Document:

s13da_092514-hc2holdex4.htm

CONSENT, WAIVER AND AMENDMENT AGREEMENT

 

 

This CONSENT, WAIVER AND AMENDMENT AGREEMENT (this “Agreement”), dated as of September 22, 2014, by and among HC2 Holdings, Inc., a Delaware corporation (the “Company”), and each of the undersigned (the “Original Purchasers”).

 

WHEREAS, reference is made to (i) the Securities Purchase Agreement (the “Luxor/DG Purchase Agreement”), dated as of the date hereof, by and among the Company and the purchasers party thereto (the “Luxor/DG Purchasers”), substantially in the form attached hereto as Exhibit A; (ii) the Securities Purchase Agreement (the “Original Purchase Agreement”), dated as of May 29, 2014, by and among the Company and the undersigned (the “Original Purchasers”); (iii) the Certificate of Designation (the “Series A Certificate of Designation”) of Series A Convertible Participating Preferred Stock (the “Series A Preferred Stock”) of HC2 Holdings, Inc., dated as of May 29, 2014; and (iv) the Registration Rights Agreement (the “Registration Rights Agreement”), dated as of May 29, 2014, by and among the Company and the Original Purchasers.  Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to such terms under the Original Purchase Agreement.

 

Transactions

 

WHEREAS, the Company desires to: (i) issue and sell shares of Series A-1 Preferred Stock (as defined below) to the Luxor/DG Purchasers (the “Equity Issuance”) pursuant to the terms of the Luxor/DG Purchase Agreement, which shares of Series A-1 Preferred Stock shall have the rights, preferences and privileges set forth in the Certificate of Designation (the “Series A-1 Certificate of Designation”) of Series A-1 Convertible Participating Preferred Stock (the “Series A-1 Preferred Stock”) of HC2 Holdings, Inc., dated as of the date hereof, substantially in the form attached hereto as Exhibit B; (ii) grant registration rights (the “Registration Rights”) to the Luxor/DG Purchasers in connection with the Equity Issuance on the terms and conditions set forth in the Amended and Restated Registration Rights Agreement, by and among the Company, the Original Purchasers and the Luxor/DG Purchasers, substantially in the form attached hereto as Exhibit C; (iii) amend and restate the Series A Certificate of Designation in the form attached hereto as Exhibit D (as amended, the “Amended Series A Certificate of Designation”); (iv) amend the Original Purchase Agreement; and (v) enter into that certain Credit Agreement (the “Credit Agreement”), among the Company, the Subsidiary Guarantors (as defined therein), the Lenders (as defined therein) and Jefferies Finance LLC, as arranger, as book manager, and as documentation agent, syndication agent and administrative agent for the Lenders and as collateral agent for the Secured Parties, in material substance in the form attached hereto as Exhibit E (the issuance of any indebtedness thereunder, the “Debt Issuance”).

 

Original Purchase Agreement

 

WHEREAS, pursuant to Section 5.4 of the Original Purchase Agreement, each of the Original Purchasers has a participation right with respect to the Equity Issuance (the “Securities Participation Right”) and the Debt Issuance (the “Debt Participation Right”), in each case subject to the terms and conditions set forth therein;

 

WHEREAS, each of the Original Purchasers desires to waive its Securities Participation Right and its Debt Participation Right;

 

WHEREAS, each of the Original Purchasers desires to amend the Original Purchase Agreement as set on Exhibit F hereto;

 

WHEREAS, pursuant to Section 12.12 of the Original Purchase Agreement, any modification, alteration, waiver or change in any of the terms of the Original Purchase Agreement must be made in writing and duly executed by the Company and the Original Purchasers (provided, that certain actions permitted to be taken by the Original Purchasers, as a group, requires the approval of only the Requisite Holders, and after such approval, such decision is binding on all of the Original Purchasers);

 

Series A Certificate of Designation

 

WHEREAS, pursuant to Section 4(b)(i) of the Series A Certificate of Designation, the Company may not, without the Requisite Approval (as defined below), amend, repeal, alter or add, delete or otherwise change the powers, preferences, rights or privileges of the Series A Preferred Stock in a manner adverse to the Holders (as defined therein);

 

WHEREAS, pursuant to Section 9(a) of the Series A Certificate of Designation, the Company may not, without the Requisite Approval, borrow or otherwise issue Indebtedness (as defined therein) if, after giving effect to such borrowing or issuance, the Debt/NAV Ratio (as defined therein) would be greater than 0.75;

 

WHEREAS, the Debt Issuance will result in a Debt/NAV Ratio in excess of 0.75;

 

WHEREAS, pursuant to Section 9(b) of the Series A Certificate of Designation, the Company may not, without the Requisite Approval, issue Parity Securities (as defined in the Series A Certificate of Designation) if, among other things, the conversion price applicable to such securities is to be less than $4.75, without the Requisite Approval;

 

WHEREAS, the Series A-1 Preferred Stock to be issued pursuant to the Equity Issuance will be a Parity Security (as defined in the Series A Certificate of Designation) with an initial Conversion Price (as defined in the Series A-1 Certificate of Designation) of $4.25;

 

WHEREAS, the Original Purchasers desire to consent to the Debt Issuance, the Equity Issuance, the adoption of the Amended Series A Certificate of Designation and the adoption of the Series A-1 Certificate of Designation, including under the Series A Certificate of Designation;

 

WHEREAS, pursuant to Section 11(d)(i) of the Series A Certificate of Designation, any consent, waiver, vote, decision, election or action required or permitted to be taken under the Series A Certificate of Designation by the holders of the Series A Preferred Stock as a group requires the approval or action, as applicable, of the Requisite Holders (as defined in the Series A Certificate of Designation) and, after such approval or action, is binding on all of the holders of Series A Preferred Stock (the “Requisite Approval”);

 

WHEREAS, the Original Purchasers constitute all of the holders of Series A Preferred Stock and the Requisite Holders under and as defined in the Series A Certificate of Designation;

 

Registration Rights Agreement

 

WHEREAS, pursuant to Section 2.10 of the Registration Rights Agreement, the Company cannot grant the Registration Rights without the prior written consent of the Original Purchasers, who represent the Majority Hudson Bay Investors, the Majority PECM Investors and the Holders of a majority of the Registrable Securities outstanding (each as defined in the Registration Rights Agreement); and

 

WHEREAS, the Original Purchasers desire to consent to the granting of the Registration Rights.

 

NOW THEREFORE,

 

1. Consent to Equity Issuance; Waiver of Securities Participation Right.  Each of the Original Purchasers does hereby (a) consent to the Equity Issuance, the execution and delivery by the Company of the Luxor/DG Purchase Agreement, the adoption of the Amended Series A Certificate of Designation and the adoption of the Series A-1 Certificate of Designation, including pursuant to Sections 4(b)(i) and 9(b) of the Series A Certificate of Designation; and (b) waive its Securities Participation Right with respect to the Equity Issuance.

 

2. Consent to Debt Issuance; Waiver of Debt Participation Right.  Each of the Original Purchasers does hereby (a) consent to the Debt Issuance (inclusive of all interest and other fees and expenses accrued in the ordinary course in connection with such indebtedness), including pursuant to Section 9(a) of the Series A Certificate of Designation and (b) waive its Debt Participation Right with respect to the Debt Issuance.  For the avoidance of doubt, the consent granted pursuant to the immediately preceding sentence is limited to the Initial Interim Term Loans and the Delayed Draw Interim Term Loans described in the Credit Agreement (as described in the form of Credit Agreement attached hereto).  Each of the Original Purchasers does hereby further consent to, pursuant to Section 9(a) of the Series A Certificate of Designation, any issuance of indebtedness in connection with any refinancing of indebtedness under the Credit Agreement, including a refinancing of such indebtedness pursuant to the Permanent Notes Documents or the Exchange Notes Documents (each as defined in the Credit Agreement) provided that (i) in the case of the issuance of Exchange Notes (as defined in the Credit Agreement), such Exchange Notes are issued in accordance with the terms of the Credit Agreement and (ii) in the case of any other refinancing, the principal amount of such indebtedness (A) does not exceed the sum of (x) the then outstanding principal plus accrued and unpaid interest under the Credit Agreement, plus (y) any principal amount that was previously prepaid under the Credit Agreement plus (z) any related refinancing fees and expenses and (B) the entire proceeds of the issuance of such indebtedness (less an amount equal to any principal amount that was previously prepaid under the Credit Agreement) are used to repay indebtedness under the Credit Agreement and any related refinancing fees and expenses.  Each of the Original Purchasers does hereby further waive its rights pursuant to Section 5.4 of the Original Purchase Agreement to participate in any issuance of indebtedness issued pursuant to Exchange Notes (as defined in the Credit Agreement).  For the avoidance of doubt, the waiver granted pursuant to this Section 2 shall not apply to, and the Original Purchasers hereby expressly reserve their right pursuant to Section 5.4 of the Original Purchase Agreement to participate in, the issuance of indebtedness issued pursuant to the Permanent Notes Documents (as defined in the Credit Agreement).

 

3. Amendment of Original Purchase Agreement.  The Original Purchase Agreement is hereby amended as set forth on Exhibit F hereto.

 

4. Waiver Under Registration Rights Agreement.  Each of the Original Purchasers does hereby consent, including pursuant to Section 2.10 of the Registration Rights Agreement, to the granting of the Registration Rights.

 

5. Waiver of Notice Requirements.  This Agreement shall satisfy any notice requirement that may be required to be given to the Original Purchasers pursuant to the Original Purchase Agreement or otherwise in connection with the Equity Issuance, the Debt Issuance and the other transactions contemplated hereby.

 

6. Representations and Warranties of the Company. The Company hereby represents and warrants to the Original Purchasers that:

 

a. After giving effect to this Agreement, the Series A-1 Certificate of Designation, the Amended Series A Certificate of Designation, the Luxor/DG Purchase Agreement and the Amended and Restated Registration Rights Agreement, each representation and warranty set forth in Section 3 of the Original Purchase Agreement is hereby restated and affirmed as true and correct in all material respects as of the date hereof (except to the extent that any such representations or warranties relate to an earlier specific date or dates and other than any such representation and warranty that may have been amended or modified by any matter disclosed in the Company Disclosure Schedule to the Luxor/DG Purchase Agreement);

 

b. The Company has the power and authority to enter into this Agreement and all other agreements contemplated hereby, and to do and perform all acts and things as are required or contemplated hereunder to be done, observed and performed by the Company;

 

c. Each of this Agreement and all other agreements to be executed by the Company which are contemplated hereby has been duly authorized (by all necessary corporate and limited liability company action and otherwise), validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms;

 

d. After giving effect to this Agreement, the execution and delivery of this Agreement and all other agreements to be executed by the Company and contemplated hereby and the Company’s performance hereunder and thereunder do not and will not require the consent or approval of any governmental authority, nor be in contravention of or in conflict with any the Company’s charter, by-laws, certificate of incorporation or the provisions of any statute, or any judgment, order, or indenture, instrument, agreement, note, arrangement or undertaking, to which the Company is a party or by which the Company or its assets or properties are or may become bound; and

 

e. After giving effect to this Agreement, the Series A-1 Certificate of Designation, the Amended Series A Certificate of Designation, the Luxor/DG Purchase Agreement and the Amended and Restated Registration Rights Agreement, no default under any such agreement has occurred and is continuing.

 

7. No Further Amendments.  Except for the consents, waivers and amendments set forth herein, the text of each of the Original Purchase Agreement, the Amended Series A Certificate of Designation and the Amended and Restated Registration Rights Agreement shall remain unchanged and in full force and effect and each is hereby ratified and reaffirmed in all respects.  No waiver by the Original Purchasers under the Original Purchase Agreement, Series A Certificate of Designation or the Registration Rights Agreement is granted or intended except as expressly set forth herein, and the Original Purchasers expressly reserve the right to require strict compliance with the terms of each of the Original Purchase Agreement, the Amended Series A Certificate of Designation and the Amended and Restated Registration Rights Agreement in all respects.

 

8. Fees and Legal Fees. The Company hereby agrees to pay to the Original Purchasers all reasonable out of pocket fees and reasonable out of pocket expenses incurred by the Original Purchasers in the drafting, review, negotiation and closing of the documents and transactions contemplated hereby, including the reasonable fees and disbursements of Ropes & Gray, as counsel to the PECM Purchasers and the Hudson Bay Purchaser.

 

9. Binding on Successors, Assigns, Transferees. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and, upon a transfer of Shares or Conversion Shares in accordance with Section 8 of the Original Purchase Agreement, such transferee shall be bound by the terms of this Agreement (including the approvals and waivers granted hereunder) as if originally a party hereto.

 

10. Entire Agreement.  This Agreement and the documents and other agreements among the parties hereto as contemplated by or referred to herein constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersede all prior agreements, negotiations, understandings, representations and statements respecting the subject matter hereof, whether written or oral.

 

11. Miscellaneous.  Sections 12.1 through 12.7 and 12.9 through 12.12 of the Original Purchase Agreement are hereby incorporated herein by reference, mutatis mutandis.

 

[Remainder of Page Intentionally Left Blank]

 

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
  

	
COMPANY

 

	
  

	
HC2 HOLDINGS, INC.

 

	
 

	 

By:/s/ Mesfin Demise

	 

 

	
  

	
Name: Mesfin Demise

 

	
  

	
Title:   Chief Financial Officer

 

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
HUDSON BAY PURCHASER

 

	
  

	
HUDSON BAY ABSOLUTE RETURN CREDIT OPPORTUNITIES MASTER FUND, LTD.

 

	
  

	
By: /s/ Marc Sole                                                     

 

	
  

	
Name: Marc Sole

 

	
  

	
Title:   Authorized Signatory

 

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
PECM PURCHASERS

 

	
  

	
PROVIDENCE DEBT FUND III L.P.

 

	
 

	 

By: /s/ Bryan Martoken

	 

 

	
  

	
Name: Bryan Martoken

 

	
  

	
Title:   CFO – Capital Markets Group

[Signature Page to Consent and Waiver]

  

  

  

 

 

	
  

	
PROVIDENCE DEBT FUND III MASTER (NON-US) L.P.

 

	
 

	 

By: /s/ Bryan Martoken

	 

 

	
  

	
Name: Bryan Martoken

 

	
  

	
Title: CFO – Capital Markets Group

[Signature Page to Consent and Waiver]

  

  

  

 

 

	
  

	
PECM STRATEGIC FUNDING L.P.

 

	
  

	
By:PECM Strategic Funding GP L.P.,

 

	
  

	
its general partner

 

	
  

	
By:PECM Strategic Funding GP Ltd.,

 

	
  

	
its general partner

 

	
 

	 

By: /s/ Bryan Martoken

	 

 

	
  

	
Name: Bryan Martoken

 

	
  

	
Title: CFO – Capital Markets Group

 

[Signature Page to Consent and Waiver]

  

  

  

 

 

	
  

	
BENEFIT STREET PARTNERS SMA LM L.P.

 

	
 

	 

By: /s/ Bryan Martoken

	 

 

	
  

	
Name: Bryan Martoken

 

	
  

	
Title: CFO – Capital Markets Group

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
DG VALUE PARTNERS, LP

 

	
  

	
By: DG Capital Management, LLC, its investment manager

 

	
  

	
By: /s/ Dov Gertzulin

 

	
  

	
  Name: Dov Gertzulin

 

	
  

	
  Title:   Managing Member

 

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
DG VALUE PARTNERS II MASTER FUND, LP

 

	
  

	
By: DG Capital Management, LLC, its investment manager

 

	
  

	
By: /s/ Dov Gertzulin

 

	
  

	
  Name: Dov Gertzulin

 

	
  

	
  Title:   Managing Member

[Signature Page to Consent and Waiver]

  

  

  

 

SPECIAL SITUATIONS, LLC

 

	
  

	
By: DG Capital Management, LLC, its investment manager

 

	
  

	
By: /s/ Dov Gertzulin

 

	
  

	
  Name: Dov Gertzulin

 

	
  

	
  Title:   Managing Member

 

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
SPECIAL SITUATIONS X, LLC

 

	
  

	
By: DG Capital Management, LLC, its investment manager

 

	
  

	
By: /s/ Dov Gertzulin

 

	
  

	
  Name: Dov Gertzulin

 

	
  

	
  Title:   Managing Member

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
DG CREDIT OPPORTUNITIES, LP

 

	
  

	
By: DG Capital Management, LLC, its investment manager

 

	
  

	
By: /s/ Dov Gertzulin

 

	
  

	
  Name: Dov Gertzulin

 

	
  

	
  Title:   Managing Member

[Signature Page to Consent and Waiver]

  

  

  

 

	
  

	
Exhibit A

 

Luxor/DG Purchase Agreement

 

[See attached.]

 

  

  

  

 

	
  

	
Exhibit B

 

Series A-1 Certificate of Designation

 

[See attached.]

 

 

  

  

  

 

	
  

	
Exhibit C

 

Amended and Restated Registration Rights Agreement

 

[See attached.]

 

 

  

  

  

 

	
  

	
Exhibit D

 

Amended Series A Certificate of Designation

 

[See attached.]

 

  

  

  

 

	
  

	
Exhibit E

 

Credit Agreement

 

[See attached.]

  

  

  

 

	
  

	
Exhibit F

 

Amendment to Original Purchase Agreement

 

	
1.  

	
The following defined term shall be inserted in alphabetical order in Section 1 of the Original Purchase Agreement

 

“Luxor Purchasers” means each of Luxor Capital Partners, LP; Luxor Capital Partners Offshore Master Fund, LP and Luxor Wavefront, LP.”

 

“September SPA” means that certain Securities Purchase Agreement, dated as of September 22, 2014, by and among the Luxor Purchasers, DG Value Partners, LP, DG Value Partners II Master Fund, LP and DG Credit Opportunities, LP.  and the Company, as amended from time to time.”

 

	
2.  

	
The following defined term in Section 1 of the Original Purchase Agreement is hereby amended and restated in its entirety to read as follows:

 

“Participation Rights Fraction” shall mean, with respect to a Purchaser, a fraction, the numerator of which is the number of shares of Common Stock held by such Purchaser and its Affiliates in the aggregate on an as converted basis, as of such date, and the denominator of which is the number of shares of Common Stock then outstanding (assuming all Preferred Stock and shares of Series A-1 Convertible Participating Preferred Stock, par value $0.001 per share, of the Company is converted to Common Stock), as of such date”

 

	
3.  

	
The last sentence of the lead-in of Section 5.5 of the Original Purchase Agreement is hereby amended and restated in its entirety to read as follows:

 

“A Purchaser shall be entitled to apportion or assign the right of first offer to purchase any Additional Preferred Securities hereby granted to it (the “Right of First Offer”) in such proportions as it deems appropriate, among itself, its Affiliates and to any other Purchaser or Luxor Purchaser.”

 

	
4.  

	
Section 5.5(b) of the Original Purchase Agreement is hereby amended and restated in its entirety to read as follows:

 

“By notification to the Company within five (5) days after the Offer Notice is given, each Purchaser may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such Additional Preferred Securities which equals the proportion that the Common Stock then held by such Purchaser (along with its Affiliates (provided that no Affiliates’ interest is counted more than once)) on an as converted basis bears to the total Common Stock then held by (x) the Purchasers (along with their Affiliates) and (y) the Luxor Purchasers (along with their Affiliates), in each case on an as converted basis (or such higher amount as has been assigned to such Purchaser by any other Purchaser in accordance with Section 5.5 hereof or by the Luxor Purchasers in accordance with the terms of the September SPA). At the expiration of such five (5) day period, the Company shall promptly notify each Purchaser that elects to purchase or acquire all the shares available to it (together with any Luxor Purchaser that elects to purchase or acquire all the shares available to it under the September SPA, each, a “Fully Exercising Investor”) of any other Purchaser’s failure to do likewise and of any Luxor Purchaser’s failure to do likewise under the September APA. During the five (5) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the Additional Preferred Securities for which the Purchasers and the Luxor Purchasers (under the September SPA) were entitled to subscribe but that were not subscribed for by the Purchasers or Luxor Purchasers (under the September SPA) which is equal to the proportion that the Common Stock issued and held by such Purchaser (along with its Affiliates (provided that no Affiliates’ interest is counted more than once)) on an as converted basis bears to the Common Stock issued and held (on an as converted basis) by all the other Fully Exercising Purchasers who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Subsection 5.5(b) shall occur within the later of ninety days of the date that the Offer Notice is given and the date of initial sale of Additional Preferred Securities pursuant to Subsection 5.5(c).”Exhibit 4.1 - Supplemental Indenture Agreement

Southern Indiana Gas and Electric Company

with

Deutsche Bank Trust Company Americas, as Trustee
_______________
Supplemental Indenture
Relating to the
First Mortgage Bonds
Series 2014A due 2044
Series 2014B due 2025

Dated as of September 1, 2014

    

                            1

Supplemental Indenture, dated as of September 1, 2014 (this “Supplemental Indenture”), between Southern Indiana Gas and Electric Company, a corporation organized and existing under the laws of the State of Indiana (hereinafter called the “Company”), party of the first part, and Deutsche Bank Trust Company Americas, a corporation organized and existing under the laws of the State of New York, formerly known as Bankers Trust Company, as Trustee under the Mortgage hereinafter referred to, party of the second part.
Whereas, the Company heretofore executed and delivered to Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as trustee (hereinafter called the “Trustee”), a certain Indenture of Mortgage and Deed of Trust dated as of April 1, 1932, to secure an issue of bonds of the Company, issued and to be issued in series, from time to time, in the manner and subject to the conditions set forth in the said Indenture, and the said Indenture has been amended and supplemented by Supplemental Indentures dated as of August 31, 1936, October 1, 1937, March 22, 1939, July 1, 1948, June 1, 1949, October 1, 1949, January 1, 1951, April 1, 1954, March 1, 1957, October 1, 1965, September 1, 1966, August 1, 1968, May 1, 1970, August 1, 1971, April 1, 1972, October 1, 1973, April 1, 1975, January 15, 1977, April 1, 1978, June 4, 1981, January 20, 1983, November 1, 1983, March 1, 1984, June 1, 1984, November 1, 1984, July 1, 1985, November 1, 1985, June 1, 1986, November 15, 1986, January 15, 1987, December 15, 1987, December 13, 1990, April 1, 1993, May 1, 1993, June 1, 1993, July 1, 1999, March 1, 2000, August 1, 2004, October 1, 2004, April 1, 2005, March 1, 2006, December 1, 2007, August 1, 2009 and April 1, 2013, which Indenture as so amended and supplemented is hereinafter referred to as the “Mortgage” and as further supplemented by this Supplemental Indenture is hereinafter referred to as the “Indenture”; and
Whereas, Section 108 of the Mortgage provides that the Company and the Trustee may, from time to time, enter into such indentures supplemental to the Mortgage as shall be deemed by them necessary or desirable; and
Whereas, the Company has entered into a (i)Loan Agreement dated as of September 1, 2014 (the “2014A Loan Agreement” or “2014A Agreement”), with the Indiana Finance Authority (the “Issuer”), pursuant to which the Issuer issued $22,300,000 aggregate principal amount of its Environmental Improvement Refunding Revenue Bonds, Series 2014A (Southern Indiana Gas and Electric Company Project) (the “Issuer 2014A Bonds”), pursuant to and in accordance with the terms of an Indenture dated as of September 1, 2014 (the “2014A Issuer Indenture”), between the Issuer and Wells Fargo Bank, National Association, as trustee (the “Issuer Trustee”), in order to provide funds to loan to the Company for the purpose of refunding certain outstanding revenue bonds issued by another Indiana issuer at the request of and for the benefit of the Company and (ii) a Loan Agreement dated as of September 1, 2014 (the “2014B Loan Agreement” or the “2014B Agreement”), with the Issuer, pursuant to which the Issuer issued $41,275,000 aggregate principal amount of its Environmental Improvement Refunding Revenue Bonds, Series 2014B (Southern Indiana Gas and Electric Company Project) (the “Issuer 2014B Bonds” and together with the Issuer 2014A Bonds, the “Issuer Bonds”), pursuant to and in accordance with the terms of an Indenture dated as of September 1, 2014 (the “2014B Issuer Indenture”), between the Issuer and the Issuer Trustee in order to provide funds to loan to the Company for the purpose of refunding certain outstanding revenue bonds issued by the Issuer and another Indiana issuer at the request of and for the benefit of the Company; and
Whereas, the Company has determined that it would be in its best interests, given the current status of the financial markets, to initially evidence and secure the Company’s obligations relating to the (i) Issuer 2014A Bonds under the 2014A Loan Agreement with the Company’s first mortgage bonds and (ii) Issuer 2014B Bonds under the 2014B Loan Agreement with the Company’s first mortgage bonds; and

                            2

Whereas, the Company by appropriate company action in conformity with the terms of the Indenture has duly determined to create (i) a new series of bonds which shall be issued under the Indenture in an aggregate principal amount of $22,300,000 and be designated as “First Mortgage Bonds, Series 2014A due 2044” (hereinafter sometimes referred to as “Bonds of the Fifty-first Series”), the bonds of which series are to bear interest at the rate from time to time borne by the Issuer 2014A Bonds and are subject to certain optional and mandatory redemption rights and obligations set forth herein and (ii) a new series of bonds which shall be issued under the Indenture in an aggregate principal amount of $41,275,000 and be designated as “First Mortgage Bonds, Series 2014B due 2025” (hereinafter sometimes referred to as “Bonds of the Fifty‐second Series”), the bonds of which series are to bear interest at the rate from time to time borne by the Issuer 2014B Bonds and are subject to certain optional and mandatory redemption rights and obligations set forth herein; and
Whereas, all things necessary to make the Bonds of the Fifty-first Series and the Bonds of the Fifty-second Series when authenticated by the Trustee and issued as in the Indenture provided, the valid, binding and legal obligations of the Company, entitled in all respects to the security of the Indenture, have been done and performed, and the creation, execution and delivery of this Supplemental Indenture has in all respects been duly authorized; and
 Whereas, the Company and the Trustee deem it advisable to enter into this Supplemental Indenture for the purposes above stated and for the purpose of describing the Bonds of the Fifty-first Series and the Bonds of the Fifty-second Series and of providing the terms and conditions of redemption of each such Series;
Now, Therefore, This Supplemental Indenture Witnesseth:  That Southern Indiana Gas and Electric Company, in consideration of the premises and of one dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and of the purchase and acceptance of the bonds issued or to be issued hereunder by the holders or registered owners thereof, and in order to secure the payment of the principal, premium, if any, and interest of all bonds at any time issued and outstanding under the Indenture, according to their tenor and effect, and the performance of all of the provisions hereof and of said bonds, hath granted, bargained, sold, released, conveyed, assigned, transferred, pledged, set over and confirmed and by these presents doth grant, bargain, sell, release, convey, assign, transfer, pledge, set over and confirm unto Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as Trustee, and to its successor or successors in said trust, and to its and their assigns forever, all the properties, real, personal and mixed, tangible and intangible of the character described in the granting clauses of the aforesaid Indenture of Mortgage and Deed of Trust dated as of April 1, 1932 or in any indenture supplemental thereto acquired by the Company on or after the date of the execution and delivery of said Indenture of Mortgage and Deed of Trust (except any in said Indenture of Mortgage and Deed of Trust or in any indenture supplemental thereto expressly excepted) and does hereby confirm that the Company will not cause or consent to a partition, either voluntary or through legal proceedings, of property, whether herein described or heretofore or hereafter acquired, in which its ownership shall be as a tenant in common, except as permitted by and in conformity with the provisions of the Indenture and particularly of Article X thereof.
Together with all and singular the tenements, hereditaments and appurtenances belonging or in any wise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Article X of the Indenture), the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title, interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof.

                            3

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

                            4

Part IA
Form of Bonds of the Fifty-first Series
The form of the definitive registered bond without coupons of the Bonds of the Fifty-first Series and the Trustee’s certificate of authentication to be borne by such bonds are to be substantially in the following forms, respectively:
“[form of fully registered Bond of the Fifty-first Series]
[form of face of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2014A due 2044
No. _____                                $22,300,000
Southern Indiana Gas and Electric Company, a corporation of the State of Indiana (hereinafter called the “Company”), for value received, hereby promises to pay to Wells Fargo Bank, National Association, as trustee under the Issuer Indenture hereinafter referred to, or registered assigns Twenty-Two Million Three Hundred Thousand dollars, on September 1, 2044 at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered owner hereof interest thereon at the same rate or rates of interest as the Environmental Improvement Refunding Revenue Bonds, Series 2014A (Southern Indiana Gas and Electric Company Project) (the “Issuer Bonds”) due September 1, 2044 and issued by the Indiana Finance Authority (the “Issuer”), under the Indenture dated as of September 1, 2014, as the same may be supplemented and amended from time to time in accordance with its terms (the “Issuer Indenture”), between the Issuer and Wells Fargo Bank, National Association, as trustee (the “Issuer Trustee”) (as determined in accordance with the Issuer Indenture); provided, however, that in no event shall the rate of interest borne by the bonds of this series exceed 12% per annum.  Such interest, in like coin or currency, payable at said office or agency on the same dates as interest on the Issuer Bonds, or if this bond shall be duly called for redemption, until the redemption date, or if the Company shall default in the payment of the principal hereof, until the Company’s obligation to pay principal shall be discharged as provided in the hereinafter defined Mortgage, is paid until the principal sum is paid in full discharge under the Mortgage.
The Company has agreed to pay the principal of, premium, if any, and interest on the Issuer Bonds pursuant to a Loan Agreement dated as of September 1, 2014, as the same may be supplemented and amended from time to time in 

                            5

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

                            6

In Witness Whereof, Southern Indiana Gas and Electric Company has caused this bond to be signed in its name by its President or a Vice President, by his signature or a facsimile thereof, and a facsimile of its corporate seal to be imprinted hereon, attested by its Secretary or an Assistant Secretary, by his signature or a facsimile thereof.
Dated: September __, 2014

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

                            7

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

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

		
	By:
	____________________________________

Authorized Officer
[form of reverse of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2014A due 2044
This bond is one of an issue of First Mortgage Bonds of the Company, issuable in series, and is one of the series designated in the title hereof, all issued and to be issued under and equally secured (except as to any sinking fund established in accordance with the provisions of the Mortgage hereinafter mentioned for the bonds of any particular series) by an Indenture of Mortgage and Deed of Trust, dated as of April 1, 1932, executed by the Company to Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as Trustee (the “Trustee”), as amended and supplemented by indentures supplemental thereto (herein referred to as the “Mortgage”), to which reference is made for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds are secured.
The bonds of this series are issued and to be issued in order to evidence and secure a loan made by the Issuer to the Company pursuant to the Agreement.  In order to provide moneys to fund such loan, the Issuer has issued the Issuer Bonds under and pursuant to the Issuer Indenture.  Payments made by the Company of principal, premium, if any, and interest on the bonds of this series are intended to be sufficient to permit payments of principal, premium, if any, and interest to be made on the Issuer Bonds.  Upon certain terms and conditions, moneys held under and pursuant to the Issuer Indenture, including moneys so held from the proceeds of the sale of the Issuer Bonds or earnings on the investment of such proceeds, or redemption of the Issuer Bonds shall be credited to or used for the payment of the bonds of this series and to the extent so credited or used shall satisfy a like amount otherwise due hereunder.
The bonds of this series are subject to optional and mandatory redemption, in whole or in part, as the case may be, on each date that Issuer Bonds are to be redeemed.  The principal amount of the bonds of this series to be redeemed 

                            8

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

                            9

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

                            10

Part IB
Form of Bonds of the Fifty-second Series
The form of the definitive registered bond without coupons of the Bonds of the Fifty-second Series and the Trustee’s certificate of authentication to be borne by such bonds are to be substantially in the following forms, respectively:
“[form of fully registered Bond of the Fifty-second Series]
[form of face of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2014B due 2025
No. _____                                $41,275,000
Southern Indiana Gas and Electric Company, a corporation of the State of Indiana (hereinafter called the “Company”), for value received, hereby promises to pay to Wells Fargo Bank, National Association, as trustee under the Issuer Indenture hereinafter referred to, or registered assigns Forty-one Million Two Hundred Seventy Five  Thousand dollars, on July 1, 2025 at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered owner hereof interest thereon at the same rate or rates of interest as the Environmental Improvement Refunding Revenue Bonds, Series 2014B (Southern Indiana Gas and Electric Company Projects) (the “Issuer Bonds”) due July 1, 2025 and issued by the Indiana Finance Authority (the “Issuer”), under the Indenture dated as of September 1, 2014, as the same may be supplemented and amended in accordance with its terms (the “Issuer Indenture”), between the Issuer and Wells Fargo Bank, National Association, as trustee (the “Issuer Trustee”) (as determined in accordance with the Issuer Indenture); provided, however, that in no event shall the rate of interest borne by the bonds of this series exceed 12% per annum.  Such interest, in like coin or currency, payable at said office or agency on the same dates as interest on the Issuer Bonds, or if this bond shall be duly called for redemption, until the redemption date, or if the Company shall default in the payment of the principal hereof, until the Company’s obligation to pay principal shall be discharged as provided in the hereinafter defined Mortgage, is paid until the principal sum is paid in full discharge under the Mortgage.
The Company has agreed to pay the principal of, premium, if any, and interest on the Issuer Bonds pursuant to a Loan Agreement dated as of September 1, 2014, as the same may be supplemented and amended in accordance with its 

                            11

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

                            12

In Witness Whereof, Southern Indiana Gas and Electric Company has caused this bond to be signed in its name by its President or a Vice President, by his signature or a facsimile thereof, and a facsimile of its corporate seal to be imprinted hereon, attested by its Secretary or an Assistant Secretary, by his signature or a facsimile thereof.
Dated: September __, 2014

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

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

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

		
	By:
	_____________________________________

Authorized Officer

                            13

[form of reverse of bond]
Southern Indiana Gas and Electric Company
First Mortgage Bond, Series 2014B due 2025
This bond is one of an issue of First Mortgage Bonds of the Company, issuable in series, and is one of the series designated in the title hereof, all issued and to be issued under and equally secured (except as to any sinking fund established in accordance with the provisions of the Mortgage hereinafter mentioned for the bonds of any particular series) by an Indenture of Mortgage and Deed of Trust, dated as of April 1, 1932, executed by the Company to Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, as Trustee (the “Trustee”), as amended and supplemented by indentures supplemental thereto (herein referred to as the “Mortgage”), to which reference is made for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof and the terms and conditions upon which the bonds are secured.
The bonds of this series are issued and to be issued in order to evidence and secure a loan made by the Issuer to the Company pursuant to the Agreement.  In order to provide moneys to fund such loan, the Issuer has issued the Issuer Bonds under and pursuant to the Issuer Indenture.  Payments made by the Company of principal, premium, if any, and interest on the bonds of this series are intended to be sufficient to permit payments of principal, premium, if any, and interest to be made on the Issuer Bonds.  Upon certain terms and conditions, moneys held under and pursuant to the Issuer Indenture, including moneys so held from the proceeds of the sale of the Issuer Bonds or earnings on the investment of such proceeds, or redemption of the Issuer Bonds shall be credited to or used for the payment of the bonds of this series and to the extent so credited or used shall satisfy a like amount otherwise due hereunder.
The bonds of this series are subject to optional and mandatory redemption, in whole or in part, as the case may be, on each date that Issuer Bonds are to be redeemed.  The principal amount of the bonds of this series to be redeemed on any such date shall be equal to the principal amount of Issuer Bonds called for redemption on that date.  All redemptions of bonds of this series shall be at the redemption prices that correspond to the redemption prices for the Issuer Bonds.
If and whenever the Trustee or the Company is notified that an event of default has occurred and is continuing under Section 7.1(D) of the Issuer Indenture or Section 6.1(a) or Section 6.1(b) of the Agreement, and provided that the principal of all Issuer Bonds then outstanding and the interest thereon shall have been declared immediately due and payable, then not later than two business days following the occurrence of the foregoing events, the Company shall, upon not less than 30 days’ and not more than 45 days’ prior written 

                            14

notice given in the manner provided in the Mortgage, call for redemption on a redemption date selected by it not later than 45 days following the date of such notice, all of the bonds of this series then outstanding, and shall on such redemption date redeem the same at a price equal to 100% of the principal amount thereof together with accrued interest thereon to the redemption date, except that such requirement or redemption shall be deemed to be waived if, prior to the date fixed for such redemption of the bonds of this series, such event of default is waived or cured.
In case a completed default, as defined in the Mortgage, shall occur, the principal of this bond and all other bonds of the Company at any such time outstanding under the Mortgage may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Mortgage.  The Mortgage provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the bonds entitled to vote then outstanding.
This bond, subject to the limitations with regard thereto contained in the Issuer Indenture, is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y., upon surrender and cancellation of this bond, and thereupon, a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange thereof as provided in the Mortgage, and upon payment, if the Company shall require it, of the charges therein prescribed.  The Company and the Trustee may deem and treat the person in whose name this bond is registered as the absolute owner for the purpose of receiving payment of or on account of the principal and interest due hereon and for all other purposes.
As provided in Section 5.9 of the Issuer Indenture, from and after the Release Date (as defined in the Issuer Indenture), the obligations of the Company with respect to this bond shall be deemed to be satisfied and discharged, this bond shall cease to secure in any manner the Company’s obligations under the Agreement with respect to the payment of any Issuer Bonds outstanding under the Issuer Indenture, and, pursuant to Section 5.9 of the Issuer Indenture, the Issuer Trustee shall forthwith deliver this bond to the Trustee for cancellation.
The bonds of this series are issuable as registered bonds without coupons in denominations of $1,000 and authorized multiples thereof.  In the manner and upon payment of the charges prescribed in the Mortgage, registered bonds without coupons of this series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof, for cancellation, to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.
No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the 

                            15

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

                            16

Part IIA
Description of Bonds of the Fifty-first Series
Bonds of the Fifty-first Series shall mature, subject to prior redemption, on the date set forth in the form of bond relating hereto hereinbefore set forth, and shall bear interest at the rate from time to time borne by the Issuer 2014A Bonds; provided, however, that in no event shall the rate of interest borne by the Bonds of the Fifty-first Series exceed 12% per annum.  Such interest shall be payable on the same dates as interest on the Issuer 2014A Bonds, and all bonds of said series shall be designated as hereinbefore in the fifth Whereas clause set forth.  Principal of, premium, if any, and interest on said bonds shall be payable, to the extent specified in the form of bond hereinabove set forth, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y.  Definitive bonds of said series may be issued, originally or otherwise, only as registered bonds without coupons; and they and the Trustee’s certificate of authentication shall be substantially in the forms hereinbefore recited, respectively.  Definitive registered Bonds of the Fifty-first Series may be issued in the denomination of $1,000 and in such other denominations (in multiples of $1,000) as the Board of Directors of the Company shall approve, and execution and delivery to the Trustee for authentication shall be conclusive evidence of such approval.  In the manner and upon payment of the charges prescribed in the Indenture, registered bonds without coupons of said series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof for cancellation to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.  However, notwithstanding the provisions of Section 12 of the Indenture, no charge shall be made upon any transfer or exchange of bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company.  The form of the temporary bonds of said series shall be in substantially the form of the form of registered bond hereinbefore recited with such appropriate changes therein as are required on account of the temporary nature thereof.  Said temporary bonds of said series shall be in registered form without coupons, registrable as to principal, and shall be exchangeable for definitive bonds of said series when prepared.
The person in whose name any registered bond without coupons of the Fifty-first Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such bond is registered either at the close of business on the day preceding the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided.  A subsequent record date may be established by or on behalf of the Company by notice mailed to the holders of bonds not less than ten days preceding such record date, which record date shall be not more than 30 days prior to the subsequent interest payment date.  The term “record date” as used in this Section with respect to any regular interest payment date shall mean the Interest Payment Date (as defined in the 2014A Issuer Indenture).
Except as provided in this Section, every registered bond without coupons of the Fifty-first Series shall be dated and shall bear interest as provided in Section 10 of the Indenture; provided, however, that so 

                            17

long as there is no existing default in the payment of interest on the bonds, the holder of any bond authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; and provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such bond shall bear interest from the interest payment date to which interest has been paid.
Upon any payment of the principal of, premium, if any, and interest on, all or any portion of the Issuer 2014A Bonds, whether at maturity or otherwise or upon provision for the payment thereof having been made in accordance with Section 10.1 of the 2014A Issuer Indenture, the Bonds of the Fifty-first Series in a principal amount equal to the principal amount of such Issuer 2014A Bonds shall, to the extent of such payment of principal, premium, if any, and interest, be deemed paid and the obligation of the Company thereunder to make such payment shall be discharged to such extent and, in the case of the payment of principal, such Bonds of the Fifty-first Series shall be surrendered to the Trustee for cancellation as provided in and subject to the terms of Section 10.1 of the 2014A Issuer Indenture.  The Trustee may at any time and all times conclusively assume that the obligation of the Company under the 2014A Agreement to make payments with respect to the principal of, premium, if any, and interest on the Issuer 2014A Bonds, so far as such payments at the time have become due, has been fully satisfied and discharged pursuant to the foregoing sentence unless and until the Trustee shall have received a written notice from the Issuer Trustee signed by one of its officers stating (i) that timely payment of principal of, premium, if any, or interest on, the Issuer 2014A Bonds has not been made, (ii) that the Company is in arrears as to the payments required to be made by it to the Issuer Trustee pursuant to the 2014A Agreement, and (iii) the amount of the arrearage.

                            18

Part IIB

Description of Bonds of the Fifty-second Series
Bonds of the Fifty-second Series shall mature, subject to prior redemption, on the date set forth in the form of bond relating hereto hereinbefore set forth, and shall bear interest at the rate from time to time borne by the Issuer 2014B Bonds; provided, however, that in no event shall the rate of interest borne by the Bonds of the Fifty-second Series exceed 12% per annum.  Such interest shall be payable on the same dates as interest on the Issuer 2014B Bonds, and all bonds of said series shall be designated as hereinbefore in the fifth Whereas clause set forth.  Principal of, premium, if any, and interest on said bonds shall be payable, to the extent specified in the form of bond hereinabove set forth, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, at the office or agency of the Company in the Borough of Manhattan, The City of New York, N.Y.  Definitive bonds of said series may be issued, originally or otherwise, only as registered bonds without coupons; and they and the Trustee’s certificate of authentication shall be substantially in the forms hereinbefore recited, respectively.  Definitive registered Bonds of the Fifty-second Series may be issued in the denomination of $1,000 and in such other denominations (in multiples of $1,000) as the Board of Directors of the Company shall approve, and execution and delivery to the Trustee for authentication shall be conclusive evidence of such approval.  In the manner and upon payment of the charges prescribed in the Indenture, registered bonds without coupons of said series may be exchanged for a like aggregate principal amount of fully registered bonds without coupons of other authorized denominations of the same series, upon presentation and surrender thereof for cancellation to the Trustee at its principal corporate trust office in the Borough of Manhattan, The City of New York, N.Y.  However, notwithstanding the provisions of Section 12 of the Indenture, no charge shall be made upon any transfer or exchange of bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company.  The form of the temporary bonds of said series shall be in substantially the form of the form of registered bond hereinbefore recited with such appropriate changes therein as are required on account of the temporary nature thereof.  Said temporary bonds of said series shall be in registered form without coupons, registrable as to principal, and shall be exchangeable for definitive bonds of said series when prepared.
The person in whose name any registered bond without coupons of the Fifty-second Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such bond is registered either at the close of business on the day preceding the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided.  A subsequent record date may be established by or on behalf of the Company by notice mailed to the holders of bonds not less than ten days preceding such record date, which record date shall be not more than 30 days prior to the subsequent interest payment date.  The term “record date” as used in this Section with respect to any regular interest payment date shall mean the Interest Payment Date (as defined in the 2014B Issuer Indenture).
Except as provided in this Section, every registered bond without coupons of the Fifty-second Series shall be dated and shall bear interest as provided in Section 10 of the Indenture; provided, however, that so long as there is no existing default in the payment of interest on the bonds, the holder of any bond authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall 

                            19

not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; and provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such bond shall bear interest from the interest payment date to which interest has been paid.
Upon any payment of the principal of, premium, if any, and interest on, all or any portion of the Issuer 2014B Bonds, whether at maturity or otherwise or upon provision for the payment thereof having been made in accordance with Section 10.1 of the 2014B Issuer Indenture, the Bonds of the Fifty-second Series in a principal amount equal to the principal amount of such Issuer 2014B Bonds shall, to the extent of such payment of principal, premium, if any, and interest, be deemed paid and the obligation of the Company thereunder to make such payment shall be discharged to such extent and, in the case of the payment of principal, such Bonds of the Fifty-second Series shall be surrendered to the Trustee for cancellation as provided in and subject to the terms of Section 10.1 of the 2014B Issuer Indenture.  The Trustee may at any time and all times conclusively assume that the obligation of the Company under the 2014B Agreement to make payments with respect to the principal of, premium, if any, and interest on the Issuer 2014B Bonds, so far as such payments at the time have become due, has been fully satisfied and discharged pursuant to the foregoing sentence unless and until the Trustee shall have received a written notice from the Issuer Trustee signed by one of its officers stating (i) that timely payment of principal of, premium, if any, or interest on, the Issuer 2014B Bonds has not been made, (ii) that the Company is in arrears as to the payments required to be made by it to the Issuer Trustee pursuant to the 2014B Agreement, and (iii) the amount of the arrearage.

                            20

Part IIIA

Redemption Provisions
Section 1.    The Bonds of the Fifty-first Series shall be subject to redemption by the Company prior to maturity in the events and in the manner and at the redemption prices set forth in the form of Bond contained in Part IA hereof and not otherwise.
Section 2.    In the manner provided by the provisions of Article IX of the Indenture, notice of redemption shall be mailed not less than 30 days and not more than 45 days prior to the date of redemption, to the registered owner of the Bonds of the Fifty-first Series, at the address thereof as the same shall appear on the transfer register of the Company; provided, however, that the owners of all of the Bonds of the Fifty-first Series may agree in writing with the Company to a shorter notice period with respect to their respective series, and such agreement, if filed with the Trustee, shall be binding on the Company.
Part IIIB
Redemption Provisions
Section 1.    The Bonds of the Fifty-second Series shall be subject to redemption by the Company prior to maturity in the events and in the manner and at the redemption prices set forth in the form of Bond contained in Part IB hereof and not otherwise.
Section 2.    In the manner provided by the provisions of Article IX of the Indenture, notice of redemption shall be mailed not less than 30 days and not more than 45 days prior to the date of redemption, to the registered owner of the Bonds of the Fifty-second Series, at the address thereof as the same shall appear on the transfer register of the Company; provided, however, that the owners of all of the Bonds of the Fifty-second Series may agree in writing with the Company to a shorter notice period with respect to their respective series, and such agreement, if filed with the Trustee, shall be binding on the Company.
Part IV
Miscellaneous
Section 1.    The Company covenants that the provisions of Section 36A of the Indenture and of Section 1.02 of the Supplemental Indenture dated as of July 1, 1948, which are to remain in effect so long as any bonds of the series referred to in said Section shall be outstanding under the Indenture, shall remain in full force and effect so long as any Bonds of the Fifty-first Series or Bonds of the Fifty-second Series shall be outstanding under the Indenture.
Section 2.    Except as herein otherwise expressly provided, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture, other than as set forth in the Mortgage.  The Trustee shall not be responsible for the recitals herein or in the bonds (except the Trustee’s certificate of authentication), all of which are made by the Company solely.

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

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

By:      /s/ Robert L. Goocher
Robert L. Goocher
Vice President and Treasurer
Attest:

/s/ Robert E. Heidorn
Robert E. Heidorn
Senior Vice President, General Counsel and Assistant Secretary

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

By  /s/  Jeffrey Schoenfeld
Jeffrey Schoenfeld
Assistant Vice President
By   /s/  Debra A. Schwalb
Debra A. Schwalb
Vice President
Attest:

/s/  Kenneth R. Ring 
Kenneth R. Ring
Vice President

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State of Indiana        )
)  SS
County of Vanderburgh    )

On this 15th day of September, 2014, before me, the undersigned, a notary public in and for the county and state aforesaid, personally came Robert L. Goocher, to me known, who being by me duly sworn, did depose and say that he resides at 300 Main Street, Unit 4E, Evansville, Indiana 47708; that he is Vice President and Treasurer of Southern Indiana Gas and Electric Company, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of the said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation and that he signed his name thereto by like order; and the said Robert L. Goocher acknowledged the execution of the foregoing instrument on behalf of the said corporation as the voluntary act and deed of the said corporation for the uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and seal the day and year first above written.

/s/  Mary Etta Smith
Notary Public

(Seal)

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State of New Jersey    )
)  SS
County of Hudson    )

On this 16th day of September, 2014, before me, the undersigned, a notary public in and for the county and state aforesaid, personally came Debra A. Schwalb, to me known, who being by me duly sworn, did depose and say that she resides at 100 Plaza One, Jersey City, NJ  07311 and personally came Jeffrey Schoenfeld, to me known, who being by me duly sworn, did depose and say that he resides at 100 Plaza One, Jersey City, NJ 07311; that each is, respectively, a Vice President and an Assistant Vice President of Deutsche Bank National Trust Company, and duly authorized to sign on behalf of Deutsche Bank Trust Company Americas, one of the corporations described in and which executed the foregoing instrument; that each knows the seal of the said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation and that each signed his or her name thereto by like order; and the said Vice President and the said Assistant Vice President acknowledged the execution of the foregoing instrument on behalf of the said corporation as the voluntary act and deed of the said corporation for the uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and seal the day and year first above written.

/s/  Robyn Gaughan
Notary Public

(Seal)

My Commission Expires:  

My County of Residence is:    Bergen
_________________________

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

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

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