the lighting outside the building including the cost of electricity
therefor.

     Lessee shall also maintain the structural, electrical and mechanical elements of the building
as well as the exterior including roof, walls and grounds in at least as good a condition as they
are now in, except for normal wear and tear; provided, however, that if any repairs to such
structural, electrical, mechanical or exterior elements of the building are necessitated by the
act, omission, negligence or intentional misconduct of Lessor, or its agents, employees or
contractors, Lessor shall be obligated to reimburse Lessee for any such required repairs, and
further provided that in the event Lessor receives the proceeds of any insurance policy for damage
to any of the foregoing or is otherwise required to perform any repairs under this Lease, then
Lessor shall have the obligation to repair such portion of the Premises at Lessor’s sole cost and
expense. The Lessee will seal and stripe

 

 

the parking lot as needed and will be responsible for patching and repaving the same as
needed.

     Notwithstanding anything to the contrary contained herein, in the event that Lessee makes or
causes to be made any repairs under this section which constitute a capital improvement to the
Premises with a useful life extending beyond the term of the Lease, then Lessor shall reimburse
Lessee for a portion of the total cost of such improvement, such portion being equal to a ratio,
the numerator of which is equal to the difference between the useful life of the improvement and
the then remaining lease term at the time the improvement or expenditure is completed, and the
denominator of which is equal to the useful life of the improvement or expenditure. Lessor shall
deliver such payment to Lessee within thirty (30) days after Lessee completes such improvement and
provides documentation of its expenditure. In the event the Lessee extends the lease under Section
Twenty-five, the Lessor shall be reimbursed for the period of time the lease is extended as per
above; also, if the Lessee exercises the purchase option, Lessor shall be reimbursed for the
balance of what was paid.

SECTION SIX

UTILITIES

     All applications and connections for necessary utility services on the demised premises shall
be made in the name of Lessee only, and Lessee shall be solely liable for utility changes as they
become due, including those for sewer, heat, water, gas, electricity, and telephone services.

SECTION SEVEN

INSURANCE

     A. During the term of the lease and for any further time that Lessee shall hold the demised
premises, Lessee shall obtain and maintain at his expense the following types and amounts of
insurance:

          1. Fire Insurance. Lessee shall keep all buildings and improvements, insured against loss or
damage by fire and shall maintain his own insurance on stock, property, fixtures, equipment, and
improvements owned by the Lessee. Further, the Lessee shall be responsible for any increases in the
fire insurance premium occasioned by Lessee’s activities or use of the building.

          2. Personal injury and property damage insurance. Insurance against liability for bodily
injury and property damage and machinery insurance, all to be in amounts and in forms of insurance
policies as may from time to time be required by Lessor, shall be provided by Lessee. This
requirement shall specifically include plate glass insurance, covering the glass in the demised
premises.

          3. Other Insurance. Lessee shall provide and keep in force other insurance in amounts that may
from time to time be required by Lessor against other insurable hazards as are commonly insured
against for the type of business activity that Lessee will conduct.

          4. Each party agrees to have all insurance coverage which may be carried by

 

 

it endorsed with a clause providing that the insurer waives all rights of subrogation which
such insurer might have against the other party. Each party hereby releases the other from any
claim for recovery for any loss or damage to any of its property which is insured under valid and
collectable insurance policies to the extent of any recovery collectable under such insurance.

     B. All insurance provided by Lessee as required by this section shall be carried in favor of
Lessor and Lessee as their respective interest may appear. All insurance shall be written with
responsible companies that Lessor shall approve, and copies of the policies shall be held by Lessor
or certificates of insurance shall be delivered by Lessee to Lessor. All policies shall require ten
(10) days notice by registered mail to Lessor of any cancellation or change affecting any interest
of Lessor.

SECTION EIGHT

UNLAWFUL OR DANGEROUS ACTIVITY

     Lessee shall neither use nor occupy the demised premises or any part thereof for any unlawful,
disreputable, or ultrahazardous business purpose nor operate or conduct his business in a manner
constituting an unreasonable nuisance. Lessee shall immediately, on discovery of any unlawful,
disreputable, or ultrahazardous use, take action to halt such activity.

SECTION NINE

INDEMNITY

     Except and to the extent arising from Lessor’s negligence or willful misconduct, Lessee shall
indemnify Lessor against all expenses, liabilities, and claims of every kind, including reasonable
counsel fees, by or on behalf of any person or entity arising out of either (1) a failure by Lessee
to perform any of the terms or conditions of this lease, (2) any injury or damage happening on or
about the demised premises, (3) failure to comply with any law of any governmental authority, or
(4) any mechanic’s lien or security interest filed against the demised premises or equipment,
materials, or alterations of buildings or improvements thereon. Lessor shall indemnify and hold
Lessee harmless from and against all claims, damages, expenses and penalties arising out of (i)
Lessor’s ownership or operation of the Premises; (ii) Lessor’s negligence or willful misconduct;
(iii) any occurrence not caused by Lessee; or (iv) the presence of hazardous materials on or under
the Premises prior to the commencement date, including, without limitation, any matters described
in the Phase I Environmental Assessment relating to 515 Enterprise Drive (Copperfield Way) prepared
by Liesch Companies and dated April 2002, the Phase I Environmental Assessment relating to 1115
West Plymouth Street prepared by Liesch Companies and dated January 1998, the Phase I Environmental
Assessment relating to 1115 West Plymouth Street prepared by Atec Environmental Consultants and
dated May 10, 1991.

SECTION TEN

DEFAULT OR BREACH

 

 

     Each of the following events shall constitute a default or breach of this lease by Lessee:

          1. If Lessee, or any successor or assignee of Lessee while in possession, shall file a
petition in bankruptcy or insolvency or for reorganization under any bankruptcy act, or shall
voluntarily take advantage of any such act by answer or otherwise, or shall make an assignment for
the benefit of creditors.

          2. If involuntary proceedings under any bankruptcy law or insolvency act shall be instituted
against Lessee, or if a receiver or trustee shall be appointed of all or substantially all of the
property of Lessee, and such proceedings shall not be dismissed or the receivership or trusteeship
vacated within thirty (30) days after the institution or appointment.

          3. If Lessee shall fail to pay Lessor any rent or additional rent when the rent shall become
due and shall not make the payment within thirty (30) days after written notice thereof by Lessor
to Lessee.

          4. If Lessee shall fail to perform or comply with any of the conditions of this lease and if
the nonperformance shall continue for a period of thirty (30) days after written notice thereof by
Lessor to Lessee, or, if the performance cannot be reasonably had within the thirty (30) day
period, Lessee shall not in good faith have commenced performance within the thirty (30) day period
and shall not diligently proceed to completion of performance.

          5. If Lessee shall abandon the demised premises and not pay rental or maintain the same.

          6. If this lease or the estate of Lessee hereunder shall be transferred to or shall pass to or
devolve on any other person or party, except in the manner herein permitted.

SECTION ELEVEN

EFFECT OF DEFAULT

     In the event of any default hereunder, as set forth in Section Eleven, the rights of Lessor
shall be as follows:

          1. Lessor shall have the right to cancel and terminate this lease, as well as all of the
right, title, and interest of Lessee hereunder, by giving to Lessee not less than ten (10) days’
notice of the cancellation and termination. On expiration of the time fixed in the notice, this
lease and the right, title and interest of Lessee hereunder, shall terminate in the same manner and
with the same force and effect, except as to Lessee’s liability, as if the date fixed in the notice
of cancellation and termination were the end of the term herein originally determined.

          2. Lessor may elect, but shall not be obligated, to make any payment required of Lessee herein
or comply with any agreement, term, or condition required hereby to be performed by Lessee, and
Lessor shall have the right to enter the demised premises for the purpose of correcting or
remedying any such default and to remain until the default has

 

 

been corrected or remedied, but any expenditure for the correction by Lessor shall not be
deemed to waive or release the default of Lessee or the right of Lessor to take any action as may
be otherwise permissible hereunder in the case of any default.

          3. Subject to applicable laws, rules and codes, Lessor may re-enter the premises immediately
and remove the property and personnel of Lessee, and store the property in a public warehouse or at
a place selected by Lessor, at the expense of Lessee. After re-entry, Lessor may terminate the
lease on giving sixty (60) days written notice of termination to Lessee. Without the notice,
re-entry will not terminate the lease. On termination, Lessor may recover from Lessee all damages
proximately resulting from the breach, including the cost of recovering the premises, and the
present value of the balance of this lease over the reasonable rental value of the premises for the
remainder of the lease term, which sum shall be immediately due Lessor from Lessee. If Lessor
defaults hereunder, then Lessee shall have the right to exercise any available legal remedy,
including, without limitation, self-help and set-off rights.

          4. Notwithstanding anything to the contrary contained herein, Lessor shall use its reasonable
good faith efforts to mitigate its damages caused by Lessee’s default under this Lease.

SECTION TWELVE

DESTRUCTION OF PREMISES

     In the event of a partial destruction of the premises during the term from any cause, Lessee
shall forthwith repair the same, but only to the extent of available insurance proceeds, provided
the repairs can be made within one hundred twenty (120) days under the laws and regulations of
applicable governmental authorities. Any partial destruction shall neither annul nor void this
lease, except that Lessee shall be entitled to a proportionate reduction being based on the extent
to which the making of repairs shall interfere with the business carried on by Lessee in the
premises, or those repairs cannot be made within one hundred twenty (120) days under the laws and
regulations of the applicable governmental authorities, or if any destruction occurring during the
last three years of the term, this lease may be terminated at the option of either party.

SECTION THIRTEEN

CONDEMNATION

     If the whole or a portion of the demised premises shall be taken or condemned by any competent
authority for any public or quasi-public use or purpose, this lease shall cease and terminate as of
the date on which title shall vest thereby in that authority, and the rent reserved hereunder shall
be apportioned and paid up to that date.

     In the event of any taking or condemnation in whole or in part, the entire resulting award of
consequential damages shall belong to Lessor without any deduction therefrom for the value of the
unexpired term of this lease or for any other estate or interest in the demised premises now or
later vested in Lessee. Lessee assigns to Lessor all his right, title, and interest in any and all
such awards. Lessee shall have the rights to any award relating to relocation expenses, tenant
fixtures or equipment.

 

 

SECTION FOURTEEN

SUBORDINATION

     This lease and all rights of Lessee hereunder shall be subject and subordinate to the lien of
any and all mortgages that may now or hereafter affect the demised premises, or any part thereof,
and to any and all renewals, modifications, or extensions of any such mortgages. Lessee shall on
demand execute, acknowledge, and deliver to Lessor, without expense to Lessor, any and all
instruments that may be reasonable, necessary or proper to subordinate this lease and all rights
therein to the lien of any such mortgage or mortgages and each renewal, modification, or extension.
Notwithstanding the foregoing, any subordination shall be subject to any conditioned upon any such
mortgagee agreeing to recognize Lessee’s right under the lease so long as Lessee is not in default.

SECTION FIFTEEN

ACCESS TO PREMISES: SIGNS POSTED BY LESSOR

     Upon reasonable prior notice, Lessee shall permit Lessor or its agents to enter the demised
premises at all reasonable hours to inspect the premises or make repairs that Lessee may neglect or
refuse to make in accordance with the provisions of this lease, and also to show the premises to
prospective buyers, so long as Lessee’s use of the premises is not disrupted. At any time within
Six (6) months prior to the expiration of the term, Lessor may show the premises at reasonable
times and upon reasonable notice to persons wishing to rent the Premises. Lessor shall use
commercially reasonable efforts to minimize any disruption of Lessee’s use or occupancy of the
Premises during such entry.

SECTION SIXTEEN

EASEMENTS, AGREEMENTS, OR ENCUMBRANCES

     Subject to Section Eighteen, the parties shall be bound by all existing easements, agreements,
and encumbrances of record relating to the demised premises, and Lessor shall not be liable to
Lessee for any damages resulting from. any action taken by a holder of an interest pursuant to the
rights of that holder thereunder. Lessor warrants to Lessee that no such easements, agreements or
encumbrances will impair Lessee’s use of the premises.

SECTION SEVENTEEN

QUIET ENJOYMENT

     Lessor warrants that Lessee shall be granted peaceable and quiet enjoyment of the demised
premises free from any eviction or interference by Lessor if Lessee pays the rent and other charges
provided herein, and otherwise fully and punctually performs the terms and conditions imposed on
Lessee.

SECTION EIGHTEEN

LIABILITY OF LESSOR

     Except to the extent caused by Lessor’s negligence or willful misconduct, Lessee shall be in
exclusive control and possession of the demised premises, and Lessor shall not be liable for any
injury or damages to any property or to any person on or about the demised

 

 

premises nor for any injury or damage to any property of Lessee. The provisions herein
permitting Lessor to enter and inspect the demised premises are made to insure that Lessee is in
compliance with the terms and conditions hereof and makes repairs that Lessee has failed to make.
Lessor shall not be liable to Lessee for any entry on the premises for inspection purposes.

SECTION NINETEEN

RENT ABATEMENT

     Except as set forth herein, no abatement, diminution, or reduction of rent shall be claimed or
allowed to Lessee or any person claiming under him under any circumstances, whether for
inconvenience, discomfort, interruption of business or otherwise, arising from the making of
alterations, improvements, or repairs to the premises, because of any governmental laws or arising
from and during the restoration of the demised premises after the destruction or damage thereof by
fire or other cause.

SECTION TWENTY

REPRESENTATIONS BY LESSEE

     Lessee agrees to indemnify and hold Lessor harmless from and against all claims, damages,
expenses and liabilities arising from or related to the existence of hazardous substances on or
about the Premises, occasioned by Lessee’s activities.

SECTION TWENTY-ONE

WAIVERS

     The failure of one party hereunder to insist on a strict performance of any of the terms and
conditions hereof shall be deemed a waiver of the rights or remedies that such party may have
regarding that specific instance only and shall not be deemed a waiver of any subsequent breach or
default in any terms and conditions.

SECTION TWENTY-TWO

NOTICE

     All notices to be given with respect to this lease shall be in writing. Each notice shall be
sent by registered or certified mail, postage prepaid and return receipt requested, to the party to
be notified at the address set forth herein or at such other address as either party may from time
to time designate in writing.

     Every notice shall be deemed to have been given at the time it shall be deposited in the
United States Mails in the manner prescribed herein. Nothing contained herein shall be construed to
preclude personal service of any notice in the manner prescribed for personal service of a summons
or other legal process.

SECTION TWENTY-THREE

ASSIGNMENT, MORTGAGE, OR SUBLEASE

     Neither Lessee nor his successors or assigns shall assign, mortgage, pledge,, or encumber this
lease or sublet the demised premises in whole or in part, or permit the

 

 

premises to be used or occupied by others, nor shall this lease be assigned or transferred by
operation of law, without the prior consent in writing of Lessor in each instance, if this lease is
assigned or transferred, or if all or any part of the demised premises is sublet or occupied by
anybody other than Lessee, Lessor may, after default by Lessee, collect rent from the assignee,
transferee, subtenant, or occupant, and apply the net amount collected to the rent reserved herein,
but no such assignment, subletting, occupancy, or collection shall be deemed a waiver of any
agreement or condition hereof, or the acceptance of the assignee, transferee, subtenant, or
occupant as Lessee. Lessee shall continue to be liable hereunder in accordance with the terms and
conditions of this lease and shall not be released from the performance of the terms and conditions
hereof. The consent by Lessor to an assignment, mortgage, pledge, or transfer shall not be
construed to relieve Lessee from obtaining the express written consent of Lessor to any future
transfer of interest.

     Notwithstanding the foregoing, Lessee shall have the right to assign this lease to any related
entity or to any entity that acquires Lessee’s assets, business or interests or to any entity that
acquires the stock or interests of a related entity of Lessee, regardless of the form of any such
acquisition, without Lessor’s prior consent.

SECTION TWENTY-FOUR

OPTION TO RENEW

     Lessor grants to Lessee an option to renew this lease for two (2) additional 5-year periods
after expiration of the term of this lease. The rental provided hereinabove shall be renegotiated
based on the Fair Market Rental for the Premises (as defined below), however, all other terms and
conditions of the renewal lease to be the same as those herein. To exercise this option, Lessee
must give Lessor written notice of the intention to do so at least one hundred eighty (180) days
before this lease expires. Lessor and Lessee shall have thirty (30) days after Lessor receives
Lessee’s renewal notice in which to agree on the rental payable during the renewal period.
Notwithstanding anything to the contrary, in no event shall the rental for the applicable renewal
period be less than the rental in effect immediately prior to the commencement of the applicable
renewal period (“Prior Rent ”).

     If Lessor and Lessee are unable to agree upon the Fair Market Rental for the applicable
renewal period within such thirty (30) day period, then within fifteen (15) days after the
expiration of such thirty day (30) period, each party, by giving notice to the other party, shall
appoint a real estate appraiser who is a current member of the American Institute of Real Estate
Appraisers, with at least five (5) years of experience appraising building space comparable to the
Premises in geographic area in which the Premises are located to determine the Fair Market Rent.
“Fair Market Rent” and “Fair Market Rental” shall mean, as of the date of applicable renewal
notice, the net monthly rent per square foot that a willing tenant would pay and a willing landlord
of comparable property in the geographic area where the Premises are located would accept at arm’s
length for comparable space in a comparable building or buildings, with comparable tenant
improvements, in a comparable location, giving appropriate consideration to then-current months net
rental rates per rentable square foot, the presence or absence of rent escalation clauses such as
operating expense and tax pass-throughs, abatement provisions, length of lease term, size and
location of premises being leased, tenant improvement allowances, if

 

 

any, and other generally applicable terms and conditions of tenancy for a similar building or
buildings. If the two (2) appraisers are unable to agree on the Fair Market Rent for the renewal
period within twenty (20) days, they shall select a third appraiser meeting the qualifications
stated in this Section within five (5) days after the last day the two (2) appraisers are given to
set the Fair Market Rent for the applicable renewal period. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity for either party. Within twenty (20)
days after the selection of the third appraiser, a majority of the appraisers shall set the Fair
Market Rent of the applicable renewal period. If a majority of the appraisers is unable to set the
Fair Market Rent within twenty (20) days the two (2) closest appraisals shall be added together and
their total divided by two (2). The resulting quotient shall be the Fair Market Rent for the
applicable renewal term. Each party shall be responsible for the costs, charges and fees of the
appraiser appointed by that party and shall share equally in the costs of the third appraiser.

SECTION TWENTY-FIVE

SURRENDER OF POSSESSION

     Lessee shall, on the last day of the term, or on earlier termination and forfeiture of the
lease, peaceably and quietly surrender and deliver the demised premises to Lessor free of
subtenancies, including all buildings, additions, and improvements constructed or placed thereon by
Lessee, except moveable trade fixtures, all in good condition and repair subject to reasonable wear
and tear and Lessor’s repair obligations, if any. Any trade fixture or personal property not used
in connection with the operation of the demised premises and belongings to Lessee, if not removed
at the termination or default, and if Lessor shall so elect, shall be deemed abandoned and become
the property of Lessor without any payment or offset therefor. Lessor may remove such fixtures or
property from the demised premises and store them at the risk and expense of Lessee if Lessor shall
not so elect. Lessee shall repair and restore all damage to the demised premises caused by the
removal of equipment, trade fixtures, and personal property.

SECTION TWENTY-SIX

REMEDIES OF LESSOR

          1. In the event of a breach or a threatened breach by Lessee of any of the terms or conditions
hereof, Lessor shall have the right of injunction to restrain Lessee and the right to invoke any
remedy allowed by law or in equity, as if the specific remedies of indemnity or reimbursement were
not provided herein.

          2. The rights and remedies given to Lessor in this lease are distinct, separate and
cumulative, and no one of them, whether or not exercised by Lessor, shall be deemed to be in
exclusion of any of the others herein, by law, or by equity provided.

          3. No receipt of money by Lessor from Lessee after default or cancellation of this lease in
any lawful manner shall (a) reinstate, continue, or extend the term or affect any notice given to
Lessee, (b) operate as a waiver of the right of Lessor to enforce the payment of rent and
additional rent then due or falling due, or (c) operate as a waiver of the right of Lessor to
recover possession of the demised premises by proper suit, action, proceeding, or other remedy.
After (a) service of notice of termination and forfeiture as

 

 

herein provided and the expiration of the time specified therein, (b) the commencement of any
suit, action, proceeding, or other remedy, or (c) final order or judgment for possession of the
demised premises, Lessor may demand, receive, and collect any monies due, without in any manner
affecting such notice, order or judgment. Any and all such monies so collected shall be deemed to
be payment on account of the use and occupation of the demised premises or at the election of
Lessor, on account of the liability of Lessee hereunder.

SECTION TWENTY-SEVEN

PURCHASE OPTION

          1. Option. Lessor hereby grants to Lessee a continuing option, for the term of this lease, to
purchase the Premises, subject to Paragraph 2 hereafter, which option may be exercised by Lessee,
in its sole and absolute discretion, at anytime during the term of the Lease. If Lessee desires to
exercise such option, Lessee shall provide Lessor with written notice of its intent to exercise
such option (the “Option Notice”) not less than ninety (90) days prior to the proposed closing
date, which date shall be set forth in the Option Notice. Upon Lessor’s receipt of such notice,
Lessor and Lessee shall enter into a real estate sale contract for the sale of the Premises with a
purchase price equal to the Fair Market Value of the Premises as determined in accordance with this
Agreement.

          2. Right of First Refusal. Lessor hereby agrees that if Lessee does not exercise their option
to purchase and a third party expresses interest in the Premises, that Lessee will have first right
of refusal to purchase said property. In the event that the Lessor receives a third party offer to
purchase the property, the Lessor shall provide the Lessee with a notice of the terms and
conditions thereof. Lessee will have ten (10) days in which to match the Offer or the Lessor may
proceed with the sale to the third party.

          3. Title. Within twenty (20) days after receipt of the Option Notice, Lessor shall deliver to
Lessee an updated abstract of title and a title insurance commitment from a title company selected
by Lessee (the “Title Company”) evidencing marketable title to the Premises. Lessee shall
thereafter have ten (10) days from the date of receipt of such documentation to examine title and
make objections thereto, if any, in writing. Lessor shall sue its best efforts to cure any title
defects within thirty (30) days thereafter. If title is not marketable and cannot be made
marketable by Lessor within such thirty (30) days period, Lessee shall not be obligated to purchase
the Premises.

          4. Closing. The closing of this transaction contemplated hereby (the “Closing Date”) shall be
held at the Title Company and occur ninety (90) days after Lessee’s delivery to Lessor of the
Option Notice or such other date as the parties may agree.

          5. Closing Documents. At the closing, Lessor shall convey good and marketable and insurable
title to Lessee or its designee by general warranty deed, subject only to the Permitted
Encumbrances, as defined herein, and shall provide Lessee or its designee with a fully-paid title
insurance policy with full ALTA extended coverage over the general exceptions, issued by the Title
Company, subject only to (i) current real estate taxes not yet due and payable as of the closing
date, (ii) building and zoning laws, ordinances, and state and federal regulations, (iii) easements
not interfering with existing

 

 

improvements, (iv) any covenant, condition, restriction or lien or other encumbrance created
by or through Lessee, and (v) such liens, covenants, conditions, easements and exceptions to title
as Lessee may agree to in writing (collectively, the “Permitted Encumbrances”). Items customarily
adjusted in commercial property transactions shall be adjusted as of the Closing Date. Lessor shall
pay any transfer taxes imposed by the applicable state or county and any transfer taxes imposed by
local ordinance shall be paid by the party designated in such ordinance. Lessor acknowledges that
Lessee shall have no obligation to exercise the Option.

        6. Fair Market Value. Fair Market Value shall mean the amount a willing buyer would be willing
to pay to a willing Seller for the Premises in a sale by the seller without a broker to a buyer
without a broker, each being under no compulsion to buy or sell. Fair Market Value, if Lessor and
Lessee are not able to agree on the same within thirty (30) days after Lessor’s receipt of the
Option Notice (the “Negotiation Period”), shall be determined pursuant to the procedures set forth
below.

     Not more than twenty (20) days after the end of the Negotiation Period wherein Lessor and
Lessee failed to agree as to the Fair Market Value of the Premises, the parties shall attempt to
agree upon an appraiser. If the parties agree upon an appraiser, the appraiser so selected shall
determine the Fair Market Value of the Premises within thirty (30) days after selection. If the
parties fail to so agree upon the selection of one such appraiser within twenty (20) days after the
end of such Negotiation Period, Lessor and Lessee shall each designate, within five (5) business
days from the end of such twenty (20) day period, one appraiser to determine such Fair Market
Value. In the event either party, fails to select it own appraiser, the appraiser selected by the
other party shall determine Fair Market Value. If two appraisers are so selected, then they shall
independently determine the Fair Market Value of the Premises and complete and forward to Lessor
and Lessee their separate appraisal reports within thirty (30) days after the expiration of such
five (5) business day period. Any appraisal report not so forwarded within such time period shall
be excluded. If only one such report is timely forwarded then the appraisal set forth therein shall
be the Fair Market Value. If both reports are timely forwarded and the lower appraisal is not less
than ninety percent (90%) of the higher appraisal, then the average of the two appraisals shall be
the Fair Market Value. If the lower appraisal is less than ninety (90%) of the higher appraisal,
then the two appraisers shall meet and select a third appraiser within ten (10) days after the
expiration of the thirty (30) day period. In the event the two appraisers fail to select a third
appraiser within such ten (10) day period, either party may obtain court appointment of such third
appraiser. The third. appraiser shall independently determine the Fair Market Value of the Premises
and promptly complete and forward its report to Lessor and Lessee. The average of the two
appraisals closest in amount shall be the Fair Market Value. All appraisers shall be members in
good standing with the Appraisal Institute or any organization succeeding thereto and shall have
not less than ten (10) years experience with commercial real estate of the type of property in the
location where the Premises is located.

SECTION TWENTY-EIGHT

TOTAL AGREEMENT: APPLICABLE TO SUCCESSORS

 

 

     This lease contains the entire agreement between the parties and cannot be changed or
terminated except by a written instrument subsequently executed by the parties hereto. This lease
and the terms and conditions hereof apply to and are binding on the heirs, legal representatives,
successors and assigns of both parties.

SECTION TWENTY-NINE

APPLICABLE LAW

     This is agreement shall be governed by and construed in accordance with the laws of the State
of Indiana.

SECTION THIRTY

TIME OF THE ESSENCE; CONSENT; COUNTERPARTS

     TIME IS OF THE ESSENCE in all provisions of this lease.

     Whatever consent is required hereunder, each party agrees not to unreasonably withhold such
consent.

     This Lease may be executed in several duplicate counterparts, each of which shall be deemed an
original of this Lease for all purposes.

     IN WITNESS WHEREOF, the parties have executed this lease at Bremen, County of Marshall, State
of Indiana, the day and year first above written.

	 	 	 	 	 
	LESSOR 

	 	      LESSEE 	 	 
	 
	 	 	 	 
	DJR VENTURES, LLC

	 	     COPPERFIELD, LLC	 	 
	 
	 

	 	 
	 	 
	By: James D. Pomeroy

	 	By: Richard N. Burger

	 	 

 

 

STATE OF INDIANA                 )

                                            
         ) SS:

COUNTY OF MARSHALL        )

     Before me, a Notary Public, in and for said County and State, personally appeared James D.
Pomeroy for and on behalf of DJR VENTURES, LLC, an Indiana Limited Liability Company, and
acknowledged the execution of the foregoing Lease dated the 1st day of February, 2008,
on this 15th day of January, 2008.

	 	 	 	 	 
	 

	 	 	 	 

	 
	 	 	 	 
	 

	 	 	 	                                                                 , Notary Public
	 
	 	 	 	 
	My Commission Expires:

	 	 	 	Residing in                     County, IN
	 
	 	 	 	 
	 

	 	 	 	 

STATE OF ILLINOIS       )

                                            ) SS:

COUNTY OF LAKE          )

     Before me, a Notary Public, in and for said County and State, personally appeared Richard N.
Burger for and on behalf of COPPERFIELD, LLC, a Minnesota Limited Liability Company, and
acknowledged the execution of the foregoing Lease dated the 1st day of February, 2008,
on this 15th day of January, 2008.

	 	 	 	 	 
	 

	 	 	 	 

	 
	 	 	 	 
	 

	 	 	 	                                                                   , Notary Public
	 
	 	 	 	 
	My Commission Expires:

	 	 	 	Residing in                     County, IL
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 

	 	 	 
	THIS INSTRUMENT PREPARED BY:

	 	David R. Holmes
	 

	 	HOLMES & WALTER, LLP
	 

	 	116 West Plymouth Street
	 

	 	Bremen, Indiana 46506
	 

	 	Telephone: (574) 546-4022Exhibit 4.1

Exhibit 4.1

  

FIFTY-SEVENTH SUPPLEMENTAL

INDENTURE

TO

INDENTURE DATED SEPTEMBER 1, 1939

 

DUKE ENERGY INDIANA, INC.

(FORMERLY NAMED EACH OF “PSI ENERGY, INC.” AND “PUBLIC SERVICE COMPANY OF INDIANA, INC.” AND

SUCCESSOR BY CONSOLIDATION TO PUBLIC SERVICE COMPANY OF INDIANA)

TO

LASALLE BANK NATIONAL ASSOCIATION

AS TRUSTEE

(FORMERLY NAMED “LASALLE NATIONAL BANK” AND THE

SUCCESSOR TRUSTEE TO THE FIRST NATIONAL BANK OF CHICAGO)

 

DATED AS OF AUGUST 21, 2008

  

CREATING FIRST MORTGAGE BONDS, SERIES LLL, 6.35%, DUE AUGUST 15, 2038

AND

OTHERWISE SUPPLEMENTING AND AMENDING THE INDENTURE

 

 

TABLE OF CONTENTS

 

Page

	 	 	 	 	 
	Parties:
	 	 	 	 
	Company (Duke Energy Indiana, Inc., formerly named each of PSI Energy,
Inc. and Public Service Company of Indiana, Inc., and successor by
consolidation to Initial Mortgagor (Public Service Company of Indiana)),
and Trustee 
	 	 	1	 
	 
	 	 	 	 
	Recitals:
	 	 	 	 
	Indenture of the Initial Mortgagor, dated September 1, 1939, and First
Supplemental Indenture thereto of the Initial Mortgagor, dated
as of March 1, 1941 
	 	 	1	 
	 
	 	 	 	 
	Consolidation of Initial Mortgagor (and four other companies) into the
Company 
	 	 	1	 
	 
	 	 	 	 
	Execution by Company of Second Supplemental Indenture to the original
Indenture 
	 	 	1	 
	 
	 	 	 	 
	Company substituted for Initial Mortgagor under Indenture 
	 	 	1	 
	 
	 	 	 	 
	Execution by Company of Third through the Fifty-Sixth Supplemental
Indentures to the original Indenture 
	 	 	2	 
	 
	 	 	 	 
	LaSalle Bank National Association, successor to original Trustee 
	 	 	3	 
	 
	 	 	 	 
	Change of name of Company from Public Service Company of Indiana,
Inc. to PSI Energy, Inc.
	 	 	3	 
	 
	 	 	 	 
	Amount of bonds presently outstanding under the Indenture 
	 	 	3	 
	 
	 	 	 	 
	Fifty-Seventh Supplemental Indenture and Bonds of Series LLL authorized
	 	 	3	 
	 
	 	 	 	 
	Conditions precedent performed 
	 	 	4	 
	 
	 	 	 	 
	Executing Clause 
	 	 	4	 

-i-

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I.
	 	 	 	 
	 
	 	 	 	 
	First Mortgage Bonds, Series LLL, 6.35%, Due August 15, 2038.
	 	 	 	 
	 
	 	 	 	 
	Section 1. Creation and designation of Bonds of Series LLL 
	 	 	4	 
	Section 2. Bonds of Series LLL to be in registered form only 
	 	 	4	 
	Form of face of Bonds of Series LLL 
	 	 	8	 
	Form of reverse of Bonds of Series LLL and Trustee’s certificate 
	 	 	10	 
	Section 3. Date of Bonds of Series LLL 
	 	 	14	 
	Section 4. Maturity dates and interest rates of Bonds of Series LLL 
	 	 	14	 
	Section 5. Place and manner of payment of Bonds of Series LLL 
	 	 	14	 
	Section 6. Denominations and numbering of definitive Bonds of Series LLL 
	 	 	14	 
	Temporary Bonds of Series LLL and exchange thereof for
definitive bonds 
	 	 	14	 
	Section 7 Maintenance and Renewal Fund shall not apply to Bonds of
Series LLL 
	 	 	15	 
	Section 8. Inspection requirements shall not apply to Bonds of Series LLL 
	 	 	15	 
	Section 9. Company’s right to further amend the original Indenture 
	 	 	15	 
	 
	 	 	 	 
	ARTICLE II.
	 	 	 	 
	 
	 	 	 	 
	Issuance of Bonds of Series LLL.
	 	 	 	 
	 
	 	 	 	 
	Section 1. Aggregate principal amount of Bonds of Series LLL issuable at once
	 	 	16	 
	Section 2. Issuance of additional Bonds of Series LLL 
	 	 	16	 
	 
	 	 	 	 
	ARTICLE III.
	 	 	 	 
	 
	 	 	 	 
	Indenture Amendments.
	 	 	 	 
	 
	 	 	 	 
	Section 1. Amendments to Article I of the original Indenture 
	 	 	17	 
	Section 2. Amendment to subdivision (1) of Article I of the original Indenture
to reflect the change of name of the Company 
	 	 	17	 
	Section 3. Amendments to Article VII of the original Indenture 
	 	 	17	 
	Section 4. No sinking fund for Bonds of Series LLL 
	 	 	19	 

-ii-

 

	 	 	 	 	 	 	 	 	 
	 	 		 	 	Page	 
	ARTICLE IV.
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Concerning the Trustee.
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Acceptance of trust by Trustee 
	 	 		 	 	 	19	 
	Trustee not responsible for validity or sufficiency of Fifty-Seventh
Supplemental Indenture, etc.
	 	 		 	 	 	19	 
	Terms and conditions of Article XVII of the original Indenture to be applied
to the Fifty-Seventh Supplemental Indenture 
	 	 		 	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V.
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Miscellaneous Provisions.
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Section 1. References in any article or section of the original Indenture refer
to such article or section as amended by all Fifty Seven
Supplemental Indentures thereto 
	 	 		 	 	 	19	 
	Section 2. Operation and construction of amendments to the original Indenture
	 	 	 	 	 	 	20	 
	Section 3. All covenants, etc., for sole benefit of parties to the Fifty-Seventh
Supplemental Indenture and holders of bonds 
	 	 		 	 	 	20	 
	Section 4. Table of contents and headings of articles not part of Fifty-Seventh
Supplemental Indenture 
	 	 		 	 	 	20	 
	Section 5. Execution of Fifty-Seventh Supplemental Indenture in counterparts 
	 	 	 	 	 	 	20	 
	Section 6. Payments Due on Legal Holidays 
	 	 	 	 	 	 	20	 
	 
	Attestation Clause 
	 	 		 	 	 	21	 
	Signatures 
	 	 		 	 	 	21	 
	Acknowledgment by Company 
	 	 		 	 	 	23	 
	Acknowledgment by Trustee 
	 	 		 	 	 	24	 

-iii-

 

     Fifty-Seventh Supplemental Indenture dated as of the twenty-first day of August,
2008, made and entered into by and between Duke Energy Indiana, Inc. (hereinafter commonly
referred to as the “Company”), a corporation organized and existing under the laws of the State of
Indiana, formerly named each of PSI Energy, Inc. and Public Service Company of Indiana, Inc., and
the successor by consolidation to Public Service Company of Indiana, an Indiana corporation, party
of the first part, and LaSalle Bank National Association, a national banking association
organized and existing under the laws of the United States and having its office or place of
business in the City of Chicago, State of Illinois, formerly named LaSalle National Bank, and the
successor trustee to The First National Bank of Chicago (hereinafter commonly referred to as the
“Trustee”), party of the second part,

     Witnesseth:

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

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

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

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

- 1 -

 

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

- 2 -

 

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

     Whereas, the Forty-Sixth Supplemental Indenture amended the Indenture to reflect a
change in the name of the Company from Public Service Company of Indiana, Inc. to PSI Energy, Inc.
effective as of April 20, 1990; and

     Whereas, as of August 21, 2008, the only bonds that have been heretofore issued under
the Indenture which are now outstanding are $7,500,000 aggregate principal amount of “PSI Energy,
Inc. First Mortgage Bonds, Series VV, Due July 15, 2026” and $70,000,000 aggregate principal amount
of “PSI Energy, Inc. First Mortgage Bonds, Series WW, Due August 15, 2027” and $124,665,000
aggregate principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series BBB, 8%, Due July 15,
2009” (such bonds being hereinafter referred to as the “Bonds of Series BBB”) and $53,055,000
aggregate principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series CCC, 8.85%, Due
January 15, 2022” and $38,000,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series DDD, 8.31%, Due September 1, 2032” and $23,000,000 aggregate principal amount of “PSI
Energy, Inc. First Mortgage Bonds, Series FFF, Due March 1, 2031” and $24,600,000 aggregate
principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series GGG, Due March 1, 2019” and
$35,000,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage Bonds, Series HHH, Due
April 1, 2022” and $77,125,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series III, Due December 1, 2039” and $77,125,000 aggregate principal amount of “PSI Energy,
Inc. First Mortgage Bonds, Series JJJ, Due December 1, 2039”; and

     Whereas, in accordance with the provisions of Section 1 of Article XVIII of the
Indenture, the Board of Directors has authorized the execution and delivery by the Company of a
Fifty-Seventh Supplemental Indenture, substantially in the form of this Fifty-Seventh Supplemental
Indenture, for the purpose of reflecting a change in the name of the Company from PSI Energy, Inc.
to Duke Energy Indiana, Inc., for the purpose of creating a fifty-sixth series of bonds to be
issued under the Indenture, to be known as “Duke Energy Indiana, Inc. First Mortgage Bonds, Series
LLL, 6.35%, Due August 15, 2038” (such bonds being hereinafter referred to as the “Bonds of Series
LLL”), and prescribing the form and substance of the Bonds of Series LLL and the terms, provisions
and characteristics thereof, and for the purpose of adding to the covenants and agreements of the
Company for the protection of the bondholders and of the trust estate, of providing the terms and
conditions for the redemption of the Bonds of Series LLL, of adding certain other covenants and
undertakings with respect to the Bonds of Series LLL and of making such changes in the Indenture as
are deemed necessary or desirable and as are permitted by the Indenture; and

- 3 -

 

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

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

ARTICLE I.

First Mortgage Bonds, Series LLL, 6.35%, Due August 15, 2038

     Section 1. There are hereby created a fifty-sixth series of bonds to be issued under and
secured by the Indenture, to be designated as “Duke Energy Indiana, Inc. First Mortgage Bonds,
Series LLL, 6.35%, Due August 15, 2038” (such series being the Bonds of Series LLL
hereinbefore referred to).

     Section 2. The following provisions shall apply to the Bonds of Series LLL.

     (a) The Bonds of Series LLL shall be issued in fully registered form only. However,
except as provided elsewhere in this Section, the registered owner of all of the Bonds of
Series LLL initially shall be The Depository Trust Company (“DTC”) or its nominee, and such
Bonds of Series LLL initially shall be registered in the name of DTC or its nominee.
Payment of the principal of or interest on Bonds of Series LLL registered in the name of
DTC or its nominee shall be made in the manner specified in DTC’s rules and by-laws. DTC
(and any successor securities depository) and its (or their) participating institutions
(collectively “Participants”) shall maintain a book-entry registration and transfer system
with respect to ownership of beneficial interests in the Bonds of Series LLL (the
“Book-Entry System”).

     (b) The Bonds of Series LLL, initially shall be issued in the form of one or more
authenticated, fully registered bonds for such series (each a “Global Security”) which (i)
need not be in the form of a lithographed or engraved certificate, but may be typewritten
or printed on ordinary paper or such paper as the Trustee may reasonably request, (ii)
shall represent and be denominated in an amount equal to 100% of the aggregate principal
amount of the Bonds of Series LLL issued under this Supplemental Indenture, (iii) shall be
executed by the Company and authenticated by the Trustee in accordance with the provisions
of the Indenture, (iv) shall be registered in the name of DTC or its nominee, and delivered
to DTC or its nominee or a custodian therefor, and (v) shall contain the following legend
on the face thereof:

- 4 -

 

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

Unless and until it is exchanged in whole or in part for Bonds of Series LLL in definitive
certificated form, each Global Security representing the Bonds of Series LLL may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any such nominee to a successor securities depository
or a nominee of any such successor securities depository.

     (c) The Trustee and the Company may treat Cede & Co. or its nominee, or any successor
securities depository or nominee thereof (collectively, the “Depository”) as the sole and
exclusive owner of the Bonds of Series LLL, registered in its name for the purposes of
payment of the principal or redemption price of or interest on the Bonds of Series LLL,
giving any notice permitted or required to be given to holders of the Bonds of Series LLL,
under the Indenture or this Supplemental Indenture, registering the transfer of the Bonds
of Series LLL, obtaining any consent or other action to be taken by holders of the Bonds of
Series LLL, and for all other purposes whatsoever and neither the Trustee nor the Company
shall be affected by any notice to the contrary. Neither the Company nor the Trustee nor
any registrar nor any paying agent shall have any responsibility or obligation to any
Participant, any person claiming a beneficial ownership interest in the Bonds of Series LLL
under or through the Depository or any Participant, or any other person which is not shown
on the registration books as being a holder of the Bonds of Series LLL with respect to (i)
the accuracy of any records maintained by the Depository or any Participant; (ii) the
payment by the Depository to any Participant of any amount in respect of the principal or
redemption price of or interest on the Bonds of Series LLL; (iii) the payment by any
Participant to any owner of a beneficial ownership interest in the Bonds of Series LLL, in
respect of the principal of or interest on the Bonds of Series LLL or (iv) any consent or
other action taken by the Depository as owner of the Bonds of Series LLL. The Trustee
shall pay all principal of and interest on the Bonds of Series LLL only to or upon the
order of the registered holder or holders of the Bonds of Series LLL, as shown on the
registration books, and all such payments shall be valid and effective to fully satisfy and
discharge the Company’s obligations with respect to the principal or redemption price of
and interest on the Bonds of Series LLL, to the extent of the sum or sums so

- 5 -

 

paid. No person other than a holder of the Bonds of Series LLL, as shown on the
registration books of DTC, shall receive an authenticated Bond evidencing the obligation of
the Company to make payment of the principal of and interest on the Bonds of Series LLL,
pursuant to the Indenture and this Supplemental Indenture. Upon delivery by DTC to the
Trustee of written notice to the effect that DTC has determined to substitute a new nominee
for Cede & Co, and subject to the provisions of the Indenture and this Supplemental
Indenture, the word “Cede & Co.”, as used in this Supplemental Indenture, shall refer to
each new nominee of DTC.

     (d) In the event that after the occurrence of an event of default that has not been
cured or waived, holders of a majority in aggregate principal amount of the beneficial
interests in the Bonds of Series LLL, as reflected in the books and records of the
Depository, notify the Trustee, through the Depository or any Participant, that the
continuation of the Book-Entry System is no longer in the best interests of such holders of
beneficial interests in the Bonds of such Series, then the Trustee shall notify the
Depository and the Company, and the Depository will notify the Participants of the
availability through the Depository of definitive certificated Bonds of such Series. In
such event, the Company shall execute, and the Trustee, upon receipt of a written order of
the Company, signed by its President or a Vice President and by its Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary (an “Issuer Order”), for the authentication and
delivery of definitive certificated Bonds of Series LLL, will authenticate and deliver
Bonds of such Series in definitive certificated form, in any authorized denominations, all
pursuant to the provisions of the Indenture, to the person or persons specified to the
Trustee in writing by the Depository in the aggregate principal amount of the applicable
Global Security or Securities and in exchange for such Global Security or Securities.

     (e) If at any time the Depository notifies the Company that it is unwilling or unable
to continue as Depository for the Bonds of Series LLL, or if at any time the Depository
shall no longer be registered as a clearing agency in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company
may appoint a successor Depository with respect to the Bonds of such Series. If a
successor Depository for the Bonds of such Series is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such condition, the Company
will execute, and the Trustee, upon receipt of an Issuer Order for the authentication and
delivery of definitive certificated Bonds of Series LLL, will authenticate and deliver
Bonds of such Series in definitive certificated form, in any authorized denominations, all
pursuant to the provisions of the Indenture, to the person or persons specified to the
Trustee in writing by the Depository in the aggregate principal amount of the applicable
Global Security or Securities and in exchange for such Global Security or Securities.

     (f) The Company may at any time and in its sole discretion determine that the Bonds
of Series LLL shall no longer be represented by a Global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of an Issuer Order for the
authentication and delivery of definitive certificated Bonds of such Series, will
authenticate and deliver Bonds of Series LLL in definitive certificated form, in any
authorized denominations, all pursuant to the provisions of

- 6 -

 

the Indenture, to the person or persons specified to the Trustee in writing by the
Depository in the aggregate principal amount of the Global Security or Securities and in
exchange for such Global Security or Securities.

     (g) Upon the exchange of any Global Security for the Bonds of Series LLL in
definitive certificated form, in authorized denominations, the Global Security or
Securities shall be cancelled by the Trustee.

     (h) Whenever the Depository requests the Company and the Trustee to do so, the
Trustee and the Company will cooperate with the Depository in taking appropriate action
after reasonable notice to (i) make available one or more separate Global Securities
evidencing the Bonds of Series LLL to any Participant having Bonds of such Series credited
to its account at the Depository, or (ii) arrange for another Depository to maintain
custody of the Global Security or Securities evidencing the Bonds of Series LLL.

     (i) In connection with any notice or other communication to be provided to holders of
the Bonds of Series LLL pursuant to the Indenture and this Supplemental Indenture by the
Company or the Trustee with respect to any consent or other action to be taken by holders
of the Bonds of such Series, the Company or the Trustee, as the case may be, shall
establish a record date for such consent or other action and give the Depository notice of
such record date not less than 15 calendar days in advance of such record date to the
extent possible. Such notice to the Depository shall be given only so long as a Depository
or its nominee is the sole holder of the Bonds of Series LLL.

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

[The remainder of this page has been left blank intentionally.]

- 7 -

 

(Form of Face of the Bonds of Series LLL)

[Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any payment is made to Cede
& Co. or to such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered holder hereof, Cede & Co., has an interest herein.]1

			
	 
	No. LLL-R-
	 	$                    

CUSIP No: 263901 AA 8

ISIN: US263901AA85

Common Code: 038455184

Duke Energy Indiana, Inc.

First Mortgage Bond, Series LLL, 6.35%, 

Due August 15, 2038

     Duke Energy Indiana, Inc., an Indiana corporation (hereinafter called the “Company”), for
value received, hereby promises to pay to                     , or registered assigns, the principal sum
of                                          Dollars ($ ) on the fifteenth day of August, 2038 and to pay
interest on said sum from the date hereof, until said principal sum is paid, at the rate of 6.35%
per annum, payable semi-annually on the fifteenth day of February and August in each year. Both the
principal of and the interest on this bond shall be payable in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and
private debts at the office or agency of the Company in Plainfield, Indiana, or, at the option of
the registered owner hereof, at the office or agency of the Company in the Borough of Manhattan,
the City of New York, State of New York, except that interest on this bond may be paid, at the
option of the Company, by check or draft mailed to the address of the person entitled thereto as it
appears on the books of the Company maintained for that purpose.

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

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

 

			
	1	 	This should be included only if the Bonds of Series
LLL are being issued in global form.

- 8 -

 

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

     Dated as of:

	 	 	 	 	 
	 	Duke Energy Indiana, Inc.

 	 
	 	By  	 	 
	 	 	 	 
	 	 	                                        President 	 
	 

Attest:

                                        

                                        Secretary

- 9 -

 

(Form of Reverse of the Bonds of Series LLL)

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

     This bond is one of a series designated as “Duke Energy Indiana, Inc. First Mortgage Bonds,
Series LLL, 6.35%, Due August 15, 2038” (hereinafter referred to as the “Bonds of Series LLL”) of
the Company issued under and secured by the Indenture and created by a Fifty-Seventh Supplemental
Indenture, dated as of August 21, 2008 (the “Fifty-Seventh Supplemental Indenture”), which also
amends the Indenture.

     The rights and obligations of the Company and of the bearers and registered owners of bonds
may be modified or amended with the consent of the Company by an affirmative vote of the bearers or
registered owners entitled to vote of at least seventy-five per centum (75%) in principal amount of
the bonds then outstanding at a meeting of bondholders called for the purpose (and by an
affirmative vote of the bearers or registered owners entitled to vote of at least seventy-five per
centum (75%) in principal amount of bonds of any series affected by such modification or amendment
in case one or more, but less than all, series of bonds are so affected), all in the manner and
subject to the limitations set forth in the Indenture, any consent by the bearer or registered
owner of any bond being conclusive and binding upon such bearer or registered owner and upon all
future bearers or registered owners of such bond, irrespective of whether or not any notation of
such consent is made on such bond; provided that no such modification or amendment shall, among
other things, extend the maturity or reduce the amount of, or reduce the rate of interest on, or
otherwise modify the terms of the payment of the principal of, or interest or premium (if any) on
this bond, which obligations are absolute and unconditional, or permit the creation of any lien
ranking prior to or equal with the lien of the Indenture on any of the mortgaged property. The
Fifty-Seventh Supplemental Indenture provides that at any time when no bonds issued under the
Indenture prior to the issuance of the “PSI Energy, Inc. First Mortgage Bonds, Series BBB, 8%, Due
July 15, 2009” are outstanding, the Company reserves the right to amend the Indenture, without the
consent or other action by the holders of the bonds outstanding at that time, to decrease the
seventy-five per centum (75%) vote requirement referred to above to sixty-six and two-thirds per
centum (66-2/3%).

- 10 -

 

     The Bonds of Series LLL may be redeemed at the option of the Company, as a whole or in part at
any time, at a redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds of Series LLL to be redeemed and (2) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to the redemption date),
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 0.35% (35 basis points), plus, in each case,
accrued interest to the redemption date. For the avoidance of doubt, interest that is due and
payable on an interest payment date falling on or prior to a redemption date will be payable on
such interest payment date in accordance with the Bonds of Series LLL and the Indenture. The
Company shall notify the Trustee of the redemption price with respect to any redemption pursuant to
this paragraph promptly after the calculation thereof. The Trustee shall not be responsible for
calculating said redemption price.

     “Business Day” means any day other than a day on which banks in New York City are required or
authorized to be closed.

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

     “Comparable Treasury Price” means, with respect to any redemption date for the Bonds of Series
LLL, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation
Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such
quotations.

     “Quotation Agent” means one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.

     “Reference Treasury Dealer” means each of Deutsche Bank Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and UBS Securities LLC, plus two other financial institutions
appointed by the Company at the time of any redemption or their affiliates which are primary U.S.
Government securities dealers, and their respective successors; provided, however, that if any of
the foregoing or their affiliates shall cease to be a primary U.S. Government securities dealer in
the United States (a “Primary Treasury Dealer”), the Company shall substitute therefor another
Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Quotation Agent by

- 11 -

 

the Reference Treasury Dealers at 3:30 p.m. New York time on the third Business Day preceding
such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption date.

     Notice of any redemption by the Company will be mailed at least 30 days but not more than 60
days before any redemption date to each holder of Bonds of Series LLL to be redeemed. If less than
all the Bonds of Series LLL are to be redeemed at the option of the Company, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the Bonds of Series LLL to be
redeemed in whole or in part.

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

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

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

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

     The Bonds of Series LLL are issuable in denominations of $2,000 or multiples of $1,000 in
excess thereof as shall from time to time be determined and authorized by the Board of Directors of
the Company. In the manner and subject to the limitations provided

- 12 -

 

in the Indenture, Bonds of Series LLL are exchangeable as between authorized denominations,
upon presentation thereof for such purpose by the registered owner, at the principal office or
place of business of LaSalle Bank National Association, the Trustee, or its successor in trust
under the Indenture, or, at the option of the registered owner, at the office or agency of the
Company in the Borough of Manhattan, the City of New York, State of New York.

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

(Form of Trustee’s Certificate)

TRUSTEE’S CERTIFICATE

     This bond is one of the Bonds of Series LLL designated therein referred to and described in
the within mentioned Indenture and Fifty-Seventh Supplemental Indenture.

	 	 	 	 	 
	 	LaSalle Bank National Association,

 as Trustee,

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

[The remainder of this page has been left blank intentionally.]

- 13 -

 

     Section 3. Each Bond of Series LLL issued prior to the first interest payment date shall be
dated as of August 21, 2008, and otherwise shall be dated as provided in Section 1 of Article II of
the Indenture.

     Section 4. All Bonds of Series LLL shall be due and payable on August 15, 2038, and shall
bear interest from the date thereof at the rate of 6.35% per annum, payable semi-annually on the
fifteenth day of February and August in each year, commencing February 15, 2009.

     Section 5. Subject to agreements with or the rules of the Depository or any successor
book-entry security system or similar system with respect to Global Securities, both the principal
of and the interest on the Bonds of Series LLL shall be payable in any coin or currency of the
United States of America which at the time of payment is legal tender for the payment of public and
private debts, at the office or agency of the Company in Plainfield, Indiana, or, at the option of
the holder thereof, at the office or agency of the Company in the Borough of Manhattan, the City of
New York, State of New York, except that interest on the Bonds of Series LLL may be paid, at the
option of the Company, by check or draft mailed to the address of the person entitled thereto as it
appears on the books of the Company maintained for that purpose.

     Section 6. Definitive Bonds of Series LLL shall be issuable in denominations of $2,000 or
multiples of $1,000 in excess thereof, numbered consecutively from “LLL-R-1” upward.

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

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

     Pursuant to the provisions of Section 11 of Article II of the Indenture, Bonds of Series LLL
may be issued in temporary form, and if temporary bonds be issued, the Company shall, with all
reasonable dispatch, at its own expense and without charge to the holders of the temporary bonds,
prepare and execute definitive Bonds of Series LLL and exchange the temporary bonds for such
definitive bonds in the manner provided for in said section, provided, however, no presentation or
surrender of temporary Bonds of Series LLL shall be necessary in order for the holders entitled to
interest thereon to receive such interest.

- 14 -

 

     Section 7. Article IX of the Indenture, “Maintenance and Renewal Fund and Sinking Fund
Provisions”, as heretofore amended or supplemented shall not apply to the Bonds of Series BBB or to
any subsequently created series of bonds (which includes the Bonds of Series LLL) from and after
the date on which no series of bonds created under the Indenture prior to the Bonds of Series BBB
are outstanding.

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

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

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

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

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

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

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

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

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

- 15 -

 

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

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

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

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

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

ARTICLE II.

Issuance of Bonds of Series LLL.

     Section 1. An initial issue of Bonds of Series LLL in the aggregate principal amount not
exceeding five hundred million dollars ($500,000,000), may be executed by the Company and delivered
to the Trustee for authentication, and shall be authenticated and delivered by the Trustee to or
upon the order of the Company (which authentication and delivery may be made without awaiting the
filing or recording of this Fifty-Seventh Supplemental Indenture), upon receipt by the Trustee of
the resolutions, certificates, orders, opinions and other instruments required by the provisions of
Section 2 of Article IV of the Indenture to be received by the Trustee as a condition to the
authentication and delivery by the Trustee of bonds pursuant to said Section 2.

     Section 2. Subject to the limitations provided in Section 24 of Article V of the Indenture,
additional Bonds of Series LLL may be issued by the Company under the provisions of Sections 2, 3
or 4 of Article IV of the Indenture.

- 16 -

 

ARTICLE III.

Indenture Amendments.

     Section 1. Article I of the Indenture, as heretofore amended, is hereby further amended (i)
by adding immediately after subdivision “(96)” thereof an additional subdivision numbered “(97)”
and reading as follows:

"(97) The term ‘Fifty-Seventh Supplemental Indenture’ shall mean the Fifty-Seventh
Supplemental Indenture executed by the Company and the Trustee, dated as of August 21,
2008, supplementing and amending the Indenture; and the term ‘Bonds of Series LLL’ shall
mean the ‘Duke Energy Indiana, Inc. First Mortgage Bonds, Series LLL, 6.35%, Due August 15,
2038’ created by the Fifty-Seventh Supplemental Indenture.”

and (ii) by changing the numbering of the present subdivision “(97)” thereof to “(98)”.

     Section 2. Subdivision (1) of Article I of the Indenture, as heretofore amended, is hereby
further amended by deleting said subdivision and inserting in lieu thereof the following
subdivision to read as follows:

     ”(1) The term ‘Company’ shall mean Public Service Company of Indiana, Inc. (successor
by consolidation to Public Service Company of Indiana) for the period of time prior to
April 20, 1990 and, as a result of a change of name, shall mean PSI Energy, Inc. for the
period of time from April 20, 1990 to and including September 30, 2006 and, as a result of
a further change of name, as of October 1, 2006 and thereafter, shall mean Duke Energy
Indiana, Inc. and, subject to Article XVI hereof, shall also include its successors and
assigns.”

     Section 3. Article VII of the Indenture, as heretofore amended, is hereby further amended by
inserting therein immediately after Section 41 thereof, a new section designated “Section 42” and
reading as follows:

     “Section 42. The Bonds of Series LLL may be redeemed at the option of the Company, as
a whole or in part at any time, at a redemption price equal to the greater of (1) 100% of
the principal amount of the Bonds of Series LLL to be redeemed and (2) the sum of the
present values of the remaining scheduled payments of principal and interest thereon
(exclusive of interest accrued to the redemption date), discounted to the redemption date
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 0.35% (35 basis points), plus, in each case, accrued interest to the
redemption date. For the avoidance of doubt, interest that is due and payable on an
interest payment date falling on or prior to a redemption date will be payable on such
interest payment date in accordance with the Bonds of Series LLL and the Indenture. The
Company shall notify the Trustee of the redemption price with respect to any redemption
pursuant to this paragraph promptly after the

- 17 -

 

calculation thereof. The Trustee shall not be responsible for calculating said
redemption price.

     ’Business Day’ means any day other than a day on which banks in New York City are
required or authorized to be closed.

     ’Comparable Treasury Issue’ means the United States Treasury security or securities
selected by the Quotation Agent as having an actual or interpolated maturity comparable to
the remaining term of the Bonds of Series LLL to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in pricing new
issues of a corporate debt securities of a comparable maturity to the remaining term of
such bonds.

     ’Comparable Treasury Price’ means, with respect to any redemption date for the Bonds
of Series LLL, (A) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Quotation Agent obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such quotations.

     ’Quotation Agent’ means one of the Reference Treasury Dealers appointed by the Trustee
after consultation with the Company.

     ’Reference Treasury Dealer’ means each of Deutsche Bank Securities Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC, plus two other financial
institutions appointed by the Company at the time of any redemption or their affiliates
which are primary U.S. Government securities dealers, and their respective successors;
provided, however, that if any of the foregoing or their affiliates shall cease to be a
primary U.S. Government securities dealer in the United States (a “Primary Treasury
Dealer”), the Company shall substitute therefor another Primary Treasury Dealer.

     ’Reference Treasury Dealer Quotations’ means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Quotation Agent, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by the
Reference Treasury Dealers at 3:30 p.m. New York time on the third Business Day preceding
such redemption date.

     ’Treasury Rate’ means, with respect to any redemption date, the rate per annum equal
to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.

- 18 -

 

     Notice of any redemption by the Company will be mailed at least 30 days but not more
than 60 days before any redemption date to each holder of Bonds of Series LLL to be
redeemed. If less than all the Bonds of Series LLL are to be redeemed at the option of the
Company, the Trustee shall select, in such manner as it shall deem fair and appropriate,
the Bonds of Series LLL to be redeemed in whole or in part.

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

     The Company shall indemnify and hold harmless the Trustee from any and all losses,
costs, damages, expenses, fees (including attorneys’ fees), court costs, judgments,
penalties, obligations, suits, disbursements and liabilities of any kind or character
whatsoever which may at any time be imposed upon, incurred by or asserted against the
Trustee by reason of or arising out of or caused, directly or indirectly by any act or
omission of the Trustee with respect to the foregoing Section 42, except for such that
would arise out of the willful misconduct or gross negligence of the Trustee and except for
costs and expenses arising in the ordinary course of the Trustee’s business.”.

     Section 4. The Bonds of Series LLL shall not be entitled to the benefit of a sinking fund.

ARTICLE IV.

Concerning the Trustee.

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

ARTICLE V.

Miscellaneous Provisions.

     Section 1. Wherever in the original Indenture or in any of the fifty-seven supplemental
indentures thereto reference is made to any article or section of the original

- 19 -

 

Indenture, such reference shall be deemed to refer to such article or section as amended by
such supplemental indentures.

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

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

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

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

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

[The remainder of this page has been left blank intentionally.]

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     In Witness Whereof, said Duke Energy Indiana, Inc. has caused this instrument to be
executed in its corporate name by its President or one of its Vice Presidents and to be attested by
its Secretary or one of its Assistant Secretaries and said LaSalle Bank National Association has
caused this instrument to be executed in its corporate name by one of its First Vice Presidents and
to be attested by one of its Assistant Secretaries, in several counterparts, all as of the day and
year first above written.

	 	 	 	 	 
	 

	 	 	 	Duke Energy Indiana, Inc.
	 
	 	 	 	 
	(Corporate Seal)

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Stephen G. De May
	 

	 	 	 	Vice President and Treasurer

Attest:

                                                            

Robert T. Lucas III, Assistant Secretary

Signed and delivered by Duke Energy Indiana, Inc.

     in the presence of:

                                                            

Jennie M. Raine, Witness

                                                            

Delcia S. Dunlap, Witness

- 21 -

 

	 	 	 	 	 
	 

	 	 	 	LaSalle Bank National Association,

solely as Trustee and not in its individual

capacity
	 
	 	 	 	 
	(Corporate Seal)

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Margaret M. Muir
	 

	 	 	 	Vice President

Attest:

                                                            

Alice M. Wolan, Assistant Secretary

                                                            

Signed and delivered by LaSalle Bank National

     Association in the presence of:

                                                            

Frank A. Pierson, Witness

                                                            

Alvita C. Griffin, Witness

- 22 -

 

	 	 	 	 	 
	State of North Carolina

	 	)	 	 
	 

	 	) ss: 
	 	
	County of Mecklenburg 

	 	)	 	 

     Be It Remembered, that on this 20th day of August, 2008, before me, the undersigned,
a notary public in and for the County and State aforesaid, duly commissioned and qualified,
personally appeared Stephen G. De May and Robert T. Lucas III, personally known to me to be the
same persons whose names are subscribed to the foregoing instrument, and personally known to me to
be the Vice President and Treasurer, and an Assistant Secretary, respectively, of Duke Energy
Indiana, Inc., an Indiana corporation, and acknowledged that they signed and delivered said
instrument as their free and voluntary act as such Vice President and Treasurer, and Assistant
Secretary, respectively, and as the free and voluntary act of said Duke Energy Indiana, Inc., for
the uses and purposes therein set forth; in pursuance of the power and authority granted to them by
resolution of the Board of Directors of said Company.

     In Witness Whereof, I have hereunto set my hand and affixed my notarial seal the day
and year aforesaid.

(Notarial Seal)

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

Patti C. Ross, Notary

My commission expires: 10-17-2009

County of residence: Mecklenburg

- 23 -

 

	 	 	 	 	 	 	 
	State Of Illinois

	 	 	)

)	 ss:	 	
	County Of Cook

	 	 	)	 	 	 

     Be It Remembered, that on this 20th day of August, 2008, before me, the
undersigned, a notary public in and for the County and State aforesaid, duly commissioned and
qualified, personally appeared Margaret M. Muir and Alice M. Wolan personally known to me to be the
same persons whose names are subscribed to the foregoing instrument, and personally known to me to
be a Vice President and an Assistant Secretary, respectively, of LaSalle Bank National Association,
a national banking association, and acknowledged that they signed and delivered said instrument as
their free and voluntary act as such Vice President and Assistant Secretary, respectively, and as
the free and voluntary act of said LaSalle Bank National Association, for the uses and purposes
therein set forth; in pursuance of the power and authority granted to them by the bylaws of said
association.

     In Witness Whereof, I have hereunto set my hand and affixed my notarial seal the day
and year aforesaid.

(Notarial Seal)

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

Nancy Lang Bowen, Notary

My commission expires: 09-23-2009

County of residence: Cook

- 24 -

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