-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CSv5VmMdvG09C2ZL4sKKXYnjLu3B2MNh7lSmTYe608jWhKm6pzfI7ZGILB2F2boG xbGVqESQ0BmiWC9j9anE7A== 0001005477-99-003045.txt : 19990705 0001005477-99-003045.hdr.sgml : 19990705 ACCESSION NUMBER: 0001005477-99-003045 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19990702 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN INDIANA GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000092195 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 350672570 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-82173 FILM NUMBER: 99658592 BUSINESS ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741-0001 BUSINESS PHONE: 8124655300 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1999 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Exact name of registrant as specified in its charter) Indiana 35-0672570 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 20 N.W. Fourth Street Evansville, Indiana 47741-0001 (812) 465-5300 (address, including ZIP code, and telephone number, including area code, of registrant's principal executive offices) TIMOTHY L. BURKE, Secretary and Treasurer Southern Indiana Gas and Electric Company 20 N.W. Fourth Street Evansville, Indiana 47741-0001 (812) 465-4136 (name, address, including ZIP code, and telephone number, including area code, of agent for service) ---------------------- Copies to: John H. Byington, Esq. Vincent Pagano, Esq. Winthrop, Stimson, Putnam & Roberts Simpson Thacher & Bartlett One Battery Park Plaza 425 Lexington Avenue New York, New York 10004-1490 New York, NY 10017-3954 Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective Registration Statement for the same offering. |_| If this Form is post-effective amendment filed pursuant to Rule 462(e) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. |_| If delivery of the Prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| CALCULATION OF REGISTRATION FEE ================================================================================ Proposed Proposed maximum maximum Amount to offering aggregate Amount of Title of each class of be price per offering Registration securities to be registered registered unit (1) price (1) Fee - -------------------------------------------------------------------------------- Senior Notes $80,000,000 $80,000,000 $22,240 - -------------------------------------------------------------------------------- First Mortgage Bonds $80,000,000 (2) (2) (2) ================================================================================ (1) Estimated solely for the purpose of calculating the registration fee. (2) First Mortgage Bonds will not be issued other than in conjunction with and as security for a like principal amount of Senior Notes. Consequently, pursuant to Rule 457(n) under the Securities Act of 1933, no additional fee is being paid ---------------------- The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ SUBJECT TO COMPLETION, DATED JULY 2, 1999 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. Prospectus $80,000,000 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY Senior Notes Southern Indiana Gas and Electric Company 20 N.W. Fourth Street Evansville, Indiana 47741-0001 (812) 465-5300 TERMS OF SALE The terms for each Senior Note that are not specified in the Prospectus will be included in a Prospectus Supplement. We may sell the Senior Notes at one or more times. Initially, we will issue our First Mortgage Bonds to the Note Trustee to secure payments due on the Senior Notes. When the aggregate principal amount of our outstanding First Mortgage Bonds (other than Bonds securing these or similar Notes) does not exceed the greater of five percent of our Net Tangible Assets or five percent of our Capitalization, the Senior Notes will no longer be secured by First Mortgage Bonds. The date that the Senior Notes are no longer secured by First Mortgage Bonds is called the Release Date. We urge you to carefully read this Prospectus and the Prospectus Supplement, which will describe the specific terms of the offering, before you make your investment decision. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this Prospectus is , 1999. TABLE OF CONTENTS WHERE YOU CAN FIND MORE INFORMATION ...........................................2 THE COMPANY ...................................................................2 RECENT DEVELOPMENTS ...........................................................2 PROSPECTUS SUPPLEMENT .........................................................3 USE OF PROCEEDS ...............................................................3 CERTAIN CONSOLIDATED FINANCIAL INFORMATION ....................................3 DESCRIPTION OF SENIOR NOTES ...................................................4 GENERAL .....................................................................4 SECURITY ....................................................................6 RELEASE DATE ................................................................6 LIMITATION OF LIENS .........................................................7 LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS .............................9 FORM, EXCHANGE AND TRANSFER ................................................10 PAYMENT AND PAYING AGENTS ..................................................10 REDEMPTION .................................................................11 CONSOLIDATION, MERGER AND SALE OF ASSETS ...................................11 EVENTS OF DEFAULT ..........................................................12 MODIFICATIONS AND WAIVER ...................................................14 DEFEASANCE .................................................................17 RESIGNATION OF SENIOR NOTE TRUSTEE .........................................17 MISCELLANEOUS ..............................................................17 GLOBAL SECURITIES ............................................................18 DESCRIPTION OF FIRST MORTGAGE BONDS ..........................................19 GENERAL ....................................................................19 INTEREST, MATURITY, REDEMPTION AND PAYMENT .................................19 IMPROVEMENT AND SINKING FUND REQUIREMENT ...................................19 MAINTENANCE AND REPLACEMENT REQUIREMENTS ...................................19 PRIORITY AND SECURITY ......................................................20 ISSUANCE OF ADDITIONAL BONDS ...............................................20 LIMITATION ON DIVIDENDS ....................................................21 MODIFICATION OF THE MORTGAGE ...............................................21 REGARDING DEFAULT ..........................................................22 REGARDING THE TRUSTEE ......................................................22 RELEASE AND SUBSTITUTION OF PROPERTY .......................................22 EVIDENCE TO BE FURNISHED TO THE TRUSTEE UNDER THE MORTGAGE .................23 PLAN OF DISTRIBUTION .........................................................23 EXPERTS ......................................................................24 LEGAL OPINIONS ...............................................................24 i WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements, and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms at the following locations: Room 1024, 450 Fifth Street, NW, Washington, D.C. 20549; Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300, New York, N.Y. 10048. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC web site at http://www.sec.gov. The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all the Senior Notes. This Prospectus is part of a registration statement we filed with the SEC. o The Company's Annual Report on Form 10-K for the year ended December 31, 1998. o The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999. You should rely only on the information incorporated by reference or provided in this Prospectus or any supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these Senior Notes in any state where the offer is not permitted. You should not assume that the information in this Prospectus or any supplement is accurate as of any date other than the date on the front of those documents. THE COMPANY The company is a public utility serving ten counties in southwestern Indiana. Retail electric service is supplied to Evansville and 74 other cities, towns and communities, and adjacent rural areas. Wholesale electric service is supplied to an additional eight communities. Gas service is supplied to Evansville and 64 other nearby communities and their environs. At December 31, 1998, the company had 124,340 electric customers and 108,335 gas customers. RECENT DEVELOPMENTS On June 14, 1999, our parent holding company, SIGCORP, Inc., and Indiana Energy, Inc. announced that they had signed a definitive merger agreement. Indiana Energy, Inc. is a holding company whose chief subsidiary is a regulated Indiana gas utility, Indiana Gas Company, Inc. Subject to the receipt of approval from their respective shareholders and to necessary regulatory approvals, the two holding companies will combine into a new holding company to be named Vectren Corporation. If and when the merger is consummated, Indiana Gas Company, Inc. and we will become separate subsidiaries of Vectren Corporation. Our obligations with respect to the Senior Notes and our First Mortgage Bonds will not change. 2 PROSPECTUS SUPPLEMENT The Prospectus Supplement for each offering of Senior Notes will contain the specific information and terms for that offering. The Prospectus Supplement may also add, update, or change information contained in this Prospectus. It is important for you to consider the information contained in this Prospectus and the Prospectus Supplement in making your investment decision. USE OF PROCEEDS We expect to use the net proceeds from the sale of the Senior Notes for the retirement of short-term debt. SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CERTAIN CONSOLIDATED FINANCIAL INFORMATION (Thousands, except ratios and percentages)
Twelve Months Year Ended December 31,(1) Ended March 31, ---------------------------------------------------- --------------- 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- --------------- Income Summary: (Unaudited) Operating Revenues .. $330,035 $338,698 $372,730 $358,106 $364,666 $370,205 Operating Income .... $ 52,367 $ 53,873 $ 60,429 $ 62,456 $ 62,002 $ 61,369 Net Income .......... $ 41,025 $ 45,918 $ 42,841 $ 45,363 $ 43,542 $ 43,012 Net Income Applicable to Common Stock ..... $ 39,920 $ 44,819 $ 41,744 $ 44,266 $ 42,447 $ 41,922 Ratio of Earnings to Fixed Charges(2) .... 3.57 3.52 4.03 4.43 4.17 4.27
At March 31, 1999(3) ------------------------------------------------ Actual As Adjusted(4) --------------------- ---------------------- Capitalization Summary: Common Stockholder's Equity $324,593 53.0% $324,593 50.1% Preferred Stock ........... 11,090 1.8 11,090 1.7 Redeemable Preferred Stock 7,500 1.2 7,500 1.2 Special Preferred Stock of Subsidiary ................ 692 0.2 692 0.1 Long-Term Debt ............ 169,782 27.7 249,782 38.6 Current Maturities of Long-Term Debt.......... 45,000 7.3 0 0.0 Bonds Subject to Tender.... 53,700 8.8 53,700 8.3 -------- ---- -------- ---- Total Capitalization .... $612,357 100.0% $647,357 100.0% ===================== ====================== - ---------- (1) Derived from audited financial information. (2) "Earnings" for purposes of these calculations have been computed by adding to "income before extraordinary items" all taxes based on income or profits, total interest charges and the estimated interest element of rentals charged to income. "Fixed charges" include total interest charges and the estimated interest element of rentals. (3) Reference is made to the Balance Sheets, the Statements of Capitalization and the Notes to Financial Statements that are contained in the documents incorporated by reference herein for additional details concerning our common stock, preferred stock, redeemable preferred stock and long-term indebtedness, including maturities and interest rates payable on such long-term indebtedness. (4) As adjusted figures include our indebtedness represented by the Senior Notes and the underlying Senior Note First Mortgage Bonds. 3 DESCRIPTION OF SENIOR NOTES GENERAL We will issue one or more new series of Senior Notes under a Senior Note Indenture between us and a Senior Note Trustee whom we will name. The information we are providing you in this Prospectus concerning the Senior Note Indenture and related documents is only a summary of the information provided in those documents. You should consult the Senior Notes themselves, the Senior Note Indenture, any Supplemental Senior Note Indentures and other documents for more complete information on the Senior Notes. These documents appear as exhibits to the Registration Statement, or will appear as exhibits to a Current Report on Form 8-K, which we will file later, and which will be incorporated by reference into this Prospectus. Until the Release Date, all of the Senior Notes will be secured by one or more series of First Mortgage Bonds, which we will issue and deliver to the Senior Note Trustee. For more information, see "Security" and "Release Date" below. On the Release Date, the Senior Notes o will cease to be secured by First Mortgage Bonds; o will become our unsecured obligations; and o will rank as equal with our other unsecured indebtedness. The Senior Note Indenture provides that, in addition to the Senior Notes offered under this shelf registration process, additional Senior Notes may be issued later, without limitation as to aggregate principal amount. Before the Release Date, however, the amount of Senior Notes that we may issue cannot exceed the amount of First Mortgage Bonds that we are able to issue under the Mortgage. For more information, see "Description of First Mortgage Bonds --Issuance of Additional Bonds" below. You should consult the Prospectus Supplement relating to any particular issue of Senior Notes for the following information: o the title of the Senior Notes; o any limit on aggregate principal amount of the Senior Notes or the series of which they are a part; o the date on which the principal of the Senior Notes will be payable; o the rate, including the method of determination if applicable, at which the Senior Notes will bear interest, if any; and -- the date from which any interest will accrue; -- the dates on which we will pay interest; and -- the record date for any interest payable on any interest payment date; o the place where -- the principal of, premium, if any, and interest on the Senior Notes will be payable; -- you may register transfer of the Senior Notes; -- you may exchange the Senior Notes; 4 -- you may serve notices and demands upon us regarding the Senior Notes; o the Security Registrar for the Senior Notes and whether the principal of the Senior Notes is payable without presentment or surrender of them; o the terms and conditions upon which we may elect to redeem any Senior Notes; o the terms and conditions upon which the Senior Notes must be redeemed or purchased due to our obligations pursuant to any sinking fund or other mandatory redemption provisions, or at the holder's option, including any applicable exceptions to notice requirements; o the denominations in which we may issue Senior Notes; o the manner in which we will determine any amounts payable on the Senior Notes which are to be determined with reference to an index or other fact or event ascertainable outside the Senior Note Indenture; o the currency, if other than United States currency, in which payments on the Senior Notes will be payable; o terms according to which elections can be made by us or the holder regarding payments on the Senior Notes in currency other than the currency in which the notes are stated to be payable; o the portion of the principal amount of the Senior Notes payable upon declaration of acceleration of their maturity; o if payments are to be made on the Senior Notes in securities or other property, the type and amount of the securities and other property or the method by which the amount shall be determined; o the terms applicable to any rights to convert Senior Notes into or exchange them for our securities or those of any other entity; o if we issue Senior Notes as Global Securities, -- any limitations on transfer or exchange rights or the right to obtain the registration of transfer; -- any limitations on the right to obtain definitive certificates for the Senior Notes; and -- any other matters incidental to the Senior Notes; o whether we are issuing the Senior Notes as bearer securities; o any limitations on transfer or exchange of Senior Notes or the right to obtain registration of their transfer, and the terms and amount of any service charge required for registration of transfer or exchange; o any exceptions to the provisions governing payments due on legal holidays, or any variations in the definition of Business Day, with respect to the Senior Notes; o any additions to the Events of Default applicable to any Senior Notes and any additions to our covenants for the benefit of the holders of the Senior Notes; o if we are issuing any Senior Notes prior to the Release Date, the designation of the series of Senior Note First Mortgage Bonds to be delivered to the Senior Note Trustee as security for the Senior Notes; 5 o any other terms of the Senior Notes not in conflict with the provisions of the Senior Note Indenture; and o any other collateral security, assurance or guarantee for the Senior Notes. For more information, see Section 301 of the Senior Note Indenture. Senior Notes may be sold at a substantial discount below their principal amount. You should consult the applicable Prospectus Supplement for a description of certain special United States federal income tax considerations which may apply to Senior Notes sold at an original issue discount or denominated in a currency other than dollars. Unless the applicable Prospectus Supplement states otherwise, the covenants contained in the Senior Note Indenture will not afford holders of Senior Notes protection in the event we have a change in control or are involved after the Release Date in a highly-leveraged transaction. SECURITY Until the Release Date, described in the following section, all of the Senior Notes will be secured by one or more series of First Mortgage Bonds, which we will issue and deliver to the Senior Note Trustee. For more information on the First Mortgage Bonds, see "Description of First Mortgage Bonds" below. When we issue a series of Senior Notes prior to the Release Date, we will simultaneously issue and deliver to the Senior Note Trustee, as security for all of the Senior Notes, a series of Senior Note First Mortgage Bonds. These First Mortgage Bonds will have the same stated interest rate (or interest calculated in the same manner), interest payment dates, stated maturity and redemption provisions, and will be in the same aggregate principal amount, as the series of Senior Notes we are issuing. For more information, see Sections 401, 402 and 403 of the Senior Note Indenture. Payments we make to the Senior Note Trustee on a series of Senior Notes will satisfy our obligations with respect to the corresponding payments due on the related series of Senior Note First Mortgage Bonds. Each series of Senior Note First Mortgage Bonds will be a series of First Mortgage Bonds, all of which are secured by a lien on certain property we own. For more discussion on the lien, see "Description of First Mortgage Bonds - Priority and Security" below. In certain circumstances prior to the Release Date, we may reduce the aggregate principal amount of Senior Note First Mortgage Bonds held by the Senior Note Trustee. In no event, however, may we reduce that amount to an amount lower than the aggregate outstanding principal amount of the Senior Notes then outstanding. For more information, see Section 409 of the Senior Note Indenture. Following the Release Date, we will close the Mortgage and not issue any additional First Mortgage Bonds under the Mortgage. For more information, see Section 403 of the Senior Note Indenture. RELEASE DATE On the Release Date, the Senior Note First Mortgage Bonds will no longer secure the Senior Notes, and the Senior Notes will become our unsecured general obligations. For more information, see Section 403 of the Senior Note Indenture. The Release Date means the date that we have repaid, redeemed or otherwise retired all of our First Mortgage Bonds, excluding Senior Note First Mortgage Bonds securing the Senior Notes and other First Mortgage Bonds which do not in aggregate principal amount exceed the greater of 5% of our Net 6 Tangible Assets or 5% of our Capitalization (each as defined in the following section on "Limitation of Liens"). Excluding this issuance, we currently have $224,615,000 aggregate principal amount of First Mortgage Bonds outstanding. If an event of default under either the Senior Note Indenture or the First Mortgage Indenture has occurred and is continuing on the date that the Release Date would otherwise occur, the Release Date will be postponed until the event of default has been cured. The Senior Note Trustee will give the Senior Note holders notice when the Release Date occurs. See "Description of Senior Notes--Defeasance" below for a discussion of another situation in which outstanding Senior Notes would not be secured by Senior Note First Mortgage Bonds. LIMITATION OF LIENS In this section and in the following section on "Limitation on Sale and Lease-Back Transactions," the following terms have the meanings indicated: "Capitalization" means the total of all the following items appearing on, or included in, our consolidated balance sheet: (i) liabilities for indebtedness maturing more than 12 months from the date of determination; and (ii) common stock, preferred stock, premium on capital stock, capital surplus, capital in excess of par value, and retained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of our capital stock held in our treasury. Capitalization shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which we are engaged and approved by independent accountants regularly retained by us, and may be determined as of a date not more than 60 days prior to the happening of the event for which the determination is being made. "Debt" means any outstanding debt for money borrowed evidenced by notes, debentures, bonds or other securities, or guarantees of any debt. "Net Tangible Assets" means the amount shown as total assets on our consolidated balance sheet, less (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, unamortized debt discount and expense and certain regulatory assets, and (ii) appropriate adjustments, if any, on account of minority interests. Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which we are engaged and approved by the independent accountants regularly retained by us, and may be determined as of a date not more than 60 days prior to the happening of the event for which such determination is being made. "Operating Property" means (i) any interest in real property we own and (ii) any asset we own that is depreciable in accordance with generally accepted accounting principles, excluding, in either case, any interest of ours as lessee under any lease (except for a lease that results from a Sale and Lease-Back Transaction) which has been or would be capitalized on the books of the lessee in accordance with generally accepted accounting principles. "Sale and Lease-Back Transaction" means any arrangement with any person providing for the leasing to us of any Operating Property (except for temporary leases for a term, including any renewal or potential renewal, of not more than 48 months), 7 which Operating Property has been or is to be sold or transferred by us to the person; PROVIDED, HOWEVER, Sale and Lease-Back Transaction shall not include [any arrangement first entered into prior to the date of the Senior Note Indenture and shall not include] any transaction pursuant to which we sell Operating Property to, and thereafter purchase energy or services from, any entity, which transaction is ordered or authorized by any regulatory authority having jurisdiction over us or our operations or is entered into pursuant to any plan or program of industry restructuring ordered or authorized by any such regulatory authority. "Value" means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (i) our net proceeds from the sale or transfer of the property leased pursuant to the Sale and Lease-Back Transaction or (ii) the net book value of the property, as determined by us in accordance with generally accepted accounting principles at the time of entering into the Sale and Lease-Back Transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of the Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of the term, without regard, in any case, to any renewal or extension options contained in the lease. The Senior Note Indenture provides that, from and after the Release Date, so long as any Senior Notes are outstanding, we may not issue, assume, guarantee (including any contingent obligation to purchase) or permit to exist any Debt that is secured by any mortgage, security interest, pledge or lien ("Lien") of or upon any Operating Property owned by us, whether owned at the date of the Senior Note Indenture or subsequently acquired, without effectively securing the Senior Notes (together with, if we shall so determine, any other indebtedness of ours ranking equally with the Senior Notes) equally and ratably with the Debt (but only so long as the Debt is so secured). The foregoing restriction will not apply to: o Liens on any Operating Property existing at the time of its acquisition and not created in contemplation of the acquisition; o Liens on Operating Property of a corporation existing at the time the corporation is merged into or consolidated with us, or at the time the corporation disposes of substantially all of its properties (or those of a division) to us provided that the Lien is not extended to property owned by us immediately prior to the merger, consolidation, or other disposition and is not created in contemplation of the merger, consolidation or other disposition; o Liens on Operating Property to secure the cost of acquisition, construction, development or substantial repair, alteration or improvement of that property or to secure indebtedness incurred to provide funds for any of these purposes or for reimbursement of funds previously expended for any of these purposes, provided the Liens are created or assumed contemporaneously with, or within 18 months after, the acquisition or the completion of substantial repair or alteration, construction, development or substantial improvement or within 6 months thereafter pursuant to a commitment for financing arranged with a lender or investor within that 18-month period; 8 o Liens in favor of the United States or any state or any department, agency or instrumentality or political subdivision of the United States or any state, or for the benefit of holders of securities issued by any of these entities, to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of substantially repairing or altering, constructing, developing or substantially improving our Operating Property; or o Any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or part, of any Lien referred to in the exceptions listed above, provided, however, that the principal amount of Debt secured thereby and not otherwise authorized by those exceptions listed above, shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal or replacement. In addition, notwithstanding the foregoing restrictions, from and after the Release Date we may issue, assume or guarantee Debt secured by a Lien which would otherwise be subject to the foregoing restrictions up to an aggregate amount which, together with all other of our secured Debt (not including secured Debt permitted under any of the foregoing exceptions) and the Value of all Sale and Lease-Back Transactions existing at such time (other than Sale and Lease-Back Transactions the proceeds of which have been applied to the retirement of certain indebtedness, Sale and Lease-Back Transactions in which the property involved would have been permitted to be subjected to a Lien under any of the foregoing exceptions and Sale and Lease-Back Transactions that are permitted by the first sentence of "Limitations on Sale and Lease-Back Transactions" below), does not exceed the greater of 10% of our Net Tangible Assets or 10% of our Capitalization. The foregoing restrictions do not limit our ability to place Liens on (i) the capital stock of any of our subsidiaries or (ii) the assets of any of our subsidiaries. LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS The Senior Note Indenture provides that so long as the Senior Notes are outstanding from and after the Release Date, we may not enter into or permit to exist any Sale and Lease-Back Transaction with respect to any Operating Property (except for temporary leases for a term, including any renewal or potential renewal, of not more than 48 months), if the purchaser's commitment is obtained more than 18 months after the later of the completion of the acquisition, construction or development of the Operating Property or the placing in operation of the Operating Property or of the Operating Property as constructed or developed or substantially repaired, altered or improved. This restriction will not apply if (a) we would be entitled pursuant to any of the provisions listed as exceptions to the restriction applicable to "Limitation on Liens" above to issue, assume, guarantee or permit to exist Debt secured by a Lien on the Operating Property without equally and ratably securing the Senior Notes, (b) after giving effect to the Sale and Lease-Back Transaction, we could incur pursuant to the provisions described in the last paragraph under "Limitation on Liens," at least $1.00 of additional Debt secured by Liens (other than Liens permitted by clause (a)), or (c) we apply within 180 days an amount equal to, in the case of a sale or transfer for cash, the net proceeds (not less than the fair value of the Operating Property so leased) and, otherwise, an amount equal to the fair value 9 (as determined by our Board of Directors) of the Operating Property so leased, to the retirement of Senior Notes or other Debt of the Company ranking equally with the Senior Notes, subject to reduction for Senior Notes delivered and the Debt retired during the 180-day period otherwise than pursuant to mandatory sinking fund or prepayment provisions and payments at stated maturity. FORM, EXCHANGE AND TRANSFER Unless the applicable Prospectus Supplement states otherwise, we will issue Senior Notes only in fully registered form without coupons and in denominations of $1,000 and integral multiples of that amount. For more information, see Sections 201 and 302 of the Senior Note Indenture. Holders may present Senior Notes for exchange or for registration of transfer, duly endorsed or accompanied by a duly executed instrument of transfer, at the office of the Security Registrar or at the office of any Transfer Agent we may designate. Exchanges and transfers are subject to the terms of the Senior Note Indenture and applicable limitations for global securities. We may designate ourselves the Security Registrar. No charge will be made for any registration of transfer or exchange of Senior Notes, but we may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transaction. Any transfer or exchange will become effective upon the Security Registrar or Transfer Agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. For more information, see Section 305 of the Senior Note Indenture. The applicable Prospectus Supplement will state the name of any Transfer Agent, in addition to the Security Registrar initially designated by the Company for any Senior Notes. We may at any time designate additional Transfer Agents or withdraw the designation of any Transfer Agent or make a change in the office through which any Transfer Agent acts. We must, however, maintain a Transfer Agent in each place of payment for the Senior Notes of each series. For more information, see Section 702 of the Senior Note Indenture. We will not be required to o issue, register the transfer of, or exchange any Senior Note or any Tranche of any Senior Note during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any Senior Note or any Tranche of any Senior Note called for redemption and ending at the close of business on the day of mailing; or o register the transfer of, or exchange any Senior Note selected for redemption except the unredeemed portion of any Senior Note being partially redeemed. For more information, see Section 305 of the Senior Note Indenture. PAYMENT AND PAYING AGENTS Unless the applicable Prospectus Supplement states otherwise, we will pay interest on a Senior Note on any interest payment date to the person in whose name the Senior Note is registered at the close of business on the regular record date for the interest payment. For more information, see Section 307 of the Senior Note Indenture. Unless the applicable Prospectus Supplement provides otherwise, we will pay principal and any premium and interest on Senior Notes at the office of the Paying Agent whom we will designate for this 10 purpose. Unless the applicable Prospectus Supplement states otherwise, the corporate trust office of the Senior Note Trustee in New York City will be designated as our sole Paying Agent for payments with respect to Senior Notes of each series. Any other Paying Agents initially designated by us for the Senior Notes of a particular series will be named in the applicable Prospectus Supplement. We may at any time add or delete Paying Agents or change the office through which any Paying Agent acts. We must, however, maintain a Paying Agent in each place of payment for the Senior Notes of a particular series. For more information, see Section 702 of the Senior Note Indenture. All money we pay to a Paying Agent for the payment of the principal and any premium or interest on any Senior Note which remains unclaimed at the end of two years after payment is due will be repaid to us. After that date, the holder of that Senior Note may look to us for these payments. For more information, see Section 703 of the Senior Note Indenture. REDEMPTION You should consult the applicable Prospectus Supplement for any terms regarding optional or mandatory redemption of Senior Notes. Except for the provisions in the applicable Prospectus Supplement regarding Senior Notes redeemable at the holder's option, Senior Notes may be redeemed only upon notice by mail not less than 30 nor more than 60 days prior to the redemption date. Further, if less than all the Senior Notes of a series, or any Tranche of a series, are to be redeemed, the Senior Notes to be redeemed will be selected by the method provided for the particular series. In the absence of a selection provision, the Senior Note Trustee will select a fair and appropriate method of random selection. For more information, see Sections 503 and 504 of the Senior Note Indenture. A notice of redemption we provide may state: o that redemption is conditioned upon receipt by the Paying Agent on or before the redemption date of money sufficient to pay the principal and any premium and interest on the Senior Notes; and o that if the money has not been received, the notice will be ineffective and we will not be required to redeem the Senior Notes. For more information, see Section 504 of the Senior Note Indenture. CONSOLIDATION, MERGER AND SALE OF ASSETS We may not consolidate with or merge into any other person, nor may we transfer or lease substantially all of our assets and property to any person, unless: o the corporation formed by the consolidation or into which we are merged, or the person which acquires by conveyance or transfer, or which leases, substantially all of our property and assets: -- is organized and validly existing under the laws of any domestic jurisdiction; -- expressly assumes our obligations on the Senior Notes and under the Senior Note Indenture; and -- prior to the Release Date, expressly assumes our obligations under the Senior Note First Mortgage Bonds and under the Mortgage; 11 o immediately after the transaction becomes effective, no Event of Default, and no event which would become an Event of Default, shall have occurred and be continuing; and o we will have delivered to the Senior Note Trustee an Officer's Certificate and Opinion of Counsel as provided in the Senior Note Indenture. For more information, see Section 1201 of the Senior Note Indenture. EVENTS OF DEFAULT "Event of Default" under the Senior Note Indenture with respect to Senior Notes of any series means any one of the following: o failure to pay any interest due on the Senior Notes within 30 days; o failure to pay principal or premium when due on a Senior Note; o breach of or failure to perform any covenant or warranty of ours in the Senior Note Indenture with respect to the particular series of Senior Notes for 60 days (subject to extension under certain circumstances for another 120 days) after we receive notice from the Senior Note Trustee, or we and the Senior Note Trustee receive notice from the holders of at least 33% in principal amount of the Senior Notes of that series outstanding under the Senior Note Indenture according to the provisions of the Senior Note Indenture; o prior to the Release Date, the occurrence of a Default under the Mortgage (see "Description of the First Mortgage Bonds - Events of Default" below); o certain events of bankruptcy, insolvency or reorganization; and o any other Event of Default set forth in the applicable Prospectus Supplement. For more information, see Section 901 of the Senior Note Indenture. An Event of Default with respect to a particular series of Senior Notes does not necessarily constitute an Event of Default with respect to the Senior Notes of any other series issued under the Senior Note Indenture. If an Event of Default with respect to a particular series of Senior Notes occurs and is continuing, either the Senior Note Trustee or the holders of at least 33% in principal amount of the outstanding Senior Notes of that series may declare the principal amount of all of the Senior Notes of that series to be due and payable immediately. If the Senior Notes of that series are discount notes or similar Senior Notes, only the portion of the principal amount as specified in the applicable Prospectus Supplement may be immediately due and payable. If an Event of Default occurs and is continuing with respect to all series of Senior Notes (including all Events of Default relating to bankruptcy, insolvency or reorganization), the Senior Note Trustee or the holders of at least 33% in principal amount of the outstanding Senior Notes of all series, considered together, may declare an acceleration of the principal amount of all Senior Notes. In the event of an acceleration prior to the Release Date with respect to all Senior Notes, the Senior Note Trustee will make a demand for acceleration of all amounts due under all of the Senior Note First Mortgage Bonds, but this demand will only result in such an acceleration if allowed by the acceleration provisions of the First Mortgage. At any time after a declaration of acceleration with respect to the Senior Notes 12 of a particular series, and before a judgment or decree for payment of the money due has been obtained, and before the acceleration of the Senior Note First Mortgage Bonds, the Event or Events of Default giving rise to the declaration of acceleration will, without further action, be deemed to have been waived, and the declaration and its consequences will be deemed to have been rescinded and annulled, if o we have paid or deposited with the Senior Note Trustee a sum sufficient to pay -- all overdue interest on all Senior Notes of the particular series; -- the principal of and any premium on any Senior Notes of that series which have become due otherwise than by the declaration of acceleration and any interest at the rate prescribed in the Senior Notes; -- interest upon overdue interest at the rate prescribed in the Senior Notes, to the extend payment is lawful; -- all amounts due to the Senior Note Trustee under the Senior Note Indenture; and o any other Event of Default with respect to the Senior Notes of the particular series, other than the failure to pay the principal of the Senior Notes of that series which has become due solely by the declaration of acceleration, has been cured or waived as provided in the Senior Note Indenture. For more information, see Section 902 of the Senior Note Indenture. The Senior Note Indenture includes provisions as to the duties of the Senior Note Trustee in case an Event of Default occurs and is continuing. Consistent with these provisions, the Senior Note Trustee will be under no obligation to exercise any of its rights or powers at the request or direction of any of the holders, unless those holders have offered to the Senior Note Trustee reasonable indemnity. For more information, see Section 1003 of the Senior Note Indenture. Subject to these provisions of indemnification, the holders of a majority in principal amount of the outstanding Senior Notes of any series may direct the time, method and place of conducting any proceeding for any remedy available to the Senior Note Trustee, or exercising any trust or power conferred on the Senior Note Trustee, with respect to the Senior Notes of that series. For more information, see Section 912 of the Senior Note Indenture. No Senior Note holder may institute any proceeding regarding the Senior Note Indenture, or for the appointment of a receiver or a trustee, or for any other remedy under the Senior Note Indenture unless o the holder has previously given to the Senior Note Trustee written notice of a continuing Event of Default with respect to Senior Notes of that particular series, o the holders of a majority in aggregate principal amount of the outstanding Senior Notes of all series with respect to which an Event of Default is continuing have made a written request to the Senior Note Trustee, and have offered reasonable indemnity to the Senior Note Trustee to institute the proceeding as trustee, and o the Senior Note Trustee has failed to institute the proceeding, and has not received from the holders of a majority in principal amount of the outstanding Senior Notes of that series a direction inconsistent with the request, within 60 13 days after notice, request and offer of reasonable indemnity. For more information, see Section 907 of the Senior Note Indenture. The preceding limitations do not apply, however, to a suit instituted by a Senior Note holder for the enforcement of payment of the principal of or any premium or interest on the Senior Note on or after the applicable due date stated in the Senior Note. For more information, see Section 908 of the Senior Note Indenture. We must furnish annually to the Senior Note Trustee a statement by an appropriate officer as to that officer's knowledge of our compliance with all conditions and covenants under the Senior Note Indenture. Our compliance is to be determined without regard to any grace period or notice requirement under the Senior Note Indenture. For more information, see Section 706 of the Senior Note Indenture. MODIFICATIONS AND WAIVER The Company and the Senior Note Trustee, without the consent of the holders of the Senior Notes, may enter into one or more supplemental Senior Note Indentures for any of the following purposes: o to evidence the assumptions by an permitted successor of our covenants in the Senior Note Indenture and the Senior Notes: o to add one or more covenants or other provisions for the benefit of the holders of outstanding Senior Notes or to surrender any right or power conferred upon us by the Senior Note Indenture; o to add any additional Events of Default; o to change or eliminate any provision of the Senior Note Indenture or add any new provision to it (but if this action will adversely affect the interests of the holders of any particular series of Senior Notes in any material respect, the action will become effective with respect to that series only when there is no Senior Note of that series remaining outstanding under the Senior Note Indenture); o to provide collateral security for the Senior Notes; o to establish the form or terms of Senior Notes according to the provisions of the Senior Note Indenture; o to evidence the acceptance of appointment of a successor Senior Note Trustee under the Senior Note Indenture with respect to one or more series of the Senior Notes and to add to or change any of the provisions of the Senior Note Indenture as necessary to provide for the administration of the trusts under the Senior Note Indenture by more than one trustee; o to provide for the procedures required to permit us to use a non-certificated system of registration for any Senior Notes series; o to change any place where -- the principal of and any premium and interest on any Senior Notes is payable, -- any Senior Notes may be surrendered for registration of transfer or exchange, or -- notices and demands to or upon us regarding Senior Notes and the 14 Senior Note Indenture may be served; or o to cure any ambiguity or inconsistency (but any of these changes or additions will not adversely affect the interests of the holders of Senior Notes of any series in any material respect). For more information see Section 1301 of the Senior Note Indenture. The holders of at least a majority in aggregate principal amount of the outstanding Senior Notes of any series may waive o compliance by us with certain provisions of the Senior Note Indenture (see Section 707 of the Senior Note Indenture); and o any past default under the Senior Note Indenture, except a default in the payment of principal, premium, or interest, and certain covenants and provisions of the Senior Note Indenture that cannot be modified or amended without consent of the holder of each outstanding Senior Note of the series affected (see Section 913 of the Senior Note Indenture). The Trust Indenture Act of 1939 may be amended after the date of the Senior Note Indenture to require changes to the Senior Note Indenture. In this event, the Senior Note Indenture will be deemed to have been amended so as to effect the changes, and we and the Senior Note Trustee may, without the consent of any holders, enter into one or more Supplemental Senior Note Indentures to evidence or effect the amendment. For more information, see Section 1301 of the Senior Note Indenture. Except as provided in this section, the consent of the holders of a majority in aggregate principal amount of the outstanding Senior Notes, considered as one class, is required to change in any manner the Senior Note Indenture pursuant to one or more supplemental Senior Note Indentures. If less than all of the series of Senior Notes outstanding are directly affected by a proposed supplemental Senior Note Indenture, however, only the consent of the holders of a majority in aggregate principal amount of the outstanding Senior Notes of all series directly affected, considered as one class, will be required. Furthermore, if the Senior Notes of any series have been issued in more than one Tranche and if the proposed supplemental Senior Note Indenture directly affects the rights of the holders of one or more, but not all Tranches, only the consent of the holders of a majority in aggregate principal amount of the outstanding Senior Notes of all Tranches directly affected, considered as one class, will be required. In addition, an amendment or modification o may not, without the consent of the holder of the Senior Note -- change the maturity of the principal of, or any installment of principal of or interest on, any Senior Note, -- reduce the principal amount or the rate of interest, or the amount of any installment of interest, or change the method of calculating the rate of interest, -- reduce any premium payable upon the redemption of the Senior Note, -- reduce the amount of the principal of any Senior Note originally issued at a discount from the stated principal amount that would be due and 15 payable upon a declaration of acceleration of maturity, -- change the currency or other property in which a Senior Note or premium or interest on a Senior Note is payable, -- impair the right to institute suit for the enforcement of any payment on or after the stated maturity (or, in the case of redemption, on or after the redemption date) of any Senior Note; o may not reduce the percentage of principal amount requirement for consent of the holders for any supplemental Senior Note Indenture, or for any waiver of compliance with any provision of or any default under the Senior Note Indenture, or reduce the requirements for quorum or voting, without the consent of the holder of each outstanding Senior Note of each series or Tranche effected; o may not prior to the Release Date -- impair the interest of the Senior Note Trustee in the Senior Note First Mortgage Bonds, -- reduce the principal amount of any series of Senior Note First Mortgage Bonds to an amount less than that of the related series of Senior Notes, or -- alter the payment provisions of the Senior Note First Mortgage Bonds in a manner adverse to the holders of the Senior Notes; and o may not modify provisions of the Senior Note Indenture relating to supplemental Senior Note Indentures, waivers of certain covenants and waivers of past defaults with respect to the Senior Notes of any series, or any Tranche of a series, without the consent of the holder of each outstanding Senior Note affected. A supplemental Senior Note Indenture will be deemed not to affect the rights under the Senior Note Indenture of the holders of any series or Tranche of the Senior Notes if the supplemental Senior Note Indenture o changes or eliminates any covenant or other provision of the Senior Note Indenture expressly included solely for the benefit of one or more other particular series of Senior Notes or Tranches thereof; or o modifies the rights of the holders of Senior Notes of any other series or Tranches with respect to any covenant or other provision. For more information, see Section 1302 of the Senior Note Indenture. If we solicit from holders of the Senior Notes any type of action, we may at our option fix in advance a record date for the determination of the holders entitled to vote on the action. We shall have no obligation, however, to do so. If we fix a record date, the action may be taken before or after the record date, but only the holders of record at the close of business on the record date shall be deemed to be holders for the purpose of determining whether holders of the requisite proportion of the outstanding Senior Notes have authorized the action. For that purpose, the outstanding Senior Notes shall be computed as of the record date. Any holder action shall bind every future holder of the same security and the holder of every security issued upon the registration of transfer of or in exchange for or in lieu of the security in respect of anything done or permitted by the Senior Note Trustee or us in reliance on that action, whether or not notation of the action is made upon the 16 security. For more information, see Section 104 of the Senior Note Indenture. DEFEASANCE Unless the applicable Prospectus Supplement provides otherwise, any Senior Note, or portion of the principal amount of a Senior Note, will be deemed to have been paid for purposes of the Senior Note Indenture, and, at our election, our entire indebtedness in respect to the Senior Note (or portion thereof) will be deemed to have been satisfied and discharged, if we have irrevocably deposited with the Senior Note Trustee or any Paying Agent other than us, in trust, money, certain Eligible Obligations, or a combination of the two, sufficient to pay principal of any premium and interest due and to become due on the Senior Note or portions thereof. For more information , see Section 801 of the Senior Note Indenture. For this purpose, unless the applicable Prospectus Supplement provides otherwise, "Eligible Obligations" include direct obligations of, or obligations unconditionally guaranteed by, the United States, entitled to the benefit of full faith and credit of the United States, and certificates, depositary receipts or other instruments which evidence a direct ownership interest in these obligations or in any specific interest or principal payments due in respect to those obligations. RESIGNATION OF SENIOR NOTE TRUSTEE The Senior Note Trustee may resign at any time by giving written notice to us or may be removed at any time by an action of the holders of a majority in principal amount of outstanding Senior Notes delivered to the Senior Note Trustee and us. No resignation or removal of the Senior Note Trustee and no appointment of a successor trustee will become effective until a successor trustee accepts appointment in accordance with the requirements of the Senior Note Indenture. So long as no Event of Default or event which would become an Event of Default has occurred and is continuing, and except with respect to a Senior Note Trustee appointed by an action of the holders, if we have delivered to the Senior Note Trustee a resolution of our Board of Directors appointing a successor trustee and the successor trustee has accepted the appointment in accordance with the terms of the Senior Note Indenture, the Senior Note Trustee will be deemed to have resigned and the successor trustee will be deemed to have been appointed as trustee in accordance with the Senior Note Indenture. For more information, see Section 1010 of the Senior Note Indenture. MISCELLANEOUS NOTICES We will give notices to holders of Senior Notes by mail to their address as they appear in the Security Register. For more information, see Section 106 of the Senior Note Indenture. TITLE The Senior Note Trustee and its agents, and we and our agents, may treat the person in whose name a Senior Note is registered as the absolute owner of that Senior Note, whether or not that Senior Note may be overdue, for the purpose of making payment and for all other purposes. For more information, see Section 308 of the Senior Note Indenture. GOVERNING LAW The Senior Note Indenture and the Senior Notes will be governed by, and construed in accordance with, the laws of the State of New York. For more information, see Section 112 of the Senior Note Indenture. 17 GLOBAL SECURITIES We may issue some or all of the Senior Notes of any series as Global Securities. We will register each Global Security in the name of a depositary identified in the applicable Prospectus Supplement. The Global Securities will be deposited with a depositary or nominee or custodian for the depositary and will bear a legend regarding restrictions on exchanges and registration of transfer as discussed below and any other matters to be provided pursuant to the Senior Note Indenture. As long as the depositary or its nominee is the registered holder of a Global Security, that person will be considered the sole owner and holder of the Global Security and the Senior Notes represented by it for all purposes under the Senior Notes and the Senior Note Indenture. Except in limited circumstances, owners of a beneficial interest in a Global Security o will not be entitled to have the Global Security or any Senior Notes represented by it registered in their names; o will not receive or be entitled to receive physical delivery of certificated Senior Notes in exchange for the Global Security; and o will not be considered to be the owners or holders of the Global Security or any Senior Notes represented by it for any purposes under the Senior Notes or the Senior Note Indenture. We will make all payments of principal and any premium and interest on a Global Security to the depositary or its nominee as the holder of the Global Security. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer beneficial interests in a Global Security. Ownership of beneficial interests in a Global Security will be limited to institutions having accounts with the depositary or its nominee, called "participants" for purposes of this discussion, and to persons that hold beneficial interests through participants. When a Global Security is issued, the depositary will credit on its book entry, registration and transfer system the principal amounts of Senior Notes represented by the Global Security to the accounts of its participants. Ownership of beneficial interests in a Global Security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by o the depositary, with respect to participant's interests or; o any participant, with respect to interests of persons held by the participants on their behalf. Payments by participants to owners of beneficial interests held through such participants will be the responsibility of such participants. The depositary may from time to time adopt various policies and procedures governing payments, transfers, exchanges, and other matters relating to beneficial interests in a Global Security. None of the following will have any responsibility or liability for any aspect of the depositary or any participant's records relating to, or for payments made on account of, beneficial interest in a Global Security, or for maintaining, supervising or reviewing any records relating to these beneficial interests: o the Southern Indiana Gas and Electric Company; 18 o the Trustee under the First Mortgage Indenture; o the Trustee under the Senior Note Indenture; or o any agent of each of the above. DESCRIPTION OF FIRST MORTGAGE BONDS GENERAL First Mortgage Bonds will be issued to the Senior Note Trustee to secure each issuance of Senior Notes. See "Description of Senior Notes -- Security" above. We will issue the First Mortgage Bonds under a Mortgage and Deed of Trust, dated as of April 1, 1932 with Bankers Trust Company, New York, N.Y., as Trustee (the "Trustee") pursuant to an indenture or indentures which will supplement the Mortgage and Deed of Trust. In the following discussion, we will refer to the Mortgage and Deed of Trust and all indentures that supplement it as the "Mortgage". We will refer to all of our First Mortgage Bonds, including those already issued and those to be issued as "First Mortgage Bonds." The information we are providing you in this Prospectus concerning the First Mortgage Bonds and the Mortgage is only a summary of the information provided in those documents. You should consult the Mortgage and other documents for more complete information. These documents appear as exhibits to the Registration Statement, or will appear as exhibits to a Current Report on Form 8-K, which we will file, and which will be incorporated by reference into this Prospectus. INTEREST, MATURITY, REDEMPTION AND PAYMENT These terms will be correlated to the terms of the related Senior Notes that the particular First Mortgage Bonds secure. See the accompanying Prospectus Supplement. IMPROVEMENT AND SINKING FUND REQUIREMENT The Mortgage (Section 36A) requires the annual deposit with the Trustee of cash equal to 1% of the maximum principal amount of all First Mortgage Bonds outstanding at any one time subsequent to July 1, 1948 (less First Mortgage Bonds retired directly or indirectly as a result of the sale of property or cancelled pursuant to the provisions of Section 36B described below). We may withdraw the cash upon certification of the amount of unfunded property additions which would support the issuance of a principal amount of First Mortgage Bonds equal to 100% of the amount of cash withdrawn or the cash may be applied to the purchase or redemption of First Mortgage Bonds. MAINTENANCE AND REPLACEMENT REQUIREMENTS The Mortgage (Section 36B) requires the annual deposit with the Trustee of an amount in cash or in principal amount of First Mortgage Bonds or of outstanding prior lien bonds (or in lieu thereof the certification of unfunded property additions) equal to the amount, if any, by which 15% of the gross earnings during the preceding calendar year exceeds the aggregate amounts expended during that period for repairs, maintenance and replacements. Gross earnings are computed after deducting the costs of electric energy and gas purchased for resale. A credit balance established in any year may be utilized to meet the requirements during a later period 19 or to effect the withdrawal of deposited cash or First Mortgage Bonds or to unfund property previously certified to the Trustee. The Mortgage provides that, effective at such times as all First Mortgage Bonds issued prior to January 1, 1977 are no longer outstanding, the Mortgage may be amended to change the above requirement, insofar as it is based upon a comparison with 15% of the gross earnings during the preceding calendar year, to a comparison with 2.25% of our depreciable property, as defined, on December 31 of the preceding calendar year (Section 3 of the Supplemental Indenture dated as of January 15, 1977). PRIORITY AND SECURITY Each First Mortgage Bond ranks pari passu as to security with all other First Mortgage Bonds outstanding under the Mortgage, which, in the opinion of our legal counsel, Messrs. Bamberger, Foreman, Oswald and Hahn, is a first lien on substantially of our physical property, permits and franchises, subject only to excepted encumbrances, as defined in the Mortgage (Section 2). The Mortgage permits the acquisition of property subject to prior liens existing at the time of acquisition and the use of such property additions as a basis for the issuance of additional bonds in an amount which, together with certain other items, does not exceed 15% of the aggregate principal amount of First Mortgage Bonds to be outstanding under the Mortgage (Section 24). ISSUANCE OF ADDITIONAL BONDS The Mortgage permits the issuance of additional First Mortgage Bonds (a) to the extent of 60% of the cost or then fair value to us, whichever is less, of unfunded property additions (as defined in the Mortgage, Sections 4 and 5) (Section 23); (b) to refund unfunded prior lien bonds (as defined in the Mortgage, Section 6) (Section 24); (c) to refund First Mortgage Bonds (Section 27); or (d) upon the deposit of cash equal to the principal amount of First Mortgage Bonds requested to be issued (Section 28). Deposited cash may be withdrawn in lieu of the authentication of First Mortgage Bonds to which we would otherwise be entitled or against 60% of unfunded property additions certified to the Trustee or against the deposit of First Mortgage Bonds or the deposit or reduction of prior lien bonds or may be applied to the purchase or redemption of First Mortgage Bonds (Sections 29 and 30). Additional First Mortgage Bonds may not be issued under (a) or (d) above (or under certain circumstances under (c) above) unless net earnings (as defined in the Mortgage, Section 7) for twelve consecutive months within the fifteen preceding calendar months shall have been at least equal to twice the annual interest requirements on, and at least 10% of, the principal amount of all First Mortgage Bonds outstanding, including those proposed to be issued and all outstanding prior lien indebtedness (Section 25). At December 31, 1998, such coverages were at least 2.4 times and 16%, respectively. Net earnings are computed before charges for renewals, replacements and depreciation, but after deducting the greater of (i) 10% of gross operating revenues for such period, or (ii) the amount by which 15% of gross operating revenues for such period exceeds the amount expended for current repairs and maintenance. Gross operating revenues are computed after deducting the cost of electric energy and gas purchased for resale. The First Mortgage Bonds issued to the Senior Note Trustee are expected to be issued against unfunded property additions or retired bonds. Unfunded property 20 additions at March 31, 1999 amounted to $310,288,123. LIMITATION ON DIVIDENDS The Mortgage in effect restricts our payment of cash dividends on our Common Stock to the accumulated surplus available for distribution to the Common Stock earned subsequent to December 31, 1947, subject to reduction if amounts deducted from earnings for current repairs and maintenance and provisions for renewals, replacements and depreciation of all of our property are less than amounts specified in the Mortgage (Section 1.02 of the Supplemental Indenture dated as of July 1, 1948, as supplemented). No amount was restricted against cash dividends on Common Stock at March 31, 1999 under this provision. The Amended Articles of Incorporation in effect restricts our payment of cash dividends on Common Stock to accumulated surplus available for distribution to the Common Stock earned subsequent to December 31, 1935, and requires that, immediately after such dividends, there shall remain to the credit of earned surplus an amount at least equal to two times the annual dividend requirements on all then outstanding Preferred Stock and Preferred Stock, No Par Value. See Art. VI, Terms of Capital Stock, General Provisions (B). The amount restricted against cash dividends on Common Stock at March 31, 1999 under this restriction was $2,154,682, leaving $244,181,106 unrestricted for the payment of dividends. In addition, the Amended Articles of Incorporation provides that surplus otherwise available for the payment of dividends on Common Stock shall be restricted to the extent that such surplus is included in a calculation required to permit us to issue, sell or dispose of preferred stock or other stock senior to the Common Stock. See Art. VI, Terms of Capital Stock, General Provisions (E)(4). An order of the Securities and Exchange Commission dated October 12, 1944 under the Public Utility Holding Company Act of 1935 in effect restricts our payment of cash dividends on Common Stock to 75% of net income available for distribution to the Common Stock, earned subsequent to December 31, 1943, if the percentage of Common Stock equity to total capitalization and surplus, as defined, is less than 25%. At March 31, 1999, the ratio of Common Stock equity to total capitalization and surplus amounted to approximately 53%. MODIFICATION OF THE MORTGAGE The Mortgage may be modified or amended by us with the consent of the holders of all the outstanding First Mortgage Bonds issued prior to January 15, 1977 and the consent of the holders of 66 2/3% of the principal amount of all outstanding First Mortgage Bonds. No amendment without the consent of the holder of a First Mortgage Bond would (1) extend the maturity of, or reduce the rate of interest on, or otherwise modify the terms of payment of principal or interest on, or impair the right of such holder to institute suit on or after the due date for the enforcement of the payment of principal or interest on, that First Mortgage Bond or (2) deprive the holder of the lien of the Mortgage or permit the creation of any lien ranking prior to or equal with the lien of the Mortgage on any of the mortgaged property or (3) reduce the percentage of bondholders whose consent is required with respect to the matters specified in (1) and (2) above (Section 4 of the Supplemental Indenture dated as of January 15, 1977). The Mortgage permits an amendment to the Mortgage which authorizes us, effective at such time as all First Mortgage Bonds issued 21 on or prior to May 31, 1986 are no longer outstanding, to designate First Mortgage Bonds of any series (rather than the First Mortgage Bonds of the earliest maturing series that are redeemable) as the First Mortgage Bonds to be redeemed pursuant to Section 36B of the Mortgage and to do so at any time (rather than only after three years) that cash for such purpose is on deposit with the Trustee pursuant to the provisions of that Section. (Section 5 of the Supplemental Indenture dated as of June 1, 1986). The Senior Note First Mortgage Bonds will not be redeemable except in conjunction with the retirement of the Senior Notes that they secure. REGARDING DEFAULT Under the Mortgage, the following are defined as "completed defaults": o failure to pay principal of any First Mortgage Bond or prior lien bond when due; o failure for 90 days to pay interest due upon any First Mortgage Bonds; o failure to pay interest due upon any prior lien bonds, continued for the period of grace, if any (not exceeding 90 days) specified in the instrument securing such prior lien bond; o the institution of voluntary proceedings involving bankruptcy or insolvency or appointment of a receiver for us or our property or general assignment for the benefit of creditors or the pendency of similar proceedings for 90 days if brought by others; and o failure for 90 days, after notice from the Trustee, to perform any other covenant, agreement or condition with respect to the Mortgage (Section 66). A failure by us to deposit or direct the application of money for the redemption of First Mortgage Bonds called for redemption also constitutes a completed default (Section 52). Upon the occurrence and continuation of a completed default, the Trustee of the holders of not less than 20% of the First Mortgage Bonds then outstanding may accelerate the maturity of all First Mortgage Bonds, subject to the right of the holders of a majority of the First Mortgage Bonds to annul the acceleration if the default has been cured and no foreclosure sale has occurred (Section 66). REGARDING THE TRUSTEE Bankers Trust Company, Trustee under the Mortgage, is a depositary of the Company. The Trustee is required to take action at the request of the holders of First Mortgage Bonds only when requested to do so by the holders of a majority in principal amount of the First Mortgage Bonds then outstanding. Before proceeding to enforce the lien of the Mortgage, the Trustee may require that it be properly indemnified to its satisfaction (Section 93). RELEASE AND SUBSTITUTION OF PROPERTY The Mortgage (Section 58) provides that, subject to various limitations, property may be released from the lien thereof, whether or not sold or otherwise disposed of by us, upon the basis of cash deposited with the Trustee, purchase money obligations or First Mortgage Bonds delivered to the Trustee, prior lien bonds delivered to the Trustee or reduced or assumed, or unfunded property additions certified to the Trustee. The Mortgage (Section 60) permits the cash proceeds of released property to be withdrawn against unfunded property 22 additions certified to the Trustee or against the deposit of First Mortgage Bonds or the deposit or reduction of prior lien bonds or to be applied to the purchase or redemption of First Mortgage Bonds. EVIDENCE TO BE FURNISHED TO THE TRUSTEE UNDER THE MORTGAGE Compliance with Mortgage provisions is evidenced by written statements of our officers or persons selected or paid by us (such as an engineer with respect to the value of property being certified or released, an accountant with respect to a net earnings certificate and counsel with respect property titles and compliance with the Mortgage generally). In certain major matters (as required by Section 314(d) of the Trust Indenture Act of 1939, as amended) the accountant or engineer must be independent. We are required to file a treasurer's certificate with the Trustee on or before May 1 of each year indicating that we have complied with all the provisions of the Mortgage and are not in default with respect to any of the covenants contained in the Mortgage (Section 3.06 of the Supplemental Indenture dated as of July 1, 1948). Various other certificates and papers are required to be filed annually and upon the happening of various events. PLAN OF DISTRIBUTION We intend to sell the Senior Notes in a public offering through the underwriters or dealers named on the cover of the applicable Prospectus Supplement. The applicable Prospectus Supplement will set forth the terms under which the Senior Notes are offered, including o the purchase price and the net proceeds to us from the sale; o any underwriting discounts and other items constituting underwriters compensation; o the initial public offering price; and o any discounts or concessions allowed, re-allowed or paid to dealers. We or any underwriters or dealers may change from time to time any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers. The Senior Notes will be acquired by the underwriters for their own account and may be resold in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of the sale. Unless the applicable Prospectus Supplement states otherwise, the obligations of any underwriter to purchase the Senior Notes will be subject to certain conditions, and the underwriter will be obligated to purchase the Senior Notes, except that in certain cases involving a default by an underwriter, less than all of the Senior Notes may be purchased. The applicable Prospectus Supplement will state whether we will authorize underwriters or dealers to solicit offers by certain specified institutions to purchase Senior Notes at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified future date. These contracts will be subject to the conditions set forth in the Prospectus Supplement. Additionally, the Prospectus Supplement will set forth the commission payable for solicitation of those contracts. The underwriters may be entitled under agreements entered into with the Company to indemnification by the Company against 23 certain civil liabilities, including liabilities under the Securities Act of 1933. EXPERTS The financial statements and schedules incorporated in this prospectus and elsewhere in the Registration Statement by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1998 have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, which is incorporated herein by reference, and have been so incorporated in reliance upon the authority of that firm as experts in accounting and auditing in giving that report. LEGAL OPINIONS Winthrop, Stimson, Putnam & Roberts of New York, New York, our outside counsel, will issue opinions about the legality of the offered securities for us. The underwriters will be advised about legal matters relating to any offering by their own legal counsel, Simpson Thacher & Bartlett of New York, New York. 24 Part II. INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Filing fees--Securities and Exchange Commission...................... $ 22,240 Rating agencies' fees ............................................... 90,000 Trustee's fees....................................................... 28,675 Auditors' fees....................................................... 25,000 Printing of registration statement, prospectus, exhibits, securities, etc. .......................................... 20,000 Legal and Blue Sky fees and expenses................................. 55,000 Miscellaneous ....................................................... 9,085 -------- $250,000 ======== All of the above amounts, other than the filing fees, are estimates. Item 15. Indemnification of Directors and Officers. The following resolution was adopted by the Executive Committee of the Board of Directors of the Company on May 12, 1999: RESOLVED: that with respect to the preparation and filing of a Registration Statement and Prospectus with the Securities and Exchange Commission in connection with the proposed issuance and sale from time to time of Securities of the Company at an aggregate initial offering price not to exceed $90,000,000, this Company indemnify and save harmless each and every officer of the Company executing and preparing the Registration Statement and Prospectus in its original or amended or supplemented form, and every director of the Company who was a director thereof at the time of the filing of the Registration Statement and Prospectus in their original or amended or supplemented form, against any and all costs reasonably incurred by them or any of them in connection with any action, suit or proceeding arising out of the preparation, filing or use of the said Registration Statement or Prospectus relating to such issue whether brought under the Securities Act of 1933, as amended, or under any other applicable law, where such action, suit or proceeding is finally adjudicated in favor of such director, officer or employee and the time to appeal has expired. Similar indemnity resolutions have been adopted which are applicable to other issues of securities presently outstanding, and similar general indemnity provisions are contained in The Indiana General Corporation Act and in the Company's By-Laws. II-1 The Company has an insurance policy covering its liabilities and expenses that might arise in connection with its lawful indemnification of its directors and officers for certain of their liabilities and expenses. Officers and directors of the Company are covered under this policy for certain other liabilities and expenses. Item 16. Exhibits. 1 Form of Underwriting Agreement. *4(a) Mortgage and Deed of Trust dated as of April 1, 1932 between the Company and Bankers Trust Company, as Trustee, and Supplemental Indentures thereto dated August 31, 1936, October 1, 1937, 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 3, 1986. (Physically filed and designated in Registration No. 2-2536 as Exhibits B-1 and B-2; in Post-effective Amendment No. 1 to Registration No. 2-62032 as Exhibit (b)(4)(ii), in Registration No. 2-88923 as Exhibit 4(b)(2), in Form 8-K, File No. 1-3553, dated June 1, 1984 as Exhibit (4), File No. 1-3553, dated March 24, 1986 as Exhibit 4-A, in Form 8-K, File No. 1-3553, dated June 3, 1986 as Exhibit (4).) July 1, 1985 and November 1, 1985. (Physically filed and designated in Form 10-K for the fiscal year 1985, File No. 1-3553, as Exhibit 4-A.) November 15, 1986 and January 15, 1987. (Physically filed and designated in Form 10-K, for the fiscal year 1986, File No. 1-3553, as Exhibit 4-A.) December 15, 1987. (Physically filed and designated in Form 10-K, for the fiscal year 1987, File No. 1-3553, as Exhibit 4-A.) December 13, 1990. (Physically filed and designated in Form 10-K, for the fiscal year 1990, File No. 1-3553, as Exhibit 4-A.) April 1, 1993. (Physically filed and designated in Form 8-K, dated April 13, 1993, File No. 1-3553, as Exhibit 4.) May 1, 1993. (Physically filed and designated in Form 10-K, for the fiscal year 1993, File No. 1-3553, as Exhibit 4(a).) June 1, 1993. (Physically filed and designated in Form 8-K, dated June 14, 1993, File No. 1-3553, as Exhibit 4.) 4(b) Form of Supplemental Indenture (for First Mortgage Bonds) between the Company and Bankers Trust Company, as Trustee. 4(c) Form of Indenture (for Senior Notes) between the Company and Bankers Trust Company, as Trustee. 4(d) Form of Supplemental Indenture (for Senior Notes) between the Company and Bankers Trust Company, as Trustee. 4(e) Form of Certificate of Senior Note is contained in the Form of Supplemental - ---------- * Incorporated herein by reference as indicated. II-2 Indenture filed as Exhibit 4(d). 5 Opinion of Messrs. Bamberger, Foreman, Oswald and Hahn. *12(a) Ratio of Earnings to Fixed Charges for the five years ended December 31, 1998. (Physically filed and designated in Form 10-K, for the fiscal year 1998, File No. 1-3553, as Exhibit 12). 12(b) Ratio of Earnings to Fixed Charges for the twelve months ended March 31, 1999. 23(a) Consent of Arthur Andersen LLP. 23(b) Consent of Messrs. Bamberger, Foreman, Oswald and Hahn is contained in their opinion filed as Exhibit 5. 25(a) Form T-1 of Bankers Trust Company (as Trustee under Senior Note Indenture). 25(b) Form T-1 of Bankers Trust Company (as Trustee under Mortgage). - ---------- * Incorporated herein by reference as indicated. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement (notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement); or (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that the registrant need not file a post-effective amendment to include the information required to be included by subsection (i) or (ii) if such information is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration II-3 statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 above, or otherwise, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of New York, State of New York on the 1st day of July, 1999. SOUTHERN INDIANA GAS AND ELECTRIC COMPANY By: Ronald G. Reherman Chairman Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Ronald G. Reherman - ----------------------- Chairman of the Board and Director July 1, 1999 RONALD G. REHERMAN /s/ Andrew E. Goebel - ----------------------- President, Chief Executive Officer and ANDREW E. GOEBEL Director July 1, 1999 /s/ Timothy L. Burke - ----------------------- Secretary and Treasurer (Chief TIMOTHY L. BURKE Financial Officer) July 1, 1999 /s/ S. Mark Kerney - ----------------------- Controller (Chief S. MARK KERNEY Accounting Officer) July 1, 1999 /s/ John M. Dunn - ----------------------- Director July 1, 1999 JOHN M. DUNN - ----------------------- Director JOHN D. ENGELBRECHT /s/ Robert L. Koch Ii - ----------------------- Director July 1, 1999 ROBERT L. KOCH II /s/ Donald A. Rausch - ----------------------- Director July 1, 1999 DONALD A. RAUSCH II-5 /s/ Richard W. Shymanski - ----------------------- Director July 1, 1999 RICHARD W. SHYMANSKI - ----------------------- Director DONALD E. SMITH /s/ James S. Vinson - ----------------------- Director July 1, 1999 JAMES S. VINSON II-6 EX-1.1 2 UNDERWRITING AGREEMENT Draft 6/23/99 Southern Indiana Gas and Electric Company Underwriting Agreement To the Representatives of the several Underwriters named in the respective Pricing Agreements hereinafter described. ________ __, 1999 Dear Sirs: From time to time Southern Indiana Gas and Electric Company, an Indiana corporation (the "Company"), proposes to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the "Underwriters" with respect to such Pricing Agreement and the Senior Notes specified therein) certain of its Senior Notes (the "Senior Notes"). Senior Notes specified in Schedule II to a Pricing Agreement are hereinafter referred to as the "Designated Senior Notes" with respect to such Pricing Agreement. The Senior Notes are to be issued under a governing indenture (together with any supplements, the "Senior Note Indenture") each between the Company and ___________________, as Trustee (the "Senior Note Trustee"), in substantially the form heretofore delivered to the Representatives. Until the Release Date (as defined in the Senior Note Indenture), the Senior Notes will be secured by one or more series of Senior Note First Mortgage Bonds (as defined in the Senior Note Indenture) issued and delivered by the Company to the Senior Note Trustee. On the Release Date, the Senior Notes will cease to be secured by the Senior Note First Mortgage Bonds and will become unsecured obligations of the Company. The Senior Note First Mortgage Bonds securing the Senior Notes will be issued under the Company's Mortgage and Deed of Trust, dated as of April 1, 1932, with Bankers Trust Company, New York, New York, as Trustee (the "Mortgage Trustee"), as heretofore supplemented and amended by 2 Supplemental Indentures and as the same may be further supplemented by a Supplemental Indenture relating to the Senior Note First Mortgage Bonds (such Mortgage and Deed of Trust, as so supplemented and amended and as to be supplemented and amended being hereinafter referred to as the "Mortgage" and such Supplemental Indenture being referred to as the "Supplemental Indenture"). The terms and rights of the Senior Notes shall be as specified in the Pricing Agreement relating thereto and specified in or pursuant to the Senior Note Indenture. 1. Particular sales of Designated Senior Notes may be made from time to time to the Underwriters of such Senior Notes for whom the firms designated as representatives of the Underwriters of such Senior Notes in the Pricing Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as their representative. This Agreement shall not be construed as an obligation of the Company to sell any of the Senior Notes to the Underwriters or as an obligation of any of the Underwriters to purchase any of the Senior Notes. The obligation of the Company to issue and sell any of the Senior Notes and the obligation of any of the Underwriters to purchase any of the Senior Notes shall be evidenced by the Pricing Agreement with respect to the Designated Senior Notes specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Designated Senior Notes, the public offering price of such Designated Senior Notes, the purchase price to the Underwriters of such Designated Senior Notes, the names of the Underwriters of such Designated Senior Notes, the names of the Representatives of such Underwriters and the principal amount of such Designated Senior Notes to be purchased by each Underwriter, and shall set forth the date, time and manner of delivery of such Designated Senior Notes and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Senior Note Indenture, the Registration Statement (as defined in Section 2 hereof) and the Prospectus (as defined in Section 2 hereof)) the terms of such Designated Senior Notes. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or communications transmitted through any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint. 2. The Company represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement in respect of the Senior Notes has been filed with the Securities and Exchange Commission (the "Commission"); such registration statement 3 and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein, to the Representatives for each of the other Underwriters have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a "Rule 462(b) Registration Statement"), filed, pursuant to rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which became effective upon filing, no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of such registration statement or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective but excluding Form T-1, each as amended at the time such part of the Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became effective, being hereinafter called the "Registration Statement"; the prospectus relating to the Senior Notes, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in 4 the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Designated Senior Notes in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Senior Notes through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Senior Notes; (c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Senior Notes through 5 the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Senior Notes; (d) Other than as set forth in or contemplated by the Prospectus, (i) the Company has not sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business whether or not insured against; and (ii) since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been, and prior to the Time of Delivery (as defined in Section 4 hereof) there will not be, any change in the capital stock, long-term debt or long-term lease obligations or commitments of the Company (other than as occasioned by shares of common stock having been issued pursuant to the Company's Dividend Reinvestment and other stock plans) or any material adverse change, or any development which the Company has reasonable cause to believe will involve a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company; (e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Indiana with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and to execute and deliver this Agreement and to perform its obligations hereunder and under any Pricing Agreement, and the Company is not qualified as a foreign corporation in any jurisdiction and the nature of its operations is such that it is not required to be so qualified; (f) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; (g) The Company has good and marketable title in fee simple to all of the principal plants and other important units of the Company's property referred to in the Prospectus, except as to Unit Number Four located in the Warrick Power Plant of Alcoa Generating Corporation in which Unit the Company has good and marketable title in fee simple as a tenant in common with Alcoa Generating Corporation, and except that the Company's transmission and distribution lines and mains are constructed principally either under indeterminate permits or other permits from governmental authorities or on rights-of-way held by the Company in fee simple title or by easement from apparent owners and, in addition to the fee simple ownership of certain lands for gas storage purposes, the Company owns rights of gas storage 6 and other rights incidental thereto which other rights are in the nature of easements only; the transmission and distribution lines and pipeline and storage easements enjoyed by the Company are valid, subsisting and enforceable easements with such exceptions as are not material and do not interfere with the conduct of the business of the Company; substantially all the physical property and franchises owned by the Company are subject to the Mortgage; any property held under lease by the Company is held by it under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made by the Company of any such property that is material to the business of the Company; the gas purchase contracts referred to in the Prospectus are valid and binding contracts in accordance with their terms; the operating agreement with Alcoa Generating Corporation referred to in the Prospectus is a valid and binding contract in accordance with its terms; and except as otherwise set forth in the Prospectus, the Company possesses all licenses, franchises, indeterminate permits, necessity certificates, and other permits, authorizations, approvals, consents and orders of all governmental authorities or agencies necessary for the ownership, operation or lease of the properties owned, operated or leased by it and for the operation of its business as described in the Registration Statement and Prospectus; all such licenses, franchises, indeterminate permits, necessity certificates, other permits, authorizations, approvals, consents and orders are in full force and effect and contain no unduly burdensome provisions and, except as otherwise set forth in the Prospectus, there are no legal, governmental or administrative proceedings pending or, to the knowledge of the Company, threatened that would result in a material modification, suspension or revocation thereof; (h) This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company; any Pricing Agreement, when executed and delivered by the Company, will have been duly and validly authorized, executed and delivered on behalf of the Company; the Senior Notes and the Senior Note First Mortgage Bonds have been duly and validly authorized, and, when issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Senior Notes, will have been duly and validly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations, subject to the qualifications noted below, of the Company entitled to the benefits provided by the Senior Note Indenture and the Mortgage, respectively, which will be substantially in the forms filed as an exhibit to the Registration Statement; the Senior Note Indenture and the Mortgage have been duly and validly authorized, and duly qualified under the Trust Indenture Act, and constitute 7 valid and legally binding instruments of the Company, enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Senior Note Indenture and the Mortgage conform and the Designated Senior Notes will conform, to the descriptions thereof in the Prospectus as amended or supplemented with respect to such Designated Senior Notes; (i) The Mortgage constitutes a legally valid and directly enforceable first mortgage lien (except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights) upon substantially all of the Company's properties and franchises, free from all prior liens, charges or encumbrances other than excepted encumbrances as defined therein; (j) The issuance and sale of the Senior Notes, the issuance of the Senior Note First Mortgage Bonds and the compliance by the Company with all of the provisions of the Senior Notes, Senior Note First Mortgage Bonds, the Senior Note Indenture, the Mortgage, this Agreement and any Pricing Agreement, and the consummation of the transactions contemplated herein and therein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or (except for liens created by the Mortgage) result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of any statute, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in the violation of the provisions of the Company's Amended Articles of Incorporation or By-laws, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental agency or body is required for the issue and sale of the Senior Notes or the consummation by the Company of the other transactions contemplated by this Agreement or any Pricing Agreement or the Senior Note Indenture or the Mortgage except the order or orders of the Indiana Utility Regulatory Commission which have been, or will have been prior to the Time of Delivery, obtained and are or will be in full force and effect, authorizing the issuance and sale of the Senior Notes and the Senior Note First Mortgage Bonds, and such as may be required under the Act and the Trust Indenture Act and such 8 consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Senior Notes by the Underwriters; (k) Except as set forth in the Prospectus, there are no legal, governmental or administrative proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, which if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the general affairs, financial position, stockholders' equity or results of operations of the Company and its subsidiaries; and, except as so set forth, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (l) Arthur Andersen & Co., who have certified certain financial statements of the Company, are independent public accountants as defined in the Act and the rules and regulations of the Commission thereunder; (m) The Company is a "holding company" as such term is defined under the Public Utility Holding Company Act (the "1935 Act") and the Company is exempt from all provisions of the 1935 Act except Section 9(A)(2); and (n) The Company has reviewed its operations and that of its subsidiaries and any third parties with which the Company or any of its subsidiaries has a material relationship to evaluate the extent to which the business or operations of the Company or any of its subsidiaries will be affected by the Year 2000 Problem and has completed or is in the process of completing measures which are designed to address the Year 2000 Problem. As a result of such review and such measures, the Company has no reason to believe, and does not believe, that the Year 2000 Problem will have a material adverse effect on the general affairs, management, the current or future consolidated financial position, business prospects, stockholders' equity or results of operations of the Company and its subsidiaries or result in any material loss or interference with the Company's business or operations. The "Year 2000 Problem" as used herein means any significant risk that computer hardware or software used in the receipt, transmission, processing, manipulation, storage, retrieval, retransmission or other utilization of data or in the operation of mechanical or electrical systems of any kind will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively as in the case of dates or time periods occurring prior to January 1, 2000. 9 3. Upon the execution of the Pricing Agreement applicable to any Designated Senior Notes and authorization by the Representatives of the release of such Designated Senior Notes, the several Underwriters propose to offer such Designated Senior Notes for sale upon the terms and conditions set forth in the Prospectus as amended and supplemented. 4. Designated Senior Notes to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in definitive form to the extent practicable, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to the Representatives at least forty-eight hours in advance, all at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the "Time of Delivery" for such Senior Notes. 5. The Company agrees with each of the Underwriters of any Designated Senior Notes: (a) To prepare the Prospectus as amended and supplemented in relation to the applicable Designated Senior Notes in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Pricing Agreement relating to the applicable Designated Senior Notes or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended and supplemented after the date of the Pricing Agreement relating to such Senior Notes and prior to the Time of Delivery for such Senior Notes which shall be disapproved by the Representatives for such Senior Notes promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Senior Notes, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has become effective or any amendment or supplement to the Prospectus or any amended 10 Prospectus has been filed, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Senior Notes, of the suspension of the qualification of such Senior Notes for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Senior Notes or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify such Senior Notes for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Senior Notes, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with copies of the Registration Statement and of each amendment and supplement thereto and copies of the Prospectus as amended and supplemented in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of any Designated Senior Notes and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to so notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in Senior Notes as many copies as the Representatives may from time to time reasonably request; and in case any Underwriter is required to deliver a Prospectus in connection with sales of any Designated Senior Notes at any 11 time nine months or more after the time or issue of the Prospectus relating to such Designated Senior Notes, upon the request of the Representatives but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act; (d) To make generally available to its security holders as soon as practicable, but in any event not later than 90 days after the close of the period covered thereby, an earnings statement of the Company and its subsidiaries, if any (which need not be audited), complying with Section 11(a) of the Act (including, at the option of the Company, Rule 158 thereunder) and covering (i) a twelve-month period beginning not later than the first day of the fiscal quarter next following the date of the Pricing Agreement and (ii) after the date of the post-effective amendment, if any, to the Registration Statement next preceding the date of the Pricing Agreement relating to the Designated Senior Notes; (e) During the period beginning from the date of the Pricing Agreement for such Designated Senior Notes and continuing to and including the earlier of (i) the termination of trading restrictions on such Designated Senior Notes, as notified to the Company by the Representatives and (ii) the Time of Delivery for such Designated Senior Notes, not to offer, sell, contract to sell or otherwise dispose of any debt Senior Notes of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Designated Senior Notes, without the prior written consent of the Representatives; and (f) To apply the net proceeds from the sale of the Senior Notes in the manner set forth under "Use of Proceeds" in the Prospectus. (g) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act. 6. The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Senior Notes under the Act and all other 12 expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and (except as otherwise expressly provided in Section 5(c) hereof) amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing any Agreement among Underwriters, this Agreement, any Pricing Agreement, any Mortgage, any Senior Note Indenture, any Blue Sky and Legal Investment Memoranda and any other documents in connection with the offering, purchase, sale and delivery of the Senior Notes; (iii) all expenses in connection with the qualification of the Senior Notes for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Senior Notes or the Senior Note First Mortgage Bonds; (v) any filing fees incident to any required review by the National Association of Securities Dealers, Inc., of the terms of the sale of the Senior Notes; (vi) the cost of printing, preparing and delivering the Senior Notes; (vii) the fees and expenses of any Senior Note Trustee or Mortgage Trustee and any agent of any Senior Note Trustee or Mortgage Trustee and the fees and disbursements of counsel for any Senior Note Trustee in connection with any Mortgage or Senior Note Indenture and the Senior Notes or the Senior Note First Mortgage Bonds; (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section; and (ix) any advertising expenses connected with the offering and sale of the Senior Notes so long as such advertising expenses have been approved by the Company. It is understood, however, that, except as provided in this Section, Section 8 and Section 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Senior Notes by them, and any advertising expenses connected with any offers they may make. 7. The obligations of the Underwriters of any Designated Senior Notes under the Pricing Agreement relating to such Designated Senior Notes shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Company in or incorporated by reference in the Pricing Agreement relating to such Designated Senior Notes are, at and as of the Time of Delivery for such Designated Senior Notes, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus as amended or supplemented in relation to the applicable Designated Senior Notes shall have been filed with the Commission pursuant to Rule 424(b) 13 within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by 10:00 p.m., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; (b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Senior Notes, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Bamberger, Foreman, Oswald and Hahn, counsel for the Company, shall have furnished to the Representatives their written opinion, dated the Time of Delivery for such Designated Senior Notes, in form and substance satisfactory to the Representatives, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Indiana, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus as amended or supplemented; to the best of such counsel's knowledge, the Company is not qualified as a foreign corporation in any jurisdiction and the nature of its operations is such that it is not required to be so qualified; (ii) The Company has an authorized capitalization as set forth in the Prospectus as amended or supplemented, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; (iii) The Company has good and marketable title in fee simple to all of the principal plants and other important units of the Company's property referred to in the Prospectus, except as to Unit Number Four located in the Warrick Power Plant of Alcoa Generating Corporation in which Unit the Company has good and marketable title in fee simple as a tenant in common 14 with Alcoa Generating Corporation, and except that the Company's transmission and distribution lines and mains are constructed principally either under indeterminate permits or other permits from governmental authorities or on rights-of-way held by the Company in fee simple title or by easement from apparent owners and, in addition to the fee simple ownership of certain lands for gas storage purposes, the Company owns rights of gas storage and other rights incidental thereto which other rights are in the nature of easements only; and the Indenture constitutes, as security for the Senior Note First Mortgage Bonds, and other First Mortgage Bonds, a first lien on substantially all the physical property and franchises owned by the Company, subject only to excepted encumbrances, as therein defined, and upon the acquisition hereafter by the Company of similar property, will, subject to liens existing thereon at the time of acquisition and to the due recordation of the Supplemented Indenture in the counties in which property is located, create such lien thereon; (iv) Except as otherwise set forth in or contemplated by the Prospectus, the Company possesses all licenses, franchises, indeterminate permits, necessity certificates, and other permits, authorizations, approvals, consents and orders of all governmental authorities or agencies necessary for the ownership, operation or lease of the properties owned, operated or leased by it and for the operation of its business as described in the Registration Statement and Prospectus, all such licenses, franchises, indeterminate permits, necessity certificates, other permits, authorizations, approvals, consents and orders are in full force and effect and contain no unduly burdensome provisions and, except as otherwise set forth in the Prospectus, there are no legal or governmental proceedings pending or, to the knowledge of such counsel, threatened that would result in a material modification, suspension or revocation thereof; (v) To the best of such counsel's knowledge after due inquiry there are no legal or governmental proceedings pending to which the Company is a party or of which property of the Company is the subject, other than as set forth in the Prospectus as amended or supplemented and except for proceedings incident to the kind of business conducted by the Company which individually and in the aggregate are not material to the Company; and to the best of such counsel's knowledge no such proceedings are threatened or 15 contemplated by governmental authorities or threatened by others; (vi) This Agreement and the Pricing Agreement with respect to the Designated Senior Notes have been duly authorized, executed and delivered by the Company; (vii) The Designated Senior Notes have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled (subject to the qualifications noted in Paragraph (viii) below) to the benefits provided by the Senior Note Indenture; and the Designated Senior Notes and the Senior Note Indenture conform to the description thereof in the Prospectus as amended or supplemented; (viii) The Senior Note Indenture has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Senior Note Indenture has been duly qualified under the Trust Indenture Act, and all taxes and fees required to be paid with respect to the execution and delivery of the Senior Note Indenture, the filing and recording of the Senior Note Indenture and the issuance of the Senior Notes have been paid; (ix) The Senior Note First Mortgage Bonds have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled (subject to the qualifications noted in Paragraph (x) below) to the benefits provided by the Mortgage; (x) The Mortgage has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, [except as the same may be limited by laws of the States of Indiana and Kentucky, where the property covered thereby is located, relating to or affecting the remedies for the enforcement of the security provided therein, which laws do not, in the opinion of such counsel, make inadequate the remedies necessary for the realization of the benefits of such security,] or as the same may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to 16 general equity principles; the Indenture has been duly qualified under the Trust Indenture Act, and all taxes and fees required to be paid with respect to the execution and delivery of the Mortgage, the filing and recording of the Mortgage and the issuance of the Senior Note First Mortgage Bonds have been paid; (xi) The issuance and sale of the Designated Senior Notes and the Senior Note First Mortgage Bonds and the compliance by the Company with all of the provisions of the Designated Senior Notes, the Senior Note Indenture, the Senior Note First Mortgage bonds, the Mortgage, this Agreement and the Pricing Agreement with respect to the Designated Senior Notes and the Senior Note First Mortgage Bonds and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or (except for liens created by the Mortgage) result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of any statute, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in the violation of the provisions of the Company's Amended Articles of Incorporation or By-Laws, or any statute or any order, rule or regulation of any court or governmental agency or entity having jurisdiction over the Company or any of its properties; (xii) The Indiana Utility Regulatory Commission has duly authorized the issuance and sale of the Senior Notes and the Senior Note First Mortgage Bonds as contemplated by this Agreement, such approval is in full force and effect and the time to appeal has expired, and no further consent, approval, authorization or order of or registration or qualification with any court or governmental agency or body is required for the issue and sale of the Senior Notes or the Senior Note First Mortgage Bonds or the consummation by the Company of the transactions contemplated by this Agreement or any Pricing Agreement or the Mortgage or the Senior Note Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Senior Notes by the Underwriters; 17 (xiii) Such counsel has no reason to believe that any of the documents incorporated by reference in the Prospectus (other than the financial statements and other financial data therein, as to which such counsel need express no opinion), when they were filed with the Commission, failed to comply as to form in all material respects with the requirements of the Act, the Exchange Act and the Trust Indenture Act, as applicable, and the rules and regulations of the Commission thereunder, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; and (xiv) Such counsel has no reason to believe that, as of the Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and such counsel does not know of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required; (d) Winthrop, Stimson, Putnam & Roberts, counsel to the Company, shall have furnished to you their written opinion, dated the Time of Delivery for such Designated Senior Notes in form and substance satisfactory to the Representatives, to the effect that: (i) The Company has been duly incorporated and is validly existing in good standing under the laws of the State of Indiana, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus as amended or supplemented; (ii) The Designated Senior Notes have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled (subject to the qualifications noted in Paragraph (iii) below) to the benefits provided by the Senior Note Indenture; and the Designated Senior Notes and the Senior Note Indenture 18 conform to the description thereof in the Prospectus as amended or supplemented; (iii) The Senior Note Indenture has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Senior Note Indenture has been duly qualified under the Trust Indenture Act, and all taxes and fees required to be paid with respect to the execution and delivery of the Senior Note Indenture, the filing and recording of the Senior Note Indenture and issuance of the Senior Notes have been paid; (iv) The Senior Note First Mortgage Bonds have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled (subject to the qualifications noted in Paragraph (v) below) to the benefits provided by the Mortgage; and the Senior Note First Mortgage Bonds and the Mortgage conform to the description thereof in the Prospectus as amended or supplemented; (v) The Mortgage has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, except as the same may be limited by laws of the States of Indiana and Kentucky, where the property covered thereby is located, relating to or affecting the remedies for the enforcement of the security provided for therein, or as the same may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Mortgage has been duly qualified under the Trust Indenture Act, and all taxes and fees required to be paid with respect to the execution and delivery of the Mortgage, the filing and recording of the Mortgage and issuance of the Senior Note First Mortgage Bonds have been paid; (vi) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and other financial data therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the 19 Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and they have no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made when such documents were so filed, not misleading; and (vii) The Registration Statement has become effective under the Act and to the best knowledge of such counsel no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the knowledge of such counsel, threatened by the Commission; and (viii) The Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the Time of Delivery for the Designated Senior Notes (other than the financial statements and other financial data therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; they have no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company prior to the Time of Delivery (other than the financial statements and other financial data therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and other financial data therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading or that, as the Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and other financial data therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact 20 necessary to make the statement therein, in light of the circumstances in which they were made, not misleading; and they do not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required; (ix) The terms of the Senior Notes conform as to legal matters to the descriptions thereof and the statements in regard thereto contained in the Registration Statement and the Prospectus as amended or supplemented; (x) The Indiana Utility Regulatory Commission has duly authorized the issuance and sale of the Senior Notes and the Senior Note First Mortgage Bonds as contemplated by this Agreement, such approval is in full force and effect and the time to appeal has expired, and no further consent, approval, authorization or order of or registration or qualification with any court or governmental agency or body is required for the issue and sale of the Senior Notes or the Senior Note First Mortgage Bonds or the consummation by the Company of the transactions contemplated by this Agreement of any Pricing Agreement, the Mortgage or the Senior Note Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Senior Notes by the Underwriters; and (xi) This Agreement and the Pricing Agreement relating to such Designated Senior Notes have been duly authorized, executed and delivered by the Company. It is understood that in rendering such opinion, Winthrop, Stimson, Putnam & Roberts may rely as to matters of Indiana and Kentucky law upon the opinion of Bamberger, Foreman, Oswald and Hahn; (e) At the Time of Delivery for such Designated Senior Notes, the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries, if any, included or incorporated by reference in the Registration Statement shall have furnished to the 21 Representatives a letter dated such Time of Delivery in form and substance satisfactory to the Representatives, to the effect set forth in Annex II hereto and as to such other matters as the Representatives may reasonably request; (f) Other than as set forth or contemplated in the Prospectus as amended or supplemented (i) the Company shall not have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented any loss or interference with its business whether or not insured against, and (ii) since the respective dates as of which information is given in the Prospectus as amended or supplemented there shall not have been any change in the capital stock, long-term debt or long-term lease obligations or commitments of the Company (other than occasioned by shares of common stock having been issued pursuant to the Company's Dividend Reinvestment and other stock plans) or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company, the effect of which in any such case described in Clause (i) or (ii) is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Senior Notes on the terms and in the manner contemplated in the Prospectus as amended or supplemented; (g) On or after the date of the Pricing Agreement relating to the Designated Senior Notes, (i) no downgrading shall have occurred in the rating accorded the Company's [senior] debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities; (h) On or after the date of the Pricing Agreement relating to the Designated Senior Notes there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iii) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this Clause (iii) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Senior Notes on 22 the terms and in the manner contemplated in the Prospectus as amended or supplemented; (i) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement; and (j) The Company shall have furnished or caused to be furnished to the Representatives at the Time of Delivery for the Designated Senior Notes a certificate or certificates of officers of the Company satisfactory to the Representatives as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of this Section and as to such other matters as the Representatives may reasonably request. 8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Senior Notes, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Senior Notes, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Underwriter of Designated Senior Notes through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Senior Notes; and provided further, that the Company shall not be liable to any Underwriter under the indemnity agreement in this subsection (a) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact 23 that such Underwriter sold Designated Senior Notes to a person as to whom it shall be established that there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus in any case where such delivery is required by the Act if such Underwriter failed to make reasonable efforts generally consistent with the then prevailing industry practice and the Company has previously furnished copies thereof in sufficient quantity and on a timely basis to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Preliminary Prospectus which was identified in writing to such Underwriter and corrected in the Prospectus. (b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Senior Notes, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Senior Notes, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under Subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel 24 satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under Subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Underwriters of the Designated Senior Notes on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations, including relative benefit. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this Subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Senior Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be 25 entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Senior Notes in this Subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Senior Notes and not joint. (e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Designated Senior Notes which it has agreed to purchase under the Pricing Agreement relating to such Designated Senior Notes, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Senior Notes on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Designated Senior Notes, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representatives to purchase such Designated Senior Notes on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Designated Senior Notes, or the Company notifies the Representatives that it has so arranged for the purchase of such Designated Senior Notes, the Representatives or the Company shall have the right to postpone the Time of Delivery for such Designated Senior Notes for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section 9 with like effect as if such person had originally been a party to the Pricing Agreement relating to such Designated Senior Notes. (b) If, after giving effect to any arrangements for the purchase of the Designated Senior Notes of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in Subsection (a) above, the aggregate 26 principal amount of such Designated Senior Notes which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Senior Notes, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Designated Senior Notes which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Senior Notes and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Designated Senior Notes which such Underwriter agreed to purchase under such Pricing Agreement) of the Designated Senior Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Designated Senior Notes of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in Subsection (a) above, the aggregate principal amount of Designated Senior Notes which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Senior Notes, as referred to in Subsection (b) above, or if the Company shall not exercise the right described in Subsection (b) above to require non-defaulting Underwriters to purchase Designated Senior Notes of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Senior Notes shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Senior Notes. 11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not then be under any liability to any Underwriter with respect to the Designated Senior Notes covered by such Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if for any other reason Designated Senior Notes are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through the Representatives for all out-of-pocket 27 expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Senior Notes, but the Company shall then be under no further liability to any Underwriter with respect to such Designated Senior Notes except as provided in Section 6 and Section 8 hereof. 12. In all dealings hereunder, the Representatives of the Underwriters of Designated Senior Notes shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail or facsimile transmission to the address of the Company set forth in the Registration Statement: Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by registered mail to such Underwriter at its address provided to the Company for the purpose of notices pursuant to such Section 8(c). 13. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Section 8 and Section 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Senior Notes from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of each Pricing Agreement. As used herein, "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. As used herein, "New York Business Day" shall mean any day when the New York Stock Exchange is open for business. 15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 16. This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in 28 any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. If the foregoing is in accordance with your understanding, please sign and return to us 5 counterparts hereof. Very truly yours, Southern Indiana Gas and Electric Company By: ------------------------------- Name: Title: - ----------------------------- ANNEX I PRICING AGREEMENT [Date] Dear Sirs: Southern Indiana Gas and Electric Company (the "Company") proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated 1999 (the "Underwriting Agreement"), between the Company, on the one hand, and you, on the other hand, to issue and sell to you the Senior Notes specified in Schedule I hereto (the "Designated Senior Notes"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each of the representations and warranties set forth in Section 2 of the Underwriting Agreement with respect to the Prospectus or the information contained in the Prospectus shall constitute a representation or warranty thereof (a) as of the date of the Underwriting Agreement with respect to the Prospectus (as therein defined), and also (b) as of the date of this Pricing Agreement with respect to the Prospectus as amended or supplemented relating to the Designated Senior Notes which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein; terms defined in the Underwriting Agreement are used herein as therein defined. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Senior Notes, in the form heretofore delivered to you is now proposed to be filed, or in the case of a supplement mailed for filing, with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to you, and you agree to purchase from the Company, at the time and place and at 2 a purchase price to you set forth in Schedule I hereto, the principal amount of Designated Senior Notes set forth on Schedule I. 3 If the foregoing is in accordance with your understanding, please sign and return to us 5 counterparts hereof, and upon acceptance by you, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between you and the Company. Very truly yours, Southern Indiana Gas and Electric Company By --------------------------------- Accepted as of the date hereof: - ------------------------------ ANNEX II Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall furnish a letter to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules (and, if applicable, prospective financial statements and/or pro forma financial information) examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data, pro forma financial information, prospective financial statements and/or condensed financial statements derived from audited financial statements of the Company for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representative of the Underwriters (the "Representatives"); (iii) The unaudited selected financial information with respect to the consolidated results of operations and financial position of the company for the five most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for five such fiscal years which were included or incorporated by reference in the Company's Annual Reports on Form 10-K for such fiscal years; (iv) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of the Company and its subsidiaries, inspection of the minute books of the Company and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Company and its subsidiaries responsible for financial and accounting 2 matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included or incorporated by reference in the Company's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act as it applies to Form 10-Q and the related published rules and regulations thereunder or are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with the basis for the audited consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (C) the unaudited financial statements which were not included in the Prospectus but from which were derived the unaudited condensed financial statements referred to in clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in Clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (D) any unaudited pro forma consolidated condensed financial statements included or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; 3 (E) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the consolidated long-term debt of the Company and its subsidiaries, or any decreases in consolidated net current assets or net assets or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (F) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (E) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (v) In addition to the examination referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (iv) above, they have carried out certain specified procedures, not constituting an examination in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Company and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting 4 records of the Company and its subsidiaries and have found them to be in agreement. All references in this Annex II to the Prospectus shall be deemed to refer to the Prospectus as amended or supplemented (including the documents incorporated by reference therein) in relation to the applicable Designated Senior Notes for purposes of the letter delivered at the Time of Delivery for such Designated Senior Notes. SCHEDULE I Principal Underwriter Amount - ----------- --------- Total ========= 2 SCHEDULE II Title of Designated Senior Notes: Senior Notes, ____% Series Due ___________ Aggregate principal amount: $ Price to Public: ____% of the principal amount of the Designated Senior Notes, plus accrued interest from ________ to the Time of Delivery Purchase Price by Underwriters: _____% of the principal amount of the Designated Senior Notes, plus accrued interest from ________ to the Time of Delivery Indenture: Maturity: ________ Interest Rate: _____% Interest Payment Dates: ________ and ________ of each year, commencing ________ Redemption Provisions: Sinking Fund Provisions: Time of Delivery: 10:00 a.m. [Closing Date] Closing Location: EX-4.(B) 3 SUPPLEMENTAL INDENTURE SOUTHERN INDIANA GAS AND ELECTRIC COMPANY WITH BANKERS TRUST COMPANY, as Trustee SUPPLEMENTAL INDENTURE Providing among other things for FIRST MORTGAGE BONDS ___% Senior Note Series of 1999 due 20__ Dated as of July __, 1999 SUPPLEMENTAL INDENTURE, dated as of July __, 1999, 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 BANKERS TRUST COMPANY, a corporation organized and existing under the laws of the State of New York, as Trustee under the Mortgage hereinafter referred to, party of the second part. WHEREAS, the Company heretofore executed and delivered to 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 and June 1, 1993, 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, 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, to establish the terms and provisions of any series of bonds to be issued under said Mortgage and to add to the covenants and agreements of the Company for the protection of the holders of bonds and of the mortgaged and pledged property; and WHEREAS, the Company and the Trustee deem it necessary or desirable to enter into this Supplemental Indenture for such purposes; and WHEREAS, the Company by appropriate corporate action in conformity with the terms of the Indenture has duly determined to create a series of bonds to be issued under the Indenture to be designated as "First Mortgage Bonds, ___% Senior Note Series of 1999 due 20__" (hereinafter sometimes referred to as "bonds of the Thirty-Eighth Series"), the bonds of which series are to bear interest at the rate per annum set forth in the title thereof; and WHEREAS, the definitive registered (without coupons) bonds of the Thirty-Eighth 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 THIRTY-EIGHTH SERIES] [FORM OF FACE OF BOND] SOUTHERN INDIANA GAS AND ELECTRIC COMPANY FIRST MORTGAGE BOND, ___% SENIOR NOTE SERIES OF 1999 DUE 20__ No. _______ $ __________ 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 ______________________________ or registered assigns ______________________________ dollars, on July __, 20__ at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, 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 from the interest payment date (________ 1 or ________ 1) next preceding the date of this bond unless the date hereof is prior to ________ 1, 1999, in which case from ________ 1, 1999 (or, of this bond is dated between the record date for any interest payment date and such interest payment date, then from such interest payment date), at the rate of _____________ per cent (__%) per annum in like coin or currency, payable at said office or agency on ________ 1 and ________ 1 in each year, until the Company's obligation with respect to the payment of such principal shall have been discharged. The interest so payable on any ________ 1 or ________ 1 will, subject to certain exceptions provided in the Mortgage hereinafter mentioned, be paid to the person in whose name this bond is registered at the close of business on the record date, which shall be the ________ 15 or ________ 15, as the case may be, next preceding such interest payment date, or, if such ________ 15 or ________ 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, The City of New York, New York, are authorized or obligated by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized or obligated to close. 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 Bankers Trust Company, the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon. 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. 2 Dated: SOUTHERN INDIANA GAS AND ELECTRIC COMPANY By: ------------------------------------- Name: Title: President and Chief Executive Officer Attest: - ------------------------------- Secretary 3 [FORM OF TRUSTEE'S CERTIFICATE] This bond is one of the bonds of the series designated therein, described in the within-mentioned Mortgage. BANKERS TRUST COMPANY, as Trustee, By: ------------------------------------- Name: Title: [FORM OF REVERSE OF BOND] SOUTHERN INDIANA GAS AND ELECTRIC COMPANY FIRST MORTGAGE BOND, __% SENIOR NOTE SERIES OF 1999 DUE 20__ 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 Bankers Trust Company, as Trustee, as amended and supplemented by indentures supplemental thereto, to which Indenture as so amended and supplemented (herein referred to as the Mortgage) 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 principal hereof may be declared or may become due on the conditions, with the effect, in the manner and at the time set forth in the Mortgage, upon the occurrence of a completed default as provided in the Mortgage. 4 The bonds of this series shall be redeemable as follows: [ ] 5 This bond 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, New York, 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, premium, if any, and interest due hereon and for all other purposes. 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 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, New York. No recourse shall be had for the payment of the principal of, premium, if any, or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, office 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. Pursuant to the Mortgage, the holder or owner of this bond by his acceptance hereof is deemed to have agreed to amendments to the Mortgage which will eventually permit certain amendments to the Mortgage with the consent of the holders of 66% of the principal amount of the outstanding bonds of all series issued under the Mortgage, which redefine, effective at such time as all bonds of each series of bonds issued under the Mortgage prior to January 1, 1977 are no longer outstanding, the amounts required to be spent by the Company under the Mortgage for the repair, maintenance, renewal and replacement of its property and which authorize the Company, effective at such time as all bonds of each series issued under the Mortgage on or prior to May 31, 1986 are no longer outstanding, to designate bonds of any series as the bonds to be redeemed pursuant to Section 36B of the Mortgage and to do so at any time that cash for such purpose is on deposit with Trustee pursuant to the provisions of that Section. [END OF FORM OF BOND] 6 and WHEREAS, all things necessary to make the bonds of the Thirty-Eighth 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 Thirty-Eighth Series, and of providing the terms and conditions of redemption thereof; 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 Bankers Trust Company, as Trustee, and to its successor or successors in said trust, and to its and their assigns forever, all the properties of the Company located in the State of Indiana described in Schedule A (which is identified by the signature of an officer of each party hereto at the end thereof) hereto annexed and hereby made a part hereof 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 party 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. 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. 7 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: SECTION 1. Bonds of the Thirty-Eighth Series shall mature on the date set forth in the form of bond relating thereto hereinbefore set forth, shall bear interest at the rate per annum set forth in the title thereof, payable semi-annually, on ________ 1 and ________ 1 in each year, and all bonds of said series shall be designated as hereinbefore in the fourth Whereas clause set forth. Principal of, premium, if any, and interest on said bonds 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 the Borough of Manhattan, The City of New York, New York. 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 Thirty-Eighth 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 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, New York. 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 8 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 and shall be exchangeable for definitive bonds of said series when prepared. The person in whose name any registered bond without coupons of the Thirty-Eighth 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 thirty 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 ________ 15 or ________ 15, as the case may be, next preceding such interest payment date, or, if such ________ 15 or ________ 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, The City of New York, New York, are authorized or obligated by law to close, the next preceding day which shall not be a legal holiday or day on which such institutions are so authorized or obligated to close. Except as provided in this Section, every registered bond without coupons of the Thirty-Eighth Series shall be dated and shall bear interest as provided in Section 10 of the Indenture; provided, however, that so long as there is no existing default in the payment of interest on the bonds, the holder of any bond authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim 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 ________ 1 or ________ 1, as the case may be, next preceding the date of such bond, to which interest has been paid or, if the Company shall be in default with respect to the interest due on ________ 1, 1999, then from ________ 1, 1999. Bonds of the Thirty-Eighth Series shall be redeemable as follows: [ ] 9 SECTION 2. The Company's obligation to make payments with respect to the principal of, premium, if any, and/or interest on, the bonds of the Thirty-Eighth Series shall be fully or partially satisfied and discharged to the extent that, at the time any such payment shall be due, the corresponding amount then due of principal of, and/or premium, if any, and/or interest then due on, the senior notes (the "Senior Notes") issued pursuant to the Indenture (for Senior Notes) dated as of July __, 1999, between the Company and Bankers Trust Company, the Senior Note Trustee (the "Senior Note Indenture") shall have been fully or partially paid (other than by the application of the proceeds of a payment in respect of such bonds of the Thirty-Eighth Series), as the case may be, or there shall have been deposited with the Senior Note Trustee pursuant to the Senior Note Indenture trust funds sufficient under such indenture to fully or partially pay, as the case may be, the corresponding amount then due of principal of, and/or premium, if any, and/or interest on, the Senior Notes (other than by the application of the proceeds of a payment in respect of such bonds of the Thirty-Eighth Series). Upon payment of the principal of, and premium if any, and interest due on the Senior Notes, whether at maturity or prior to maturity by acceleration, redemption or otherwise, or upon provision for the payment thereof having been made in accordance with the Senior Note Indenture (other than by the application of the proceeds of a payment in respect of such bonds of the Thirty-Eighth Series), bonds of the Thirty-Eighth Series in a principal amount equal to the principal amount of Senior Notes so paid or for which such provision for payment has been made shall be deemed fully paid, satisfied and discharged and the obligations of the Company thereunder shall be terminated and such bonds of the Thirty-Eighth Series shall be surrendered to and cancelled by the Trustee. From and after the Release Date (as defined in the Senior Note Indenture), the bonds of the Thirty-Eighth Series shall be deemed fully paid, satisfied and discharged and the obligation of the Company thereunder shall be terminated. On the Release Date, the bonds of the Thirty-Eighth Series shall be surrendered to and cancelled by the Trustee. SECTION 3. 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 Thirty-Eighth Series shall be outstanding under the Indenture. SECTION 4. 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. Without limiting the generality of the foregoing, the Trustee shall have no responsibility for, and shall incur no liability with respect to, the form or substance of the Certificates or the form or substance of any agreement under which any banking or other financial institution receives the Deposit or makes the Payments nor shall the Trustee have any responsibility, or incur any liability, with respect to the performance of such banking or other financial institution under any such agreement. 10 SECTION 5. 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 6. 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. 11 IN WITNESS WHEREOF, SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, party of the first part hereto, and BANKERS TRUST COMPANY, party of the second part hereto, have caused these presents to be executed in their respective names by their respective Chairmen of the Board or Presidents or one of their Vice Presidents or Assistant Vice Presidents and their respective seals to be hereunto affixed and attested by their respective Secretaries or one of their Assistant Secretaries, all as of the day and year first above written. (SEAL) SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, By: ------------------------------------ Name: Title: Attest: - ----------------------- Name: Title: (SEAL) BANKERS TRUST COMPANY, By: ------------------------------------ Name: Title: Attest: - ----------------------- Name: Title: 12 STATE OF INDIANA ) ) ss.: COUNTY OF VANDERBURGH ) On this __ day of July, 1999, before me, the undersigned, a notary public in and for the county and state aforesaid, personally came ___________________, to me known, who being by me duly sworn, did depose and say that he resides at _________________________________; that he is _____________________ 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 _____________________ 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. (SEAL) -------------------------- Notary Public My Commission Expires My County of Residence is 13 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this __ day of July, 1999, before me, the undersigned, a notary public in and for the county and state aforesaid, personally came ___________________, to me known, who being by me duly sworn, did depose and say that he resides at ____________________________; that he is a ______________________ of BANKERS TRUST 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 ______________________ 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. (SEAL) -------------------------- Notary Public My Commission Expires My County of Residence is 14 A-1 SCHEDULE A Detailed Description of Additional Properties Signed for identification ---------------------------------------- Name: Title: SOUTHERN INDIANA GAS AND ELECTRIC COMPANY ---------------------------------------- Name: Title: BANKERS TRUST COMPANY 15 EX-4.(C) 4 INDENTURE EXHIBIT 4(c) -------------------------------------------------- SOUTHERN INDIANA GAS AND ELECTRIC COMPANY TO BANKERS TRUST COMPANY, Trustee ------------ Indenture (For Senior Notes) Dated as of July __, 1999 -------------------------------------------------- TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...................... 1 Section 101. Definitions .................................................. 1 Section 102. Compliance Certificates and Opinions ......................... 9 Section 103. Form of Documents Delivered to Trustee ....................... 9 Section 104. Acts of Holders .............................................. 10 Section 105. Notices, Etc. to Trustee and Company ......................... 12 Section 106. Notice to Holders of Notes; Waiver ........................... 13 Section 107. Conflict with Trust Indenture Act ............................ 13 Section 108. Effect of Headings and Table of Contents ..................... 13 Section 109. Successors and Assigns ....................................... 13 Section 110. Separability Clause .......................................... 13 Section 111. Benefits of Indenture ........................................ 14 Section 112. Governing Law ................................................ 14 Section 113. Legal Holidays ............................................... 14 ARTICLE II NOTE FORMS .................................................................. 14 Section 201. Forms Generally .............................................. 14 Section 202. Form of Trustee's Certificate of Authentication .............. 15 ARTICLE III THE NOTES................................................................... 15 Section 301. Amount Unlimited; Issuable in Series ......................... 15 Section 302. Denominations ................................................ 18 Section 303. Execution, Authentication, Delivery and Dating ............... 19 Section 304. Temporary Notes .............................................. 21 Section 305. Registration, Registration of Transfer and Exchange .......... 22 Section 306. Mutilated, Destroyed, Lost and Stolen Notes .................. 23 Section 307. Payment of Interest; Interest Rights Preserved ............... 24 i Section 308. Persons Deemed Owners ........................................ 25 Section 309. Cancellation by Note Registrar ............................... 25 Section 310. Computation of Interest ...................................... 26 Section 311. Payment to be in Proper Currency ............................. 26 Section 312. Payments on Senior Note First Mortgage Bonds ................. 26 ARTICLE IV SENIOR NOTE FIRST MORTGAGE BONDS............................................. 26 Section 401. Acceptance of Senior Note First Mortgage Bonds; Registration and Ownership of Senior Note First Mortgage Bonds............. 26 Section 402. Terms of Senior Note First Mortgage Bonds .................... 27 Section 403. Senior Note First Mortgage Bonds as Security for Notes ....... 27 Section 404. Fair Value Certificate ....................................... 28 Section 405. Senior Note First Mortgage Bonds Held by the Trustee ......... 29 Section 406. No Transfer of Senior Note First Mortgage Bonds; Exception ... 29 Section 407. Delivery to the Company of all Senior Note First Mortgage Bonds ........................................................ 29 Section 408. Further Assurances ........................................... 30 Section 409. Exchange and Surrender of Senior Note First Mortgage Bonds ... 30 ARTICLE V REDEMPTION OF NOTES.......................................................... 30 Section 501. Applicability of Article ..................................... 30 Section 502. Election to Redeem; Notice to Trustee ........................ 31 Section 503. Selection of Notes to be Redeemed ............................ 31 Section 504. Notice of Redemption ......................................... 31 Section 505. Notes Payable on Redemption Date ............................. 33 Section 506. Notes Redeemed in Part ....................................... 33 ARTICLE VI SINKING FUNDS................................................................ 33 Section 601. Applicability of Article ..................................... 33 Section 602. Satisfaction of Sinking Fund Payments with Notes ............. 34 Section 603. Redemption of Notes for Sinking Fund ......................... 34 ii ARTICLE VII COVENANTS.................................................................... 35 Section 701. Payment of Principal, Premium and Interest ................... 35 Section 702. Maintenance of Office or Agency .............................. 35 Section 703. Money for Notes Payments to be Held in Trust ................. 35 Section 704. Corporate Existence .......................................... 37 Section 705. Maintenance of Properties .................................... 37 Section 706. Annual Officer's Certificate as to Compliance ................ 37 Section 707. Waiver of Certain Covenants .................................. 37 Section 708. Recording, Filing, etc.; Opinions of Counsel ................. 38 Section 709. Liens ........................................................ 39 Section 710. Sale and Lease-Back Transactions ............................. 41 ARTICLE VIII SATISFACTION AND DISCHARGE................................................... 41 Section 801. Satisfaction and Discharge of Notes .......................... 41 Section 802. Satisfaction and Discharge of Indenture ...................... 44 Section 803. Application of Trust Money ................................... 45 ARTICLE IX EVENTS OF DEFAULT; REMEDIES.................................................. 46 Section 901. Events of Default ............................................ 46 Section 902. Acceleration of Maturity; Rescission and Annulment ........... 47 Section 903. Collection of Indebtedness and Suits for Enforcement by Trustee ...................................................... 48 Section 904. Trustee May File Proofs of Claim ............................. 49 Section 905. Trustee May Enforce Claims Without Possession of Notes ....... 50 Section 906. Application of Money Collected ............................... 50 Section 907. Limitation on Suits .......................................... 50 Section 908. Unconditional Right of Holders to Receive Principal, Premium and Interest ................................................. 51 Section 909. Restoration of Rights and Remedies ........................... 51 Section 910. Rights and Remedies Cumulative ............................... 51 Section 911. Delay or Omission Not Waiver ................................. 52 Section 912. Control by Holders of Notes .................................. 52 Section 913. Waiver of Past Defaults ...................................... 52 iii Section 914. Undertaking for Costs ........................................ 53 Section 915. Waiver of Stay or Extension Laws ............................. 53 Section 916. Default Under the First Mortgage ............................. 53 ARTICLE X THE TRUSTEE.................................................................. 54 Section 1001. Certain Duties and Responsibilities .......................... 54 Section 1002. Notice of Defaults ........................................... 54 Section 1003. Certain Rights of Trustee .................................... 55 Section 1004. Not Responsible for Recitals or Issuance of Notes ............ 56 Section 1005. May Hold Notes ............................................... 56 Section 1006. Money Held in Trust .......................................... 56 Section 1007. Compensation and Reimbursement ............................... 56 Section 1008. Disqualification; Conflicting Interests ...................... 57 Section 1009. Corporate Trustee Required; Eligibility ...................... 57 Section 1010. Resignation and Removal; Appointment of Successor ............ 58 Section 1011. Acceptance of Appointment by Successor ....................... 60 Section 1012. Merger, Conversion, Consolidation or Succession to Business .. 61 Section 1013. Preferential Collection of Claims Against Company ............ 61 Section 1014. Co-trustees and Separate Trustees ............................ 61 Section 1015. Appointment of Authenticating Agent .......................... 63 ARTICLE XI HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............................ 64 Section 1101. Lists of Holders ............................................. 64 Section 1102. Reports by Trustee and Company ............................... 65 ARTICLE XII CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER.......................... 65 Section 1201. Company May Consolidate, Etc., Only on Certain Terms ......... 65 Section 1202. Successor Corporation Substituted ............................ 66 ARTICLE XIII SUPPLEMENTAL INDENTURES...................................................... 66 iv Section 1301. Supplemental Indentures Without Consent of Holders ........... 66 Section 1302. Supplemental Indentures With Consent of Holders .............. 68 Section 1303. Execution of Supplemental Indentures ......................... 70 Section 1304. Effect of Supplemental Indentures ............................ 70 Section 1305. Conformity with Trust Indenture Act .......................... 70 Section 1306. Reference in Notes to Supplemental Indentures ................ 70 Section 1307. Modification Without Supplemental Indenture .................. 71 ARTICLE XIV MEETINGS OF HOLDERS; ACTION WITHOUT MEETING.................................. 71 Section 1401. Purposes for Which Meetings May Be Called .................... 71 Section 1402. Call, Notice and Place of Meetings ........................... 71 Section 1403. Persons Entitled to Vote at Meetings ......................... 72 Section 1404. Quorum; Action ............................................... 72 Section 1405. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings........................... 73 Section 1406. Counting Votes and Recording Action of Meetings .............. 74 Section 1407. Action Without Meeting ....................................... 74 ARTICLE XV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.............. 74 Section 1501. Liability Solely Corporate ................................... 74 v SOUTHERN INDIANA GAS AND ELECTRIC COMPANY Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of July __, 1999 Trust Indenture Act Section Indenture Section ss.310 (a)(1) ...................................1009 (a)(2) ...................................1009 (a)(3) ...................................1014 (a)(4) ...................................Not Applicable (b) ...................................1008 1010 ss.311 (a) ...................................1013 (b) ...................................1013 (c) ...................................1013 ss.312 (a) ...................................1101 (b) ...................................1101 (c) ...................................1101 ss.313 (a) ...................................1102 (b) ...................................1102 (c) ...................................1102 (d) ...................................1102 ss.314 (a) ...................................1102 (a)(4) ...................................706 (b) ...................................708 (c)(1) ...................................102 (c)(2) ...................................102 (c)(3) ...................................Not Applicable (d) ...................................102 404 (e) ...................................102 ss.315 (a) ...................................1001 1003 (b) ...................................1002 (c) ...................................1001 (d) ...................................1001 (e) ...................................914 ss.316 (a) ...................................912 ...................................913 (a)(1)(A) ...................................902 912 (a)(1)(B) ...................................913 (a)(2) ...................................Not Applicable (b) ...................................908 vi Trust Indenture Act Section Indenture Section ss.317 (a)(1) ...................................903 (a)(2) ...................................904 (b) ...................................703 ss.318 (a) ...................................107 vii INDENTURE, dated as of July __, 1999, between SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of Indiana (herein called the "Company"), having its principal office at 20 N.W. Fourth Street, Evansville, Indiana 47741-0001, and BANKERS TRUST COMPANY, a banking corporation of the State of New York, having its principal office at 4 Albany Street, 4th Floor, New York, New York 10006, as Trustee (herein called the "Trustee"). RECITAL OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its senior notes (herein called the "Notes"), in an unlimited aggregate principal amount, to be issued in one or more series as contemplated herein; and all acts necessary to make this Indenture a valid agreement of the Company have been performed. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires, capitalized terms used herein shall have the meanings assigned to them in Article One of this Indenture. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes or of series thereof, as follows: ARTICLE I Definitions and Other Provisions of General Application Section 101. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all terms used herein without definition which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted 1 hereunder shall mean such accounting principles as are generally accepted in the United States at the date of such computation or, at the election of the Company from time to time, at the date of the execution and delivery of this Indenture; provided, however, that in determining generally accepted accounting principles applicable to the Company, the Company shall, to the extent required, conform to any order, rule or regulation of any administrative agency, regulatory authority or other governmental body having jurisdiction over the Company; and (d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Ten, are defined in that Article. "Act", when used with respect to any Holder of a Note, has the meaning specified in Section 104. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person (other than the Company or an Affiliate of the Company) authorized by the Trustee pursuant to Section 1015 to act on behalf of the Trustee to authenticate one or more series of Notes or Tranche thereof. "Authorized Officer" means the Chairman of the Board, the President, any Vice President, the Treasurer or any other duly authorized officer of the Company. "Board of Directors" means either the board of directors of the Company or any committee thereof duly authorized to act or any director or directors and/or officer or officers of the Company to whom that board or committee shall have duly delegated its authority in respect of matters relating to this Indenture. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day", when used with respect to a Place of Payment or any other particular location specified in the Notes or this Indenture, means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location are generally authorized or required by law, regulation or executive order to remain closed, except as may be otherwise specified as contemplated by Section 301. "Capitalization" means the total of all the following items appearing on, or included in, the consolidated balance sheet of the Company: (i) liabilities for indebtedness 2 maturing more than twelve (12) months from the date of determination; and (ii) common stock, preferred stock, premium on capital stock, capital surplus, capital in excess of par value, and retained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of capital stock of the Company held in its treasury. Subject to the foregoing, Capitalization shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by independent accountants regularly retained by the Company, and may be determined as of a date not more than (sixty) 60 days prior to the happening of an event for which such determination is being made. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the date of execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body, if any, performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by an Authorized Officer and delivered to the Trustee. "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution and delivery of this Indenture is located at [___________________________]. "corporation" means a corporation, association, company, limited liability company, joint stock company or business trust. "Debt" means any outstanding debt for money borrowed evidenced by notes, debentures, bonds, or other securities, or guarantees of any debt. "Defaulted Interest" has the meaning specified in Section 307. "Depositary" means, with respect to Notes of any series issuable in whole or in part in form of one or more Global Notes, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Notes as contemplated by Section 301. "Discount Note" means any Note which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 902. "Interest" with respect to a Discount Note means interest, if any, borne by such Note at a Stated Interest Rate. "Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts. 3 "Eligible Obligations" means: (a) with respect to Notes denominated in Dollars, Government Obligations; or (b) with respect to Notes denominated in a currency other than Dollars or in a composite currency, such other obligations or instruments as shall be specified with respect to such Notes, as contemplated by Section 301. "Event of Default" has the meaning specified in Section 901. "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time. "Expert" means any officer of the Company familiar with the terms of the First Mortgage and this Indenture, any law firm, any investment banking firm, any accounting firm, or any other Person, in each case that is appointed by Company Request, is an expert in the applicable matter, and is satisfactory in the reasonable judgment of the Trustee. "First Mortgage" means the Indenture, dated as of April 1, 1932, between the Company and Bankers Trust Company, as trustee, as supplemented and amended from time to time. "First Mortgage Bonds" means all first mortgage bonds issued by the Company and outstanding under the First Mortgage, other than Senior Note First Mortgage Bonds. "Global Note" means a Note that evidences all or part of the Notes of any series and bears such legend as may be specified as contemplated by Section 301 for such Notes. "Governmental Authority" means the government of the United States or of any State or Territory thereof or of the District of Columbia or of any county, municipality or other political subdivision of any thereof, or any department, agency, authority or other instrumentality of any of the foregoing. "Government Obligations" means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States entitled to the benefit of the full faith and credit thereof; and (b) certificates, depositary receipts or other instruments which evidence a direct ownership interest in obligations described in clause (a) above or in any specific interest or principal payments due in respect thereof; provided, however, that the custodian of such obligations or specific interest or principal payments shall be a bank or trust company (which may include the Trustee or any Paying Agent) subject to Federal or state supervision or examination with a combined capital and surplus of at least $100,000,000; and provided, further, that except as may be otherwise required by law, such custodian shall be obligated to pay to the holders of such certificates, depositary receipts or other instruments the full amount received by 4 such custodian in respect of such obligations or specific payments and shall not be permitted to make any deduction therefrom. "Holder" means a Person in whose name a Note is registered in the Note Register. "Indenture" means this instrument as originally executed and delivered and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Notes established as contemplated by Section 301. "Independent" when used with respect to any specified Person means such a Person who is in fact independent and selected by the Company and approved by the Trustee in the exercise of reasonable care. "Interest Payment Date", when used with respect to any Note, means the Stated Maturity of an installment of interest on such Note. "Maturity", when used with respect to any Note, means the date on which the principal of such Note or an installment of principal becomes due and payable as provided in such Note or in this Indenture, whether at the Stated Maturity, by declaration of acceleration, upon call for redemption or otherwise. "Mortgage Trustee" means the Trustee at the time under the First Mortgage (as such term is defined in the First Mortgage). "Net Tangible Assets" means the amount shown as total assets on the consolidated balance sheet of the Company, less the following: (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, unamortized debt discount and expense and other regulatory assets carried as an asset on the Company's consolidated balance sheet; and (ii) appropriate adjustments, if any, on account of minority interests. Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by the independent accountants regularly retained by the Company, and may be determined as of a date not more than (sixty) 60 days prior to the happening of the event for which such determination is being made. "Note Register" and "Note Registrar" have the respective meanings specified in Section 305. "Notes" has the meaning stated in the first recital of this Indenture and more particularly means any notes authenticated and delivered under this Indenture. "Officer's Certificate" means a certificate signed by an Authorized Officer and delivered to the Trustee. 5 "Operating Property" means (i) any interest in real property owned by the Company and (ii) any asset owned by the Company that is depreciable in accordance with generally accepted accounting principles, excluding in either case, any interest of the Company as lessee under any lease (except for a lease that results from a Sale and Lease-Back Transaction) which has been or would be capitalized on the books of the lessee in accordance with generally accepted accounting principles. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, or other counsel acceptable to the Trustee. "Outstanding", when used with respect to Notes, means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except: (a) Notes theretofore canceled by the Trustee or the Note Registrar or delivered to the Trustee or the Note Registrar for cancellation; (b) Notes deemed to have been paid in accordance with Section 801; and (c) Notes which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it and the Company that such Notes are held by a bona fide purchaser or purchasers in whose hands such Notes are valid obligations of the Company; provided, however, that in determining whether or not the Holders of the requisite principal amount of the Notes Outstanding under this Indenture, or the Outstanding Notes of any series or Tranche, have given any request, demand, authorization, direction, notice, consent or waiver hereunder or whether or not a quorum is present at a meeting of Holders of Notes, (x) Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor (unless the Company, such Affiliate or such obligor owns all Notes Outstanding under this Indenture, or all Outstanding Notes of each such series and each such Tranche, as the case may be, determined without regard to this clause (x)) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver or upon any such determination as to the presence of a quorum, only Notes which the Trustee knows to be so owned shall be so disregarded; provided, however, that Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor; and (y) the principal amount of a Discount Note that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 902; 6 provided, further, that, in the case of any Note the principal of which is payable from time to time without presentment or surrender, the principal amount of such Note that shall be deemed to be Outstanding at any time for all purposes of this Indenture shall be the original principal amount thereof less the aggregate amount of principal thereof theretofore paid. "Paying Agent" means any Person, including the Company, authorized by the Company to pay the principal of and premium, if any, or interest, if any, on any Notes on behalf of the Company. "Periodic Offering" means an offering of Notes of a series from time to time, any or all of the specific terms of which Notes, including without limitation the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents upon the issuance of such Notes. "Person" means any individual, corporation, partnership, joint venture, trust or unincorporated organization or any Governmental Authority. "Place of Payment", when used with respect to the Notes of any series, or Tranche thereof, means the place or places, specified as contemplated by Section 301, at which, subject to Section 702, principal of and premium, if any, and interest, if any, on the Notes of such series or Tranche are payable. "Predecessor Note" of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Note shall be deemed (to the extent lawful) to evidence the same debt as the mutilated, destroyed, lost or stolen Note. "Redemption Date", when used with respect to any Note to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Note to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Notes of any series means the date specified for that purpose as contemplated by Section 301. "Release Date" means the date as of which all First Mortgage Bonds, other than First Mortgage Bonds which, at the time of determination, do not in aggregate principal amount exceed the greater of five percent (5%) of Net Tangible Assets or five percent (5%) of Capitalization, have been retired through payment, redemption or otherwise (including those First Mortgage Bonds the payment for which has been provided for in accordance with the First Mortgage) at, before or after the maturity thereof, provided that no default or Event of Default has occurred and, at the time of determination, is continuing. "Required Currency" has the meaning specified in Section 311. 7 "Responsible Officer", when used with respect to the Trustee, means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Sale and Lease-Back Transaction" means any arrangement with any person providing for the leasing to the Company of any Operating Property (except for temporary leases for a term, including any renewal or potential renewal thereof, of not more than forty-eight (48) months), which Operating Property has been or is to be sold or transferred by the Company to such person; provided, however, Sale and Lease-Back Transaction shall not include any arrangement first entered into prior to the date hereof, and shall not include any transaction pursuant to which the Company sells Operating Property to, and thereafter purchases energy or services from, any entity if such transaction is ordered or authorized by any regulatory authority having jurisdiction over the Company or its operations or is entered into pursuant to any plan or program of industry restructuring ordered or authorized by any regulatory authority. "Senior Note First Mortgage Bonds" shall mean any bonds issued by the Company under the First Mortgage and delivered to the Trustee pursuant to Section 401 hereof. "Special Record Date" for the payment of any Defaulted Interest on the Notes of any series means a date fixed by the Trustee pursuant to Section 307. "Stated Interest Rate" means a rate (whether fixed or variable) at which an obligation by its terms is stated to bear interest. Any calculation or other determination to be made under this Indenture by reference to the Stated Interest Rate on a Note shall be made without regard to the effective interest cost to the Company of such Note and without regard to the Stated Interest Rate on, or the effective cost to the Company of, any other indebtedness in respect of which the Company's obligations are evidenced or secured in whole or in part by such Note. "Stated Maturity", when used with respect to any obligation or any installment of principal thereof or interest thereon, means the date on which the principal of such obligation or such installment of principal or interest is stated to be due and payable (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension). "Tranche" means a group of Notes which (a) are of the same series and (b) have identical terms except as to principal amount. "Trust Indenture Act" means, as of any time, the Trust Indenture Act of 1939, or any successor statute, as in effect at such time. "Trustee" means the Person named as the "Trustee" in the first paragraph of this Indenture until a successor Trustee shall have become such with respect to one or more series of Notes pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Notes of any series shall mean the Trustee with respect to Notes of that series. "United States" means the United States of America, its Territories, its possessions and other areas subject to its political jurisdiction. 8 "Value" means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds to the Company from the sale or transfer of the property leased pursuant to such Sale and Lease-Back Transaction or (2) the net book value of such property, as determined in accordance with generally accepted accounting principles by the Company at the time of entering into such Sale and Lease-Back Transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of such Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of such term, without regard, in any case, to any renewal or extension options contained in such lease. Section 102. Compliance Certificates and Opinions. Except as otherwise expressly provided in this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such Person, such Person has made such examination or investigation as is necessary to enable such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with. Section 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters 9 and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such officer's certificate or opinion are based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Whenever, subsequent to the receipt by the Trustee of any Board Resolution, Officer's Certificate, Opinion of Counsel or other document or instrument, a clerical, typographical or other inadvertent or unintentional error or omission shall be discovered therein, a new document or instrument may be substituted therefor in corrected form with the same force and effect as if originally filed in the corrected form and, irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Anything in this Indenture to the contrary notwithstanding, if any such corrective document or instrument indicates that action has been taken by or at the request of the Company which could not have been taken had the original document or instrument not contained such error or omission, the action so taken shall not be invalidated or otherwise rendered ineffective but shall be and remain in full force and effect, except to the extent that such action was a result of willful misconduct or bad faith. Without limiting the generality of the foregoing, any Notes issued under the authority of such defective document or instrument shall nevertheless be the valid obligations of the Company entitled to the benefits of this Indenture equally and ratably with all other Outstanding Notes, except as aforesaid. Section 104. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, election, waiver or other action provided by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article Fourteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or 10 instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 1001) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders shall be proved in the manner provided in Section 1406. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof or may be proved in any other manner which the Trustee and the Company deem sufficient. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The principal amount (except as otherwise contemplated in clause (y) of the proviso to the definition of Outstanding) and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Note Register. (d) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note. (e) Until such time as written instruments shall have been delivered to the Trustee with respect to the requisite percentage of principal amount of Notes for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of a Holder may be revoked with respect to any or all of such Notes by written notice by such Holder or any subsequent Holder, proven in the manner in which such instrument was proven. (f) Notes of any series, or any Tranche thereof, authenticated and delivered after any Act of Holders may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine, new Notes of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee and the Company, to such action may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Notes of such series or Tranche. (g) If the Company shall solicit from Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its 11 option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of such record date. Section 105. Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, the Trustee by any Holder or by the Company, or the Company by the Trustee or by any Holder, shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and delivered personally to an officer or other responsible employee of the addressee, or transmitted by facsimile transmission or other direct written electronic means to such telephone number or other electronic communications address as the parties hereto shall from time to time designate, or transmitted by certified or registered mail, charges prepaid, to the applicable address set opposite such party's name below or to such other address as either party hereto may from time to time designate: If to the Trustee, to: Bankers Trust Company 4 Albany Street, 4th Floor New York, New York 10006 Attention: [______________________] Telephone: [_____________________] Telecopy: [______________________] If to the Company, to: Southern Indiana Gas and Electric Company 20 N.W. Fourth Street Evansville, Indiana 47741-0001 Attention: Timothy L. Burke, Secretary and Treasurer Telephone: (812) 465-4136 Telecopy: (812) 464-4554 Any communication contemplated herein shall be deemed to have been made, given, furnished and filed if personally delivered, on the date of delivery, if transmitted by facsimile transmission or other direct written electronic means, on the date of transmission, and if transmitted by certified or registered mail, on the date of receipt. 12 Section 106. Notice to Holders of Notes; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given, and shall be deemed given, to Holders if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice required by this Indenture may be waived in writing by the Person entitled to receive such notice, either before or after the event otherwise to be specified therein, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 107. Conflict with Trust Indenture Act. If any provision of this Indenture limits, qualifies or conflicts with another provision hereof which is required or deemed to be included in this Indenture by, or is otherwise governed by, any of the provisions of the Trust Indenture Act, such other provision shall control; and if any provision hereof otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall control. Section 108. Effect of Headings and Table of Contents. The Article and Section headings in this Indenture and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 110. Separability Clause. In case any provision in this Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 13 Section 111. Benefits of Indenture. Nothing in this Indenture or the Notes, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. Governing Law. This Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York, except to the extent that the law of any other jurisdiction shall be mandatorily applicable. Section 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Note shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Notes other than a provision in Notes of any series, or any Tranche thereof, or in the indenture supplemental hereto, Board Resolution or Officer's Certificate which establishes the terms of the Notes of such series or Tranche, which specifically states that such provision shall apply in lieu of this Section) payment of interest or principal and premium, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. ARTICLE II Note Forms Section 201. Forms Generally. The definitive Notes of each series shall be in substantially the form or forms thereof established in the indenture supplemental hereto establishing such series or in a Board Resolution establishing such series, or in an Officer's Certificate pursuant to such supplemental indenture or Board Resolution, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. If the form or forms of Notes of any series are established in a Board Resolution or in an Officer's Certificate pursuant to an indenture supplemental hereto or a Board Resolution, such Board Resolution and Officer's Certificate, if any, shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Notes. 14 Unless otherwise specified as contemplated by Sections 301 or 1301(g), the Notes of each series shall be issuable in registered form without coupons. The definitive Notes shall be produced in such manner as shall be determined by the officers executing such Notes, as evidenced by their execution thereof. Section 202. Form of Trustee's Certificate of Authentication. The Trustee's certificate of authentication shall be in substantially the form set forth below: This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture. Dated: ______________ BANKERS TRUST COMPANY, as Trustee By:_____________________________________ Authorized Signatory ARTICLE III The Notes Section 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited. The Notes may be issued in one or more series. Subject to the last paragraph of this Section, prior to the authentication and delivery of Notes of any series there shall be established by specification in a supplemental indenture or in a Board Resolution, or in an Officer's Certificate pursuant to a supplemental indenture or a Board Resolution: (a) the title of the Notes of such series (which shall distinguish the Notes of such series from Notes of all other series); (b) any limit upon the aggregate principal amount of the Notes of such series which may be authenticated and delivered under this Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of the series pursuant to Section 304, 305, 306, 506 or 1306 and, except 15 for any Notes which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (c) the Person or Persons (without specific identification) to whom interest on Notes of such series, or any Tranche thereof, shall be payable on any Interest Payment Date, if other than the Persons in whose names such Notes (or one or more Predecessor Notes) are registered at the close of business on the Regular Record Date for such interest; (d) the date or dates on which the principal of the Notes of such series or any Tranche thereof, is payable or any formulary or other method or other means by which such date or dates shall be determined, by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension); (e) the rate or rates at which the Notes of such series, or any Tranche thereof, shall bear interest, if any (including the rate or rates at which overdue principal shall bear interest, if different from the rate or rates at which such Notes shall bear interest prior to Maturity, and, if applicable, the rate or rates at which overdue premium or interest shall bear interest, if any), or any formulary or other method or other means by which such rate or rates shall be determined, by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise; the date or dates from which such interest shall accrue; the Interest Payment Dates on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on such Notes on any Interest Payment Date; and the basis of computation of interest, if other than as provided in Section 310; (f) the place or places at which or methods by which (1) the principal of and premium, if any, and interest, if any, on Notes of such series, or any Tranche thereof, shall be payable, (2) registration of transfer of Notes of such series, or any Tranche thereof, may be effected, (3) exchanges of Notes of such series, or any Tranche thereof, may be effected and (4) notices and demands to or upon the Company in respect of the Notes of such series, or any Tranche thereof, and this Indenture may be served; the Note Registrar for such series; and if such is the case, that the principal of such Notes shall be payable without presentment or surrender thereof; (g) the period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which the Notes of such series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company and any restrictions on such redemptions, including but not limited to a restriction on a partial redemption by the Company of the Notes of any series, or any Tranche thereof, resulting in delisting of such Notes from any national exchange; (h) the obligation or obligations, if any, of the Company to redeem or purchase the Notes of such series, or any Tranche thereof, pursuant to any sinking fund or other mandatory redemption provisions or at the option of a Holder thereof and the period or periods within which or the date or dates on which, the price or prices at which and the 16 terms and conditions upon which such Notes shall be redeemed or purchased, in whole or in part, pursuant to such obligation, and applicable exceptions to the requirements of Section 504 in the case of mandatory redemption or redemption at the option of the Holder; (i) the denominations in which Notes of such series, or any Tranche thereof, shall be issuable if other than denominations of $1,000 and any integral multiple thereof; (j) the currency or currencies, including composite currencies, in which payment of the principal of and premium, if any, and interest, if any, on the securities Notes of such series, or any Tranche thereof, shall be payable (if other than in Dollars); (k) if the principal of or premium, if any, or interest, if any, on the Notes of such series, or any Tranche thereof, are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Notes are stated to be payable, the period or periods within which and the terms and conditions upon which, such election may be made; (l) if the principal of or premium, if any, or interest, if any, on the Notes of such series, or any Tranche thereof, are to be payable, or are to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; (m) if the amount payable in respect of principal of or premium, if any, or interest, if any, on the Notes of such series, or any Tranche thereof, may be determined with reference to an index or other fact or event ascertainable outside this Indenture, the manner in which such amounts shall be determined to the extent not established pursuant to clause (e) of this paragraph; (n) if other than the principal amount thereof, the portion of the principal amount of Notes of such series, or any Tranche thereof, which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 902; (o) any Events of Default, in addition to those specified in Section 901, with respect to the Notes of such series, and any covenants of the Company for the benefit of the Holders of the Notes of such series, or any Tranche thereof, in addition to those set forth in Article Seven; (p) the terms, if any, pursuant to which the Notes of such series, or any Tranche thereof, may be converted into or exchanged for shares of capital stock or other Notes of the Company or any other Person; (q) the obligations or instruments, if any, which shall be considered to be Eligible Obligations in respect of the Notes of such series, or any Tranche thereof, denominated in a currency other than Dollars or in a composite currency, and any additional or alternative provisions for the reinstatement of the Company's indebtedness 17 in respect of such Notes after the satisfaction and discharge thereof as provided in Section 801; (r) if the Notes of such series, or any Tranche thereof, are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Notes to transfer or exchange the same or to obtain the registration of transfer thereof, (ii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of temporary form and (iii) any and all other matters incidental to such Notes; (s) if the Notes of such series, or any Tranche thereof, are to be issuable as bearer Notes, any and all matters incidental thereto which are not specifically addressed in a supplemental indenture as contemplated by clause (g) of Section 1301; (t) to the extent not established pursuant to clause (r) of this paragraph, any limitations on the rights of the Holders of the Notes of such Series, or any Tranche thereof, to transfer or exchange such Notes or to obtain the registration of transfer thereof; and if a service charge will be made for the registration of transfer or exchange of Notes of such series, or any Tranche thereof, the amount or terms thereof; (u) any exceptions to Section 113, or variation in the definition of Business Day, with respect to the Notes of such series, or any Tranche thereof; (v) if any Notes of the series are issued prior to the Release Date, the designation of the series of Senior Note First Mortgage Bonds to be delivered to the Trustee as security for such series of Notes; (w) any collateral security, assurance or guarantee for such series of Notes (other than the Senior Note First Mortgage Bonds); and (x) any other terms of the Notes of such series, or any Tranche thereof, not inconsistent with the provisions of this Indenture. With respect to Notes of a series subject to a Periodic Offering, the indenture supplemental hereto or the Board Resolution which establishes such series, or the Officer's Certificate pursuant to such supplemental indenture or Board Resolution, as the case may be, may provide general terms or parameters for Notes of such series and provide either that the specific terms of Notes of such series, or any Tranche thereof, shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance with procedures specified in a Company Order as contemplated by clause (b) of the third paragraph of Section 303. Section 302. Denominations. Unless otherwise provided as contemplated by Section 301 with respect to any series of Notes, or any Tranche thereof, the Notes of each series shall be issuable in denominations of $1,000 and any integral multiple thereof. 18 Section 303. Execution, Authentication, Delivery and Dating. Unless otherwise provided as contemplated by Section 301 with respect to any series of Notes, or any Tranche thereof, the Notes shall be executed on behalf of the Company by an Authorized Officer and may have the corporate seal of the Company affixed thereto or reproduced thereon attested by any other Authorized Officer. The signature of any or all of these officers on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signatures of individuals who were at the time of execution Authorized Officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes. The Trustee shall authenticate and deliver Notes of a series, for original issue, at one time or from time to time in accordance with the Company Order referred to below, upon receipt by the Trustee of: (a) the instrument or instruments establishing the form or forms and terms of such series, as provided in Sections 201 and 301; (b) a Company Order requesting the authentication and delivery of such Notes and, to the extent that the terms of such Notes shall not have been established in an indenture supplemental hereto or in a Board Resolution, or in an Officer's Certificate pursuant to a supplemental indenture or Board Resolution, all as contemplated by Sections 201 and 301, either (i) establishing such terms or (ii) in the case of Notes of a series subject to a Periodic Offering, specifying procedures, acceptable to the Trustee, by which such terms are to be established (which procedures may provide, to the extent acceptable to the Trustee, for authentication and delivery pursuant to oral or electronic instructions from the Company or any agent or agents thereof, which oral instructions are to be promptly confirmed electronically or in writing), in either case in accordance with the instrument or instruments delivered pursuant to clause (a) above; the Notes of such series, executed on behalf of the Company by an Authorized Officer; (c) if prior to the Release Date, Senior Note First Mortgage Bonds of a series conforming to the requirements of Sections 401 and 402 hereof; (d) the Notes of such series, executed on behalf of the Company by an Authorized Officer; (e) an Opinion of Counsel to the effect that: (i) the form or forms of such Notes have been duly authorized by the Company and have been established in conformity with the provisions of this Indenture; (ii) the terms of such Notes have been duly authorized by the Company and have been established in conformity with the provisions of this Indenture; and 19 (iii) assuming authentication and delivery by the Trustee and subject to any conditions specified in such Opinion of Counsel, such Notes will have been duly issued under the Indenture and will be legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles; (iv) if prior to the Release Date, the Senior Note First Mortgage Bonds being delivered to the Trustee in connection with the issuance of such Notes, assuming authentication by the Mortgage Trustee in accordance with the First Mortgage and delivery to the Trustee and subject to any conditions specified in such Opinion of Counsel, will have been duly authorized by the Company and duly issued under the First Mortgage and will constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting mortgagees' and other creditors' rights and general equitable principles, and such Senior Note First Mortgage Bonds are entitled to the benefits of the security afforded by the First Mortgage, and are secured equally and ratably with all other bonds outstanding thereunder, except insofar as any sinking or other fund may afford additional security for the bonds of any particular series; provided, however, that, with respect to Notes of a series subject to a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication of such Notes (provided that such Opinion of Counsel addresses the authentication and delivery of all Notes of such series) and that in lieu of the opinions described in clauses (ii) and (iii) above Counsel may opine that: (x) when the terms of such Notes shall have been established pursuant to a Company Order or Orders or pursuant to such procedures (acceptable to the Trustee) as may be specified from time to time by a Company Order or Orders, all as contemplated by and in accordance with the instrument or instruments delivered pursuant to clause (a) above, such terms will have been duly authorized by the Company and will have been established in conformity with the provisions of this Indenture; and (y) such Notes, when authenticated and delivered by the Trustee in accordance with this Indenture and the Company Order or Orders or specified procedures referred to in paragraph (x) above and issued and delivered by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by the Indenture, and enforceable in accordance with their terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 20 With respect to Notes of a series subject to a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Company of any of such Notes, the form and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel and other documents delivered pursuant to Sections 201 and 301 and this Section, as applicable, at or prior to the time of the first authentication of Notes of such series unless and until such opinion or other documents have been superseded or revoked or expire by their terms. In connection with the authentication and delivery of Notes of a series subject to a Periodic Offering, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Notes do not violate any rules, regulations or orders of any Governmental Authority having jurisdiction over the Company. If the form or terms of the Notes of any series have been established by or pursuant to a Board Resolution or an Officer's Certificate as permitted by Sections 201 or 301, the Trustee shall not be required to authenticate such Notes if the issuance of such Notes pursuant to this Indenture will materially or adversely affect the Trustee's own rights, duties or immunities under the Notes and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Unless otherwise specified as contemplated by Section 301 with respect to any series of Notes, or any Tranche thereof, each Note shall be dated the date of its authentication. Unless otherwise specified as contemplated by Section 301 with respect to any series of Notes, or any Tranche thereof, no Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Trustee or its agent by manual signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Note shall have been authenticated and delivered hereunder to the Company, or any Person acting on its behalf, but shall never have been issued and sold by the Company, and the Company shall deliver such Note to the Note Registrar for cancellation as provided in Section 309 together with a written statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Note has never been issued and sold by the Company, for all purposes of this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits hereof. Section 304. Temporary Notes. Pending the preparation of definitive Notes of any series, or any Tranche thereof, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Notes in lieu of which they are issued, with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Notes may determine, as evidenced by their execution of such Notes; provided, however, that temporary Notes need not recite specific redemption, sinking fund, conversion or exchange provisions. 21 Unless otherwise specified as contemplated by Section 301 with respect to the Notes of any series, or any Tranche thereof, after the preparation of definitive Notes of such series or Tranche, the temporary Notes of such series or Tranche shall be exchangeable, without charge to the Holder thereof, for definitive Notes of such series or Tranche, upon surrender of such temporary Notes at the office or agency of the Company maintained pursuant to Section 702 in a Place of Payment for such Notes. Upon such surrender of temporary Notes, the Company shall, except as aforesaid, execute and the Trustee shall authenticate and deliver in exchange therefor definitive Notes of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount. Until exchanged in full as hereinabove provided, temporary Notes shall in all respects be entitled to the same benefits under this Indenture as definitive Notes of the same series and Tranche and of like tenor authenticated and delivered hereunder. Section 305. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept in each office designated pursuant to Section 702, with respect to the Notes of each series or any Tranche thereof, a register (all registers kept in accordance with this Section being collectively referred to as the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes of such series or Tranche and the registration of transfer thereof. The Company shall designate one Person to maintain the Note Register for the Notes of each series on a consolidated basis, and such Person is referred to herein, with respect to such series, as the "Note Registrar." Anything herein to the contrary notwithstanding, the Company may designate one or more of its offices as an office in which a register with respect to the Notes of one or more series, or any Tranche or Tranches thereof, shall be maintained, and the Company may designate itself the Note Registrar with respect to one or more of such series. The Note Register shall be open for inspection by the Trustee and the Company at all reasonable times. Except as otherwise specified as contemplated by Section 301 with respect to the Notes of any series, or any Tranche thereof, upon surrender for registration of transfer of any Note of such series or Tranche at the office or agency of the Company maintained pursuant to Section 702 in a Place of Payment for such series or Tranche, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount. Except as otherwise specified as contemplated by Section 301 with respect to the Notes of any series, or any Tranche thereof, any Note of such series or Tranche may be exchanged at the option of the Holder, for one or more new Notes of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive. 22 All Notes delivered upon any registration of transfer or exchange of Notes shall be valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Trustee or the Note Registrar) be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or the Note Registrar, as the case may be, duly executed by the Holder thereof or his attorney duly authorized in writing. Unless otherwise specified as contemplated by Section 301 with respect to Notes of any series, or any Tranche thereof, no service charge shall be made for any registration of transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 304, 506 or 1306 not involving any transfer. The Company shall not be required to execute or to provide for the registration of transfer of or the exchange of (a) Notes of any series, or any Tranche thereof, during a period of 15 days immediately preceding the day of the mailing of a notice of redemption of the Notes of such series or Tranche or (b) any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. Section 306. Mutilated, Destroyed, Lost and Stolen Notes. If any mutilated Note is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Note of the same series, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (a) evidence to their satisfaction of the ownership of and the destruction, loss or theft of any Note and (b) such security or indemnity as may be reasonably required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Note is held by a Person purporting to be the owner of such Note, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of the same series and Tranche, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, in case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note. Upon the issuance of any new Note under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee) connected therewith. 23 Every new Note of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone other than the Holder of such new Note, and any such new Note shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes of such series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. Section 307. Payment of Interest; Interest Rights Preserved. Unless otherwise specified as contemplated by Section 301 with respect to the Notes of any series, or any Tranche thereof, interest on any Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest payment. Any interest on any Note of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the related Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below: (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes of such series (or their respective Predecessor Notes) are registered at the close of business on a date (herein called a "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall promptly cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Notes of such series at the address of such Holder as it appears in the Note Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Notes of such series (or their 24 respective Predecessor Notes) are registered at the close of business on such Special Record Date. (b) The Company may make payment of any Defaulted Interest on the Notes of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section and Section 305, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note. Section 308. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and premium, if any, and (subject to Sections 305 and 307) interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 309. Cancellation by Note Registrar. All Notes surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Note Registrar, be delivered to the Note Registrar and, if not theretofore canceled, shall be promptly canceled by the Note Registrar. The Company may at any time deliver to the Note Registrar for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever or which the Company shall not have issued and sold, and all Notes so delivered shall be promptly canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture. All certificates representing canceled Notes held by the Note Registrar shall be disposed of in accordance with the customary practices of the Note Registrar at the time in effect, and the Note Registrar shall not be required to destroy any such certificates. The Note Registrar, if other than the Trustee, shall promptly deliver a certificate of disposition with respect to such disposed certificates to the Trustee and the Company unless, by a Company Order, similarly delivered, the Company shall direct that canceled Notes be returned to it. The Note Registrar, if other than the Trustee, shall promptly deliver evidence of any cancellation of a Note in accordance with this Section to the Trustee and the Company. If the Trustee is the entity that is acting as Note Registrar, it shall promptly deliver to the Company a certificate of disposition with respect to any certificates disposed of and/or evidence of any cancellation of a Note, in each case in accordance with this Section, if so requested by a Company Order. 25 Section 310. Computation of Interest. Except as otherwise specified as contemplated by Section 301 for Notes of any series, or any Tranche thereof, interest on the Notes of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months and on the basis of the actual number of days elapsed within any month in relation to the deemed 30 days of such month. Section 311. Payment to be in Proper Currency. In the case of the Notes of any series, or any Tranche thereof, denominated in any currency other than Dollars or in a composite currency (the "Required Currency"), except as otherwise specified with respect to such Notes as contemplated by Section 301, the obligation of the Company to make any payment of the principal thereof, or the premium or interest thereon, shall not be discharged or satisfied by any tender by the Company, or recovery by the Trustee, in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the Trustee timely holding the full amount of the Required Currency then due and payable. If any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks of delay and exchange rate fluctuation, shall be borne by the Company, the Company shall remain fully liable for any shortfall or delinquency in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor except in the case of its negligence or willful misconduct. Section 312. Payments on Senior Note First Mortgage Bonds. Subject to Section 403 and Articles Eight and Nine hereof, all payments made by the Company to the Trustee on Senior Note First Mortgage Bonds shall be applied by the Trustee to pay, when due, principal of, and premium, if any, and interest on the Notes of the related series of Notes and, to the extent so applied, shall satisfy the Company's obligations in respect of payment of principal of, and premium, if any, and interest on such Notes. The Company shall pay to the Trustee principal of, and premium, if any, and interest on Senior Note First Mortgage Bonds of each series in a manner and at a time that will enable the Trustee to make payments when due, of principal of, and premium, if any, and interest on the Notes of the related series. ARTICLE IV Senior Note First Mortgage Bonds Section 401. Acceptance of Senior Note First Mortgage Bonds; Registration and Ownership of Senior Note First Mortgage Bonds. At or prior to the time of issuance of a series of Notes hereunder at any time prior to the Release Date, the Company shall issue and deliver to the Trustee for the benefit of the Holders of all Notes from time to time Outstanding as described in Section 403 hereof, and the Trustee shall accept therefor, Senior Note First Mortgage Bonds of a series of Senior Note First 26 Mortgage Bonds not theretofore delivered to the Trustee. All Senior Note First Mortgage Bonds shall be registered in the name of the Trustee or its nominee and shall be held by the Trustee, subject to the provisions of this Indenture, for the benefit of the Holders of all Notes from time to time Outstanding, and the Company shall have no interest therein. Section 402. Terms of Senior Note First Mortgage Bonds. Each series of Senior Note First Mortgage Bonds issued and delivered to the Trustee pursuant to Section 401 hereof in respect of a series of Notes being issued hereunder shall have the same rate or rates of interest (or interest calculated in the same manner) (including interest payable following a default on the Notes), interest payment dates, maturity and redemption provisions, and shall be in the same aggregate principal amount, as such series of Notes. Section 403. Senior Note First Mortgage Bonds as Security for Notes. Until the Release Date and subject to Article Eight hereof, Senior Note First Mortgage Bonds issued and delivered to the Trustee shall serve as security for any and all obligations of the Company under all Notes from time to time Outstanding, including, but not limited to, (1) the full and prompt payment of the principal and premium, if any, on such Notes when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or such Notes, either at the Stated Maturity thereof, upon acceleration of the maturity thereof, upon redemption, or otherwise, and (2) the full and prompt payment of any interest on such Notes when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or the Notes including, if and to the extent provided for in such Notes, interest on overdue installments of principal and (to the extent permitted by law) interest on overdue installments of interest. Each supplemental indenture to the First Mortgage pursuant to which any Senior Note First Mortgage Bonds are issued shall contain a provision to the effect that any payment by the Company hereunder of principal of or premium or interest on Notes which shall have been authenticated and delivered in connection with the issuance and delivery to the Trustee of such Senior Note First Mortgage Bonds (other than by the application of the proceeds of a payment in respect of such Senior Note First Mortgage Bonds) shall to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal, premium or interest, as the case may be, in respect of such Senior Note First Mortgage Bonds which is then due. Notwithstanding anything in this Indenture to the contrary, from and after the Release Date, the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Senior Note First Mortgage Bonds shall be deemed satisfied and discharged as provided in the supplemental indenture or indentures to the First Mortgage creating such Senior Note First Mortgage Bonds and the Senior Note First Mortgage Bonds shall cease to secure in any manner Notes theretofore or subsequently issued. From and after the Release Date, all Notes, whether theretofore or subsequently issued, shall be unsecured, and any conditions to the issuance of Notes that refer or relate to Senior Note First Mortgage Bonds or the First Mortgage shall be inapplicable. Following the Release Date, the Company 27 shall cause the First Mortgage to be closed and the Company shall not issue any additional First Mortgage Bonds or Senior Note First Mortgage Bonds under the First Mortgage. Notice of the occurrence of the Release Date shall be given by the Trustee to the Holders of the Notes in the manner provided for in Section 106 hereof not later than 30 days after the Company notifies the Trustee of the occurrence of the Release Date. In connection with the establishment of the occurrence of the Release Date, the Trustee shall be entitled to receive, may presume the correctness of, and shall be fully protected in relying upon, the Officer's Certificate stating that the conditions to the occurrence of the Release Date have been satisfied. Section 404. Fair Value Certificate. (a) Upon the delivery by the Company to the Trustee of Senior Note First Mortgage Bonds pursuant to Section 401 hereof, the Company shall simultaneously therewith deliver to the Trustee a certificate of an Expert (1) stating that he or she is familiar with the provisions of such Senior Note First Mortgage Bonds and of this Indenture; (2) identifying such Senior Note First Mortgage Bonds; (3) identifying the Notes being issued contemporaneously therewith and (4) stating the fair value to the Company of such Senior Note First Mortgage Bonds. If the fair value to the Company of the Senior Note First Mortgage Bonds so delivered, as described in the certificate to be delivered pursuant to this Section 404(a), both (1) is equal to or exceeds (A) $25,000 and (B) 1% of the principal amount of the Notes outstanding at the date of delivery of such Senior Note First Mortgage Bonds and (2) together with the fair value to the Company, as described in the certificates delivered pursuant to this Section 404(a), of all other Senior Note First Mortgage Bonds delivered to the Trustee since the commencement of the then current calendar year, is equal to or exceeds 10% of the principal amount of the Notes outstanding at the date of delivery of such Senior Note First Mortgage Bonds, then the certificate required by this Section 404(a) shall (1) be delivered by an Independent Expert and (2) shall, in addition to the certifications described above, state the fair value to the Company of all Senior Note First Mortgage Bonds delivered to the Trustee pursuant to Section 401 hereof since the commencement of the then current year as to which a certificate was not delivered by an Independent Expert. (b) If Senior Note First Mortgage Bonds are delivered or surrendered to the Company pursuant to Sections 403, 407 or 409 hereof, the Company shall simultaneously therewith deliver to the Trustee a certificate of an Expert (1) stating that it is familiar with the provisions of such Senior Note First Mortgage Bonds and of this Indenture, (2) identifying such Senior Note First Mortgage Bonds, (3) if applicable, identifying the Notes, the payment of the interest on and principal of which has been discharged hereunder, (4) stating that such delivery or surrender will not impair the lien of this Indenture in contravention of the provisions of this Indenture. If, prior to the Release Date, the fair value of the Senior Note First Mortgage Bonds so delivered and surrendered, as described in the certificate to be delivered pursuant to this Section 404(b), both (1) is equal to or exceeds (A) $25,000 and (B) 1% of the principal amount of the Notes outstanding at the date of delivery or surrender of such Senior Note First Mortgage Bonds and (2) together with the fair value, as described in the certificates delivered 28 pursuant to this Section 404(b), of all other Senior Note First Mortgage Bonds released from the lien of this Indenture since the commencement of the then current calendar year, is equal to or exceeds 10% of the principal amount of the Notes outstanding at the date of delivery or surrender of such Senior Note First Mortgage Bonds, then the certificate required by this Section 404(b) shall be delivered by an Independent Expert. If, in connection with a delivery or surrender of outstanding Senior Note First Mortgage Bonds provided for in subsection (a) or (b) of this Section 404, as the case may be, the Company provides to the trustee an Opinion of Counsel stating that the certificate described by the applicable subsection is not required by law, such certificate shall not be required to be delivered hereunder in connection with such delivery or surrender. Section 405. Senior Note First Mortgage Bonds Held by the Trustee. The Trustee, as a Holder of Senior Note First Mortgage Bonds, shall attend each meeting of holders of First Mortgage Bonds under the First Mortgage as to which it receives due notice, or, at its option, shall deliver its proxy in connection therewith. Either at such meeting, or otherwise where consent of holders of First Mortgage Bonds issued under the First Mortgage is sought without a meeting, the Trustee shall vote all of the Senior Note First Mortgage Bonds held by it, or shall consent or withhold its consent with respect thereto, as directed by the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes, considered as one class. Section 406. No Transfer of Senior Note First Mortgage Bonds; Exception. Except as required to effect an assignment to a successor trustee or to a nominee of the Trustee under this Indenture or pursuant to Section 407 or Section 409 hereof, the Trustee shall not sell, assign or transfer the Senior Note First Mortgage Bonds and the Company shall issue stop transfer instructions to the Mortgage Trustee and any transfer agent under the First Mortgage to effect compliance with this Section 406. Section 407. Delivery to the Company of all Senior Note First Mortgage Bonds. When the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Senior Note First Mortgage Bonds shall be satisfied or deemed satisfied pursuant to Section 403 or Article Eight hereof, the Trustee shall, upon written request of the Company and receipt of the certificate of the Expert described in Section 404(b) hereof (if such certificate is then required by Section 404(b) hereof), deliver to the Company without charge therefor all of the Senior Note First Mortgage Bonds, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Senior Note First Mortgage Bonds delivered to the Company in accordance with this Section 407 shall be delivered by the Company to the First Mortgage Trustee for cancellation. 29 Section 408. Further Assurances. The Company, at its own expense, shall do such further lawful acts and things, and execute and deliver such additional conveyances, assignments, assurances, agreements, financing statements and instruments. as may be necessary in order to further assign, assure, perfect and confirm to the Trustee its security interest in the Senior Note First Mortgage Bonds and for maintaining, protecting and preserving such security interest. Section 409. Exchange and Surrender of Senior Note First Mortgage Bonds. At any time upon receipt of a Company Order at the written direction of the Company, the Trustee shall surrender to the Company all or part of the Senior Note First Mortgage Bonds in exchange for Senior Note First Mortgage Bonds equal in aggregate principal amount to, in different denominations than but of the same series and with all other terms identical to, the Senior Note First Mortgage Bonds so surrendered to the Company. In addition, at any time a Note shall cease to be entitled to any lien, benefit or security under this Indenture pursuant to Article Eight hereof, the Trustee shall surrender an equal principal amount of Senior Note First Mortgage Bonds of the related series to the Company for cancellation. The Trustee shall, together with such Senior Note First Mortgage Bonds, deliver to the Company such appropriate instruments of transfer or release as the Company may reasonably request. Prior to the surrender required by this paragraph, the Trustee shall receive from the Company the following, and (subject to Section 801 hereof) shall be fully protected in relying upon, (a) an Officer's Certificate stating (i) the aggregate outstanding principal amount of the Senior Note First Mortgage Bonds of the series surrendered by the Trustee, after giving effect to such surrender, (ii) the aggregate Outstanding principal amount of the related series of Notes, (iii) that the surrender of the Senior Note First Mortgage Bonds will not result in any default under this Indenture, and (iv) that any Senior Note First Mortgage Bonds to be received in exchange for the Senior Note First Mortgage Bonds being surrendered comply with the provisions of this Section. The Company shall not be permitted to cause the surrender or exchange of all or any part of a series of Senior Note First Mortgage Bonds contemplated in this Section, if, after such surrender or exchange, the aggregate Outstanding principal amount of the related series of Notes would exceed the aggregate outstanding principal amount of such series of Senior Note First Mortgage Bonds held by the Trustee. Any Senior Note First Mortgage Bonds received by the Company pursuant to this Section shall be delivered to the Mortgage Trustee for cancellation. ARTICLE V Redemption of Notes Section 501. Applicability of Article. Notes of any series, or any Tranche thereof, which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Notes of such series or Tranche) in accordance with this Article. 30 Section 502. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Notes shall be evidenced by a Board Resolution and/or an Officer's Certificate. The Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of the principal amount of such Notes to be redeemed. In the case of any redemption of Notes (a) prior to the expiration of any restriction on such redemption provided in the terms of such Notes or elsewhere in this Indenture or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Notes, the Company shall furnish the Trustee with an Officer's Certificate evidencing compliance with such restriction or condition. Section 503. Selection of Notes to be Redeemed. If less than all the Notes of any series, or any Tranche thereof, are to be redeemed, the particular Notes to be redeemed shall be selected by the Trustee from the Outstanding Notes of such series or Tranche not previously called for redemption, by such method as shall be provided for any particular series, or, in the absence of any such provision, by such method of random selection as the Trustee shall deem fair and appropriate and which may, in any case, provide for the selection for redemption of portions (equal to the minimum authorized denomination for Notes of such series or Tranche or any integral multiple thereof) of the principal amount of Notes of such series or Tranche of a denomination larger than the minimum authorized denomination for Notes of such series or Tranche; provided, however, that if, as indicated in an Officer's Certificate, the Company shall have offered to purchase all or any principal amount of the Notes then Outstanding of any series, or any Tranche thereof, and less than all of such Notes as to which such offer was made shall have been tendered to the Company for such purchase, the Trustee, if so directed by Company Order, shall select for redemption all or any principal amount of such Notes which have not been so tendered. The Trustee shall promptly notify the Note Registrar in writing of the Notes selected for redemption and, in the case of any Notes selected to be redeemed in part, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Notes shall relate, in the case of any Notes redeemed or to be redeemed only in part, to the portion of the principal amount of such Notes which has been or is to be redeemed. Section 504. Notice of Redemption. Except for Notes redeemable at the option of the Holder, notice of redemption shall be given in the manner provided in Section 106 to the Holders of the Notes to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date. All notices of redemption shall state: (a) the Redemption Date, 31 (b) the Redemption Price or, if the Redemption Price is not ascertainable as of the date any such notice of redemption is given pursuant to Section 404, the method of calculation of the Redemption Price, (c) if less than all the Notes of any series or Tranche are to be redeemed, the identification of the particular Notes to be redeemed and the portion of the principal amount of any Note to be redeemed in part, (d) that on the Redemption Date, the Redemption Price, together with accrued interest, if any, to the Redemption Date, will become due and payable upon each such Note to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (e) the place or places where such Notes are to be surrendered for payment of the Redemption Price and accrued interest, if any, unless it shall have been specified as contemplated by Section 301 with respect to such Notes that such surrender shall not be required, (f) that the redemption is for a sinking or other fund, if such is the case, and (g) such other matters as the Company shall deem desirable or appropriate (including CUSIP numbers with respect to such Securities, if the Company shall so choose, in which event such notice of redemption may contain a disclaimer as to the correctness of such numbers either as printed on the Securities or on such notice of redemption). Unless otherwise specified with respect to any Notes in accordance with Section 301, with respect to any notice of redemption of Notes at the election of the Company, unless, upon the giving of such notice, such Notes shall be deemed to have been paid in accordance with Section 801, such notice may state that such redemption shall be conditional upon the receipt by the Paying Agent or Agents for such Notes, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest, if any, on such Notes and that if such money shall not have been so received such notice shall be of no force or effect and the Company shall not be required to redeem such Notes. In the event that such notice of redemption contains such a condition and such money is not so received, the redemption shall not be made and within a reasonable time thereafter notice shall be given, in the manner in which the notice of redemption was given, that such money was not so received and such redemption was not required to be made, and the Paying Agent or Agents for the Notes otherwise to have been redeemed shall promptly return to the Holders thereof any of such Notes which had been surrendered for payment upon such redemption. Notice of redemption of Notes to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid, shall be given by the Company or, at the Company's request, by the Note Registrar in the name and at the expense of the Company. Notice of mandatory redemption of Notes shall be given by the Note Registrar in the name and at the expense of the Company. 32 Section 505. Notes Payable on Redemption Date. Notice of redemption having been given as aforesaid, and the conditions, if any, set forth in such notice having been satisfied, the Notes or portions thereof so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless, in the case of an unconditional notice of redemption, the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Notes or portions thereof, if interest-bearing, shall cease to bear interest. Upon surrender of any such Note for redemption in accordance with such notice, such Note or portion thereof shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that no such surrender shall be a condition to such payment if so specified as contemplated by Section 301 with respect to such Note; and provided, further, that except as otherwise specified as contemplated by Section 301 with respect to such Note, any installment of interest on any Note the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable to the Holder of such Note, or one or more Predecessor Notes, registered as such at the close of business on the related Regular Record Date according to the terms of such Note and subject to the provisions of Section 307. Section 506. Notes Redeemed in Part. Upon the surrender of any Note which is to be redeemed only in part at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Notes of the same series and Tranche, of any authorized denomination requested by such Holder and of like tenor and in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Note so surrendered. ARTICLE VI Sinking Funds Section 601. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of the Notes of any series, or any Tranche thereof, except as otherwise specified as contemplated by Section 301 for Notes of such series or Tranche. The minimum amount of any sinking fund payment provided for by the terms of Notes of any series, or any Tranche thereof, is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Notes of any series, or any Tranche thereof, is herein referred to as an "optional sinking fund payment." If provided for by the terms of Notes of any series, or any Tranche thereof, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 602. 33 Each sinking fund payment shall be applied to the redemption of Notes of the series or Tranche in respect of which it was made as provided for by the terms of such Notes. Section 602. Satisfaction of Sinking Fund Payments with Notes. The Company (a) may deliver to the Trustee Outstanding Notes (other than any previously called for redemption) of a series or Tranche in respect of which a mandatory sinking fund payment is to be made and (b) may apply as a credit Notes of such series or Tranche which have been redeemed either at the election of the Company pursuant to the terms of such Notes or through the application of permitted optional sinking fund payments pursuant to the terms of such Notes, in each case in satisfaction of all or any part of such mandatory sinking fund payment; provided, however, that no Notes shall be applied in satisfaction of a mandatory sinking fund payment if such Notes shall have been previously so applied. Notes so applied shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Notes for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly. Section 603. Redemption of Notes for Sinking Fund. Not less than 45 days prior to each sinking fund payment date for the Notes of any series, or any Tranche thereof, the Company shall deliver to the Trustee an Officer's Certificate specifying: (a) the amount of the next succeeding mandatory sinking fund payment for such series or Tranche; (b) the amount, if any, of the optional sinking fund payment to be made together with such mandatory sinking fund payment; (c) the aggregate sinking fund payment; (d) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by the payment of cash; and (e) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by delivering and crediting Notes of such series or Tranche pursuant to Section 602 and stating the basis for such credit and that such Notes have not previously been so credited, and the Company shall also deliver to the Trustee any Notes to be so delivered. If the Company shall not have delivered such Officer's Certificate and, to the extent applicable, all such Notes, on or prior to the 45th day prior to such sinking fund payment date, the sinking fund payment for such series or Tranche in respect of such sinking fund payment date shall be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Notes to be redeemed upon such sinking fund payment date in the manner specified in Section 503 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 504. Such notice having been duly 34 given, the redemption of such Notes shall be made upon the terms and in the manner stated in Sections 505 and 506. ARTICLE VII Covenants Section 701. Payment of Principal, Premium and Interest. The Company shall pay the principal of and premium, if any, and interest, if any, on the Notes of each series in accordance with the terms of such Notes and this Indenture. Section 702. Maintenance of Office or Agency. The Company shall maintain in each Place of Payment for the Notes of each series, or any Tranche thereof, an office or agency where payment of such Notes shall be made, where the registration of transfer or exchange of such Notes may be effected and where notices and demands to or upon the Company in respect of such Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of each such office or agency and prompt notice to the Holders of any such change in the manner specified in Section 106. If at any time the Company shall fail to maintain any such required office or agency in respect of Notes of any series, or any Tranche thereof, or shall fail to furnish the Trustee with the address thereof, payment of such Notes shall be made, registration of transfer or exchange thereof may be effected and notices and demands in respect thereof may be served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent for all such purposes in any such event. The Company may also from time to time designate one or more other offices or agencies with respect to the Notes of one or more series, or any Tranche thereof, for any or all of the foregoing purposes and may from time to time rescind such designations; provided, however, that, unless otherwise specified as contemplated by Section 301 with respect to the Notes of such series or Tranche no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes in each Place of Payment for such Notes in accordance with the requirements set forth above. The Company shall give prompt written notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 106, of any such designation or rescission and of any change in the location of any such other office or agency. Anything herein to the contrary notwithstanding, any office or agency required by this Section may be maintained at an office of the Company, in which event the Company shall perform all functions to be performed at such office or agency. Section 703. Money for Notes Payments to be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to the Notes of any series, or any Tranche thereof, it shall, on or before each due date of the principal of and premium, if any, and interest, if any, on any of such Notes, segregate and hold in trust for the 35 benefit of the Persons entitled thereto a sum sufficient to pay the principal and premium or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided. The Company shall promptly notify the Trustee of any failure by the Company (or any other obligor on such Notes) to make any payment of principal of or premium, if any, or interest, if any, on such Notes. Whenever the Company shall have one or more Paying Agents for the Notes of any series, or any Tranche thereof, it shall, on or before each due date of the principal of and premium, if any, and interest, if any, on such Notes, deposit with such Paying Agents sums sufficient (without duplication) to pay the principal and premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of any failure by it so to act. The Company shall cause each Paying Agent for the Notes of any series, or any Tranche thereof, other than the Company or the Trustee, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall: (a) hold all sums held by it for the payment of the principal of and premium, if any, or interest, if any, on such Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any failure by the Company (or any other obligor upon such Notes) to make any payment of principal of or premium, if any, or interest, if any, on such Notes; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent and furnish to the Trustee such information as it possesses regarding the names and addresses of the Persons entitled to such sums. The Company may at any time pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent and, if so stated in a Company Order delivered to the Trustee, in accordance with the provisions of Article Eight; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of and premium, if any, or interest, if any, on any Note and remaining unclaimed for two years after such principal and premium, if any, or interest has become due and payable shall be paid to the Company on Company Request, or, if then held by the Company, shall be discharged from such trust; and, upon such payment or discharge, the Holder of such Note shall, as an unsecured general creditor and not as a Holder of 36 an Outstanding Note, look only to the Company for payment of the amount so due and payable and remaining unpaid, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment to the Company, may at the expense of the Company cause to be mailed, on one occasion only, notice to such Holder that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be paid to the Company. Section 704. Corporate Existence. Subject to the rights of the Company under Article Twelve, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. Section 705. Maintenance of Properties. The Company shall cause (or, with respect to property owned in common with others, make reasonable effort to cause) all its properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and shall cause (or, with respect to property owned in common with others, make reasonable effort to cause) to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as, in the judgment of the Company, may be necessary so that the business carried on in connection therewith may be properly conducted; provided, however, that nothing in this Section shall prevent the Company from discontinuing, or causing the discontinuance of, the operation and maintenance of any of its properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business. Section 706. Annual Officer's Certificate as to Compliance. Not later than June 1 in each year, commencing June 1, 2000, the Company shall deliver to the Trustee an Officer's Certificate, which need not comply with Section 102, executed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company, stating whether to such officer's knowledge, the Company is in compliance with all conditions and covenants under this Indenture, such compliance to be determined without regard to any period of grace or requirement of notice under this Indenture, and making any other statements as may be required by the provisions of Section 314(a)(4) of the Trust Indenture Act. Section 707. Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition set forth in (a) Section 702 or any additional covenant or restriction specified with respect to the Notes of any series, or any Tranche thereof, as contemplated by Section 301 if before the time for such compliance the Holders of at least a majority in aggregate principal amount of the Outstanding Notes of all series and Tranches with respect to which compliance with Section 702 or such additional covenant or restriction is to be omitted, 37 considered as one class, shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition and (b) Section 704, 705, 706 or Article Twelve if before the time for such compliance the Holders of at least a majority in principal amount of Notes Outstanding under this Indenture shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition; but, in the case of (a) or (b), no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. Section 708. Recording, Filing, etc.; Opinions of Counsel. The Company will (and the Trustee shall be under no duty to) cause this Indenture, any indentures supplemental to this Indenture, any financing or continuation statements, and any other documents, to be promptly recorded and filed and rerecorded and refiled in such a manner and in such places, as may be required by law in order fully to preserve, protect and perfect the security of the Holders and all rights of the Trustee, and shall deliver to the Trustee: (a) promptly after the execution and delivery of this Indenture and of any indenture supplemental to this Indenture but prior to the Release Date, an Opinion of Counsel either stating that, in the opinion of such counsel, this Indenture or such supplemental indenture, any financing or continuation statements, and any other documents, have been properly recorded and filed so as to make effective and to perfect the security interest of the Trustee intended to be created by this Indenture for the benefit of the Holders from time to time in the Senior Note First Mortgage Bonds, and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to perfect or make such security interest effective and stating what, if any, action of the foregoing character may reasonably be expected to become necessary prior to the next succeeding July 15 to maintain, perfect and make such security interest effective; and (b) on or before July 15 of each year, beginning in 2000, and prior to the Release Date, an Opinion of Counsel either stating that in the opinion of such counsel such action has been taken, since the date of the most recent Opinion of Counsel furnished pursuant to this Section 710(b) or the first Opinion of Counsel furnished pursuant to Section 710(a), with respect to the recording, filing, rerecording, or refiling of this Indenture, each supplemental indenture, any financing or continuation statements, and any other documents, as is necessary to maintain and perfect the security interest of the Trustee intended to be created by this Indenture for the benefit of the Holders from time to time of the Notes in the Senior Note First Mortgage Bonds, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain and perfect such security interest and stating what, if any, action of the foregoing character may reasonably be expected to become necessary prior to the next succeeding July 15 to maintain, perfect and make such security interest effective. 38 Section 709. Liens. (a) From and after the Release Date and so long as any Notes are Outstanding, the Company will not issue, assume, or guarantee (including any contingent obligation to purchase) any Debt secured by any mortgage, security interest, pledge, or lien (herein referred to as a "Lien") of or upon any Operating Property of the Company, whether owned at the date of the Indenture or thereafter acquired, and will not permit to exist any Debt secured by a Lien on any Operating Property created on or prior to the Release Date, without in any such case effectively securing, on the later to occur of the issuance, assumption, or guarantee of any such Debt or the Release Date, the Outstanding Notes (together with, if the Company shall so determine, any other Note or Debt of or guaranteed by the Company ranking equally with, the Notes) equally and ratably with such Debt; provided, however, that the foregoing restriction shall not apply to Debt secured by any of the following: (1) Liens on any Operating Property existing at the time of acquisition thereof and not created in contemplation of such acquisition; (2) Liens on Operating Property of a corporation existing at the time such corporation is merged into or consolidated with the Company, or at the time of a sale, lease, or other disposition of the properties of such corporation or a division thereof as an entirety or substantially as an entirety to the Company, provided that such Lien as a result of such merger, consolidation, sale, lease, or other disposition is not extended to property owned by the Company immediately prior thereto and is not created in contemplation of such merger, consolidation, sale, lease or other disposition; (3) Liens on Operating Property to secure all or part of the cost of acquiring, constructing, developing, or substantially repairing, altering, or improving such property, or to secure indebtedness incurred to provide funds for any such purpose or for reimbursement of funds previously expended for any such purpose, provided such Liens are created or assumed contemporaneously with, or within eighteen (18) months after, such acquisition or completion of construction, development, or substantial repair, alteration, or improvement or within six (6) months thereafter pursuant to a commitment for financing arranged with a lender or investor within such eighteen (18) month period; (4) Liens in favor of the United States of America or any State thereof, or any department, agency, or instrumentality or political subdivision of the United States of America or any State thereof, or for the benefit of holders of securities issued by any such entity, to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing, developing, 39 or substantially repairing, altering, or improving the property subject to such Liens; or (5) any extension, renewal or replacement (or successive extensions, renewals, or replacements), in whole or in part, of any Lien referred to in the foregoing clauses (1) to (4), inclusive; provided, however, that the principal amount of Debt secured thereby and not otherwise authorized by said clauses (1) to (4), inclusive, shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal, or replacement, so secured at the time of such extension, renewal, or replacement. (b) Notwithstanding the provisions of Section 709(a), from and after the Release Date and so long as any Notes are Outstanding, the Company may issue, assume, or guarantee Debt, or permit to exist Debt, secured by Liens which would otherwise be subject to the restrictions of Section 709(a) up to an aggregate principal amount that, together with the principal amount of all other Debt of the Company secured by Liens (other than Liens permitted by Section 709(a) that would otherwise be subject to the foregoing restrictions) and the Value of all Sale and Lease-Back Transactions in existence at such time (other than (i) any Sale and Lease-Back Transaction that, if such Sale and Lease-Back Transaction had been a Lien, would have been permitted by Section 709(a), (ii) Sale and Lease-Back Transactions permitted by Section 710 because the commitment by or on behalf of the purchaser was obtained no later than eighteen (18) months after the later of events described in (i) or (ii) of Section 710, and (iii) Sale and Lease-Back Transactions as to which application of amounts have been made in accordance with clause (z) of Section 710), does not at the time exceed the greater of ten percent (10%) of Net Tangible Assets or ten percent (10%) of Capitalization. (c) If at any time the Company shall issue, assume, or guarantee any Debt secured by any Lien and if Section 709(a) requires that the Outstanding Notes be secured equally and ratably with such Debt, the Company will promptly execute, at its expense, any instruments necessary to so equally and ratably secure the Outstanding Notes and deliver the same to the Trustee along with: (1) An Officers' Certificate stating that the covenant of the Company contained in Section 709(a) has been complied with; and (2) An Opinion of Counsel to the effect that the Company has complied with the covenant contained in Section 709(a), and that any instrument executed by the Company in the performance of such covenant complies with the requirements of such covenant. In the event that the Company shall hereafter secure Outstanding Notes equally and ratably with any other obligation or indebtedness (including other Notes) pursuant to the provisions of this Section 709, the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto and to take such action, if any, as it may, in 40 its sole and absolute discretion, deem advisable to enable it to enforce effectively the rights of the Holders of Outstanding Notes so secured, equally and ratably with such other obligation or indebtedness. Section 710. Sale and Lease-Back Transactions. From and after the Release Date and so long as any Notes are outstanding, the Company will not enter into any Sale and Lease-Back Transaction with respect to any Operating Property and will not permit to remain in effect any Sale and Lease-Back Transaction entered into on or prior to the Release Date with respect to any Operating Property if, in any case, the commitment by or on behalf of the purchaser is or was obtained more than eighteen (18) months after the later of (i) the completion of the acquisition, construction, or development of such Operating Property or (ii) the placing in operation of such Operating Property or of such Operating Property as constructed, developed, or substantially repaired, altered, or improved, unless (x) the Company would be entitled pursuant to Section 709(a) to issue, assume, or guarantee Debt secured by a Lien on such Operating Property without equally and ratably securing the Notes or (y) the Company would be entitled pursuant to Section 709(b), after giving effect to such Sale and Lease-Back Transaction, to incur $1.00 of additional Debt secured by Liens (other than Liens permitted by Section 709(a)) or (z) the Company shall apply or cause to be applied, in the case of a sale or transfer for cash, an amount equal to the net proceeds thereof (but not less than the fair value (as determined by the Company's Chief Financial Officer) of such Operating Property at the date of such sale or transfer) and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair value (as determined by the Board of Directors) of the Operating Property so leased, to the retirement, within one hundred eighty (180) days after the later to occur of the effective date of such Sale and Lease-Back Transaction or the Release Date, of Notes or other Debt of the Company ranking equally with, the Notes; provided, however, that any such retirement of Notes shall be in accordance with the terms and provisions of the Indenture and the Notes; provided, further, that the amount to be applied to such retirement of Notes or other Debt shall be reduced by an amount equal to the sum of (a) an amount equal to the redemption price with respect to Notes delivered within such one hundred eighty (180)-day period to the Trustee for retirement and cancellation and (b) the principal amount, plus any premium or fee paid in connection with any redemption in accordance with the terms of other Debt voluntarily retired by the Company within such one hundred eighty (180)-day period, excluding in each case retirements pursuant to mandatory sinking fund or prepayment provisions and payments at maturity. ARTICLE VIII Satisfaction and Discharge Section 801. Satisfaction and Discharge of Notes. Any Note or Notes, or any portion of the principal amount thereof, shall be deemed to have been paid for all purposes of this Indenture, and the entire indebtedness of the Company in respect thereof shall be deemed to have been satisfied and discharged, if there shall 41 have been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust: (a) money in an amount which shall be sufficient, or (b) in the case of a deposit made prior to the Maturity of such Notes or portions thereof, Eligible Obligations, which shall not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with or held by the Trustee or such Paying Agent, shall be sufficient, or (c) a combination of (a) or (b) which shall be sufficient, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Notes or portions thereof on or prior to Maturity, provided, however, that in the case of the provision for payment or redemption of less than all the Notes of any series or Tranche, such Notes or portions thereof shall have been selected by the Trustee as provided herein and, in the case of a redemption, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall have been given by the Company to the Trustee to give such notice, under arrangements satisfactory to the Trustee; and provided, further, that the Company shall have delivered to the Trustee and such Paying Agent: (x) if such deposit shall have been made prior to the Maturity of such Notes, a Company Order stating that the money and Eligible Obligations deposited in accordance with this Section shall be held in trust, as provided in Section 803; (y) if Eligible Obligations shall have been deposited, an Opinion of Counsel that the obligations so deposited constitute Eligible Obligations and do not contain provisions permitting the redemption or other prepayment at the option of the issuer thereof, and an opinion of an independent public accountant of nationally recognized standing, selected by the Company, to the effect that the requirements set forth in clause (b) above have been satisfied; and (z) if such deposit shall have been made prior to the Maturity of such Notes, an Officer's Certificate stating the Company's intention that, upon delivery of such Officer's Certificate, its indebtedness in respect of such Notes or portions thereof will have been satisfied and discharged as contemplated in this Section. If the Company shall make any deposit of money and/or Eligible Obligations with respect to any Notes, or any portion of the principal amount thereof, as contemplated by this section, the Company shall not deliver an Officer's Certificate described in clause (z) above unless the Company shall also deliver to the Trustee, together with such Officer's Certificate, an Opinion of Counsel to the effect that, as a result of a change in law occurring after the date of this Indenture, the Holders of such Notes, or portions thereof, will not recognize income, gain or loss for United States federal income tax purposes as a result of the satisfaction and discharge of the Company's indebtedness in respect thereof and will be subject to United States federal income tax on the 42 same amounts, at the same times and in the same manner as if such satisfaction and discharge had not been effected. Upon the deposit of money or Eligible Obligations, or both, in accordance with this Section, together with the documents required by clauses (x), (y) and (z) above, the Trustee shall, upon receipt of a Company Request, acknowledge in writing that the Note or Notes or portions thereof with respect to which such deposit was made are deemed to have been paid for all purposes of this Indenture and that the entire indebtedness of the Company in respect thereof has been satisfied and discharged as contemplated in this Section. In the event that all of the conditions set forth in the preceding paragraph shall have been satisfied in respect of any Notes or portions thereof except that, for any reason, the Officer's Certificate specified in clause (z) shall not have been delivered, such Notes or portions thereof shall nevertheless be deemed to have been paid for all purposes of this Indenture, and the Holders of such Notes or portions thereof shall nevertheless be no longer entitled to the benefits of this Indenture or of any of the covenants of the Company under Article Seven (except the covenants contained in Sections 702 and 703) or any other covenants made in respect of such Notes or portions thereof as contemplated by Section 301, but the indebtedness of the Company in respect of such Notes or portions thereof shall not be deemed to have been satisfied and discharged prior to Maturity for any other purpose, and the Holders of such Notes or portions thereof shall continue to be entitled to look to the Company for payment of the indebtedness represented thereby; and, upon Company Request, the Trustee shall acknowledge in writing that such Notes or portions thereof are deemed to have been paid for all purposes of this Indenture. If payment at Stated Maturity of less than all of the Notes of any series, or any Tranche thereof, is to be provided for in the manner and with the effect provided in this Section, the Trustee shall select such Notes, or portions of principal amount thereof, in the manner specified by Section 503 for selection for redemption of less than all the Notes of a series or Tranche. In the event that Notes which shall be deemed to have been paid for purposes of this Indenture, and, if such is the case, in respect of which the Company's indebtedness shall have been satisfied and discharged, all as provided in this Section do not mature and are not to be redeemed within the sixty (60) day period commencing with the date of the deposit of moneys or Eligible Obligations, as aforesaid, the Company shall, as promptly as practicable, give a notice, in the same manner as a notice of redemption with respect to such Notes, to the Holders of such Notes to the effect that such deposit has been made and the effect thereof. Notwithstanding that any Notes shall be deemed to have been paid for purposes of this Indenture, as aforesaid, the obligations of the Company and the Trustee in respect of such Notes under Sections 304, 305, 306, 504, 603 (as to notice of redemption), 702, 703, 1007, 1014 and 1015 and this Article Eight shall survive. To the extent Notes are deemed paid and discharged pursuant to this Section 801, the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the related Senior Note First Mortgage Bonds shall be satisfied and discharged, and such Senior Note First Mortgage Bonds shall cease to secure the Notes in any manner but shall continue to be held by the Trustee until the Release Date. 43 If the Company shall have paid or caused to be paid the principal of and premium, if any, and interest on any Note, as and when the same shall have become due and payable or the Company shall have delivered to the Trustee or the Note Registrar for cancellation any Outstanding Note, such Note shall cease to be entitled to any lien, benefit or security under this Indenture. Upon a Note of any series ceasing to be entitled to any lien, benefit or security under this Indenture, the obligation of the Company to make payment with respect to principal of and premium, if any, and interest on a principal amount of the related series of Senior Note First Mortgage Bonds equal to the principal amount of such Note shall be satisfied and discharged and such portion of the principal amount of such Senior Note First Mortgage Bonds shall cease to secure such Note in any manner, but such Senior Note First Mortgage Bonds shall continue to be held by the Trustee until the Release Date. The Company shall pay, and shall indemnify the Trustee or any Paying Agent with which Eligible Obligations shall have been deposited as provided in this Section against, any tax, fee or other charge imposed on or assessed against such Eligible Obligations or the principal or interest received in respect of such Eligible Obligations, including, but not limited to, any such tax payable by any entity deemed, for tax purposes, to have been created as a result of such deposit. Anything herein to the contrary notwithstanding, (a) if, at any time after a Note would be deemed to have been paid for purposes of this Indenture, and, if such is the case, the Company's indebtedness in respect thereof would be deemed to have been satisfied or discharged, pursuant to this Section (without regard to the provisions of this paragraph), the Trustee or any Paying Agent, as the case may be, shall be required to return the money or Eligible Obligations, or combination thereof, deposited with it as aforesaid to the Company or its representative under any applicable Federal or State bankruptcy, insolvency or other similar law, such Note shall thereupon be deemed retroactively not to have been paid and any satisfaction and discharge of the Company's indebtedness in respect thereof (and in respect of the related Senior Note First Mortgage Bonds) shall retroactively be deemed not to have been effected, such Note shall be deemed to remain Outstanding, and such Note shall continue to be secured by the related Senior Note First Mortgage Bond until the Release Date and (b) any satisfaction and discharge of the Company's indebtedness in respect of any Note shall be subject to the provisions of the last paragraph of Section 703. Section 802. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) no Notes remain Outstanding hereunder; and (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; provided, however, that if, in accordance with the last paragraph of Section 801, any Note, previously deemed to have been paid for purposes of this Indenture, shall be deemed 44 retroactively not to have been so paid, this Indenture shall thereupon be deemed retroactively not to have been satisfied and discharged, as aforesaid, and to remain in full force and effect, and the Company shall execute and deliver such instruments as the Trustee shall reasonably request to evidence and acknowledge the same. Notwithstanding the satisfaction and discharge of this Indenture as aforesaid, the obligations of the Company and the Trustee under Sections 304, 305, 306, 504, 603 (as to notice of redemption), 702, 703, 1007, 1014 and 1015 and this Article Eight shall survive. Upon satisfaction and discharge of this Indenture as provided in this Section, the Trustee shall assign, transfer and turn over to the Company, subject to the lien provided by Section 1007, any and all money, Notes and other property then held by the Trustee for the benefit of the Holders of the Notes other than money and Eligible Obligations held by the Trustee pursuant to Section 803. Section 803. Application of Trust Money. Neither the Eligible Obligations nor the money deposited pursuant to Section 801, nor the principal or interest payments on any such Eligible Obligations, shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of, and premium, if any, and interest, if any, on, the Notes or portions of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section 703; provided, however, that, so long as there shall not have occurred and be continuing an Event of Default, or an event which, with the giving of notice or the passage of time, would become an Event of Default, any cash received from such principal or interest payments on such Eligible Obligations, if not then needed for such purpose, shall, to the extent practicable, be invested in Eligible Obligations of the type described in clause (b) in the first paragraph of Section 801 maturing at such times and in such amounts as shall be sufficient to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Notes or portions thereof on and prior to the Maturity thereof, and interest earned from such reinvestment shall be paid over to the Company as received, free and clear of any trust, lien or pledge under this Indenture except the lien provided by Section 1007; and provided, further, that, so long as there shall not have occurred and be continuing an Event of Default, or an event which, with the giving of notice or the passage of time, would become an Event of Default, any moneys held in accordance with this Section on the Maturity of all such Notes in excess of the amount required to pay the principal of and premium, if any, and interest, if any, then due on such Notes shall be paid over to the Company free and clear of any trust, lien or pledge under this Indenture except the lien provided by Section 1007; and provided, further, that if an Event of Default, or an event which, with the giving of notice or the passage of time, would become an Event of Default, shall have occurred and be continuing, moneys to be paid over to the Company pursuant to this Section shall be held until such Event of Default, or event which, with the giving of notice or the passage of time, would become an Event of Default, shall have been waived or cured. 45 ARTICLE IX Events of Default; Remedies Section 901. Events of Default. "Event of Default", wherever used herein with respect to Notes of any series, means any one of the following events: (a) failure to pay interest, if any, on any Note of such series within thirty (30) days after the same becomes due and payable; or (b) failure to pay the principal of or premium, if any, on any Note of such series when due and payable; or (c) failure to perform or breach of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in the performance of which or breach of which is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of one or more series of Notes other than such series) for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 33% in principal amount of the Outstanding Notes of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder, unless the Trustee, or the Trustee and the Holders of a principal amount of Notes of such series not less than the principal amount of Notes the Holders of which gave such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and the Holders of such principal amount of Notes of such series, as the case may be, shall be deemed to have agreed to an extension of such period for a maximum of one hundred twenty (120) days if corrective action is initiated by the Company within such period and is being diligently pursued; or (d) prior to the Release Date, a completed default (as defined in Section 66 of the First Mortgage) has occurred and is continuing; provided, however, that, anything in this Indenture to the contrary notwithstanding, the waiver or cure of such completed default under the First Mortgage and the rescission and annulment of the consequences thereof shall constitute a waiver of the corresponding Event of Default hereunder and a rescission and annulment of the consequences thereof; (e) the entry by a court having jurisdiction in the premises of (1) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (2) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition by one or more Persons other than the Company seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company or for any 46 substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief or any such other decree or order shall have remained unstayed and in effect for a period of 90 consecutive days; or (f) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the authorization of such action by the Board of Directors; or (g) any other Event of Default specified with respect to Notes of such series. Section 902. Acceleration of Maturity; Rescission and Annulment. If an Event of Default due to the default in payment of principal of, or premium, if any, or interest on, any series of Notes or due to the default in the performance or breach of any other covenant or warranty of the Company applicable to the Notes of such series but not applicable to all Outstanding Notes shall have occurred and be continuing, either the Trustee or the Holders of not less than 33% in principal amount of the Notes of such series may then declare the principal amount (or, if any of the Notes of such series are Discount Notes, such portion of the principal amount as may be specified in the terms thereof as contemplated by Section 301) of all Notes of such series and premium, if payment of any thereof be in default, and interest accrued thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders). If an Event of Default due to default in the performance of any other of the covenants or agreements herein applicable to all Outstanding Notes or an Event of Default specified in Section 901(d), (e) or (f) shall have occurred and be continuing, either the Trustee or the Holders of not less than 33% in principal amount of all Notes then Outstanding (considered as one class), and not the Holders of the Notes of any one of such series, may declare the principal amount (or, if any of the Notes are Discount Notes, such portion of the principal amount of such Notes as may be specified in the terms thereof as contemplated by Section 301) of all Notes and premium, if payment of any thereof be in default, and interest accrued thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders). As a consequence of each such declaration (herein referred to as a declaration of acceleration) with respect to Notes of any series, the principal amount (or portion thereof in the case of Discount Notes) of such Notes, any such premium, and interest accrued thereon shall become due and payable immediately. Prior to the Release Date, upon all of the Notes becoming immediately due and payable by declaration pursuant to any of the foregoing provisions of this Section 902, the Trustee shall immediately file 47 with the Mortgage Trustee a written demand for the acceleration of the payment of principal of and premium, if any and accrued interest on all Senior Note First Mortgage Bonds pursuant to the applicable provisions of the First Mortgage. At any time after such a declaration of acceleration with respect to Notes of any series shall have been made and before a judgment or decree for payment of the money due shall have been obtained by the Trustee as hereinafter in this Article provided, and prior to the receipt by the Trustee from the Mortgage Trustee of an irrevocable, valid and unconditional notice to the Trustee of the acceleration of the payment of principal, by declaration or otherwise, of all of the Senior Note First Mortgage Bonds issued and outstanding under the First Mortgage, the Event or Events of Default and its consequences (including, if given, the written demand for the acceleration of the payment of principal of and premium, if any, and accrued interest on all such Senior Note First Mortgage Bonds) giving rise to such declaration of acceleration shall, without further act, be deemed to have been waived, and such declaration and its consequences shall, without further act, be deemed to have been rescinded and annulled, if (a) the Company shall have paid or deposited with the Trustee a sum sufficient to pay (1) all overdue interest on all Notes of such series; (2) the principal of and premium, if any, on any Notes of such series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Notes; (3) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Notes; (4) all amounts due to the Trustee under Section 1007; and (b) any other Event or Events of Default with respect to Notes of such series, other than the non-payment of the principal of Notes of such series which shall have become due solely by such declaration of acceleration, shall have been cured (including any completed default (as defined in Section 66 of the First Mortgage) under the First Mortgage, as evidenced by notice thereof received by the Trustee from the Mortgage Trustee) or waived as provided in Section 913 or under the First Mortgage. No such rescission shall affect any subsequent Event of Default or impair any right consequent thereon. Section 903. Collection of Indebtedness and Suits for Enforcement by Trustee. If an Event of Default described in clause (a) or (b) of Section 901 shall have occurred and be continuing, the Company shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Notes of the series with respect to which such Event of Default shall 48 have occurred, the whole amount then due and payable on such Notes for principal and premium, if any, and interest, if any, and, to the extent permitted by law, interest on premium, if any, and on any overdue principal and interest, at the rate or rates prescribed therefor in such Notes, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 1007. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Notes, wherever situated. If an Event of Default with respect to Notes of any series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights (including, prior to the Release Date, any rights the Trustee may have as a holder of Senior Note First Mortgage Bonds) and the rights of the Holders of Notes of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 904. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Notes or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal, premium, if any, and interest, if any, owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due to the Trustee under Section 1007 and, prior to the Release Date, any claims of the Trustee as holder of Senior Note First Mortgage Bonds) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amounts due it under Section 1007. 49 Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 905. Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered. Section 906. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or premium, if any, or interest, if any, upon presentation of the Notes in respect of which or for the benefit of which such money shall have been collected and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: First: To the payment of all amounts due the Trustee under Section 1007; Second: To the payment of the amounts then due and unpaid upon the Notes for principal of and premium, if any, and interest, if any, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal, premium, if any, and interest, if any, respectively; and Third: To the payment of the remainder, if any, to the Company, or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. Section 907. Limitation on Suits. No Holder shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (a) such Holder shall have previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes of such series; (b) the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class, shall have made written request to 50 the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders shall have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceeding; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Notes of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 908. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and (subject to Section 307) interest, if any, on such Note on the Stated Maturity or Maturities expressed in such Note (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 909. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, and Trustee and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and such Holder shall continue as though no such proceeding had been instituted. Section 910. Rights and Remedies Cumulative. Except as otherwise provided in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or 51 hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 911. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 912. Control by Holders of Notes. If an Event of Default shall have occurred and be continuing in respect of a series of Notes, the Holders of a majority in principal amount of the Outstanding Notes of such series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Notes of such series; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Notes, the Holders of a majority in aggregate principal amount of the Outstanding Notes of all such series, considered as one class, shall have the right to make such direction, and not the Holders of the Notes of any one of such series; and provided, further, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not in the Trustee's reasonable discretion be adequate, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Before proceeding to exercise any right or power hereunder at the direction of such Holders, the Trustee shall be entitled to receive from such Holders reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with any such direction. Section 913. Waiver of Past Defaults. The Holders of not less than a majority in aggregate principal amount of the Outstanding Notes of any series may on behalf of the Holders of all the Notes of such series waive any past default hereunder with respect to such series and its consequences, except a default (a) in the payment of the principal of or premium, if any, or interest, if any, on any Note of such series, or 52 (b) in respect of a covenant or provision hereof which under Section 1302 cannot be modified or amended without the consent of the Holder of each Outstanding Note of such series affected. Upon any such waiver, such default shall cease to exist, and any and all Events of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 914. Undertaking for Costs. The Company and the Trustee agree, and each Holder by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Outstanding Notes of all series in respect of which such suit may be brought, considered as one class, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or premium, if any, or interest, if any, on any Note on or after the Stated Maturity or Maturities expressed in such Note (or, in the case of redemption, on or after the Redemption Date). Section 915. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. Section 916. Default Under the First Mortgage. In addition to every other right and remedy provided herein, the Trustee may exercise any right or remedy available to the Trustee in its capacity as owner and holder of Senior Note First Mortgage Bonds which arises as a result of a completed default (as defined in Section 66 of the First Mortgage) whether or not an Event of Default hereunder shall then have occurred and be continuing. 53 ARTICLE X The Trustee Section 1001. Certain Duties and Responsibilities. (a) The Trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee in the Trust Indenture Act and no implied covenants or obligations shall be read into this Indenture against the Trustee. For purposes of Sections 315(a) and 315(c) of the Trust Indenture Act, the term "default" is hereby defined as an Event of Default which has occurred and is continuing. (b) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (c) Notwithstanding anything contained in this Indenture to the contrary, the duties and responsibilities of the Trustee under this Indenture shall be subject to the protections, exculpations and limitations on liability afforded to the Trustee under the provisions of the Trust Indenture Act, including those provisions of such Act deemed by such Act to be included herein. For the purpose of Section 315(d)(2) of the Trust Indenture Act, the term "responsible officer" is hereby defined as a Responsible Officer and the chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller of the Trustee, or any other officer of the Trustee customarily performing functions similar to those performed by a Responsible Officer or any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of or familiarity with the particular subject. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 1002. Notice of Defaults. The Trustee shall give the Holders notice of any default hereunder with respect to the Notes of any series to the Holders of Notes of such series of which it has knowledge (within the meaning of Section 1003(h) hereof) in the manner and to the extent required to do so by the Trust Indenture Act, unless such default shall have been cured or waived; provided, however, that in the case of any default of the character specified in Section 901(c), no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this 54 Section, the term "default" means any event that is, or after notice or lapse of time, or both, would become, an Event of Default. Section 1003. Certain Rights of Trustee. Subject to the provisions of Section 1001 and to the applicable provisions of the Trust Indenture Act: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or as otherwise expressly provided herein, and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate, (d) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any Holder pursuant to this Indenture, unless such Holder shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall (subject to applicable legal requirements) be entitled to examine, during normal business hours, the books, records and premises of the Company, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and 55 (h) the Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Notes of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee shall have actual knowledge of the default or Event of Default or (2) written notice of such default or Event of Default (which shall state that such notice is a "Notice of Default" or a "Notice of an Event of Default" hereunder, as the case may be) shall have been given to the Trustee by the Company, any other obligor on such Notes or by any Holder of such Notes, or in the case of an Event of Default described in Section 901(d), by the Mortgage Trustee or Holders of at least 25% in principal amount of the outstanding Notes. Section 1004. Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes (except the Trustee's certificates of authentication) shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes or as to the value, title or validity of any Senior Note First Mortgage Bonds or other securities at any time pledged or deposited with the Trustee hereunder or as to the security offered thereby or hereby. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Notes or the proceeds thereof. Section 1005. May Hold Notes. Each of the Trustee, any Authenticating Agent, any Paying Agent, any Note Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 1008 and 1013, may otherwise deal with the Company with the same rights it would have if it were not the Trustee, Authenticating Agent, Paying Agent, Note Registrar or such other agent. Section 1006. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds, except to the extent required by law. The Trustee shall be under no liability for interest on investment of any money received by it hereunder except as expressly provided herein or otherwise agreed with, and for the sole benefit of, the Company. Section 1007. Compensation and Reimbursement. The Company shall (a) pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any provision of this Indenture, including the 56 costs of collection and (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except to the extent that any such expense, disbursement or advance may be attributable to its negligence, willful misconduct or bad faith; and (c) indemnify the Trustee and hold it harmless from and against any loss, liability or expense (including reasonable attorney's fees and expenses) incurred without negligence or bad faith on its part arising out of or in connection with the acceptance or administration of the trust or trusts hereunder or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Notes upon all property and funds held or collected by the Trustee as such other than property and funds held in trust under Section 803 (except as otherwise provided in Section 803). "Trustee" for purposes of this Section shall include any predecessor Trustee; provided; however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder. When a Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 901(e) or Section 901(f), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency or other similar law. The provisions of this Section 1007 shall survive termination of this Indenture. Section 1008. Disqualification; Conflicting Interests. If the Trustee shall have or acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either eliminate such conflicting interest or resign to the extent, in the manner and with the effect, and subject to the conditions, provided in the Trust Indenture Act and this Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the Trustee shall not be deemed to have a conflicting interest by virtue of being a Trustee under (i) this Indenture with respect to Notes of more than one series, or (ii) the First Mortgage or with respect to the Senior Note First Mortgage Bonds issued thereunder. Section 1009. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be (a) a corporation organized and doing business under the laws of the United States, any State or Territory thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000 and subject to supervision or examination by Federal or State authority, or 57 (b) if and to the extent permitted by the Commission by rule, regulation or order upon application, a corporation or other Person organized and doing business under the laws of a foreign government, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000 or the Dollar equivalent of the applicable foreign currency and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees, and, in either case, qualified and eligible under this Article and the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 1010. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 1011. (b) The Trustee may resign at any time with respect to the Notes of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 1011 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Notes of such series. (c) The Trustee may be removed at any time with respect to the Notes of any series by Act of the Holders of a majority in principal amount of the Outstanding Notes of such series delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 1008 after written request therefor by the Company or by any Holder who has been a bona fide Holder for at least six months, or (2) the Trustee shall cease to be eligible under Section 1009 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, 58 then, in any such case, (x) the Company by a Board Resolution may remove the Trustee with respect to all Notes or (y) subject to Section 914, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Notes and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause (other than as contemplated in clause (y) in subsection (d) of this Section), with respect to the Notes of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Notes of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Notes of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Notes of any particular series) and shall comply with the applicable requirements of Section 1011. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Notes of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Notes of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 1011, become the successor Trustee with respect to the Notes of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Notes of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 1011, any Holder who has been a bona fide Holder of a Note of such series for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Notes of such series. (f) So long as no event which is, or after notice or lapse of time, or both, would become, an Event of Default shall have occurred and be continuing, and except with respect to a Trustee appointed by Act of the Holders of a majority in principal amount of the Outstanding Notes pursuant to subsection (e) of this Section, if the Company shall have delivered to the Trustee (i) a Board Resolution appointing a successor Trustee, effective as of a date specified therein, and (ii) an instrument of acceptance of such appointment, effective as of such date, by such successor Trustee in accordance with Section 1011, the Trustee shall be deemed to have resigned as contemplated in subsection (b) of this Section, the successor Trustee shall be deemed to have been appointed by the Company pursuant to subsection (e) of this Section and such appointment shall be deemed to have been accepted as contemplated in Section 1011, all as of such date, and all other provisions of this Section and Section 1011 shall be applicable to such resignation, appointment and acceptance except to the extent inconsistent with this subsection (f). (g) The Company or, should the Company fail so to act promptly, the successor Trustee at the expense of the Company shall give notice of each resignation and each removal of the Trustee with respect to the Notes of any series and each appointment of a successor Trustee with respect to the Notes of any series by mailing 59 written notice of such event by first-class mail, postage prepaid, to all Holders of Notes of such series as their names and addresses appear in the Note Register. Each notice shall include the name of the successor Trustee with respect to the Notes of such series and the address of its corporate trust office. Section 1011. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to the Notes of all series, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee, including rights, title and interest in the Senior Note First Mortgage Bonds; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of all sums owed to it, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Notes of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Notes of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers and trusts of the retiring Trustee with respect to the Notes of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Notes, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Notes of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Notes of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee, upon payment of all sums owed to it, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Notes of that or those series to which the appointment of such successor Trustee relates. 60 (c) Upon request of any such successor Trustee, the Company shall execute any instruments which fully vest in and confirm to such successor Trustee all such rights, powers and trusts referred to in subsection (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 1012. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes. Section 1013. Preferential Collection of Claims Against Company. If the Trustee shall be or become a creditor of the Company or any other obligor upon the Notes (other than by reason of a relationship described in Section 311(b) of the Trust Indenture Act), the Trustee shall be subject to any and all applicable provisions of the Trust Indenture Act regarding the collection of claims against the Company or such other obligor. For purposes of Section 311(b) of the Trust Indenture Act: (a) the term "cash transaction" means any transaction in which full payment for goods or Notes sold is made within seven days after delivery of the goods or Notes in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; (b) the term "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. Section 1014. Co-trustees and Separate Trustees. At any time or times, for the purpose of meeting the legal requirements of any applicable jurisdiction, the Company and the Trustee shall have power to appoint, and, upon the 61 written request of the Trustee or of the Holders of at least thirty-three percent (33%) in principal amount of the Notes then Outstanding, the Company shall for such purpose join with the Trustee in the execution and delivery of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, or to act as separate trustee, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons, in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Company does not join in such appointment within 15 days after the receipt by it of a request so to do, or if an Event of Default shall have occurred and be continuing, the Trustee alone shall have power to make such appointment. Should any written instrument or instruments from the Company be required by any co-trustee or separate trustee so appointed to more fully confirm to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Company. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following conditions: (a) the Notes shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of Notes, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely, by the Trustee; (b) the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed either by the Trustee or by the Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee; (c) the Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Company, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, if an Event of Default shall have occurred and be continuing, the Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Company. Upon the written request of the Trustee, the Company shall join with the Trustee in the execution and delivery of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section; (d) no co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such trustee hereunder; and 62 (e) any Act of Holders delivered to the Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. Section 1015. Appointment of Authenticating Agent. The Trustee may appoint an Authenticating Agent or Agents with respect to the Notes of one or more series, or any Tranche thereof, which shall be authorized to act on behalf of the Trustee to authenticate Notes of such series or Tranche issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Notes so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Notes by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States, any State or territory thereof or the District of Columbia or the Commonwealth of Puerto Rico, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving 45 days written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. 63 The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. The provisions of Sections 308, 1004 and 1005 shall be applicable to each Authenticating Agent. If an appointment with respect to the Notes of one or more series, or any Tranche thereof, shall be made pursuant to this Section, the Notes of such series or Tranche may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication substantially in the following form: This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture. Dated: ________________________________________ As Trustee By______________________________________ As Authenticating Agent By______________________________________ Authorized Signatory If all of the Notes of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Notes upon original issuance located in a Place of Payment where the Company wishes to have Notes of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint, in accordance with this Section and in accordance with such procedures as shall be acceptable to the Trustee, an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Notes. ARTICLE XI Holders' Lists and Reports by Trustee and Company Section 1101. Lists of Holders. Semiannually, between March 15 and April 1 and between September 15 and October 1 in each year, commencing with the year 1999, and at such other times as the Trustee may request in writing, the Company shall furnish or cause to be furnished to the Trustee information as to the names and addresses of the Holders, and the Trustee shall preserve such information and similar information received by it in any other capacity and afford to the Holders access to information so preserved by it, all to such extent, if any, and in such manner as 64 shall be required by the Trust Indenture Act; provided, however, that no such list need be furnished so long as the Trustee shall be the Note Registrar. Every holder of Notes by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Notes in accordance with Section 312 of the Trust Indenture Act, or any successor section of such Act, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act, or any successor section of such Act. Section 1102. Reports by Trustee and Company. Annually, not later than sixty (60) days after __________ 15 in each year, commencing ____________ 15, 2000, the Trustee shall transmit to the Holders, the Commission and each securities exchange upon which any Notes are listed, a report, dated as of the next preceding ________ 15, with respect to any events and other matters described in Section 313(a) of the Trust Indenture Act, in such manner and to the extent required by the Trust Indenture Act. The Trustee shall transmit to the Holders, the Commission and each securities exchange upon which any Notes are listed, and the Company shall file with the Trustee (within thirty (30) days after filing with the Commission in the case of reports which pursuant to the Trust Indenture Act must be filed with the Commission and furnished to the Trustee) and transmit to the Holders, such other information, reports and other documents, if any, at such times and in such manner, as shall be required by the Trust Indenture Act. The Company shall notify the Trustee of the listing of any Notes on any securities exchange. Delivery of such reports, information and documents by the Company to the Trustee is for informational purposes only, and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer's Certificates). ARTICLE XII Consolidation, Merger, Conveyance or Other Transfer Section 1201. Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person, or convey or otherwise transfer or lease its properties and assets substantially as an entirety to any Person, unless (a) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a Person organized and validly existing under the laws of the United States, any State thereof or the District of Columbia, and (a) shall expressly assume, by an indenture supplemental 65 hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest, if any, on all Outstanding Notes and the performance of every covenant of this Indenture on the part of the Company to be performed or observed, and (b) if such consolidation, merger, conveyance, transfer, or lease occurs prior to the Release Date, shall expressly assume, by an indenture supplemental to the First Mortgage, executed and delivered to the Trustee and the Mortgage Trustee, in form satisfactory to the Trustee and the Mortgage Trustee, the due and punctual payment of the principal of, and premium, if any, and interest on all of the Senior Note First Mortgage Bonds and the performance of every covenant of the First Mortgage on the part of the Company to be performed or observed. (b) immediately after giving effect to such transaction and treating any indebtedness for borrowed money which becomes an obligation of the Company as a result of such transaction as having been incurred by the Company at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (c) the Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, or other transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transactions have been complied with. Section 1202. Successor Corporation Substituted. Upon any consolidation by the Company with or merger by the Company into any other corporation or any conveyance, or other transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 1201, the successor corporation formed by such consolidation or into which the Company is merged or the Person to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Notes Outstanding hereunder. ARTICLE XIII Supplemental Indentures Section 1301. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: 66 (a) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Notes, all as provided in Article Twelve; or (b) to add one or more covenants of the Company or other provisions for the benefit of the Holders of, or to remain in effect only so long as there shall be, Outstanding Notes of one or more specified series, or one or more specified Tranches thereof, or to surrender any right or power herein conferred upon the Company; or (c) to add any additional Events of Default with respect to all or any series of Notes Outstanding hereunder; or (d) to change or eliminate any provision of this Indenture or to add any new provision to this Indenture; provided, however, that if such change, elimination or addition shall adversely affect the interests of the Holders of Notes of any series or Tranche Outstanding on the date of such indenture supplemental hereto in any material respect, such change, elimination or addition shall become effective with respect to such series or Tranche only when no Note of such series or Tranche remains Outstanding; or (e) to provide collateral security for the Notes; or (f) to establish the form or terms of Notes of any series or Tranche as contemplated by Sections 201 and 301; or (g) to provide for the authentication and delivery of bearer Notes and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or (h) to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Notes of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 1011(b); or (i) to provide for the procedures required to permit the Company to utilize, at its option, a non-certificated system of registration for any series or Tranche of the Notes; or to provide for the authentication and delivery of bearer Notes and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or (j) to change any place or places where (1) the principal of and premium, if any, and interest, if any, on all or any series of Notes, or any Tranche thereof, shall be payable, (2) all or any series of Notes, or any Tranche thereof, may be surrendered for registration of transfer, (3) all or any series of Notes, or any Tranche thereof, may be 67 surrendered for exchange and (4) notices and demands to or upon the Company in respect of all or any series of Notes, or any Tranche thereof, and this Indenture may be served; or (k) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein; provided that no such changes or additions shall adversely affect the interests of the Holders of Notes of any series or Tranche in any material respect. As to whether the interests of the Holders of Notes shall be adversely affected pursuant to clause (k) above, the Trustee shall be entitled to receive, may presume the correctness of, and shall be fully protected in relying upon an Officer's Certificate and/or an Opinion of Counsel to such effect. Without limiting the generality of the foregoing, if the Trust Indenture Act as in effect at the date of the execution and delivery of this Indenture or at any time thereafter shall be amended and (x) if any such amendment shall require one or more changes to any provisions hereof or the inclusion herein of any additional provisions, or shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall be deemed to have been amended so as to conform to such amendment to the Trust Indenture Act, and the Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to effect or evidence such changes or additional provisions; or (y) if any such amendment shall permit one or more changes to, or the elimination of, any provisions hereof which, at the date of the execution and delivery hereof or at any time thereafter, are required by the Trust Indenture Act to be contained herein, this Indenture shall be deemed to have been amended to effect such changes or elimination, and the Company and the Trustee may, without the consent of any Holders, enter into an indenture or indentures supplemental hereto to evidence such amendment hereof. Section 1302. Supplemental Indentures With Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Notes of all series then Outstanding under this Indenture, considered as one class, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture; provided, however, that if there shall be Notes of more than one series Outstanding hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders of Notes of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Notes of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Notes of any series shall have been issued in more than one 68 Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Notes of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Notes of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that no such supplemental indenture shall: (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Note, or reduce the principal amount thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate, or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discount Note that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 902, or change the coin or currency (or other property) in which any Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Note (or, in the case of redemption, on or after the Redemption Date), without, in any such case, the consent of the Holder of such Note, or (b) prior to the Release Date, impair the interest hereunder of the Trustee in any Senior Note First Mortgage Bonds, reduce the principal amount of any series of Senior Note First Mortgage Bonds to an amount less than the principal amount of the related series of Notes or alter the payment provisions of such Senior Note First Mortgage Bonds in a manner adverse to the Holders of the Senior Notes, without, in any such case, the consent of the Holder of each Outstanding Note; or (c) reduce the percentage in principal amount of the Outstanding Notes of any series or any Tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of this Indenture or of any default hereunder and its consequences, or reduce the requirements of Section 1404 for quorum or voting, without, in any such case, the consent of the Holders of each Outstanding Note of such series or Tranche, or (d) modify any of the provisions of this Section, Section 707 or Section 913 with respect to the Notes of any series, or any Tranche thereof (except to increase the percentages in principal amount referred to in this Section or such other Sections or to provide that other provisions of this Indenture cannot be modified or waived) without the consent of the Holder of each Outstanding Note affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 1011(b), 1014 and 1301(h). A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Notes, or of one or more Tranches thereof, or which modifies the rights of the Holders of Notes of such series or Tranches with respect to such covenant or other provision, shall be 69 deemed not to affect the rights under this Indenture of the Holders of Notes of any other series or Tranche. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. A waiver by a Holder of such Holder's right to consent under this Section shall be deemed to be a consent of such Holder. Section 1303. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 1001) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties, immunities or liabilities under this Indenture or otherwise. Section 1304. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Any supplemental indenture permitted by this Article may restate this Indenture in its entirety, and, upon the execution and delivery thereof, any such restatement shall supersede this Indenture as theretofore in effect for all purposes. Section 1305. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. Section 1306. Reference in Notes to Supplemental Indentures. Notes of any series, or any Tranche thereof, authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Notes of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Notes of such series or Tranche. 70 Section 1307. Modification Without Supplemental Indenture. If the terms of any particular series of Notes shall have been established in a Board Resolution or an Officer's Certificate pursuant to a Board Resolution as contemplated by Section 301, and not in an indenture supplemental hereto, additions to, changes in or the elimination of any of such terms may be effected by means of a supplemental Board Resolution or Officer's Certificate, as the case may be, delivered to, and accepted by, the Trustee; provided, however, that such supplemental Board Resolution or Officer's Certificate shall not be accepted by the Trustee or otherwise be effective unless all conditions set forth in this Indenture which would be required to be satisfied if such additions, changes or elimination were contained in a supplemental indenture shall have been appropriately satisfied. Upon the acceptance thereof by the Trustee, any such supplemental Board Resolution or Officer's Certificate shall be deemed to be a "supplemental indenture" for purposes of Section 1304 and 1306. ARTICLE XIV Meetings of Holders; Action Without Meeting Section 1401. Purposes for Which Meetings May Be Called. A meeting of Holders of Notes of one or more, or all, series, or any Tranche or Tranches thereof, may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Notes of such series or Tranches. Section 1402. Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders of Notes of one or more, or all, series, or any Tranche or Tranches thereof, for any purpose specified in Section 1401, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine, or, with the approval of the Company, at any other place. Notice of every such meeting, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) If the Trustee shall have been requested to call a meeting of the Holders of Notes of one or more, or all, series, or any Tranche or Tranches thereof, by the Company or by the Holders of 33% in aggregate principal amount of all of such series and Tranches, considered as one class, for any purpose specified in Section 1401, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have given the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Notes of such series and Tranches in the amount above specified, as the case may be, may determine the time and the place 71 in the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. (c) Any meeting of Holders of Notes of one or more, or all, series, or any Tranche or Tranches thereof, shall be valid without notice if the Holders of all Outstanding Notes of such series or Tranches are present in person or by proxy and if representatives of the Company and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all Outstanding Notes of such series, or by such of them as are not present at the meeting in person or by proxy, and by the Company and the Trustee. Section 1403. Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Notes of one or more, or all, series, or any Tranche or Tranches thereof, a Person shall be (a) a Holder of one or more Outstanding Notes of such series or Tranches, or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Notes of such series or Tranches by such Holder or Holders. The only Persons who shall be entitled to attend any meeting of Holders of Notes of any series or Tranche shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 1404. Quorum; Action. The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Notes of the series and Tranches with respect to which a meeting shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders of Notes of such series and Tranches; provided, however, that if any action is to be taken at such meeting which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Notes of such series and Tranches, considered as one class, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Notes of such series and Tranches, considered as one class, shall constitute a quorum. In the absence of a quorum within one hour of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Notes of such series and Tranches, be dissolved. In any other case the meeting may be adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Except as provided by Section 1405(e), notice of the reconvening of any meeting adjourned for more than 30 days shall be given as provided in Section 1402(a) not less than ten days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Notes of such series and Tranches that shall constitute a quorum. 72 Except as limited by Section 1302, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Notes of the series and Tranches with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as so limited, any resolution with respect to any action which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Notes of such series and Tranches, considered as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Notes of such series and Tranches, considered as one class. Any resolution passed or decision taken at any meeting of Holders of Notes duly held in accordance with this Section shall be binding on all the Holders of Notes of the series and Tranches with respect to which such meeting shall have been held, whether or not present or represented at the meeting. Section 1405. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Attendance at meetings of Holders of Notes may be in person or by proxy; and, to the extent permitted by law, any such proxy shall remain in effect and be binding upon any future Holder of the Notes with respect to which it was given unless and until specifically revoked by the Holder or future Holder of such Notes before being voted. (b) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Notes in regard to proof of the holding of such Notes and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Notes shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof. (c) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 1402(b), in which case the Company or the Holders of Notes of the series and Tranches calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Notes of all series and Tranches represented at the meeting, considered as one class. 73 (d) At any meeting each Holder or proxy shall be entitled to one vote for each $1 principal amount of Notes held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Note or proxy. (e) Any meeting duly called pursuant to Section 1402 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Notes of all series and Tranches represented at the meeting, considered as one class; and the meeting may be held as so adjourned without further notice. Section 1406. Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Notes, of the series and Tranches with respect to which the meeting shall have been called, held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports of all votes cast at the meeting. A record of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1402 and, if applicable, Section 1404. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. Section 1407. Action Without Meeting. In lieu of a vote of Holders at a meeting as hereinbefore contemplated in this Article, any request, demand, authorization, direction, notice, consent, waiver or other action may be made, given or taken by Holders by written instruments as provided in Section 104. ARTICLE XV Immunity of Incorporators, Stockholders, Officers and Directors Section 1501. Liability Solely Corporate. No recourse shall be had for the payment of the principal of or premium, if any, or interest, if any, on any Notes, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or 74 agreement under this Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood that this Indenture and all the Notes are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, past, present or future, of the Company or of any predecessor or successor corporation, either directly or indirectly through the Company or any predecessor or successor corporation, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Notes or to be implied herefrom or therefrom, and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of this Indenture and the issuance of the Notes. -------------------- This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 75 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. SOUTHERN INDIANA GAS AND ELECTRIC COMPANY By:_____________________________________ Name: Title: [SEAL] ATTEST: ___________________________________ Name: Title: (Trustee's Signature Page Follows) 76 Trustee's Signature Page Indenture (For Senior Notes), dated as of July __, 1999 BANKERS TRUST COMPANY, as Trustee By:_____________________________________ Name: Title: [SEAL] ATTEST: ___________________________________ Name: Title: 77 EX-4.(D) 5 FIRST SUPPLEMENTAL INDENTURE -------------------------------------------------- SOUTHERN INDIANA GAS AND ELECTRIC COMPANY TO BANKERS TRUST COMPANY, Trustee ------------ First Supplemental Indenture Dated as of July __, 1999 to Indenture (For Senior Notes) Dated as of July __, 1999 -------------------------------------------------- Senior Notes, ____% Series Due __________, 20__ THIS FIRST SUPPLEMENTAL INDENTURE, dated as of July __, 1999, between SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of Indiana (herein called the "Company"), having its principal office at 20 N.W. Fourth Street, Evansville, Indiana 47741-0001, and BANKERS TRUST COMPANY, a banking corporation of the State of New York, having its principal office at 4 Albany Street, 4th Floor, New York, New York 10006, as Trustee (herein called the "Trustee") under the Indenture (For Senior Notes) dated as of July __, 1999 between the Company and the Trustee (the "Indenture"). Capitalized terms used but not defined herein shall have the meanings given them in the Indenture. RECITALS OF THE COMPANY A. The Company has executed and delivered the Indenture to the Trustee to provide for the issuance from time to time of its Senior Notes (the "Notes"), said Notes to be issued in one or more series as in the Indenture provided. B. Pursuant to the terms of the Indenture, the Company desires to establish a new series of its Notes to be known as its Senior Notes, ___% Series Due ________, 20__ (herein called the "Senior Notes Due 20__"), the form and substance of such Senior Notes Due 20__ and the terms, provisions, and conditions thereof to be set forth as provided in the Indenture and this First Supplemental Indenture. C. All things necessary to make this First Supplemental Indenture a valid agreement of the Company, and to make the Senior Notes Due 20__, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been done. NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Senior Notes Due 20__ by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Senior Notes Due 20__ and the terms, provisions, and conditions thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Senior Notes Due 20__, as follows: ARTICLE I GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES DUE 20__ Section 101 There is hereby established a series of Notes designated the "Senior Notes, ___% Series Due ________, 20__," limited in the aggregate principal amount of EIGHTY MILLION AND NO/100 DOLLARS ($80,000,000). Such series of Notes shall be initially authenticated and delivered from time to time upon delivery to the Trustee of the documents required by Section 303 of the Indenture including, among other things, a Company Order for the authentication and delivery of the Senior Notes Due 20__. Section 102 The Senior Notes Due 20__ shall be issued in certificated form, except that the Senior Notes Due 20__ shall be issued initially as a Global Note to and registered in the name of a nominee of The Depository Trust Company, as Depositary therefor. Any Senior Notes Due 20__ to be issued or transferred to, or to be held by such nominee (or any successor thereof) for such purpose shall bear the depositary legend in substantially the form set forth at the top of the form of Senior Notes Due 20__ in Article II hereof, unless otherwise agreed by the Company, such agreement to be confirmed in writing to the Trustee. Such Global Note may be exchanged in whole or in part for Senior Notes Due 20__ registered, and any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than such Depositary or a nominee thereof as to which the Company shall agree, such agreement to be confirmed in writing to the Trustee. Principal of, and premium, if any, and interest on the Senior Notes Due 20__ will be payable, the transfer of Senior Notes Due 20__ will be registrable and Senior Notes Due 20__ will be exchangeable for Senior Notes Due 20__ bearing identical terms and provisions, at the office or agency of the Company in the Borough of Manhattan, The City and State of New York; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holders thereof at such address as shall appear in the Note Register. The Senior Notes Due 20__ shall have the terms set forth in the form of the Senior Notes Due 20__ set forth in Article II hereof. Section 103 The Company may, at its option, redeem, at any time, all, or, from time to time, any part of the Senior Notes Due 20__, upon notice as provided in the Indenture (not less than 30 nor more than 60 days prior to a date fixed for redemption (the "Redemption Date")) as follows: [ ] 2 Section 104 The Company has issued pursuant to the Thirty-Eighth Supplemental Indenture to the First Mortgage, and hereby delivers to the Trustee for the benefit of the Holders of all Notes from time to time Outstanding under the Indenture, a series of Senior Note First Mortgage Bonds designated the "First Mortgage Bonds, ___% Senior Note Series Due 20__." The Senior Note First Mortgage Bonds have the same rate or rates of interest (or interest calculated in the same manner) (including interest payable following a default on the Senior Notes Due 20__), interest payment dates, maturity and redemption provisions, and have been issued in the same aggregate principal amount, as the Senior Notes Due 20__. Section 105 When the obligation of the Company to make payments with respect to the principal of, and premium, if any, and interest on all or any part of the Senior Note First Mortgage Bonds shall be satisfied or deemed satisfied pursuant to Section 403, Section 801 or 3 Section 802 of the Indenture or pursuant to Section 103 of this First Supplemental Indenture, the Trustee shall, upon written request of the Company and the receipt of the certificate of the Expert described in Section 404(b) of the Indenture (if such certificate is then required by Section 404(b) of the Indenture), deliver to the Company without charge therefor all of the Senior Note First Mortgage Bonds so satisfied or deemed satisfied, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Senior Note First Mortgage Bonds delivered to the Company in accordance with this Section 105 shall be delivered by the Company to the Mortgage Trustees for cancellation. Section 106 The Senior Notes Due 20__ shall be defeasible pursuant to Section 801 of the Indenture. ARTICLE II FORM OF SENIOR NOTES, ___% SERIES DUE ________, 20__ Section 201 The Senior Notes Due 20__ and the Trustee's certificate of authentication to be endorsed are to be substantially in the following forms: Form of Face of Note. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO SOUTHERN INDIANA GAS & ELECTRIC COMPANY 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 OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. SOUTHERN INDIANA GAS & ELECTRIC COMPANY Senior Notes, ___% Series Due ________, 20__ No. ____ $___________ CUSIP No. ________ Southern Indiana Gas & Electric, a corporation duly organized and existing under the laws of the State of Indiana (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___________, or registered assigns, the principal sum of _______________ Dollars ($_____) on 4 ________, 20__, and to pay interest thereon from ________, 1999 or from the most recent Interest Payment Date with respect to which interest has been paid or duly provided for, semi-annually on ________ 1 and ________ 1 in each year (each an "Interest Payment Date"), commencing ________, ____, at the rate of ___% per annum, until the principal hereof is paid or made available for payment, provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of ____% per annum (to the extent that the payment of such interest shall be legally enforceable); from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be the ________ 15 or ________ 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of (and premium if any) and such interest on this Note will be made at the office or agency of the Company maintained for that purpose in The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of such interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Interest will accrue from each prior Interest Payment Date to, but not including, the relevant payment date. In the event that any date on which interest is payable on the Notes of this series is not a Business Day at any Place of Payment, then payment of interest or principal and premium, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. A "Business Day" means when used with respect to a Place of Payment or any other particular location specified in the Indenture, means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location are generally authorized or required by law, regulation or executive order to remain closed. Reference is hereby made to the further provisions of this Note set forth below, which further provisions shall for all purposes have the same effect as if set forth at this place. 5 Unless the certificate of authentication hereon has been executed by the Trustee referred to below by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. SOUTHERN INDIANA GAS & ELECTRIC COMPANY By ------------------------------------- Attest: - ------------------------------ Form of Reverse of Note. This Note is one of a duly authorized issue of securities of the Company (herein called the "Notes"), issued and to be issued in one or more series under an Indenture (For Senior Notes), dated as of July __, 1999 (herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and Bankers Trust Company, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof, limited in aggregate principal amount to $80,000,000. Prior to the Release Date (as hereinafter defined), this Note will be secured by first mortgage bonds (the "Senior Note First Mortgage Bonds") delivered by the Company to the Trustee for the benefit of all Holders of Notes from time to time Outstanding, issued under the Indenture, dated as of April 1, 1932, between the Company and Bankers Trust Company, as trustee, as supplemented and amended from time to time (the "First Mortgage"). Reference is made to the First Mortgage for a description of property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the first mortgage bonds under the First Mortgage and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which the Senior Note First Mortgage Bonds are secured and the circumstances under which additional first mortgage bonds may be issued. 6 FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS, OTHER THAN FIRST MORTGAGE BONDS WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED EITHER FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION, HAVE BEEN RETIRED THROUGH REPAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE FIRST MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER. The Notes of this series are subject to redemption by the Company, at its option, in whole, at any time, or in part, from time to time, upon notice as provided in the Indenture (not less than 30 nor more than 60 days prior to a date fixed for redemption (the "Redemption Date")) as follows: [ ] If notice has been given as provided in the Indenture and funds for the redemption of any Notes (or any portion thereof) called for redemption shall have been made available on the redemption date referred to in such notice, such Notes (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Notes will be to receive payment of the Redemption Price. Notice of any optional redemption of Notes of this series (or any portion thereof) will be given to Holders at their addresses, as shown in the Note Register for such Notes, not more than 60 nor less than 30 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, the method of calculation of the Redemption Price and the principal amount of the Notes held by such Holder to be redeemed. If less than all of the Notes 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 portion of such Note to be redeemed in whole or in part. 7 The Notes of this series will not be subject to any sinking fund. 8 In the event of redemption of this Note in part only, a new Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance with certain conditions set forth in the Indenture. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture and, upon such declaration, the Trustee shall demand the acceleration of the payment of principal of the Senior Note First Mortgage Bonds as provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of specified percentages of the Notes Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than a majority in aggregate principal amount of the Notes of all series at the time Outstanding in respect of which an Event of Default shall have occurred and be continuing shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of all series at the time Outstanding in respect of which an Event of Default shall have occurred and be continuing a direction inconsistent with such request, and shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 9 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. Form of Trustee's Certificate of Authentication. CERTIFICATE OF AUTHENTICATION This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture. Dated: ------------------ BANKERS TRUST COMPANY, as Trustee By ------------------------------------- Authorized Signatory 10 ARTICLE III ORIGINAL ISSUE OF SENIOR NOTES DUE 20__ Section 301 Senior Notes Due 20__ in the aggregate principal amount of $80,000,000, may, upon execution of this First Supplemental Indenture, be executed by the Company by an Authorized Officer and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes upon receipt of and in accordance with a Company Order therefor without any further action by the Company. ARTICLE IV PAYING AGENT AND REGISTRAR Section 401 Bankers Trust Company will be the Paying Agent and Note Registrar for the Senior Notes Due 20__. ARTICLE V MISCELLANEOUS PROVISIONS Section 501 Except as otherwise expressly provided in this First Supplemental Indenture or in the form of Senior Notes Due 20__ or otherwise clearly required by the context hereof or thereof, all terms used herein or in said form of Senior Notes Due 20__ that are defined in the Indenture shall have the several meanings respectively assigned to them thereby. Section 502 The Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. Section 503 The Trustee hereby accepts the trusts herein declared, provided, created, supplemented, or amended and agrees to perform the same upon the terms and conditions herein and in the Indenture set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture 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 Seven of the Indenture shall apply to and form part of this First Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations, and insertions, if any, as may be appropriate to make the same conform to the provisions of this First Supplemental Indenture. ---------------------------------- 11 This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. SOUTHERN INDIANA GAS & ELECTRIC COMPANY By: ------------------------------------ [SEAL] Name: Title: ATTEST: - ------------------------------ Name: Title: (Trustee's Signature Page Follows) 12 Trustee's Signature Page First Supplemental Indenture, dated as of July __, 1999, to Indenture (For Senior Notes), dated as of July __, 1999 BANKERS TRUST COMPANY, as Trustee By: ------------------------------------ [SEAL] Name: Title: ATTEST: - ------------------------------ Name: Title: 13 EX-5 6 OPINION RE: LEGALITY Exhibit 5 July 1, 1999 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Southern Indiana Gas and Electric Company (the "Company") Registration Statement on Form S-3 with respect to $80,000,000 Senior Notes secured by $80,000,000 First Mortgage Bonds Ladies and Gentlemen: In connection with the registration of $80,000,000 of the Company's Senior Notes (the "Senior Notes") secured by $80,000,000 of the Company's First Mortgage Bonds (the "First Mortgage Bonds") under the Securities Act of 1933, as amended (the "Act"), we have examined the Registration Statement on Form S-3 (the "Registration Statement") and such corporate records, other documents and questions of law as we considered necessary for the purpose of this opinion. On the basis of such examination, it is our opinion, assuming (i) the applicable provisions of the Securities Act, the Trust Indenture Act of 1939, as amended, and the securities or "blue sky" laws of various states shall have been complied with, (ii) the Indenture (for Senior Notes) between the Company and Bankers Trust Company, as Trustee, and the Supplemental Indentures relating to the Senior Notes and First Mortgage Bonds shall have been duly authorized, executed and delivered, (iii) the Senior Notes shall have been duly authorized, executed, authenticated and delivered against the consideration therefor to be set forth in the supplement or supplements to the prospectus constituting a part of the Registration Statement and (iv) the First Mortgage Bonds have been duly authorized, executed, authenticated and delivered to the Senior Note Trustee in connection with the issuance of the Senior Notes, that the Senior Notes and First Mortgage Bonds will be legally issued, fully paid, non-assessable and binding obligations of the Company, except as limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or other similar laws affecting creditors' rights and general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement. Yours very truly, BAMBERGER, FOREMAN, OSWALD AND HAHN By: /s/ Robert M. Becker ------------------------------------ Name: Robert M. Becker EX-12.(B) 7 STATEMENT RE: COMPUTATION OF RATIOS Exhibit 12(b) SOUTHERN INDIANA GAS & ELECTRIC COMPANY Ratio of Earnings to Fixed Charges (SEC METHOD) FOR TWELVE MONTHS ENDED MARCH 31, 1999 Earnings as defined Net Income 43,012,272 Add: Income Taxes: Current: Federal 20,374,034 State 2,958,746 Deferred (net): Federal 3,371,190 State 847,960 Deferred investment tax credit, net (1,442,997) Interest on long-term debt, less AFUDC borrowed 15,196,373 Amortization of premium, discount and expense on debt 699,000 Other Interest 2,805,549 One-third of rentals charged to operating expense 548,087 ----------- Earnings as defined 88,370,214 =========== Fixed Charges as Defined Interest on long-term debt 16,627,689 Amortization of premium, discount, and expense on debt 699,000 Other Interest 2,805,549 One-third of rentals charged to operating expense 548,087 ----------- Fixed charges as defined 20,680,325 =========== Ratio of Earnings to Fixed Charges 4.2732 =========== EX-23.(A) 8 CONSENTS OF EXPERTS Exhibit (23)(a) CONSENT OF EXPERTS Southern Indiana Gas and Electric Company As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report, dated January 29, 1999, included in Southern Indiana Gas and Electric Company's Annual Report on Form 10-K for the year ended December 31, 1998, and to all references to our firm included in or made part of this Registration Statement. ARTHUR ANDERSEN LLP Chicago, Illinois Date: July 1, 1999 /s/ Arthur Andersen LLP ---------------------------------------- EX-25.(A) 9 FORM T-1 - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___________ ------------------------------ BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) Bankers Trust Company Legal Department 130 Liberty Street, 31st Floor New York, New York 10006 (212) 250-2201 (Name, address and telephone number of agent for service) --------------------------------- Southern Indiana Gas and Electric Company (Exact name of Registrant as specified in its charter) Indiana 35-0672570 (State or other jurisdiction of (I.R.S. employer identification no.) Incorporation or organization) 20 N. W. Fourth Street Evansville, Indiana 47741-0001 (812) 465 5300 (Address, including zip code, and telephone number of principal executive offices) Senior Notes (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. Name Address ---- ------- Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. Item 3. -15. Not Applicable Item 16. List of Exhibits. Exhibit 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated June 21, 1995 - Incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33-65171, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 20, 1996, incorporate by referenced to Exhibit 1 filed with Form T-1 Statement, Registration No. 333-25843 and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated June 19, 1997, copy attached. Exhibit 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 4 - Existing By-Laws of Bankers Trust Company, as amended on November 18, 1997. Copy attached. -2- Exhibit 5 - Not applicable. Exhibit 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. Exhibit 7 - The latest report of condition of Bankers Trust Company dated as of September 30, 1998. Copy attached. Exhibit 8 - Not Applicable. Exhibit 9 - Not Applicable. -3- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 30th day of June, 1999 BANKERS TRUST COMPANY By: /s/ Vincent Chorney ------------------------------------ Vincent Chorney Assistant Vice President -4- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 30th day of June, 1999 BANKERS TRUST COMPANY /s/ Vincent Chorney /s/ ------------------------------------ By: Vincent Chorney Assistant Vice President -5- State of New York, Banking Department I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section 8005 of the Banking Law," dated June 19, 1997, providing for an increase in authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 600 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of $1,000,000 each designated as Series Preferred Stock. Witness, my hand and official seal of the Banking Department at the City of New York, this 27th day of June in the Year of our Lord one thousand nine hundred and ninety-seven. Manuel Kursky -------------------------------- Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law ----------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 600 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 1000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 19th day of June, 1997. James T. Byrne, Jr. ---------------------------------------- James T. Byrne, Jr. Managing Director Lea Lahtinen ---------------------------------------- Lea Lahtinen Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ---------------------------------------- Lea Lahtinen Sworn to before me this 19th day of June, 1997. Sandra L. West - -------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 1998 BY-LAWS NOVEMBER 18, 1997 Bankers Trust Company New York BY-LAWS of Bankers Trust Company ARTICLE I MEETINGS OF STOCKHOLDERS SECTION 1. The annual meeting of the stockholders of this Company shall be held at the office of the Company in the Borough of Manhattan, City of New York, on the third Tuesday in January of each year, for the election of directors and such other business as may properly come before said meeting. SECTION 2. Special meetings of stockholders other than those regulated by statute may be called at any time by a majority of the directors. It shall be the duty of the Chairman of the Board, the Chief Executive Officer or the President to call such meetings whenever requested in writing to do so by stockholders owning a majority of the capital stock. SECTION 3. At all meetings of stockholders, there shall be present, either in person or by proxy, stockholders owning a majority of the capital stock of the Company, in order to constitute a quorum, except at special elections of directors, as provided by law, but less than a quorum shall have power to adjourn any meeting. SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive Officer or, in his absence, the President or, in their absence, the senior officer present, shall preside at meetings of the stockholders and shall direct the proceedings and the order of business. The Secretary shall act as secretary of such meetings and record the proceedings. ARTICLE II DIRECTORS SECTION 1. The affairs of the Company shall be managed and its corporate powers exercised by a Board of Directors consisting of such number of directors, but not less than ten nor more than twenty-five, as may from time to time be fixed by resolution adopted by a majority of the directors then in office, or by the stockholders. In the event of any increase in the number of directors, additional directors may be elected within the limitations so fixed, either by the stockholders or within the limitations imposed by law, by a majority of directors then in office. One-third of the number of directors, as fixed from time to time, shall constitute a quorum. Any one or more members of the Board of Directors or any Committee thereof may participate in a meeting of the Board of Directors or Committee thereof by means of a conference telephone or similar communications equipment which allows all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such a meeting. All directors hereafter elected shall hold office until the next annual meeting of the stockholders and until their successors are elected and have qualified. No person who shall have attained age 72 shall be eligible to be elected or re-elected a director. Such director may, however, remain a director of the Company until the next annual meeting of the stockholders of Bankers Trust New York Corporation (the Company's parent) so that such director's retirement will coincide with the retirement date from Bankers Trust New York Corporation. No Officer-Director who shall have attained age 65, or earlier relinquishes his responsibilities and title, shall be eligible to serve as a director. SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of Directors may be filled by the affirmative vote of a majority of the directors then in office, and the directors so elected shall hold office for the balance of the unexpired term. SECTION 3. The Chairman of the Board shall preside at meetings of the Board of Directors. In his absence, the Chief Executive Officer or, in his absence, such other director as the Board of Directors from time to time may designate shall preside at such meetings. SECTION 4. The Board of Directors may adopt such Rules and Regulations for the conduct of its meetings and the management of the affairs of the Company as it may deem proper, not inconsistent with the laws of the State of New York, or these By-Laws, and all officers and employees shall strictly adhere to, and be bound by, such Rules and Regulations. SECTION 5. Regular meetings of the Board of Directors shall be held from time to time on the third Tuesday of the month. If the day appointed for holding such regular meetings shall be a legal holiday, the regular meeting to be held on such day shall be held on the next business day thereafter. Special meetings of the Board of Directors may be called upon at least two day's notice whenever it may be deemed proper by the Chairman of the Board or, the Chief Executive Officer or, in their absence, by such other director as the Board of Directors may have designated pursuant to Section 3 of this Article, and shall be called upon like notice whenever any three of the directors so request in writing. SECTION 6. The compensation of directors as such or as members of committees shall be fixed from time to time by resolution of the Board of Directors. ARTICLE III COMMITTEES SECTION 1. There shall be an Executive Committee of the Board consisting of not less than five directors who shall be appointed annually by the Board of Directors. The Chairman of the Board shall preside at meetings of the Executive Committee. In his absence, the Chief Executive Officer or, in his absence, such other member of the Committee as the Committee from time to time may designate shall preside at such meetings. The Executive Committee shall possess and exercise to the extent permitted by law all of the powers of the Board of Directors, except when the latter is in session, and shall keep minutes of its proceedings, which shall be presented to the Board of Directors at its next subsequent meeting. All acts done and powers and authority conferred by the Executive Committee from time to time shall be and be deemed to be, and may be certified as being, the act and under the authority of the Board of Directors. A majority of the Committee shall constitute a quorum, but the Committee may act only by the concurrent vote of not less than one-third of its members, at least one of whom must be a director other than an officer. Any one or more directors, even though not members of the Executive Committee, may attend any meeting of the Committee, and the member or members of the Committee present, even though less than a quorum, may designate any one or more of such directors as a substitute or substitutes for any absent member or members of the Committee, and each such substitute or substitutes shall be counted for quorum, voting, and all other purposes as a member or members of the Committee. SECTION 2. There shall be an Audit Committee appointed annually by resolution adopted by a majority of the entire Board of Directors which shall consist of such number of directors, who are not also officers of the Company, as may from time to time be fixed by resolution adopted by the Board of Directors. The Chairman shall be designated by the Board of Directors, who shall also from time to time fix a quorum for meetings of the Committee. Such Committee shall conduct the annual directors' examinations of the Company as required by the New York State Banking Law; shall review the reports of all examinations made of the Company by public authorities and report thereon to the Board of Directors; and shall report to the Board of Directors such other matters as it deems advisable with respect to the Company, its various departments and the conduct of its operations. In the performance of its duties, the Audit Committee may employ or retain, from time to time, expert assistants, independent of the officers or personnel of the Company, to make studies of the Company's assets and liabilities as the Committee may request and to make an examination of the accounting and auditing methods of the Company and its system of internal protective controls to the extent considered necessary or advisable in order to determine that the operations of the Company, including its fiduciary departments, are being audited by the General Auditor in such a manner as to provide prudent and adequate protection. The Committee also may direct the General Auditor to make such investigation as it deems necessary or advisable with respect to the Company, its various departments and the conduct of its operations. The Committee shall hold regular quarterly meetings and during the intervals thereof shall meet at other times on call of the Chairman. SECTION 3. The Board of Directors shall have the power to appoint any other Committees as may seem necessary, and from time to time to suspend or continue the powers and duties of such Committees. Each Committee appointed pursuant to this Article shall serve at the pleasure of the Board of Directors. ARTICLE IV OFFICERS SECTION 1. The Board of Directors shall elect from among their number a Chairman of the Board and a Chief Executive Officer; and shall also elect a President, and may also elect a Senior Vice Chairman, one or more Vice Chairmen, one or more Executive Vice Presidents, one or more Senior Managing Directors, one or more Managing Directors, one or more Senior Vice Presidents, one or more Principals, one or more Vice Presidents, one or more General Managers, a Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate General Counsels, a General Auditor, a General Credit Auditor, and one or more Deputy Auditors, who need not be directors. The officers of the corporation may also include such other officers or assistant officers as shall from time to time be elected or appointed by the Board. The Chairman of the Board or the Chief Executive Officer or, in their absence, the President, the Senior Vice Chairman or any Vice Chairman, may from time to time appoint assistant officers. All officers elected or appointed by the Board of Directors shall hold their respective offices during the pleasure of the Board of Directors, and all assistant officers shall hold office at the pleasure of the Board or the Chairman of the Board or the Chief Executive Officer or, in their absence, the President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors may require any and all officers and employees to give security for the faithful performance of their duties. SECTION 2. The Board of Directors shall designate the Chief Executive Officer of the Company who may also hold the additional title of Chairman of the Board, President, Senior Vice Chairman or Vice Chairman and such person shall have, subject to the supervision and direction of the Board of Directors or the Executive Committee, all of the powers vested in such Chief Executive Officer by law or by these By-Laws, or which usually attach or pertain to such office. The other officers shall have, subject to the supervision and direction of the Board of Directors or the Executive Committee or the Chairman of the Board or, the Chief Executive Officer, the powers vested by law or by these By-Laws in them as holders of their respective offices and, in addition, shall perform such other duties as shall be assigned to them by the Board of Directors or the Executive Committee or the Chairman of the Board or the Chief Executive Officer. The General Auditor shall be responsible, through the Audit Committee, to the Board of Directors for the determination of the program of the internal audit function and the evaluation of the adequacy of the system of internal controls. Subject to the Board of Directors, the General Auditor shall have and may exercise all the powers and shall perform all the duties usual to such office and shall have such other powers as may be prescribed or assigned to him from time to time by the Board of Directors or vested in him by law or by these By-Laws. He shall perform such other duties and shall make such investigations, examinations and reports as may be prescribed or required by the Audit Committee. The General Auditor shall have unrestricted access to all records and premises of the Company and shall delegate such authority to his subordinates. He shall have the duty to report to the Audit Committee on all matters concerning the internal audit program and the adequacy of the system of internal controls of the Company which he deems advisable or which the Audit Committee may request. Additionally, the General Auditor shall have the duty of reporting independently of all officers of the Company to the Audit Committee at least quarterly on any matters concerning the internal audit program and the adequacy of the system of internal controls of the Company that should be brought to the attention of the directors except those matters responsibility for which has been vested in the General Credit Auditor. Should the General Auditor deem any matter to be of special immediate importance, he shall report thereon forthwith to the Audit Committee. The General Auditor shall report to the Chief Financial Officer only for administrative purposes. The General Credit Auditor shall be responsible to the Chief Executive Officer and, through the Audit Committee, to the Board of Directors for the systems of internal credit audit, shall perform such other duties as the Chief Executive Officer may prescribe, and shall make such examinations and reports as may be required by the Audit Committee. The General Credit Auditor shall have unrestricted access to all records and may delegate such authority to subordinates. SECTION 3. The compensation of all officers shall be fixed under such plan or plans of position evaluation and salary administration as shall be approved from time to time by resolution of the Board of Directors. SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or any person authorized for this purpose by the Chief Executive Officer, shall appoint or engage all other employees and agents and fix their compensation. The employment of all such employees and agents shall continue during the pleasure of the Board of Directors or the Executive Committee or the Chairman of the Board or the Chief Executive Officer or any such authorized person; and the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or any such authorized person may discharge any such employees and agents at will. ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of the New York Banking Law, indemnify any person who is or was made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, whether involving any actual or alleged breach of duty, neglect or error, any accountability, or any actual or alleged misstatement, misleading statement or other act or omission and whether brought or threatened in any court or administrative or legislative body or agency, including an action by or in the right of the Company to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the Company is servicing or served in any capacity at the request of the Company by reason of the fact that he, his testator or intestate, is or was a director or officer of the Company, or is serving or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement, and costs, charges and expenses, including attorneys' fees, or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 2. The Company may indemnify any other person to whom the Company is permitted to provide indemnification or the advancement of expenses by applicable law, whether pursuant to rights granted pursuant to, or provided by, the New York Banking Law or other rights created by (i) a resolution of stockholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, it being expressly intended that these By-Laws authorize the creation of other rights in any such manner. SECTION 3. The Company shall, from time to time, reimburse or advance to any person referred to in Section 1 the funds necessary for payment of expenses, including attorneys' fees, incurred in connection with any action or proceeding referred to in Section 1, upon receipt of a written undertaking by or on behalf of such person to repay such amount(s) if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 4. Any director or officer of the Company serving (i) another corporation, of which a majority of the shares entitled to vote in the election of its directors is held by the Company, or (ii) any employee benefit plan of the Company or any corporation referred to in clause (i) in any capacity shall be deemed to be doing so at the request of the Company. In all other cases, the provisions of this Article V will apply (i) only if the person serving another corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise so served at the specific request of the Company, evidenced by a written communication signed by the Chairman of the Board, the Chief Executive Officer or the President, and (ii) only if and to the extent that, after making such efforts as the Chairman of the Board, the Chief Executive Officer or the President shall deem adequate in the circumstances, such person shall be unable to obtain indemnification from such other enterprise or its insurer. SECTION 5. Any person entitled to be indemnified or to the reimbursement or advancement of expenses as a matter of right pursuant to this Article V may elect to have the right to indemnification (or advancement of expenses) interpreted on the basis of the applicable law in effect at the time of occurrence of the event or events giving rise to the action or proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time indemnification is sought. SECTION 6. The right to be indemnified or to the reimbursement or advancement of expense pursuant to this Article V (i) is a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Company and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto. SECTION 7. If a request to be indemnified or for the reimbursement or advancement of expenses pursuant hereto is not paid in full by the Company within thirty days after a written claim has been received by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses of prosecuting such claim. Neither the failure of the Company (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of or reimbursement or advancement of expenses to the claimant is proper in the circumstance, nor an actual determination by the Company (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled. SECTION 8. A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in Section 1 shall be entitled to indemnification only as provided in Sections 1 and 3, notwithstanding any provision of the New York Banking Law to the contrary. ARTICLE VI SEAL SECTION 1. The Board of Directors shall provide a seal for the Company, the counterpart dies of which shall be in the charge of the Secretary of the Company and such officers as the Chairman of the Board, the Chief Executive Officer or the Secretary may from time to time direct in writing, to be affixed to certificates of stock and other documents in accordance with the directions of the Board of Directors or the Executive Committee. SECTION 2. The Board of Directors may provide, in proper cases on a specified occasion and for a specified transaction or transactions, for the use of a printed or engraved facsimile seal of the Company. ARTICLE VII CAPITAL STOCK SECTION 1. Registration of transfer of shares shall only be made upon the books of the Company by the registered holder in person, or by power of attorney, duly executed, witnessed and filed with the Secretary or other proper officer of the Company, on the surrender of the certificate or certificates of such shares properly assigned for transfer. ARTICLE VIII CONSTRUCTION SECTION 1. The masculine gender, when appearing in these By-Laws, shall be deemed to include the feminine gender. ARTICLE IX AMENDMENTS SECTION 1. These By-Laws may be altered, amended or added to by the Board of Directors at any meeting, or by the stockholders at any annual or special meeting, provided notice thereof has been given. Legal Title of Bank: Bankers Trust Company Call Date: 09/30/98 Address: 130 Liberty Street Vendor ID: D City, State ZIP: New York, NY 10006 FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3 ST-BK: 36-4840 FFIEC 031 CERT: 00623 Page RC-1 11 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for September 30, 1998 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter. Schedule RC--Balance Sheet
------------------- C400 ------------------------------- Dollar Amounts in Thousands RCFD Bil Mil Thou - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS //////////// 1. Cash and balances due from depository institutions (from Schedule RC-A): //////////// a. Noninterest-bearing balances and currency and coin (1) .................. 0081 2,291,000 1.a. b. Interest-bearing balances (2) ........................................... 0071 2,636,000 1.b. 2. Securities: //////////// a. Held-to-maturity securities (from Schedule RC-B, column A) .............. 1754 0 2.a. b. Available-for-sale securities (from Schedule RC-B, column D) ............ 1773 6,617,000 2.b. 3. Federal funds sold and securities purchased under agreements to resell ..... 1350 32,734,000 3. 4. Loans and lease financing receivables: //////////// a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 20,227,000 //////////// 4.a. b. LESS: Allowance for loan and lease losses ......................RCFD 3123 619,000 //////////// 4.b. c. LESS: Allocated transfer risk reserve ..........................RCFD 3128 0 //////////// 4.c. d. Loans and leases, net of unearned income, //////////// allowance, and reserve (item 4.a minus 4.b and 4.c) ..................... 2125 19,608,000 4.d. 5. Trading Assets (from schedule RC-D) ........................................ 3545 49,545,000 5. 6. Premises and fixed assets (including capitalized leases) ................... 2145 885,000 6. 7. Other real estate owned (from Schedule RC-M) ............................... 2150 115,000 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 391,000 8. 9. Customers' liability to this bank on acceptances outstanding ............... 2155 392,000 9. 10. Intangible assets (from Schedule RC-M) ..................................... 2143 266,000 10. 11. Other assets (from Schedule RC-F) .......................................... 2160 5,884,000 11. 12. Total assets (sum of items 1 through 11) ................................... 2170 121,364,000 12. -------------------------------
- ---------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: Bankers Trust Company Call Date: 09/30/98 Address: 130 Liberty Street Vendor ID: D City, State ZIP: New York, NY 10006 FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3 ST-BK: 36-4840 FFIEC 031 CERT: 00623 Page RC-2 12 Schedule RC--Continued
----------------------------------- Dollar Amounts in Thousands //////// Bil Mil Thou - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES //////////////////// 13. Deposits: //////////////////// a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 22,231,000 13.a. (1) Noninterest-bearing(1) ...................................RCON 6631 3,040,000 //////////////////// 13.a.(1) (2) Interest-bearing .........................................RCON 6636 19,191,000 //////////////////// 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E //////////////////// part II) RCFN 2200 21,932,000 13.b. (1) Noninterest-bearing ......................................RCFN 6631 2,423,000 //////////////////// 13.b.(1) (2) Interest-bearing .........................................RCFN 6636 19,509,000 //////////////////// 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase RCFD 2800 14,360,000 14. 15. a. Demand notes issued to the U.S. Treasury ................................ RCON 2840 0 15.a. b. Trading liabilities (from Schedule RC-D) ................................ RCFD 3548 32,890,000 15.b. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): //////////////////// a. With a remaining maturity of one year or less ........................... RCFD 2332 7,653,000 16.a. b. With a remaining maturity of more than one year through three years ..... A547 3,707,000 16.b. c. With a remaining maturity of more than three years ...................... A548 3,034,000 16.c 17. Not Applicable. //////////////////// 17. 18. Bank's liability on acceptances executed and outstanding ................... RCFD 2920 392,000 18. 19. Subordinated notes and debentures(2) ....................................... RCFD 3200 1,533,000 19. 20. Other liabilities (from Schedule RC-G) ..................................... RCFD 2930 6,595,000 20. 21. Total liabilities (sum of items 13 through 20) ............................. RCFD 2948 114,327,000 21. 22. Not Applicable //////////////////// 22. //////////////////// EQUITY CAPITAL //////////////////// 23. Perpetual preferred stock and related surplus .............................. RCFD 3838 1,500,000 23. 24. Common stock ............................................................... RCFD 3230 2,002,000 24. 25. Surplus (exclude all surplus related to preferred stock) ................... RCFD 3839 540,000 25. 26. a. Undivided profits and capital reserves .................................. RCFD 3632 3,421,000 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities .. RCFD 8434 (46,000) 26.b. 27. Cumulative foreign currency translation adjustments ........................ RCFD 3284 (380,000) 27. 28. Total equity capital (sum of items 23 through 27) .......................... RCFD 3210 7,037,000 28. 29. Total liabilities and equity capital (sum of items 21 and 28) .............. RCFD 3300 121,364,000 29 ----------- -----------------------------------
Memorandum To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below Number that best describes the most comprehensive level of auditing work -------------- performed for the bank by independent external Number auditors as of any date during 1997 ............................................................... RCFD 6724 1 M.1 ---------------------------
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ---------- (1) Including total demand deposits and noninterest-bearing time and savings deposits. (2) Includes limited-life preferred stock and related surplus. EX-25.(B) 10 FORM T-1 - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___________ ------------------------------ BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) Bankers Trust Company Legal Department 130 Liberty Street, 31st Floor New York, New York 10006 (212) 250-2201 (Name, address and telephone number of agent for service) --------------------------------- Southern Indiana Gas and Electric Company (Exact name of Registrant as specified in its charter) Indiana 35-0672570 (State or other jurisdiction of (I.R.S. employer identification no.) Incorporation or organization) 20 N. W. Fourth Street Evansville, Indiana 47741-0001 (812) 465 5300 (Address, including zip code, and telephone number of principal executive offices) First Mortgage Bonds (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. Name Address ---- ------- Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. Item 3. -15. Not Applicable Item 16. List of Exhibits. Exhibit 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated June 21, 1995 - Incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33-65171, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 20, 1996, incorporate by referenced to Exhibit 1 filed with Form T-1 Statement, Registration No. 333-25843 and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated June 19, 1997, copy attached. Exhibit 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 4 - Existing By-Laws of Bankers Trust Company, as amended on November 18, 1997. Copy attached. -2- Exhibit 5 - Not applicable. Exhibit 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. Exhibit 7 - The latest report of condition of Bankers Trust Company dated as of September 30, 1998. Copy attached. Exhibit 8 - Not Applicable. Exhibit 9 - Not Applicable. -3- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 30th day of June, 1999 BANKERS TRUST COMPANY By: /s/ Vincent Chorney ------------------------------------ Vincent Chorney Assistant Vice President -4- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 30th day of June, 1999 BANKERS TRUST COMPANY /s/ Vincent Chorney /s/ ------------------------------------ By: Vincent Chorney Assistant Vice President -5- State of New York, Banking Department I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section 8005 of the Banking Law," dated June 19, 1997, providing for an increase in authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 600 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of $1,000,000 each designated as Series Preferred Stock. Witness, my hand and official seal of the Banking Department at the City of New York, this 27th day of June in the Year of our Lord one thousand nine hundred and ninety-seven. Manuel Kursky ------------------------------ Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law ----------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 600 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 1000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 19th day of June, 1997. James T. Byrne, Jr. -------------------------------------- James T. Byrne, Jr. Managing Director Lea Lahtinen -------------------------------------- Lea Lahtinen Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen -------------------------- Lea Lahtinen Sworn to before me this 19th day of June, 1997. Sandra L. West - -------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 1998 BY-LAWS NOVEMBER 18, 1997 Bankers Trust Company New York BY-LAWS of Bankers Trust Company ARTICLE I MEETINGS OF STOCKHOLDERS SECTION 1. The annual meeting of the stockholders of this Company shall be held at the office of the Company in the Borough of Manhattan, City of New York, on the third Tuesday in January of each year, for the election of directors and such other business as may properly come before said meeting. SECTION 2. Special meetings of stockholders other than those regulated by statute may be called at any time by a majority of the directors. It shall be the duty of the Chairman of the Board, the Chief Executive Officer or the President to call such meetings whenever requested in writing to do so by stockholders owning a majority of the capital stock. SECTION 3. At all meetings of stockholders, there shall be present, either in person or by proxy, stockholders owning a majority of the capital stock of the Company, in order to constitute a quorum, except at special elections of directors, as provided by law, but less than a quorum shall have power to adjourn any meeting. SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive Officer or, in his absence, the President or, in their absence, the senior officer present, shall preside at meetings of the stockholders and shall direct the proceedings and the order of business. The Secretary shall act as secretary of such meetings and record the proceedings. ARTICLE II DIRECTORS SECTION 1. The affairs of the Company shall be managed and its corporate powers exercised by a Board of Directors consisting of such number of directors, but not less than ten nor more than twenty-five, as may from time to time be fixed by resolution adopted by a majority of the directors then in office, or by the stockholders. In the event of any increase in the number of directors, additional directors may be elected within the limitations so fixed, either by the stockholders or within the limitations imposed by law, by a majority of directors then in office. One-third of the number of directors, as fixed from time to time, shall constitute a quorum. Any one or more members of the Board of Directors or any Committee thereof may participate in a meeting of the Board of Directors or Committee thereof by means of a conference telephone or similar communications equipment which allows all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such a meeting. All directors hereafter elected shall hold office until the next annual meeting of the stockholders and until their successors are elected and have qualified. No person who shall have attained age 72 shall be eligible to be elected or re-elected a director. Such director may, however, remain a director of the Company until the next annual meeting of the stockholders of Bankers Trust New York Corporation (the Company's parent) so that such director's retirement will coincide with the retirement date from Bankers Trust New York Corporation. No Officer-Director who shall have attained age 65, or earlier relinquishes his responsibilities and title, shall be eligible to serve as a director. SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of Directors may be filled by the affirmative vote of a majority of the directors then in office, and the directors so elected shall hold office for the balance of the unexpired term. SECTION 3. The Chairman of the Board shall preside at meetings of the Board of Directors. In his absence, the Chief Executive Officer or, in his absence, such other director as the Board of Directors from time to time may designate shall preside at such meetings. SECTION 4. The Board of Directors may adopt such Rules and Regulations for the conduct of its meetings and the management of the affairs of the Company as it may deem proper, not inconsistent with the laws of the State of New York, or these By-Laws, and all officers and employees shall strictly adhere to, and be bound by, such Rules and Regulations. SECTION 5. Regular meetings of the Board of Directors shall be held from time to time on the third Tuesday of the month. If the day appointed for holding such regular meetings shall be a legal holiday, the regular meeting to be held on such day shall be held on the next business day thereafter. Special meetings of the Board of Directors may be called upon at least two day's notice whenever it may be deemed proper by the Chairman of the Board or, the Chief Executive Officer or, in their absence, by such other director as the Board of Directors may have designated pursuant to Section 3 of this Article, and shall be called upon like notice whenever any three of the directors so request in writing. SECTION 6. The compensation of directors as such or as members of committees shall be fixed from time to time by resolution of the Board of Directors. ARTICLE III COMMITTEES SECTION 1. There shall be an Executive Committee of the Board consisting of not less than five directors who shall be appointed annually by the Board of Directors. The Chairman of the Board shall preside at meetings of the Executive Committee. In his absence, the Chief Executive Officer or, in his absence, such other member of the Committee as the Committee from time to time may designate shall preside at such meetings. The Executive Committee shall possess and exercise to the extent permitted by law all of the powers of the Board of Directors, except when the latter is in session, and shall keep minutes of its proceedings, which shall be presented to the Board of Directors at its next subsequent meeting. All acts done and powers and authority conferred by the Executive Committee from time to time shall be and be deemed to be, and may be certified as being, the act and under the authority of the Board of Directors. A majority of the Committee shall constitute a quorum, but the Committee may act only by the concurrent vote of not less than one-third of its members, at least one of whom must be a director other than an officer. Any one or more directors, even though not members of the Executive Committee, may attend any meeting of the Committee, and the member or members of the Committee present, even though less than a quorum, may designate any one or more of such directors as a substitute or substitutes for any absent member or members of the Committee, and each such substitute or substitutes shall be counted for quorum, voting, and all other purposes as a member or members of the Committee. SECTION 2. There shall be an Audit Committee appointed annually by resolution adopted by a majority of the entire Board of Directors which shall consist of such number of directors, who are not also officers of the Company, as may from time to time be fixed by resolution adopted by the Board of Directors. The Chairman shall be designated by the Board of Directors, who shall also from time to time fix a quorum for meetings of the Committee. Such Committee shall conduct the annual directors' examinations of the Company as required by the New York State Banking Law; shall review the reports of all examinations made of the Company by public authorities and report thereon to the Board of Directors; and shall report to the Board of Directors such other matters as it deems advisable with respect to the Company, its various departments and the conduct of its operations. In the performance of its duties, the Audit Committee may employ or retain, from time to time, expert assistants, independent of the officers or personnel of the Company, to make studies of the Company's assets and liabilities as the Committee may request and to make an examination of the accounting and auditing methods of the Company and its system of internal protective controls to the extent considered necessary or advisable in order to determine that the operations of the Company, including its fiduciary departments, are being audited by the General Auditor in such a manner as to provide prudent and adequate protection. The Committee also may direct the General Auditor to make such investigation as it deems necessary or advisable with respect to the Company, its various departments and the conduct of its operations. The Committee shall hold regular quarterly meetings and during the intervals thereof shall meet at other times on call of the Chairman. SECTION 3. The Board of Directors shall have the power to appoint any other Committees as may seem necessary, and from time to time to suspend or continue the powers and duties of such Committees. Each Committee appointed pursuant to this Article shall serve at the pleasure of the Board of Directors. ARTICLE IV OFFICERS SECTION 1. The Board of Directors shall elect from among their number a Chairman of the Board and a Chief Executive Officer; and shall also elect a President, and may also elect a Senior Vice Chairman, one or more Vice Chairmen, one or more Executive Vice Presidents, one or more Senior Managing Directors, one or more Managing Directors, one or more Senior Vice Presidents, one or more Principals, one or more Vice Presidents, one or more General Managers, a Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate General Counsels, a General Auditor, a General Credit Auditor, and one or more Deputy Auditors, who need not be directors. The officers of the corporation may also include such other officers or assistant officers as shall from time to time be elected or appointed by the Board. The Chairman of the Board or the Chief Executive Officer or, in their absence, the President, the Senior Vice Chairman or any Vice Chairman, may from time to time appoint assistant officers. All officers elected or appointed by the Board of Directors shall hold their respective offices during the pleasure of the Board of Directors, and all assistant officers shall hold office at the pleasure of the Board or the Chairman of the Board or the Chief Executive Officer or, in their absence, the President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors may require any and all officers and employees to give security for the faithful performance of their duties. SECTION 2. The Board of Directors shall designate the Chief Executive Officer of the Company who may also hold the additional title of Chairman of the Board, President, Senior Vice Chairman or Vice Chairman and such person shall have, subject to the supervision and direction of the Board of Directors or the Executive Committee, all of the powers vested in such Chief Executive Officer by law or by these By-Laws, or which usually attach or pertain to such office. The other officers shall have, subject to the supervision and direction of the Board of Directors or the Executive Committee or the Chairman of the Board or, the Chief Executive Officer, the powers vested by law or by these By-Laws in them as holders of their respective offices and, in addition, shall perform such other duties as shall be assigned to them by the Board of Directors or the Executive Committee or the Chairman of the Board or the Chief Executive Officer. The General Auditor shall be responsible, through the Audit Committee, to the Board of Directors for the determination of the program of the internal audit function and the evaluation of the adequacy of the system of internal controls. Subject to the Board of Directors, the General Auditor shall have and may exercise all the powers and shall perform all the duties usual to such office and shall have such other powers as may be prescribed or assigned to him from time to time by the Board of Directors or vested in him by law or by these By-Laws. He shall perform such other duties and shall make such investigations, examinations and reports as may be prescribed or required by the Audit Committee. The General Auditor shall have unrestricted access to all records and premises of the Company and shall delegate such authority to his subordinates. He shall have the duty to report to the Audit Committee on all matters concerning the internal audit program and the adequacy of the system of internal controls of the Company which he deems advisable or which the Audit Committee may request. Additionally, the General Auditor shall have the duty of reporting independently of all officers of the Company to the Audit Committee at least quarterly on any matters concerning the internal audit program and the adequacy of the system of internal controls of the Company that should be brought to the attention of the directors except those matters responsibility for which has been vested in the General Credit Auditor. Should the General Auditor deem any matter to be of special immediate importance, he shall report thereon forthwith to the Audit Committee. The General Auditor shall report to the Chief Financial Officer only for administrative purposes. The General Credit Auditor shall be responsible to the Chief Executive Officer and, through the Audit Committee, to the Board of Directors for the systems of internal credit audit, shall perform such other duties as the Chief Executive Officer may prescribe, and shall make such examinations and reports as may be required by the Audit Committee. The General Credit Auditor shall have unrestricted access to all records and may delegate such authority to subordinates. SECTION 3. The compensation of all officers shall be fixed under such plan or plans of position evaluation and salary administration as shall be approved from time to time by resolution of the Board of Directors. SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or any person authorized for this purpose by the Chief Executive Officer, shall appoint or engage all other employees and agents and fix their compensation. The employment of all such employees and agents shall continue during the pleasure of the Board of Directors or the Executive Committee or the Chairman of the Board or the Chief Executive Officer or any such authorized person; and the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or any such authorized person may discharge any such employees and agents at will. ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of the New York Banking Law, indemnify any person who is or was made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, whether involving any actual or alleged breach of duty, neglect or error, any accountability, or any actual or alleged misstatement, misleading statement or other act or omission and whether brought or threatened in any court or administrative or legislative body or agency, including an action by or in the right of the Company to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the Company is servicing or served in any capacity at the request of the Company by reason of the fact that he, his testator or intestate, is or was a director or officer of the Company, or is serving or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement, and costs, charges and expenses, including attorneys' fees, or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 2. The Company may indemnify any other person to whom the Company is permitted to provide indemnification or the advancement of expenses by applicable law, whether pursuant to rights granted pursuant to, or provided by, the New York Banking Law or other rights created by (i) a resolution of stockholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, it being expressly intended that these By-Laws authorize the creation of other rights in any such manner. SECTION 3. The Company shall, from time to time, reimburse or advance to any person referred to in Section 1 the funds necessary for payment of expenses, including attorneys' fees, incurred in connection with any action or proceeding referred to in Section 1, upon receipt of a written undertaking by or on behalf of such person to repay such amount(s) if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 4. Any director or officer of the Company serving (i) another corporation, of which a majority of the shares entitled to vote in the election of its directors is held by the Company, or (ii) any employee benefit plan of the Company or any corporation referred to in clause (i) in any capacity shall be deemed to be doing so at the request of the Company. In all other cases, the provisions of this Article V will apply (i) only if the person serving another corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise so served at the specific request of the Company, evidenced by a written communication signed by the Chairman of the Board, the Chief Executive Officer or the President, and (ii) only if and to the extent that, after making such efforts as the Chairman of the Board, the Chief Executive Officer or the President shall deem adequate in the circumstances, such person shall be unable to obtain indemnification from such other enterprise or its insurer. SECTION 5. Any person entitled to be indemnified or to the reimbursement or advancement of expenses as a matter of right pursuant to this Article V may elect to have the right to indemnification (or advancement of expenses) interpreted on the basis of the applicable law in effect at the time of occurrence of the event or events giving rise to the action or proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time indemnification is sought. SECTION 6. The right to be indemnified or to the reimbursement or advancement of expense pursuant to this Article V (i) is a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Company and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto. SECTION 7. If a request to be indemnified or for the reimbursement or advancement of expenses pursuant hereto is not paid in full by the Company within thirty days after a written claim has been received by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses of prosecuting such claim. Neither the failure of the Company (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of or reimbursement or advancement of expenses to the claimant is proper in the circumstance, nor an actual determination by the Company (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled. SECTION 8. A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in Section 1 shall be entitled to indemnification only as provided in Sections 1 and 3, notwithstanding any provision of the New York Banking Law to the contrary. ARTICLE VI SEAL SECTION 1. The Board of Directors shall provide a seal for the Company, the counterpart dies of which shall be in the charge of the Secretary of the Company and such officers as the Chairman of the Board, the Chief Executive Officer or the Secretary may from time to time direct in writing, to be affixed to certificates of stock and other documents in accordance with the directions of the Board of Directors or the Executive Committee. SECTION 2. The Board of Directors may provide, in proper cases on a specified occasion and for a specified transaction or transactions, for the use of a printed or engraved facsimile seal of the Company. ARTICLE VII CAPITAL STOCK SECTION 1. Registration of transfer of shares shall only be made upon the books of the Company by the registered holder in person, or by power of attorney, duly executed, witnessed and filed with the Secretary or other proper officer of the Company, on the surrender of the certificate or certificates of such shares properly assigned for transfer. ARTICLE VIII CONSTRUCTION SECTION 1. The masculine gender, when appearing in these By-Laws, shall be deemed to include the feminine gender. ARTICLE IX AMENDMENTS SECTION 1. These By-Laws may be altered, amended or added to by the Board of Directors at any meeting, or by the stockholders at any annual or special meeting, provided notice thereof has been given. Legal Title of Bank: Bankers Trust Company Call Date: 09/30/98 Address: 130 Liberty Street Vendor ID: D City, State ZIP: New York, NY 10006 FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3 ST-BK: 36-4840 FFIEC 031 CERT: 00623 Page RC-1 11 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for September 30, 1998 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter. Schedule RC--Balance Sheet
------------------- C400 ------------------------------- Dollar Amounts in Thousands RCFD Bil Mil Thou - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS //////////// 1. Cash and balances due from depository institutions (from Schedule RC-A): //////////// a. Noninterest-bearing balances and currency and coin (1) .................. 0081 2,291,000 1.a. b. Interest-bearing balances (2) ........................................... 0071 2,636,000 1.b. 2. Securities: //////////// a. Held-to-maturity securities (from Schedule RC-B, column A) .............. 1754 0 2.a. b. Available-for-sale securities (from Schedule RC-B, column D) ............ 1773 6,617,000 2.b. 3. Federal funds sold and securities purchased under agreements to resell ..... 1350 32,734,000 3. 4. Loans and lease financing receivables: //////////// a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 20,227,000 //////////// 4.a. b. LESS: Allowance for loan and lease losses ......................RCFD 3123 619,000 //////////// 4.b. c. LESS: Allocated transfer risk reserve ..........................RCFD 3128 0 //////////// 4.c. d. Loans and leases, net of unearned income, //////////// allowance, and reserve (item 4.a minus 4.b and 4.c) ..................... 2125 19,608,000 4.d. 5. Trading Assets (from schedule RC-D) ........................................ 3545 49,545,000 5. 6. Premises and fixed assets (including capitalized leases) ................... 2145 885,000 6. 7. Other real estate owned (from Schedule RC-M) ............................... 2150 115,000 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 391,000 8. 9. Customers' liability to this bank on acceptances outstanding ............... 2155 392,000 9. 10. Intangible assets (from Schedule RC-M) ..................................... 2143 266,000 10. 11. Other assets (from Schedule RC-F) .......................................... 2160 5,884,000 11. 12. Total assets (sum of items 1 through 11) ................................... 2170 121,364,000 12. -------------------------------
- ---------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: Bankers Trust Company Call Date: 09/30/98 Address: 130 Liberty Street Vendor ID: D City, State ZIP: New York, NY 10006 FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3 ST-BK: 36-4840 FFIEC 031 CERT: 00623 Page RC-2 12 Schedule RC--Continued
----------------------------------- Dollar Amounts in Thousands //////// Bil Mil Thou - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES //////////////////// 13. Deposits: //////////////////// a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 22,231,000 13.a. (1) Noninterest-bearing(1) ...................................RCON 6631 3,040,000 //////////////////// 13.a.(1) (2) Interest-bearing .........................................RCON 6636 19,191,000 //////////////////// 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E //////////////////// part II) RCFN 2200 21,932,000 13.b. (1) Noninterest-bearing ......................................RCFN 6631 2,423,000 //////////////////// 13.b.(1) (2) Interest-bearing .........................................RCFN 6636 19,509,000 //////////////////// 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase RCFD 2800 14,360,000 14. 15. a. Demand notes issued to the U.S. Treasury ................................ RCON 2840 0 15.a. b. Trading liabilities (from Schedule RC-D) ................................ RCFD 3548 32,890,000 15.b. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): //////////////////// a. With a remaining maturity of one year or less ........................... RCFD 2332 7,653,000 16.a. b. With a remaining maturity of more than one year through three years ..... A547 3,707,000 16.b. c. With a remaining maturity of more than three years ...................... A548 3,034,000 16.c 17. Not Applicable. //////////////////// 17. 18. Bank's liability on acceptances executed and outstanding ................... RCFD 2920 392,000 18. 19. Subordinated notes and debentures(2) ....................................... RCFD 3200 1,533,000 19. 20. Other liabilities (from Schedule RC-G) ..................................... RCFD 2930 6,595,000 20. 21. Total liabilities (sum of items 13 through 20) ............................. RCFD 2948 114,327,000 21. 22. Not Applicable //////////////////// 22. //////////////////// EQUITY CAPITAL //////////////////// 23. Perpetual preferred stock and related surplus .............................. RCFD 3838 1,500,000 23. 24. Common stock ............................................................... RCFD 3230 2,002,000 24. 25. Surplus (exclude all surplus related to preferred stock) ................... RCFD 3839 540,000 25. 26. a. Undivided profits and capital reserves .................................. RCFD 3632 3,421,000 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities .. RCFD 8434 (46,000) 26.b. 27. Cumulative foreign currency translation adjustments ........................ RCFD 3284 (380,000) 27. 28. Total equity capital (sum of items 23 through 27) .......................... RCFD 3210 7,037,000 28. 29. Total liabilities and equity capital (sum of items 21 and 28) .............. RCFD 3300 121,364,000 29 ----------- -----------------------------------
Memorandum To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below Number that best describes the most comprehensive level of auditing work -------------- performed for the bank by independent external Number auditors as of any date during 1997 ............................................................... RCFD 6724 1 M.1 ---------------------------
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ---------- (1) Including total demand deposits and noninterest-bearing time and savings deposits. (2) Includes limited-life preferred stock and related surplus. -----END PRIVACY-ENHANCED MESSAGE-----