**Exhibit10.5**

**EXECUTION COPY**

$2,000,000,000

AMENDED ANDRESTATED CREDIT AGREEMENT

dated as ofJune 29, 2006

among

Cinergy Corp.,The Cincinnati Gas & Electric Company,PSI Energy, Inc.,The Union Light, Heat and Power Company,

The Banks ListedHerein,

Barclays Bank PLC,as Administrative Agent

and

JPMorgan ChaseBank, N.A.,as Syndication Agent

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Barclays Capital,the investment banking division of Barclays Bank PLC, andJ.P. Morgan Securities Inc.Joint Lead Arrangers andJoint Bookrunners

Banc of America SecuritiesLLC,Citigroup Global Markets Inc. andWachovia Capital Markets, LLCDocumentation Agents

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**TABLE OF CONTENTS**
|                    | ** ** | ** **                                                                     | ** ** | **Page** | ** ** |
|--------------------|------------|--------------------------------------------------------------------------------|------------|----------|------------|
|               |       | * *                                                                       |       |     |       |
|               |       | Article 1  Definitions                                                         |       |     |       |
|               |       | * *                                                                       |       |     |       |
| Section 1.01. |       | *Definitions*                                                                  |       | 1        |       |
| Section 1.02. |       | *Accounting Terms and Determinations*                                          |       | 12       |       |
| Section 1.03. |       | *Types of Borrowings*                                                          |       | 13       |       |
|               |       | * *                                                                       |       |     |       |
|               |       | Article 2  The Credits                                                         |       |     |       |
|               |       | * *                                                                       |       |     |       |
| Section 2.01. |       | *Commitments to Lend*                                                          |       | 13       |       |
| Section 2.02. |       | *Notice of Borrowings*                                                         |       | 14       |       |
| Section 2.03. |       | *Notice to Banks; Funding of Loans*                                            |       | 15       |       |
| Section 2.04. |       | *Registry; Notes*                                                              |       | 16       |       |
| Section 2.05. |       | *Maturity of Loans; Effect of Cash  Collateralization of Letters of Credit*    |       | 16       |       |
| Section 2.06. |       | *Interest Rates*                                                               |       | 17       |       |
| Section 2.07. |       | *Fees*                                                                         |       | 18       |       |
| Section 2.08. |       | *Optional Termination or Reduction of Commitments  and Maximum Availabilities* |       | 18       |       |
| Section 2.09. |       | *Method of Electing Interest Rates*                                            |       | 19       |       |
| Section 2.10. |       | *Mandatory Termination of Commitments*                                         |       | 20       |       |
| Section 2.11. |       | *Optional Prepayments*                                                         |       | 20       |       |
| Section 2.12. |       | *General Provisions as to Payments*                                            |       | 20       |       |
| Section 2.13. |       | *Funding Losses*                                                               |       | 21       |       |
| Section 2.14. |       | *Computation of Interest and Fees*                                             |       | 22       |       |
| Section 2.15. |       | *Letters of Credit.*                                                           |       | 22       |       |
| Section 2.16. |       | *Regulation D Compensation*                                                    |       | 26       |       |
| Section 2.17. |       | *Increase In Commitments; Additional Banks*                                    |       | 26       |       |
|               |       | * *                                                                       |       |     |       |
|               |       | Article 3  Conditions                                                          |       |     |       |
|               |       | * *                                                                       |       |     |       |
| Section 3.01. |       | *Effectiveness*                                                                |       | 27       |       |
| Section 3.02. |       | *Borrowings and Issuance of Letters of Credit*                                 |       | 29       |       |
|               |       | * *                                                                       |       |     |       |
|               |       | Article 4  Representations and Warranties                                      |       |     |       |
|               |       | * *                                                                       |       |     |       |
| Section 4.01. |       | *Organization and Power*                                                       |       | 30       |       |

 

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| Section 4.02. |   | *Corporate and Governmental Authorization; No  Contravention* |   | 30     |   |
|--------------------|--------|---------------------------------------------------------------|--------|--------|--------|
| Section 4.03. |   | *Binding Effect*                                              |   | 30     |   |
| Section 4.04. |   | *Financial Information*                                       |   | 30     |   |
| Section 4.05. |   | *Regulation U*                                                |   | 31     |   |
| Section 4.06. |   | *Litigation*                                                  |   | 31     |   |
| Section 4.07. |   | *Compliance with Laws*                                        |   | 31     |   |
| Section 4.08. |   | *Taxes*                                                       |   | 32     |   |
|               |   | * *                                                      |   |   |   |
|               |   | Article 5  Covenants                                          |   |   |   |
|               |   | * *                                                      |   |   |   |
| Section 5.01. |   | *Information*                                                 |   | 32     |   |
| Section 5.02. |   | *Payment of Taxes*                                            |   | 34     |   |
| Section 5.03. |   | *Maintenance of Property; Insurance*                          |   | 34     |   |
| Section 5.04. |   | *Maintenance of Existence*                                    |   | 34     |   |
| Section 5.05. |   | *Compliance with Laws*                                        |   | 35     |   |
| Section 5.06. |   | *Books and Records*                                           |   | 35     |   |
| Section 5.07. |   | *Negative Pledge*                                             |   | 35     |   |
| Section 5.08. |   | *Consolidations, Mergers and Sales of Assets*                 |   | 37     |   |
| Section 5.09. |   | *Use of Proceeds*                                             |   | 37     |   |
| Section 5.10. |   | *Indebtedness/Capitalization Ratio.*                          |   | 37     |   |
|               |   | * *                                                      |   |   |   |
|               |   | Article 6  Defaults                                           |   |   |   |
|               |   | * *                                                      |   |   |   |
| Section 6.01. |   | *Events of Default*                                           |   | 37     |   |
| Section 6.02. |   | *Notice of Default*                                           |   | 40     |   |
| Section 6.03. |   | *Cash Cover*                                                  |   | 40     |   |
|               |   | * *                                                      |   |   |   |
|               |   | Article 7  The Administrative Agent                           |   |   |   |
|               |   | * *                                                      |   |   |   |
| Section 7.01. |   | *Appointment and Authorization*                               |   | 40     |   |
| Section 7.02. |   | *Administrative Agent and Affiliates.*                        |   | 40     |   |
| Section 7.03. |   | *Action by Administrative Agent*                              |   | 41     |   |
| Section 7.04. |   | *Consultation with Experts*                                   |   | 41     |   |
| Section 7.05. |   | *Liability of Administrative Agent*                           |   | 41     |   |
| Section 7.06. |   | *Indemnification*                                             |   | 41     |   |
| Section 7.07. |   | *Credit Decision*                                             |   | 42     |   |
| Section 7.08. |   | *Successor Administrative Agent*                              |   | 42     |   |
| Section 7.09. |   | *Administrative Agent’s Fee*                             |   | 42     |   |
| Section 7.10. |   | *Other Agents*                                                |   | 42     |   |

 

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|                    |   | Article 8  Change in Circumstances                            |   |   |   |
|--------------------|--------|---------------------------------------------------------------|--------|--------|--------|
|               |   | * *                                                      |   |   |   |
| Section 8.01. |   | *Basis for Determining Interest Rate Inadequate or  Unfair*   |   | 43     |   |
| Section 8.02. |   | *Illegality*                                                  |   | 43     |   |
| Section 8.03. |   | *Increased Cost and Reduced Return*                           |   | 44     |   |
| Section 8.04. |   | *Taxes*                                                       |   | 45     |   |
| Section 8.05. |   | *Base Rate Loans Substituted for Affected  Euro-Dollar Loans* |   | 47     |   |
| Section 8.06. |   | *Substitution of Bank; Termination Option*                    |   | 48     |   |
|               |   | * *                                                      |   |   |   |
|               |   | Article 9  Miscellaneous                                      |   |   |   |
|               |   | * *                                                      |   |   |   |
| Section 9.01. |   | *Notices*                                                     |   | 49     |   |
| Section 9.02. |   | *No Waivers*                                                  |   | 49     |   |
| Section 9.03. |   | *Expenses; Indemnification*                                   |   | 49     |   |
| Section 9.04. |   | *Sharing of Set-offs*                                         |   | 50     |   |
| Section 9.05. |   | *Amendments and Waivers*                                      |   | 50     |   |
| Section 9.06. |   | *Successors and Assigns*                                      |   | 51     |   |
| Section 9.07. |   | *Collateral*                                                  |   | 53     |   |
| Section 9.08. |   | *Confidentiality*                                             |   | 53     |   |
| Section 9.09. |   | *Governing Law; Submission to Jurisdiction*                   |   | 53     |   |
| Section 9.10. |   | *Counterparts; Integration*                                   |   | 53     |   |
| Section 9.11. |   | *WAIVER OF JURY TRIAL*                                        |   | 54     |   |
| Section 9.12. |   | *USA Patriot Act*                                             |   | 54     |   |

 

COMMITMENT SCHEDULEPRICING SCHEDULE
| EXHIBIT A -   | Note                                                                  |
|---------------|-----------------------------------------------------------------------|
| EXHIBIT B-1 - | Opinion of Internal Counsel of the Borrower                           |
| EXHIBIT B-2 - | Opinion of Special Counsel for the Borrower                           |
| EXHIBIT C -   | Opinion of Davis Polk & Wardwell, Special  Counsel for the Agents |
| EXHIBIT D -   | Assignment and Assumption Agreement                                   |
| EXHIBIT E -   | Extension Agreement                                                   |
| EXHIBIT F -   | Notice of Issuance                                                    |
| EXHIBIT G -   | Approved Form of Letter of Credit                                     |

 

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**AMENDED ANDRESTATED CREDIT AGREEMENT**

AGREEMENT dated as of June 29, 2006 among CINERGYCORP., THE CINCINNATI GAS & ELECTRIC COMPANY, PSI ENERGY, INC., THE UNIONLIGHT, HEAT AND POWER COMPANY, the BANKS listed on the signature pages hereof,BARCLAYS BANK PLC, as Administrative Agent, and JPMORGAN CHASE BANK, N.A., asSyndication Agent.

**W I T N E S S E T H:**

WHEREAS, the Borrowers, the Banks party hereto, andthe Agents are parties to a Five-Year Senior Revolving Credit Agreement datedas of September 9, 2005 (as amended and/or restated to the Effective Date (asdefined below), the “**Existing Agreement**”);and

WHEREAS, the parties hereto wish to modify theExisting Agreement in a number of respects, as more fully set forth below;

NOW, THEREFORE, the parties hereto hereby agree that,on and as of the Effective Date, the Existing Agreement is hereby amended andrestated in its entirety as follows:

**ARTICLE 1Definitions**

Section***1.01.*   Definitions.*  *The following terms, as used herein, have thefollowing meanings:

“**Additional Bank**”means any financial institution that becomes a Bank for purposes hereofpursuant to Section 2.17 or 8.06.

“**AdministrativeAgent**” means Barclays Bank PLC in its capacity as administrativeagent for the Banks hereunder, and its successors in such capacity.

“**Administrative Questionnaire**” means, with respect toeach Bank, the administrative questionnaire in the form submitted to such Bankby the Administrative Agent and submitted to the Administrative Agent (with acopy to each Borrower) duly completed by such Bank.

“**Affiliate**”means, as to any Person (the “**specifiedPerson**”) (i) any Person that directly, or indirectly through one ormore intermediaries, controls the specified Person (a “**Controlling Person**”) or (ii) any Person(other than the specified Person or a Subsidiary of the specified Person) whichis controlled by or is under common control with a Controlling Person. As usedherein, the term “**control**” means possession,directly or indirectly, of the power to direct or cause the direction of themanagement or policies of a Person, whether through the 

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ownership of voting securities, by contract orotherwise. Unless otherwise specified, “**Affiliate**”means an Affiliate of the Borrower.

“**Agent**” meansany of the Administrative Agent, the Syndication Agent or the DocumentationAgents.

**“Agreement”**means the ExistingAgreement as amended and restated by this Amended Agreement and as the same maybe further amended from time to time after the date hereof.

**“Amended Agreement”**means thisAmended and Restated Credit Agreement dated as of June 29, 2006.

“**Applicable LendingOffice**” means, with respect to any Bank, (i) in the case of its BaseRate Loans, its Domestic Lending Office and (ii) in the case of its Euro-DollarLoans, its Euro-Dollar Lending Office.

“**Appropriate Share**”has the meaning set forth in Section 8.03(d).

“**Approved Fund**”means any Fund that is administered or managed by (i) a Bank, (ii) an Affiliateof a Bank or (iii) an entity or an Affiliate of an entity that administers ormanages a Bank.

“**Approved Officer**”means the president, a vice president, the treasurer, an assistant treasurer orthe controller of the Borrower or such other representative of the Borrower asmay be designated by any one of the foregoing with the consent of theAdministrative Agent.

“**Assignee**”has the meaning set forth in Section 9.06(c).

“**Availability Percentage**”means, with respect to each Borrower, at any time, the percentage which suchBorrower’s Maximum Availability bears to the aggregate Maximum Availabilitiesof all Borrowers, all determined as of such time.

“**Bank**”means each bank or other financial institution listed on the signature pageshereof, each Additional Bank, each Assignee which becomes a Bank pursuant toSection 9.06(c), and their respective successors. Each reference herein to a “Bank”shall, unless the context otherwise requires, include each Issuing Bank in suchcapacity.

“**Barclays**” meansBarclays Bank PLC.

“**Base Rate**”means, for any day for which the same is to be calculated, the higher of (a)the rate designated by Barclays from time to time as its prime rate in theUnited States of America and (b) the Federal Funds Rate for such day 

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plus 1/2 of 1%. Each change in the Base Rate shalltake effect simultaneously with the corresponding change in the rates describedin clause (a) or clause (b) above, as the case may be.

“**Base Rate Loan**”means (i) a Loan which bears interest at the Base Rate pursuant to theapplicable Notice of Borrowing or Notice of Interest Rate Election or theprovisions of Article 8 or (ii) an overdue amount which was a Base Rate Loanimmediately before it became overdue.

“**Borrower**” meanseach of Cinergy, CG&E, PSI Energy and ULH&P; collectively, the “**Borrowers**”. References herein to “the Borrower” inconnection with any Loan or Group of Loans or any Letter of Credit hereunderare to the particular Borrower to which such Loan or Loans are made or proposedto be made or at whose request and for whose account such Letter of Credit isissued or proposed to be issued.

“**Borrowing**”has the meaning set forth in Section 1.03.

“**CG&E**” meansthe Cincinnati Gas & Electric Company, an Ohio corporation. CG&E iscurrently doing business under the name Duke Energy Ohio, Inc., and intends tochange its legal name to Duke Energy Ohio, Inc. effective October 1, 2006.

“**CG&E First MortgageTrust Indenture**” means the first mortgage trust indenture, dated asof August 1, 1936, between CG&E and The Bank of New York (successor toIrving Trust Company), as trustee, as amended, modified or supplemented fromtime to time, and any successor or replacement mortgage trust indenture.

“**Cinergy**” meansCinergy Corp., a Delaware corporation.

“**Commitment**”means (i) with respect to any Bank listed on the signature pages hereof, theamount set forth opposite its name on the Commitment Schedule as its Commitmentand (ii) with respect to each Additional Bank or Assignee which becomes a bankpursuant to Sections 2.17, 8.06 and 9.06(c), the amount of the Commitmentthereby assumed by it, in each case as such amount may from time to time bereduced pursuant to Section 2.08, 2.10, 8.06 or 9.06(c) or increased pursuantto Section 2.17, 8.06 or 9.06(c).

“**Commitment Schedule**”means the Commitment Schedule attached hereto.

“**CommitmentTermination Date**” means, for each Bank, June 29, 2011, as such datemay be extended from time to time with respect to such Bank 

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pursuant to Section 2.01(c) or, if such day is not aEuro-Dollar Business Day, the next preceding Euro-Dollar Business Day.

“**Company**” meansDuke Energy Corporation, a Delaware corporation, originally incorporated asDeer Holding Corporation, a Delaware corporation.

“**ConsolidatedCapitalization**” means, with respect to any Borrower, the sum of (i)Consolidated Indebtedness of such Borrower, (ii) consolidated commonequityholders’ equity as would appear on a consolidated balance sheet of suchBorrower and its Consolidated Subsidiaries prepared in accordance withgenerally accepted accounting principles, (iii) the aggregate liquidationpreference of preferred or priority equity interests (other than preferred orpriority equity interests subject to mandatory redemption or repurchase) ofsuch Borrower and its Consolidated Subsidiaries upon involuntary liquidation,(iv) the aggregate outstanding amount of all Equity Preferred Securities ofsuch Borrower and (v) minority interests as would appear on a consolidatedbalance sheet of such Borrower and its Consolidated Subsidiaries prepared inaccordance with generally accepted accounting principles.

“**Consolidated Indebtedness**”means, at any date, with respect to any Borrower, all Indebtedness of suchBorrower and its Consolidated Subsidiaries determined on a consolidated basisin accordance with generally accepted accounting principles.

“**ConsolidatedSubsidiary**” means, for any Person, at any date any Subsidiary orother entity the accounts of which would be consolidated with those of suchPerson in its consolidated financial statements if such statements were preparedas of such date; unless otherwise specified “Consolidated Subsidiary” means aConsolidated Subsidiary of the Borrower.

“**Credit Exposure**”means, with respect to any Bank at any time, (i) the amount of its Commitment(whether used or unused) at such time or (ii) if its Commitment has terminated,the aggregate outstanding principal amount of its Loans and the aggregateamount of its Letter of Credit Liabilities at such time.

“**Default**”means any condition or event which constitutes an Event of Default or whichwith the giving of notice or lapse of time or both would, unless cured orwaived, become an Event of Default.

“**Departing Bank**”means any Person which is a “Lender” under the Existing Agreement but does nothave a Commitment under this Amended Agreement.

“**Documentation Agent**”means each of Banc of America Securities LLC, Citigroup Global Markets Inc. andWachovia Capital Markets, LLC, in its 

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capacity as a documentation agent in connection withthe credit facility provided under this Agreement.

“**Domestic BusinessDay**” means any day except a Saturday, Sunday or other day on whichcommercial banks in New York City or, with respect to any Letter of Creditissued or to be issued in the State of North Carolina, in the State of NorthCarolina are authorized by law to close.

“**Domestic LendingOffice**” means, as to each Bank, its office located at its addressset forth in its Administrative Questionnaire (or identified in itsAdministrative Questionnaire as its Domestic Lending Office) or such otheroffice as such Bank may hereafter designate as its Domestic Lending Office bynotice to the Borrowers and the Administrative Agent.

“**Effective Date**”means the date this Amended Agreement becomes effective in accordance withSection 3.01.

“**Endowment**”means the Duke Endowment, a charitable common law trust established by James B.Duke by Indenture dated December 11, 1924.

“**Environmental Laws**”means any and all federal, state, local and foreign statutes, laws,regulations, ordinances, rules, judgments, orders, decrees, permits,concessions, grants, franchises, licenses, agreements or other governmentalrestrictions relating to the environment or to emissions, discharges, releasesof pollutants, contaminants, chemicals, or industrial, toxic or hazardoussubstances or wastes into the environment including, without limitation,ambient air, surface water, ground water, or land, or otherwise relating to themanufacture, processing, distribution, use, treatment, storage, disposal,transport, or handling of pollutants, contaminants, chemicals, or industrial,toxic or hazardous substances or wastes.

“**Equity PreferredSecurities**” means any securities, however denominated, (i) issued byany Borrower or any Consolidated Subsidiary of any Borrower, (ii) that are notsubject to mandatory redemption or the underlying securities, if any, of whichare not subject to mandatory redemption, (iii) that are perpetual or mature noless than 20 years from the date of issuance, (iv) the indebtedness issued inconnection with which, including any guaranty, is subordinated in right ofpayment to the unsecured and unsubordinated indebtedness of the issuer of suchindebtedness or guaranty and (v) the terms of which permit the deferral ofinterest or distributions thereon to date occurring after the first anniversaryof the Commitment Termination Date.

“**ERISA**”means the Employee Retirement Income Security Act of 1974, as amended.

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“**ERISA Group**”means, with respect to any Borrower, such Borrower and all other members of acontrolled group of corporations and all trades or businesses (whether or notincorporated) under common control which, together with such Borrower, aretreated as a single employer under Section 414 of the Internal Revenue Code.

“**Euro-DollarBusiness Day**” means any Domestic Business Day on which commercialbanks are open for international business (including dealings in dollardeposits) in London.

“**Euro-DollarLending Office**” means, as to each Bank, its office, branch oraffiliate located at its address set forth in its Administrative Questionnaire(or identified in its Administrative Questionnaire as its Euro-DollarLending Office) or such other office, branch or affiliate of such Bank as itmay hereafter designate as its Euro-Dollar Lending Office by notice tothe Borrowers and the Administrative Agent.

“**Euro-DollarLoan**” means (i) a Loan which bears interest at a Euro-Dollar Ratepursuant to the applicable Notice of Borrowing or Notice of Interest RateElection or (ii) an overdue amount which was a Euro-Dollar Loan immediatelybefore it became overdue.

“**Euro-Dollar Margin**”means the applicable rate per annum determined in accordance with the PricingSchedule.

“**Euro-Dollar Rate**”means a rate of interest determined pursuant to Section 2.06(b) on the basis ofa London Interbank Offered Rate.

“**Euro-DollarReference Banks**” means the principal London offices of Barclays andJPMorgan Chase Bank, N.A.

“**Euro-DollarReserve Percentage**” has the meaning set forth in Section 2.15.

“**Event of Default**”has the meaning set forth in Section 6.01.

“**Existing Agreement**”has the meaning set forth in the Recitals.

“**Facility Fee Rate**”has the meaning set forth in the Pricing Schedule.

“**Federal Funds Rate**” means, for any day, the rate perannum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal tothe weighted average of the rates on overnight Federal funds transactions withmembers of the Federal Reserve System arranged by Federal funds brokers on suchday, as published by the Federal Reserve Bank of New York on the DomesticBusiness Day next succeeding such day; *provided*that (i) if such day is not a Domestic Business 

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Day, the Federal Funds Rate for such day shall be suchrate on such transactions on the next preceding Domestic Business Day as sopublished on the next succeeding Domestic Business Day and (ii) if no such rateis so published on such next succeeding Domestic Business Day, the FederalFunds Rate for such day shall be the average rate quoted to Barclays on suchday on such transactions as determined by the Administrative Agent.

“**Final Maturity Date**”means, for each Bank, the first anniversary of its Commitment Termination Dateor, if such day is not a Euro-Dollar Business Day, the next precedingEuro-Dollar Business Day.

“**Fund**”means any Person (other than a natural Person) that is (or will be) engaged inmaking, purchasing, holding or otherwise investing in commercial loans andsimilar extensions of credit in the ordinary course of its business.

“**Group of Loans**”means at any time a group of Loans consisting of (i) all Loans to the same Borrowerwhich are Base Rate Loans at such time or (ii) all Euro-Dollar Loans to thesame Borrower having the same Interest Period at such time;*provided*that, if a Loan of anyparticular Bank is converted to or made as a Base Rate Loan pursuant to Article8, such Loan shall be included in the same Group or Groups of Loans from timeto time as it would have been if it had not been so converted or made.

“**Hedging Agreement**”means for any Person, any and all agreements, devices or arrangements designedto protect such Person or any of its Subsidiaries from the fluctuations ofinterest rates, exchange rates applicable to such party’s assets, liabilitiesor exchange transactions, including, but not limited to, dollar-denominated orcross-currency interest rate exchange agreements, forward currency exchangeagreements, interest rate cap or collar protection agreements, commodity swapagreements, forward rate currency or interest rate options, puts and warrants.Notwithstanding anything herein to the contrary, “Hedging Agreements” shallalso include fixed-for-floating interest rate swap agreements and similarinstruments.

**“Increased Commitments”**has themeaning set forth in Section 2.17.

“**Indebtedness**”of any Person means at any date, without duplication, (i) all obligations ofsuch Person for borrowed money, (ii) all indebtedness of such Person for thedeferred purchase price of property or services purchased (excluding currentaccounts payable incurred in the ordinary course of business), (iii) allindebtedness created or arising under any conditional sale or other titleretention agreement with respect to property acquired, (iv) all indebtednessunder leases which shall have been or should be, in accordance with generallyaccepted accounting principles, recorded as capital leases in respect of whichsuch Person is liable as lessee, (v) the face amount of all outstanding lettersof credit issued for 

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the account of such Person (other than letters ofcredit relating to indebtedness included in Indebtedness of such Personpursuant to another clause of this definition) and, without duplication, theunreimbursed amount of all drafts drawn thereunder, (vi) indebtedness securedby any Lien on property or assets of such Person, whether or not assumed (butin any event not exceeding the fair market value of the property or asset),(vii) all direct guarantees of Indebtedness referred to above of anotherPerson, (viii) all amounts payable in connection with mandatory redemptions orrepurchases of preferred stock or member interests or other preferred orpriority equity interests and (ix) any obligations of such Person (in thenature of principal or interest) in respect of acceptances or similarobligations issued or created for the account of such Person.

“**Interest Period**” means, with respect toeach Euro-Dollar Loan, the period commencing on the date of borrowing specifiedin the applicable Notice of Borrowing or on the date specified in an applicableNotice of Interest Rate Election and ending one, two, three or six, or, if depositsof a corresponding maturity are generally available in the London interbankmarket, nine or twelve, months thereafter, as the Borrower may elect in suchnotice; *provided* that:

(a)    anyInterest Period which would otherwise end on a day which is not a Euro-DollarBusiness Day shall be extended to the next succeeding Euro-DollarBusiness Day unless such Euro-Dollar Business Day falls in anothercalendar month, in which case such Interest Period shall end on the nextpreceding Euro-Dollar Business Day; and

(b)    anyInterest Period which begins on the last Euro-Dollar Business Day of acalendar month (or on a day for which there is no numerically corresponding dayin the calendar month at the end of such Interest Period) shall end on the lastEuro-Dollar Business Day of a calendar month;

*provided**further* that: (x) no Interest Periodapplicable to any Loan of any Bank which begins before such Bank’s CommitmentTermination Date may end after such Bank’s Commitment Termination Date; and (y)no Interest Period applicable to any Loan of any Bank may end after such Bank’sFinal Maturity Date.

“**Internal RevenueCode**” means the Internal Revenue Code of 1986, as amended, or anysuccessor statute.

“**Investment GradeStatus**” exists as to any Person at any date if all senior long-termunsecured debt securities of such Person outstanding at such date which hadbeen rated by S&P or Moody’s are rated BBB- or higher by S&P*or*Baa3 or higher by Moody’s, as the casemay be.

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“**Issuing Bank**”means (i) each of Barclays, JPMorgan Chase Bank, N.A. and Wachovia Bank,National Association, and (ii) any other Bank that may agree to issue lettersof credit hereunder, in each case as issuer of a Letter of Credit hereunder. NoIssuing Bank shall be obligated to issue any Letter of Credit hereunder if,after giving effect thereto, the aggregate Letter of Credit Liabilities inrespect of all Letters of Credit issued by such Issuing Bank hereunder wouldexceed (i) in the case of any Issuing Bank named in clause (i) of the precedingsentence, $500,000,000 (as such amount may be modified from time to time byagreement between Cinergy and such Issuing Bank) or (ii) with respect to anyother Issuing Bank, such amount (if any) as may be agreed for this purpose fromtime to time by such Issuing Bank and Cinergy. For avoidance of doubt, thelimitations in the preceding sentence are for the exclusive benefit of therespective Issuing Banks, are incremental to the other limitations specifiedherein on the availability of Letters of Credit and do not affect such otherlimitations.

“**Letter of Credit**”means a letter of credit issued or to be issued hereunder by an Issuing Bank inaccordance with Section 2.15.

“**Letter of CreditLiabilities**” means, for any Bank and at any time, such Bank’sratable participation in the sum of (x) the amounts then owing by all Borrowersin respect of amounts drawn under Letters of Credit and (y) the aggregateamount then available for drawing under all Letters of Credit.

“**Lien**”means, with respect to any asset, any mortgage, lien, pledge, charge, securityinterest or encumbrance of any kind in respect of such asset. For the purposesof this Agreement, any Borrower or any of its Subsidiaries shall be deemed toown subject to a Lien any asset which it has acquired or holds subject to theinterest of a vendor or lessor under any conditional sale agreement, capitallease or other title retention agreement relating to such asset.

“**Loan**” means aloan made by a Bank pursuant to Section 2.01(a) or 2.01(b); *provided* that, if any loan or loans (orportions thereof) are combined or subdivided pursuant to a Notice of InterestRate Election, the term “Loan” shall refer to the combined principal amountresulting from such combination or to each of the separate principal amountsresulting from such subdivision, as the case may be.

“**London InterbankOffered Rate**” has the meaning set forth in Section 2.06(b).

“**Material Debt**”means, with respect to any Borrower, Indebtedness of such Borrower or any ofits Material Subsidiaries in an aggregate principal amount exceeding$150,000,000 and, in the case of Cinergy, Indebtedness of any of its MaterialSubsidiaries incurred under this Agreement.

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“**Material Plan**”has the meaning set forth in Section 6.01(i).

“**Material Subsidiary**”means at any time, with respect to any Borrower, any Subsidiary of suchBorrower that is a “significant subsidiary” (as such term is defined on theEffective Date in Regulation S-X of the Securities and Exchange Commission (17CFR 210.1-02(w)), but treating all references therein to the “registrant” asreferences to such Borrower).

“**Maximum Availability**”means, (i) in the case of Cinergy, an amount equal to the aggregate amount ofthe Commitments then in effect and (ii) in the case of each of CG&E, PSIEnergy and ULH&P, an amount equal to the lesser of (x) the aggregate amountof the Commitments then in effect and (y) $500,000,000 (for CG&E or PSIEnergy) or $100,000,000 (for ULH&P), as such amounts may be reduced fromtime to time pursuant to Section 2.08. In the event of an increase in the Commitmentspursuant to Section 2.17, the respective amounts set forth in clause (ii)(y)above shall be increased for each Borrower by an amount equal to itsAvailability Percentage immediately prior to such increase multiplied by theamount of such increase.

“**Moody’s**”means Moody’s Investors Service, Inc.

“**Mortgage Indenture**”means, in the case of each of CG&E, PSI Energy and ULH&P, the CG&EFirst Mortgage Trust Indenture, PSI Energy First Mortgage Trust Indenture orULH&P First Mortgage Trust Indenture, respectively.

“**Notes**”means promissory notes of a Borrower, in the form required by Section 2.04,evidencing the obligation of such Borrower to repay the Loans made to it, and “**Note**” means any one of such promissorynotes issued hereunder.

“**Notice of Borrowing**”has the meaning set forth in Section 2.02.

“**Notice of InterestRate Election**” has the meaning set forth in Section 2.09(b).

“**Notice of Issuance**”has the meaning set forth in Section 2.15(b).

“**Parent**”means, with respect to any Bank, any Person controlling such Bank.

“**Participant**”has the meaning set forth in Section 9.06(b).

“**PBGC**”means the Pension Benefit Guaranty Corporation or any entity succeeding to anyor all of its functions under ERISA.

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“**Percentage**”means, with respect to any Bank at any time, the percentage which the amount ofits Commitment at such time represents of the aggregate amount of all theCommitments at such time.

“**Person**”means an individual, a corporation, a partnership, an association, a trust orany other entity or organization, including a government or politicalsubdivision or an agency or instrumentality thereof.

“**Plan**”means at any time an employee pension benefit plan which is covered by Title IVof ERISA or subject to the minimum funding standards under Section 412 of the InternalRevenue Code and is either (i) maintained by a member of the ERISA Group foremployees of a member of the ERISA Group or (ii) maintained pursuant to acollective bargaining agreement or any other arrangement under which more thanone employer makes contributions and to which a member of the ERISA Group isthen making or accruing an obligation to make contributions or has within thepreceding five plan years made contributions.

“**Pricing Schedule**”means the Pricing Schedule attached hereto.

“**PSI Energy**”means PSI Energy, Inc., an Indiana corporation. PSI Energy is currently doingbusiness under the name Duke Energy Indiana, Inc., and intends to change itslegal name to Duke Energy Indiana, Inc. effective October 1, 2006.

“**PSI Energy First MortgageTrust Indenture**” means the first mortgage trust indenture, dated asof September 1, 1939, between PSI Energy (formerly known as Public ServiceCompany of Indiana, Inc. and successor by consolidation to Public ServiceCompany of Indiana) and LaSalle Bank National Association (formerly known asLaSalle National Bank Company and successor, as trustee, to First National Bankof Chicago), as trustee, as amended, modified or supplemented from time totime, and any successor or replacement mortgage trust indenture.

“**Quarterly PaymentDate**” means the first Domestic Business Day of each January, April,July and October.

“**Regulation U**”means Regulation U of the Board of Governors of the Federal Reserve System, asin effect from time to time.

“**ReimbursementObligation**” means, at any time, the obligation of the Borrower thenoutstanding under Section 2.15 to reimburse the Issuing Bank for amounts paidby the Issuing Bank in respect of any one or more drawings under a Letter ofCredit.

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“**Removed Borrower**”has the meaning set forth in Section 9.05(b)

“**Required Banks**”means, at any time, Banks having at least 51% in aggregate amount of the CreditExposures at such time.

“**Revolving CreditLoan**” means a loan made or to be made by a Bank pursuant to Section2.01(a); *provided* that, if anysuch loan or loans (or portions thereof) are combined or subdivided pursuant toa Notice of Interest Rate Election, the term “Revolving Credit Loan” shallrefer to the combined principal amount resulting from such combination or toeach of the separate principal amounts resulting from such subdivision, as thecase may be.

“**Revolving CreditPeriod**”****means, with respect to any Bank,the period from and including the Effective Date to but not including itsCommitment Termination Date.

“**S&P**”means Standard & Poor’s Rating Services, a division of The McGraw-HillCompanies, Inc.

“**Subsidiary**”means, as to any Person, any corporation or other entity of which securities orother ownership interests having ordinary voting power to elect a majority ofthe board of directors or other persons performing similar functions are at thetime directly or indirectly owned by such Person; unless otherwise specified, “Subsidiary”means a Subsidiary of a Borrower.

“**Substantial Assets**”means, with respect to any Borrower, assets sold or otherwise disposed of in asingle transaction or a series of related transactions representing 25% or moreof the consolidated assets of such Borrower and its Consolidated Subsidiaries,taken as a whole.

“**Syndication Agent**”means JPMorgan Chase Bank, N.A., in its capacity as syndication agent inrespect of this Agreement.

“**Term Loan**”means a loan made or to be made by a Bank pursuant to Section 2.01(b); *provided* that, if any such loan or loans(or portions thereof) are combined or subdivided pursuant to a Notice ofInterest Rate Election, the term “Term Loan” shall refer to the combinedprincipal amount resulting from such combination or to each of the separateprincipal amounts resulting from such subdivision, as the case may be.

“**Trust**”means The Doris Duke Trust, a trust established by James B. Duke by Indenturedated December 11, 1924 for the benefit of certain relatives.

“**ULH&P**”means The Union Light, Heat and Power Company, a Kentucky corporation.ULH&P is currently doing business under the name Duke 

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Energy Kentucky, Inc., and intends to change its legalname to Duke Energy Kentucky, Inc. effective October 1, 2006.

“**ULH&P First MortgageTrust Indenture**” means the first mortgage trust indenture, dated asof February 1, 1949, between ULH&P and The Bank of New York (successor toIrving Trust Company), as trustee, as amended, modified or supplemented fromtime to time, and any successor or replacement mortgage trust indenture.

“**Unfunded VestedLiabilities**” means, with respect to any Plan at any time, the amount(if any) by which (i) the present value of all benefits under such Plan exceeds(ii) the fair market value of all Plan assets allocable to such benefits, alldetermined as of the then most recent valuation date for such Plan, but only tothe extent that such excess represents a potential liability of a member of theERISA Group to the PBGC or the Plan under Title IV of ERISA.

“**United States**”means the United States of America, including the States and the District ofColumbia, but excluding its territories and possessions.

“**Utilization**”has the meaning set forth in the Pricing Schedule.

Section***1.02.*   Accounting Termsand Determinations.*  *Unlessotherwise specified herein, all accounting terms used herein shall beinterpreted, all accounting determinations hereunder shall be made, and allfinancial statements required to be delivered hereunder shall be prepared inaccordance with generally accepted accounting principles as in effect from timeto time, applied on a basis consistent (except for changes concurred in by therelevant Borrower’s independent public accountants) with the most recentaudited consolidated financial statements of such Borrower and its ConsolidatedSubsidiaries delivered to the Banks.

Section***1.03.*   Types ofBorrowings.*  *The term “**Borrowing**” denotes the aggregation of Loansof one or more Banks to be made to a single Borrower pursuant to Article 2 on asingle date and for a single Interest Period. Borrowings are classified forpurposes of this Agreement by reference to the pricing of Loans comprising suchBorrowing (*e.g.*, a “**Euro-Dollar Borrowing**” is a Borrowingcomprised of Euro Dollar Loans).

**ARTICLE 2The Credits**

Section***2.01.*   Commitments toLend.*  *(a)*Revolving Credit Loans*. Duringits Revolving Credit Period, each Bank severally agrees, on the terms andconditions set forth in this Agreement, to make loans to each Borrower pursuant

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to this subsection from time to time; *provided* that, immediately after each such loan is made, (i)the aggregate outstanding principal amount of such Bank’s Loans to allBorrowers plus the aggregate amount of such Bank’s Letter of Credit Liabilitiesshall not exceed its Commitment and (ii) the aggregate outstanding principalamount of Loans to any Borrower plus the aggregate amount of Letter of CreditLiabilities for the account of such Borrower shall not exceed the MaximumAvailability of such Borrower. Each Borrowing under this subsection shall be inan aggregate principal amount of $10,000,000 or any larger multiple of$1,000,000 (except that any such Borrowing may be in the aggregate amountavailable in accordance with Section 3.02(b)) and shall be made from theseveral Banks ratably in proportion to their respective Commitments in effecton the date of Borrowing; *provided*that, if the Interest Period selected by the Borrower for a Borrowing wouldotherwise end after the Commitment Termination Dates of some but not all Banks,the Borrower may in its Notice of Borrowing elect not to borrow from thoseBanks whose Commitment Termination Dates fall prior to the end of such InterestPeriod. Within the foregoing limits, the Borrowers may borrow under thissubsection (a), or to the extent permitted by Section 2.11, prepay Loans andreborrow at any time during the Revolving Credit Periods under this subsection(a).

(b)*   Term Loans.*   EachBank severally agrees, on the terms and conditions set forth in this Agreement,to make a loan to each Borrower on its Commitment Termination Date; *provided* that, immediately after each such loan is made, (i)the aggregate outstanding principal amount of such Bank’s Loans to allBorrowers plus the aggregate amount of such Bank’s Letter of Credit Liabilitiesshall not exceed its Commitment and (ii) the aggregate outstanding principalamount of such Bank’s Loans to any Borrower plus the aggregate amount of suchBank’s Letter of Credit Liabilities for the account of such Borrower shall notexceed such Bank’s Percentage of the Maximum Availability of such Borrower; and*provided**further*thatno Bank shall be obligated to make a loan pursuant to this subsection if anyCommitment shall have been extended pursuant to Section 2.01(c) to a date laterthan the Commitment Termination Date of such Bank. Each Borrowing under thisSection 2.01(b) shall be made from the several Banks having the same CommitmentTermination Date ratably in proportion to their respective Commitments.

(c)*   Extension of Commitments.*   Cinergymay, upon notice to the Administrative Agent not less than 60 days but no morethan 90 days prior to any anniversary of the Effective Date, propose to extendthe Commitment Termination Dates for an additional one-year period measuredfrom the Commitment Termination Dates then in effect. The Administrative Agentshall promptly notify the Banks of receipt of such request. Each Bank shallendeavor to respond to such request, whether affirmatively or negatively (suchdetermination in the sole discretion of such Bank), by notice to Cinergy andthe Administrative Agent within 30 days. Subject to the execution by theBorrowers, 

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the Administrative Agent and such Banks of a dulycompleted Extension Agreement in substantially the form of Exhibit E, theCommitment Termination Date applicable to the Commitment of each Bank soaffirmatively notifying Cinergy and the Administrative Agent shall be extendedfor the period specified above; *provided*that no Commitment Termination Date of any Bank shall be extended unless Bankshaving Commitments in an aggregate amount equal to at least 51% in aggregateamount of the Commitments in effect at the time any such extension is requestedshall have elected so to extend their Commitments. Any Bank which does not givesuch notice to Cinergy and the Administrative Agent shall be deemed to haveelected not to extend as requested, and the Commitment of each non-extendingBank shall terminate on its Commitment Termination Date determined withoutgiving effect to such requested extension. Cinergy may, in accordance withSection 8.06, designate another bank or other financial institution (which maybe, but need not be, an extending Bank) to replace a non-extending Bank.

Section***2.02.*   Notice ofBorrowings.*  *The Borrower shall givethe Administrative Agent notice (a “**Notice ofBorrowing**”) not later than 11:00 A.M. (New York City time) on (x)the date of each Base Rate Borrowing and (y) the third Euro-DollarBusiness Day before each Euro-Dollar Borrowing, specifying:

(a)    the dateof such Borrowing, which shall be a Domestic Business Day in the case of aDomestic Borrowing or a Euro-Dollar Business Day in the case of a Euro-DollarBorrowing;

(b)    theaggregate amount of such Borrowing;

(c)    whetherthe Loans comprising such Borrowing are to bear interest initially at the BaseRate or a Euro-Dollar Rate; and

(d)    in thecase of a Euro-Dollar Borrowing, the duration of the initial Interest Periodapplicable thereto, subject to the provisions of the definition of InterestPeriod.

Section***2.03.*   Notice to Banks;Funding of Loans.*  *(a)**Upon receipt of a Notice of Borrowing, the AdministrativeAgent shall promptly notify each Bank of the contents thereof and of such Bank’sshare (if any) of such Borrowing and such Notice of Borrowing shall notthereafter be revocable by the Borrower.

(b)    Not laterthan 1:00 P.M. (New York City time) on the date of each Borrowing, each Bankparticipating therein shall (except as provided in subsection (c) of thisSection) make available its share of such Borrowing, in Federal or other fundsimmediately available in New York City, to the Administrative Agent at itsaddress specified in or pursuant to Section 9.01. Unless the AdministrativeAgent determines that any applicable condition 

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specified in Article 3 has not been satisfied, theAdministrative Agent will make the funds so received from the Banks availableto the Borrower at the Administrative Agent’s aforesaid address.

(c)    Unless theAdministrative Agent shall have received notice from a Bank prior to the dateof any Borrowing that such Bank will not make available to the AdministrativeAgent such Bank’s share of such Borrowing, the Administrative Agent may assumethat such Bank has made such share available to the Administrative Agent on thedate of such Borrowing in accordance with subsection (b) of this Section 2.03and the Administrative Agent may, in reliance upon such assumption, makeavailable to the Borrower on such date a corresponding amount. If and to the extentthat such Bank shall not have so made such share available to theAdministrative Agent, such Bank and, if such Bank shall not have made suchpayment within two Domestic Business Days of demand therefor, the Borrowerseverally agree to repay to the Administrative Agent forthwith on demand suchcorresponding amount together with interest thereon, for each day from the datesuch amount is made available to the Borrower until the date such amount isrepaid to the Administrative Agent, at (i) in the case of the Borrower, a rateper annum equal to the higher of the Federal Funds Rate and the interest rateapplicable thereto pursuant to Section 2.06 and (ii) in the case of such Bank,the Federal Funds Rate. If such Bank shall repay to the Administrative Agentsuch corresponding amount, such amount so repaid shall constitute such Bank’sLoan included in such Borrowing for purposes of this Agreement.

(d)    Thefailure of any Bank to make the Loan to be made by it as part of any Borrowingshall not relieve any other Bank of its obligation, if any, hereunder to make aLoan on the date of such Borrowing, but no Bank shall be responsible for thefailure of any other Bank to make a Loan to be made by such other Bank.

Section***2.04.*   Registry; Notes.*  *(a)**TheAdministrative Agent shall maintain a register (the “**Register**”) on which it will record the Commitment of eachBank, each Loan made by such Bank and each repayment of any Loan made by suchBank. Any such recordation by the Administrative Agent on the Register shall beconclusive, absent manifest error. Failure to make any such recordation, or anyerror in such recordation, shall not affect the Borrowers’ obligationshereunder.

(b)    EachBorrower hereby agrees that, promptly upon the request of any Bank at any time,such Borrower shall deliver to such Bank a duly executed Note, in substantiallythe form of Exhibit A hereto, payable to the order of such Bank andrepresenting the obligation of such Borrower to pay the unpaid principal amountof the Loans made to such Borrower by such Bank, with interest as providedherein on the unpaid principal amount from time to time outstanding.

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(c)    Each Bankshall record the date, amount and maturity of each Loan made by it and the dateand amount of each payment of principal made by the Borrower with respectthereto, and each Bank receiving a Note pursuant to this Section, if such Bankso elects in connection with any transfer or enforcement of its Note, mayendorse on the schedule forming a part thereof appropriate notations toevidence the foregoing information with respect to each such Loan thenoutstanding; *provided* that thefailure of such Bank to make any such recordation or endorsement shall notaffect the obligations of any Borrower hereunder or under the Notes. Such Bankis hereby irrevocably authorized by each Borrower so to endorse its Note and toattach to and make a part of its Note a continuation of any such schedule asand when required.

Section***2.05.*   Maturity ofLoans; Effect of Cash Collateralization of Letters of Credit.*  *(a)**Each RevolvingCredit Loan made by any Bank shall mature, and the principal amount thereofshall be due and payable together with accrued interest thereon, on theCommitment Termination Date of such Bank.

(b)    The TermLoan of each Bank shall mature, and the principal amount thereof shall be dueand payable, together with accrued interest thereon, on the Final MaturityDate.

(c)    If anyprovision of any debt instrument or other agreement or instrument binding uponany Borrower, including without limitation this Agreement, would be contravenedby any deposit required hereunder to cash collateralize any Letter of CreditLiabilities of such Borrower, such Borrower shall either (x) obtain a waiver ofsuch provision, (y) prepay the debt incurred under such debt instrument andterminate such debt instrument or (z) make other arrangements satisfactory tothe Required Banks; it being understood and agreed that the risk of any suchcontravention shall be borne solely by the Borrowers and not by the Banks andshall in no event constitute a defense available to any Borrower fornonperformance of its obligations hereunder.

Section***2.06.*   Interest Rates.*  *(a)**Each Base RateLoan shall bear interest on the outstanding principal amount thereof, for eachday from the date such Loan is made until it becomes due, at a rate per annumequal to the Base Rate for such day. Such interest shall be payable quarterlyin arrears on each Quarterly Payment Date, at maturity and on the date oftermination of the Commitments in their entirety. Any overdue principal of oroverdue interest on any Base Rate Loan shall bear interest, payable on demand,for each day until paid at a rate per annum equal to the sum of 1% plus theBase Rate for such day.

(b)    Each Euro-DollarLoan shall bear interest on the outstanding principal amount thereof, for eachday during each Interest Period applicable thereto, at a rate per annum equalto the sum of the Euro-Dollar Margin for such day plus the LondonInterbank Offered Rate applicable to such Interest Period. 

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Such interest shall be payable for each InterestPeriod on the last day thereof and, if such Interest Period is longer thanthree months, at intervals of three months after the first day thereof.

The “**London Interbank Offered Rate**” applicableto any Interest Period means the rate appearing on Page 3750 of the TelerateService Company (or on any successor or substitute page of such service, or anysuccessor to or substitute for such service, providing rate quotationscomparable to those currently provided on such page of the Telerate Service, asmay be nominated by the British Bankers’ Association for purposes of providingquotations of interest rates applicable to dollar deposits in the Londoninterbank market) as of 11:00 A.M. (London time) two Euro-Dollar Business Daysprior to the commencement of such Interest Period, as the rate for dollardeposits with a maturity comparable to such Interest Period. In the event thatsuch rate is not so available at such time for any reason, then the “**London Interbank Offered Rate**” for suchInterest Period shall be the average (rounded upward, if necessary, to the nexthigher 1/16 of 1%) of the respective rates per annum at which deposits indollars are offered to each of the Euro-Dollar Reference Banks in the Londoninterbank market at approximately 11:00 A.M. (London time) two Euro-DollarBusiness Days before the first day of such Interest Period in an amountapproximately equal to the principal amount of the Loan of such Euro-DollarReference Bank to which such Interest Period is to apply and for a period oftime comparable to such Interest Period. If any Euro-Dollar Reference Bank doesnot furnish a timely quotation, the Administrative Agent shall determine therelevant interest rate on the basis of the quotation furnished by the remainingEuro-Dollar Reference Bank or, if none of such quotations is available on atimely basis, the provisions of Section 8.01 shall apply.

(c)    Anyoverdue principal of or overdue interest on any Euro-Dollar Loan shallbear interest, payable on demand, for each day from and including the datepayment thereof was due to but excluding the date of actual payment, at a rateper annum equal to the sum of 1% plus the higher of (i) the sum of the Euro-DollarMargin for such day plus the London Interbank Offered Rate applicable to suchLoan at the date such payment was due and (ii) the Base Rate for such day.

(d)    TheAdministrative Agent shall determine each interest rate applicable to the Loanshereunder. The Administrative Agent shall give prompt notice to the Borrowerand the participating Banks by telecopy, telex or cable of each rate ofinterest so determined, and its determination thereof shall be conclusive inthe absence of manifest error unless the Borrower raises an objection theretowithin five Domestic Business Days after receipt of such notice.

Section***2.07.*   Fees.*  *(a)*Facility Fees*. Cinergy shall payto the Administrative Agent, for the account of the Banks ratably in proportionto their 

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Credit Exposures, a facility fee calculated for eachday at the Facility Fee Rate for such day (determined in accordance with thePricing Schedule) on the aggregate amount of the Credit Exposures on such day; *provided*that if at any time Cinergy shall fail to pay suchfacility fee within five days of the date when such facility fee is due, eachof CG&E, PSI Energy and ULH&P severally, but not jointly, agrees to payupon demand to the Administrative Agent for the account of each Bank the amountof such unpaid facility fee multiplied by the percentage which the MaximumAvailability applicable to such Borrower represents of the aggregateCommitments (it being understood that Cinergy shall remain liable for anyunpaid amounts). Such facility fee shall accrue for each day from and includingthe Effective Date but excluding the day on which the Credit Exposures arereduced to zero.

(b)*   Letter of Credit Fees.*   TheBorrower shall pay to the Administrative Agent (i) for the account of the Banksratably a letter of credit fee accruing daily on the aggregate amount thenavailable for drawing under all outstanding Letters of Credit at a rate perannum equal to the then applicable Euro-Dollar Margin and (ii) for the accountof each Issuing Bank a letter of credit fronting fee accruing daily on theaggregate amount then available for drawing under all Letters of Credit issuedby such Issuing Bank at a rate per annum of 0.125% (or such other rate as maybe mutually agreed from time to time by the Borrower and such Issuing Bank).

(c)*   Payments.*   Accruedfees under this Section for the account of any Bank shall be payable quarterlyin arrears on each Quarterly Payment Date and upon such Bank’s CommitmentTermination Date and Final Maturity Date (and, if later, the date the CreditExposure of such Bank is reduced to zero).

Section***2.08.*   OptionalTermination or Reduction of Commitments and Maximum Availabilities.*  *(a)**Cinergy may,upon at least three Domestic Business Days’ notice to the Administrative Agent,(i) terminate the Commitments at any time, if no Loans or Letter of CreditLiabilities are outstanding at such time, or (ii) ratably reduce from time totime by an aggregate amount of $10,000,000 or any larger multiple of $1,000,000the aggregate amount of the Commitments in excess of the aggregate Utilization.

(b)    EachBorrower, other than Cinergy, may, upon at least three Domestic Business Days’notice to the Administrative Agent, reduce its Maximum Availability (i) tozero, if no Loans to it or Letter of Credit Liabilities for its account areoutstanding or (ii) by an amount of $10,000,000 or any larger multiple of$1,000,000 so long as, after giving effect to such reduction, its MaximumAvailability is not less than the sum of the aggregate principal amount ofLoans outstanding to it and the aggregate Letter of Credit Liabilitiesoutstanding for its account. Upon any reduction in the Maximum Availability of 

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a Borrower to zero pursuant to this Section 2.08(b),such Borrower shall cease to be a Borrower hereunder.

Section***2.09.*   Method ofElecting Interest Rates.*  *(a)**The Loans included in each Borrowing shall bear interestinitially at the type of rate specified by the Borrower in the applicableNotice of Borrowing. Thereafter, the Borrower may from time to time elect tochange or continue the type of interest rate borne by each Group of Loans(subject in each case to the provisions of Article 8 and the last sentence ofthis subsection (a)), as follows:

(i)     if suchLoans are Base Rate Loans, the Borrower may elect to convert such Loans to Euro-DollarLoans as of any Euro-Dollar Business Day; and

(ii)    if suchLoans are Euro-Dollar Loans, the Borrower may elect to convert such Loansto Base Rate Loans or elect to continue such Loans as Euro-Dollar Loansfor an additional Interest Period, subject to Section 2.13 in the case of anysuch conversion or continuation effective on any day other than the last day ofthe then current Interest Period applicable to such Loans.

Each such electionshall be made by delivering a notice (a “**Noticeof Interest Rate Election**”) to the Administrative Agent not laterthan 11:00 A.M. (New York City time) on the third Euro-Dollar BusinessDay before the conversion or continuation selected in such notice is to beeffective. A Notice of Interest Rate Election may, if it so specifies, apply toonly a portion of the aggregate principal amount of the relevant Group ofLoans; *provided* that (i) suchportion is allocated ratably among the Loans comprising such Group and (ii) theportion to which such notice applies, and the remaining portion to which itdoes not apply, are each $10,000,000 or any larger multiple of $1,000,000.

(b)    EachNotice of Interest Rate Election shall specify:

(i)     the Groupof Loans (or portion thereof) to which such notice applies;

(ii)    the dateon which the conversion or continuation selected in such notice is to beeffective, which shall comply with the applicable clause of subsection 2.09(a)above;

(iii)   if theLoans comprising such Group are to be converted, the new type of Loans and, ifthe Loans being converted are to be Euro-Dollar Loans, the duration of the nextsucceeding Interest Period applicable thereto; and

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(iv)   if suchLoans are to be continued as Euro-Dollar Loans for an additional InterestPeriod, the duration of such additional Interest Period.

Each InterestPeriod specified in a Notice of Interest Rate Election shall comply with theprovisions of the definition of the term “**InterestPeriod**”.

(c)    Promptlyafter receiving a Notice of Interest Rate Election from the Borrower pursuantto subsection 2.09(a) above, the Administrative Agent shall notify each Bank ofthe contents thereof and such notice shall not thereafter be revocable by theBorrower. If no Notice of Interest Rate Election is timely received prior tothe end of an Interest Period for any Group of Loans, the Borrower shall bedeemed to have elected that such Group of Loans be converted to Base Rate Loansas of the last day of such Interest Period.

(d)    Anelection by the Borrower to change or continue the rate of interest applicableto any Group of Loans pursuant to this Section shall not constitute a “**Borrowing**” subject to the provisions ofSection 3.02.

Section***2.10.*   MandatoryTermination of Commitments.*  *TheCommitment of each Bank shall terminate on such Bank’s Commitment TerminationDate.

Section***2.11.*   OptionalPrepayments.*  *(a)**The Borrower may (i) upon notice to the AdministrativeAgent not later than 11:00 A.M. (New York City time) on any Domestic BusinessDay prepay on such Domestic Business Day any Group of Base Rate Loans and (ii)upon at least three Euro-Dollar Business Days’ notice to theAdministrative Agent not later than 11:00 A.M. (New York City time) prepay anyGroup of Euro-Dollar Loans, in each case in whole at any time, or fromtime to time in part in amounts aggregating $5,000,000 or any larger multipleof $1,000,000, by paying the principal amount to be prepaid together with accruedinterest thereon to the date of prepayment and together with any additionalamounts payable pursuant to Section 2.13. Each such optional prepayment shallbe applied to prepay ratably the Loans of the several Banks included in suchGroup or Borrowing.

(b)    Uponreceipt of a notice of prepayment pursuant to this Section, the AdministrativeAgent shall promptly notify each Bank of the contents thereof and of such Bank’sshare (if any) of such prepayment and such notice shall not thereafter berevocable by the Borrower.

Section***2.12.*   GeneralProvisions as to Payments.*  *(a)**The Borrower shall make each payment of principal of, andinterest on, the Loans and of fees hereunder, not later than 1:00 P.M. (NewYork City time) on the date when due, in Federal or other funds immediatelyavailable in New York City, to the Administrative Agent at its address referredto in Section 9.01 and without 

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reduction by reason of any set-off, counterclaim ordeduction of any kind. The Administrative Agent will promptly distribute toeach Bank in like funds its ratable share of each such payment received by theAdministrative Agent for the account of the Banks. Whenever any payment ofprincipal of, or interest on, the Base Rate Loans or Letter of CreditLiabilities or of fees shall be due on a day which is not a Domestic BusinessDay, the date for payment thereof shall be extended to the next succeedingDomestic Business Day. Whenever any payment of principal of, or interest on,the Euro-Dollar Loans shall be due on a day which is not a Euro-DollarBusiness Day, the date for payment thereof shall be extended to the nextsucceeding Euro-Dollar Business Day unless such Euro-DollarBusiness Day falls in another calendar month, in which case the date forpayment thereof shall be the next preceding Euro-Dollar Business Day. Ifthe date for any payment of principal is extended by operation of law orotherwise, interest thereon shall be payable for such extended time.

(b)    Unless theAdministrative Agent shall have received notice from the Borrower prior to thedate on which any payment is due to the Banks hereunder that the Borrower willnot make such payment in full, the Administrative Agent may assume that theBorrower has made such payment in full to the Administrative Agent on such dateand the Administrative Agent may, in reliance upon such assumption, cause to bedistributed to each Bank on such due date an amount equal to the amount thendue such Bank. If and to the extent that the Borrower shall not have so madesuch payment, each Bank shall repay to the Administrative Agent forthwith ondemand such amount distributed to such Bank together with interest thereon, foreach day from the date such amount is distributed to such Bank until the datesuch Bank repays such amount to the Administrative Agent, at the Federal FundsRate.

Section***2.13.*   Funding Losses.*  *If the Borrower makes any payment of principal withrespect to any Euro-Dollar Loan or any Euro-Dollar Loan is converted to a BaseRate Loan or continued as a Euro-Dollar Loan for a new Interest Period(pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last dayof an Interest Period applicable thereto, or if the Borrower fails to borrow,prepay, convert or continue any Euro-Dollar Loans after notice has been given toany Bank in accordance with Section 2.03(a), 2.09(c) or 2.11(b), the Borrowershall reimburse each Bank within 15 days after demand for any resulting loss orexpense incurred by it (or by an existing or prospective Participant in therelated Loan), including (without limitation) any loss incurred in obtaining,liquidating or employing deposits from third parties, but excluding loss ofmargin for the period after any such payment or conversion or failure toborrow, prepay, convert or continue; *provided*that such Bank shall have delivered to the Borrower a certificate setting forthin reasonable detail the calculation of the amount of such loss or expense,which certificate shall be conclusive in the absence of manifest error.

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Section***2.14.*   Computation ofInterest and Fees.*  *Interestbased on the Base Rate and facility fees hereunder shall be computed on thebasis of a year of 365 days (or 366 days in a leap year) and paid for theactual number of days elapsed (including the first day but excluding the lastday). All other interest and Letter of Credit fees shall be computed on thebasis of a year of 360 days and paid for the actual number of days elapsed(including the first day but excluding the last day).

Section***2.15.*   Letters ofCredit.

(a)    Subject tothe terms and conditions hereof, each Issuing Bank agrees to issue Letters ofCredit hereunder from time to time before its Commitment Termination Date uponthe request and for the account of any Borrower; *provided*that, immediately after each Letter of Credit is issued, (i) the Utilizationshall not exceed the aggregate amount of the Commitments, (ii) the aggregateoutstanding principal amount of Loans to any Borrower plus the aggregate amountof Letter of Credit Liabilities for the account of such Borrower shall notexceed the Maximum Availability of such Borrower and (iii) the aggregate amountof the Letter of Credit Liabilities shall not exceed $1,000,000,000. Upon thedate of issuance by the Issuing Bank of a Letter of Credit, the Issuing Bankshall be deemed, without further action by any party hereto, to have sold toeach Bank, and each Bank shall be deemed, without further action by any partyhereto, to have purchased from the Issuing Bank, a participation in such Letterof Credit and the related Letter of Credit Liabilities in the proportion itsCommitment bears to the aggregate Commitments; *provided*that (i) if the scheduled Commitment Termination Date of a Bank falls prior tothe expiry date of a Letter of Credit then outstanding and the Commitments ofthe other Banks are extended on such date in accordance with Section 2.01(c),such Bank’s participation in such Letter of Credit shall terminate on itsCommitment Termination Date, and the participations of the other Banks thereinshall be redetermined pro rata in proportion to their Commitments after givingeffect to the termination of the Commitment of such former Bank; and (ii) inthe event that the Commitments of the other Banks are not extended inaccordance with Section 2.01(c), then such Bank’s participation in all Lettersof Credit shall remain at the level existing prior to the proposed extension,regardless of whether the expiry of any such Letters of Credit extends beyondsuch Bank’s Commitment Termination Date. If and to the extent necessary topermit redetermination of the participations in Letters of Credit pursuant toclause (i) of the foregoing proviso within the limits of the Commitments whichare not terminated, the Borrowers shall prepay on such date all or a portion ofthe outstanding Loans and/or secure cancellation of outstanding Letters ofCredit, and such redetermination and termination of participations inoutstanding Letters of Credit shall be conditioned upon their having done so.

(b)    TheBorrower shall give the Issuing Bank notice at least three Domestic BusinessDays prior to the requested issuance of a Letter of Credit, or in 

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the case of a Letter of Credit substantially in theform of Exhibit G, at least one Business Day prior to the requested issuance ofsuch Letter of Credit, specifying the date such Letter of Credit is to beissued and describing the terms of such Letter of Credit (such notice,including any such notice given in connection with the extension of a Letter ofCredit, a “**Notice of Issuance**”),substantially in the form of Exhibit F, appropriately completed. Upon receiptof a Notice of Issuance, the Issuing Bank shall promptly notify theAdministrative Agent, and the Administrative Agent shall promptly notify eachBank of the contents thereof and of the amount of such Bank’s participation insuch Letter of Credit. The issuance by the Issuing Bank of each Letter ofCredit shall, in addition to the conditions precedent set forth in Article 3,be subject to the conditions precedent that such Letter of Credit shall bedenominated in U.S. dollars and shall be in such form and contain such terms asshall be reasonably satisfactory to the Issuing Bank. Unless otherwise notifiedby the Administrative Agent, the Issuing Bank may, but shall not be requiredto, conclusively presume that all conditions precedent set forth in Article 3have been satisfied. The Borrower shall also pay to each Issuing Bank for itsown account issuance, drawing, amendment and extension charges in the amountsand at the times as agreed between the Borrower and such Issuing Bank. Exceptfor non-substantive amendments to any Letter of Credit for the purpose ofcorrecting errors or ambiguities or to allow for administrative convenience(which amendments each Issuing Bank may make in its discretion with the consentof the Borrower), the amendment, extension or renewal of any Letter of Creditshall be deemed to be an issuance of such Letter of Credit. If any Letter ofCredit contains a provision pursuant to which it is deemed to be automaticallyrenewed unless notice of termination is given by the Issuing Bank of suchLetter of Credit, the Issuing Bank shall timely give notice of termination if(i) as of close of business on the seventeenth day prior to the last day uponwhich the Issuing Bank’s notice of termination may be given to thebeneficiaries of such Letter of Credit, the Issuing Bank has received a noticeof termination from the Borrower or a notice from the Administrative Agent thatthe conditions to issuance of such Letter of Credit have not been satisfied or(ii) the renewed Letter of Credit would have a term not permitted by subsection(c) below.

(c)    No Letterof Credit shall have a term extending beyond the first anniversary of theCommitment Termination Date of the applicable Issuing Bank.

(d)    Uponreceipt from the beneficiary of any applicable Letter of Credit of any noticeof a drawing under such Letter of Credit, the Issuing Bank shall notify theAdministrative Agent and the Administrative Agent shall promptly notify theBorrower and each other Bank as to the amount to be paid as a result of suchdemand or drawing and the payment date. The Borrower shall be irrevocably andunconditionally obligated forthwith to reimburse the Issuing Bank for anyamounts paid by the Issuing Bank upon any drawing under any Letter of Creditwithout presentment, demand, protest or other formalities of any kind. All such

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amounts paid by the Issuing Bank and remaining unpaidby the Borrower shall bear interest, payable on demand, for each day until paidat a rate per annum equal to the Base Rate for such day plus, if such amountremains unpaid for more than two Domestic Business Days, 1%. In addition, eachBank will pay to the Administrative Agent, for the account of the applicableIssuing Bank, immediately upon such Issuing Bank’s demand at any time duringthe period commencing after such drawing until reimbursement therefor in fullby the Borrower, an amount equal to such Bank’s ratable share of such drawing(in proportion to its participation therein), together with interest on suchamount for each day from the date of the Issuing Bank’s demand for such payment(or, if such demand is made after 12:00 Noon (New York City time) on such date,from the next succeeding Domestic Business Day) to the date of payment by suchBank of such amount at a rate of interest per annum equal to the Federal FundsRate and, if such amount remains unpaid for more than five Domestic BusinessDays after the Issuing Bank’s demand for such payment, at a rate of interestper annum equal to the Base Rate plus 1%. The Issuing Bank will pay to eachBank ratably all amounts received from the Borrower for application in paymentof its reimbursement obligations in respect of any Letter of Credit, but onlyto the extent such Bank has made payment to the Issuing Bank in respect of suchLetter of Credit pursuant hereto.

(e)    Theobligations of the Borrower and each Bank under subsection 2.15(d) above shallbe absolute, unconditional and irrevocable, and shall be performed strictly inaccordance with the terms of this Agreement, under all circumstanceswhatsoever, including without limitation the following circumstances:

(i)     the usewhich may be made of the Letter of Credit by, or any acts or omission of, abeneficiary of a Letter of Credit (or any Person for whom the beneficiary maybe acting);

(ii)    theexistence of any claim, set-off, defense or other rights that the Borrower mayhave at any time against a beneficiary of a Letter of Credit (or any Person forwhom the beneficiary may be acting), the Banks (including the Issuing Bank) orany other Person, whether in connection with this Agreement or the Letter ofCredit or any document related hereto or thereto or any unrelated transaction;

(iii)   anystatement or any other document presented under a Letter of Credit proving tobe forged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect whatsoever;

(iv)   paymentunder a Letter of Credit to the beneficiary of such Letter of Credit againstpresentation to the Issuing Bank of a draft or 

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certificate that does not comply with the terms of theLetter of Credit; *provided* thatthe determination by the Issuing Bank to make such payment shall not have beenthe result of its willful misconduct or gross negligence; or

(v)    any otheract or omission to act or delay of any kind by any Bank (including the IssuingBank), the Administrative Agent or any other Person or any other event orcircumstance whatsoever that might, but for the provisions of this subsection(v), constitute a legal or equitable discharge of the Borrower’s or the Bank’sobligations hereunder.

(f)     TheBorrower hereby indemnifies and holds harmless each Bank (including the IssuingBank) and the Administrative Agent from and against any and all claims,damages, losses, liabilities, costs or expenses which such Bank or theAdministrative Agent may incur (including, without limitation, any claims,damages, losses, liabilities, costs or expenses which the Issuing Bank mayincur by reason of or in connection with (i) the failure of any other Bank tofulfill or comply with its obligations to such Issuing Bank hereunder (butnothing herein contained shall affect any rights the Borrower may have againstsuch defaulting Bank) or (ii) any litigation arising with respect to thisAgreement (whether or not the Issuing Bank shall prevail in such litigation)),and none of the Banks (including the Issuing Bank) nor the Administrative Agentnor any of their officers or directors or employees or agents shall be liableor responsible, by reason of or in connection with the execution and deliveryor transfer of or payment or failure to pay under any Letter of Credit,including without limitation any of the circumstances enumerated in subsection2.15(e) above, as well as (i) any error, omission, interruption or delay intransmission or delivery of any messages, by mail, cable, telegraph, telex orotherwise, (ii) any loss or delay in the transmission of any document requiredin order to make a drawing under a Letter of Credit and (iii) any consequencesarising from causes beyond the control of the Issuing Bank, including, withoutlimitation, any government acts or any other circumstances whatsoever, inmaking or failing to make payment under such Letter of Credit; *provided* that the Borrower shall not berequired to indemnify the Issuing Bank for any claims, damages, losses,liabilities, costs or expenses, and the Borrower shall have a claim for direct(but not consequential) damage suffered by it, to the extent found by a courtof competent jurisdiction to have been caused by (x) the willful misconduct orgross negligence of the Issuing Bank in determining whether a request presentedunder any Letter of Credit complied with the terms of such Letter of Credit or(y) the Issuing Bank’s failure to pay under any Letter of Credit after thepresentation to it of a request strictly complying with the terms andconditions of the Letter of Credit. Nothing in this subsection 2.15(f) isintended to limit the obligations of the Borrower under any other provision ofthis Agreement. To the extent the Borrower does not indemnify the Issuing Bankas required by this subsection, the Banks agree to do so ratably in accordancewith their Commitments.

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(g)    TheIssuing Bank shall act on behalf of the Banks with respect to any Letters ofCredit issued by it and the documents associated therewith, and the IssuingBank shall have all of the benefits and immunities (i) provided to theAdministrative Agent in Article 7 (other than Sections 7.08 and 7.09) withrespect to any acts taken or omissions suffered by the Issuing Bank inconnection with Letters of Credit issued by it or proposed to be issued by itand the applications and agreements for letters of credit pertaining to suchLetters of Credit as fully as if the term “Administrative Agent” as used inArticle 7 included the Issuing Bank with respect to such acts or omissions and(ii) as additionally provided herein with respect to the Issuing Bank.

Section***2.16.*   Regulation DCompensation.*  *In theevent that a Bank is required to maintain reserves of the type contemplated bythe definition of “**Euro-Dollar Reserve Percentage**”, such Bankmay require the Borrower to pay, contemporaneously with each payment ofinterest on the Euro-Dollar Loans, additional interest on the relatedEuro-Dollar Loan of such Bank at a rate per annum determined by such Bankup to but not exceeding the excess of (i) (A) the applicable London InterbankOffered Rate divided by (B) one *minus*the Euro-Dollar Reserve Percentage over (ii) the applicable LondonInterbank Offered Rate. Any Bank wishing to require payment of such additionalinterest (x) shall so notify the Borrower and the Administrative Agent, inwhich case such additional interest on the Euro-Dollar Loans of such Bankshall be payable to such Bank at the place indicated in such notice withrespect to each Interest Period commencing at least three Euro-DollarBusiness Days after the giving of such notice and (y) shall notify the Borrowerat least three Euro-Dollar Business Days prior to each date on whichinterest is payable on the Euro-Dollar Loans of the amount then due itunder this Section. Each such notification shall be accompanied by suchinformation as the Borrower may reasonably request.

“**Euro-Dollar ReservePercentage**” means for any day that percentage (expressed as adecimal) which is in effect on such day, as prescribed by the Board ofGovernors of the Federal Reserve System (or any successor) for determining themaximum reserve requirement for a member bank of the Federal Reserve System inNew York City with deposits exceeding five billion dollars in respect of “**Eurocurrency liabilities**” (or in respect ofany other category of liabilities which includes deposits by reference to whichthe interest rate on Euro-Dollar Loans is determined or any category ofextensions of credit or other assets which includes loans by a non-UnitedStates office of any Bank to United States residents).

Section***2.17.*   Increase InCommitments; Additional Banks.*  *(a)Subsequent to the Effective Date, Cinergy may, upon at least 30 days’ notice tothe Administrative Agent (which shall promptly provide a copy of such notice tothe Banks), propose to increase the aggregate amount of the Commitments, *provided* that after giving effect to any such increase, thetotal Commitments shall 

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not exceed $2,500,000,000 (the amount of any suchincrease, the “**Increased Commitments**”). Each Bankparty to this Agreement at such time shall have the right (but no obligation), fora period of 15 days following receipt of such notice, to elect by notice toCinergy and the Administrative Agent to increase its Commitment hereunder.

(b)    If anyBank party to this Agreement shall not elect to increase its Commitmentpursuant to subsection (a) of this Section, Cinergy may designate another bankor other lenders (which may be, but need not be, one or more of the existingBanks) which at the time agree to (i) in the case of any such lender that is anexisting Bank, increase its Commitment and (ii) in the case of any other suchlender (an “**Additional Bank**”), become a partyto this Agreement. The sum of the increases in the Commitments of the existingBanks pursuant to this subsection (b) plus the Commitments of the AdditionalBanks shall not in the aggregate exceed the unsubscribed amount of theIncreased Commitments.

(c)    Anincrease in the aggregate amount of the Commitments pursuant to this Section2.17 shall become effective upon the receipt by the Administrative Agent of anagreement in form and substance satisfactory to the Administrative Agent signedby the Borrowers, by each Additional Bank and by each other Bank whoseCommitment is to be increased, setting forth the new Commitments of such Banksand setting forth the agreement of each Additional Bank to become a party tothis Agreement and to be bound by all the terms and provisions hereof, togetherwith such evidence of appropriate corporate authorization on the part of theBorrower with respect to the Increased Commitments and such opinions of counselfor the Borrower with respect to the Increased Commitments as theAdministrative Agent may reasonably request.

Upon any increase in the aggregate amount of theCommitments pursuant to this Section 2.17, (i) the respective Letter of CreditLiabilities of the Banks shall be redetermined as of the effective date of suchincrease and (ii) within five Domestic Business Days, in the case of any BaseRate Loans then outstanding, and at the end of the then current Interest Periodwith respect thereto, in the case of any Euro-Dollar Loans then outstanding,the Borrower shall prepay such Group of Loans in its entirety and, to theextent the Borrower elects to do so and subject to the conditions specified inArticle 3, the Borrower shall reborrow Revolving Credit Loans from the Banks inproportion to their respective Commitments after giving effect to suchincrease, until such time as all outstanding Revolving Credit Loans are held bythe Banks in such proportion.

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**ARTICLE 3Conditions**

Section***3.01.*   Effectiveness.*  *This Amended Agreement shall become effective on thedate that each of the following conditions shall have been satisfied (or waivedin accordance with Section 9.05).

(a)    receipt bythe Administrative Agent of counterparts hereof signed by each of the partieshereto (or, in the case of any party as to which an executed counterpart shallnot have been received, receipt by the Administrative Agent in formsatisfactory to it of telegraphic, telecopy, telex or other writtenconfirmation from such party of execution of a counterpart hereof by suchparty);

(b)    receipt bythe Administrative Agent of (i) an opinion of internal counsel of eachBorrower, substantially in the form of Exhibit B-1 hereto and (ii) an opinionof Robinson, Bradshaw & Hinson, P.A., special counsel for the Borrowers,substantially in the form of Exhibit B-2 hereto, and, in each case, coveringsuch additional matters relating to the transactions contemplated hereby as theRequired Banks may reasonably request;

(c)    receipt bythe Administrative Agent of an opinion of Davis Polk & Wardwell, specialcounsel for the Agents, substantially in the form of Exhibit C hereto andcovering such additional matters relating to the transactions contemplatedhereby as the Required Banks may reasonably request;

(d)    receipt bythe Administrative Agent of a certificate signed by a Vice President, theTreasurer, an Assistant Treasurer or the Controller of Cinergy, dated theEffective Date, to the effect set forth in clauses (c) and (d) of Section 3.02;

(e)    receipt bythe Administrative Agent of all documents it may have reasonably requestedprior to the date hereof relating to the existence of the Borrowers, thecorporate authority for and the validity of this Agreement and the Notes, andany other matters relevant hereto, all in form and substance satisfactory tothe Administrative Agent;

(f)     receiptby the Administrative Agent of evidence satisfactory to it of the payment ofall principal of and interest on any “Advances” (as defined in the Existing Agreement)made by any Departing Bank outstanding under the Existing Agreement; and

(g)    receipt bythe Administrative Agent for the account of the Banks of participation fees asheretofore mutually agreed by Cinergy and the Administrative Agent;

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*provided* that thisAgreement shall not become effective or be binding on any party hereto unlessall of the foregoing conditions are satisfied not later than July 15, 2006. TheAdministrative Agent shall promptly notify Cinergy and the Banks of theEffective Date, and such notice shall be conclusive and binding on all partieshereto.

On the Effective Date, the Existing Agreement will beautomatically amended and restated in its entirety to read as set forth herein.On and after the Effective Date, the rights and obligations of the partieshereto shall be governed by this Amended Agreement; *provided*thatthe rights and obligations of the parties hereto with respect to the periodprior to the Effective Date shall continue to be governed by the provisions ofthe Existing Agreement. The Administrative Agent shall promptly notify theBorrowers and each Bank of the effectiveness of this Amended Agreement, andsuch notice shall be conclusive and binding on all parties hereto. TheCommitment of any Person which has a Commitment under the Existing Agreementbut not under this Amended Agreement shall terminate on the Effective Date, andall accrued fees and other amounts payable to such Person shall be due on theEffective Date.

On the Effective Date, (i) the respective participationsof the Banks in any “Letters of Credit” (as defined in the Existing Agreement)outstanding under the Existing Agreement shall be redetermined on the basis oftheir respective Commitments under this Amended Agreement as if issuedhereunder on the Effective Date, and any such “Letters of Credit” shall beLetters of Credit hereunder and (ii) within five Domestic Business Days of theEffective Date, in the case of any “Base Rate Advances” (as defined in theExisting Agreement) made under the Existing Agreement and outstanding on theEffective Date, and at the end of the then current “Interest Period” (asdefined in the Existing Agreement) with respect thereto, in the case of any “EurodollarRate Advances” (as defined in the Existing Agreement) then outstanding underthe Existing Agreement, the Borrower shall prepay the same in their entiretyand, to the extent the Borrower elects to do so and subject to the conditionsspecified in this Article 3, the Borrower shall reborrow Revolving Credit Loansfrom the Banks in proportion to their respective Commitments under this AmendedAgreement, until such time as all outstanding principal amounts are held by theBanks in such proportion.

Section***3.02.*   Borrowings andIssuance of Letters of Credit.*  *Theobligation of any Bank to make a Loan on the occasion of any Borrowing and theobligation of any Issuing Bank to issue (or renew or extend the term of) anyLetter of Credit is subject to the satisfaction of the following conditions:

(a)    receipt bythe Administrative Agent of a Notice of Borrowing as required by Section 2.02or receipt by the Issuing Bank of a Notice of Issuance as required by Section2.15(b), as the case may be;

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(b)    the factthat, immediately after such Borrowing or issuance of such Letter of Credit,(i) the Utilization will not exceed the aggregate amount of the Commitments,(ii) the aggregate outstanding principal amount of Loans to the Borrower plusthe aggregate amount of Letter of Credit Liabilities for the account of theBorrower will not exceed the Maximum Availability of such Borrower and (iii) inthe case of an issuance of a Letter of Credit the aggregate amount of theLetter of Credit Liabilities shall not exceed $1,000,000,000;

(c)    the factthat, immediately after such Borrowing or issuance of such Letter of Credit, noDefault with respect to the Borrower shall have occurred and be continuing; and

(d)    the factthat the representations and warranties of the Borrower contained in thisAgreement (except the representations and warranties set forth in Sections4.04(c) and 4.06) shall be true on and as of the date of such Borrowing orissuance of such Letter of Credit.

Each Borrowing and issuance of a Letter of Credithereunder shall be deemed to be a representation and warranty by the Borroweron the date of such Borrowing or issuance as to the facts specified in clauses(b), (c) and (d) of this Section.

**ARTICLE 4Representations and Warranties**

Each Borrower, severally but not jointly, representsand warrants that:

Section***4.01.*   Organization andPower.*  *Such Borrower is dulyorganized, validly existing and in good standing under the laws of thejurisdiction of its organization and has all requisite powers and all materialgovernmental licenses, authorizations, consents and approvals required to carryon its business as now conducted and is duly qualified to do business in eachjurisdiction where such qualification is required, except where the failure soto qualify would not have a material adverse effect on the business, financialposition or results of operations of such Borrower and its consolidatedSubsidiaries, considered as a whole.

Section***4.02.*   Corporate andGovernmental Authorization; No Contravention.*  *Theexecution, delivery and performance by such Borrower of this Agreement and theNotes are within such Borrower’s powers, have been duly authorized by allnecessary company action, require no action by or in respect of, or filingwith, any governmental body, agency or official (except for consents,authorizations or filings which have been obtained or made, as the case may be,and are in full force and effect) and do not contravene, or constitute adefault under, any provision of applicable law or regulation or of the articlesof incorporation, by-laws, certificate of formation or the limitedliability company 

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agreement of such Borrower or of any agreement,judgment, injunction, order, decree or other instrument binding upon suchBorrower or result in the creation or imposition of any Lien on any asset ofsuch Borrower or any of its Material Subsidiaries.

Section***4.03.*   Binding Effect.*  *This Agreement constitutes a valid and bindingagreement of such Borrower and each Note, if and when executed and delivered byit in accordance with this Agreement, will constitute a valid and bindingobligation of such Borrower, in each case enforceable in accordance with itsterms, except as the same may be limited by bankruptcy, insolvency or similarlaws affecting creditors’ rights generally and by general principles of equity.

Section***4.04.*   FinancialInformation.*  *(a)**The consolidated balance sheet of such Borrower and itsConsolidated Subsidiaries as of December 31, 2005 and the related consolidatedstatements of income, cash flows, capitalization and retained earnings for thefiscal year then ended, reported on by Deloitte & Touche, copies of whichhave been delivered to each of the Banks by using such Borrower’s IntraLinkssite, fairly present, in conformity with generally accepted accountingprinciples, the consolidated financial position of such Borrower and itsConsolidated Subsidiaries as of such date and their consolidated results ofoperations and cash flows for such fiscal year.

(b)    Theunaudited consolidated balance sheet of such Borrower and its ConsolidatedSubsidiaries as of March 31, 2006 and the related unaudited consolidatedstatements of income and cash flows for the three months then ended, copies ofwhich have been delivered to each of the Banks by using such Borrower’sIntraLinks site, fairly present, in conformity with generally acceptedaccounting principles applied on a basis consistent with the financialstatements referred to in subsection (a) of this Section, the consolidatedfinancial position of such Borrower and its Consolidated Subsidiaries as ofsuch date and their consolidated results of operations and changes in financialposition for such three-month period (subject to normal year-endadjustments and the absence of footnotes).

(c)    SinceDecember 31, 2005, there has been no material adverse change in the business,financial position or results of operations of such Borrower and itsConsolidated Subsidiaries, considered as a whole.

Section***4.05.*   Regulation U.*  *Such Borrower and its Material Subsidiaries are notengaged in the business of extending credit for the purpose of purchasing orcarrying margin stock (within the meaning of Regulation U issued by the Boardof Governors of the Federal Reserve System) and no proceeds of any Borrowing byand no issuance of Letters of Credit for the account of such Borrower will beused to purchase or carry any margin stock or to extend credit to others forthe purpose of purchasing or carrying any margin stock. Not more than 

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25% of the value of the assets of such Borrower andits Material Subsidiaries is represented by margin stock.

Section***4.06.*   Litigation.*  *Except as disclosed in the Borrower’s annual reporton Form 10-K for the fiscal year ended December 31, 2005 and its quarterlyreport on Form 10-Q for the period ended March 31, 2006, there is no action,suit or proceeding pending against, or to the knowledge of such Borrowerthreatened against or affecting, such Borrower or any of its Subsidiariesbefore any court or arbitrator or any governmental body, agency or officialwhich would be likely to be decided adversely to such Borrower or such Subsidiaryand, as a result, have a material adverse effect upon the business,consolidated financial position or results of operations of such Borrower andits Consolidated Subsidiaries, considered as a whole, or which in any mannerdraws into question the validity of this Agreement or any Note.

Section***4.07.*   Compliance withLaws.*  *Such Borrower and each of itsMaterial Subsidiaries is in compliance in all material respects with allapplicable laws, ordinances, rules, regulations and requirements of governmentalauthorities (including, without limitation, ERISA and Environmental Laws)except where (i) non-compliance would not have a material adverse effect on thebusiness, financial position or results of operations of such Borrower and itsConsolidated Subsidiaries, considered as a whole, or (ii) the necessity ofcompliance therewith is contested in good faith by appropriate proceedings.

Section***4.08.*   Taxes.*  *Such Borrower and its Material Subsidiaries havefiled all United States Federal income tax returns and all other material taxreturns which are required to be filed by them and have paid all taxes duepursuant to such returns or pursuant to any assessment received by suchBorrower or any such Material Subsidiary except (i) where nonpayment would nothave a material adverse effect on the business, financial position or resultsof operations of such Borrower and its Consolidated Subsidiaries, considered asa whole, or (ii) where the same are contested in good faith by appropriateproceedings. The charges, accruals and reserves on the books of such Borrowerand its Material Subsidiaries in respect of taxes or other governmental chargesare, in the opinion of such Borrower, adequate.

**ARTICLE 5Covenants**

Each Borrower, severally but not jointly, agrees that,so long as any Bank has any Commitment hereunder with respect to such Borroweror any amount payable hereunder remains unpaid by such Borrower or any Letterof Credit Liabilities remain outstanding:

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Section***5.01.*   Information.*  *Such Borrower will deliver to each of the Banks:

(a)    as soon asavailable and in any event within 120 days after the end of each fiscal year ofsuch Borrower, a consolidated balance sheet of such Borrower and itsConsolidated Subsidiaries as of the end of such fiscal year and the relatedconsolidated statements of income, cash flows, capitalization and retainedearnings for such fiscal year, setting forth in each case in comparative formthe figures for the previous fiscal year, all reported on in a mannerconsistent with the requirements of the Securities and Exchange Commission byDeloitte & Touche or other independent public accountants of nationallyrecognized standing;

(b)    as soon asavailable and in any event within 75 days after the end of each of the firstthree quarters of each fiscal year of such Borrower, a consolidated balancesheet of such Borrower and its Consolidated Subsidiaries as of the end of suchquarter and the related consolidated statements of income and cash flows for suchquarter and for the portion of such Borrower’s fiscal year ended at the end ofsuch quarter, setting forth in each case in comparative form the figures forthe corresponding quarter and the corresponding portion of such Borrower’sprevious fiscal year, all certified (subject to normal year-endadjustments) as to fairness of presentation, generally accepted accountingprinciples and consistency by an Approved Officer of such Borrower;

(c)    simultaneouslywith the delivery of each set of financial statements referred to in clauses(a) and (b) above, a certificate of an Approved Officer of such Borrower (i)setting forth in reasonable detail the calculations required to establishwhether such Borrower was in compliance with the requirements of Section 5.10 onthe date of such financial statements and (ii) stating whether any Defaultexists on the date of such certificate and, if any Default then exists, settingforth the details thereof and the action which such Borrower is taking orproposes to take with respect thereto;

(d)    withinfive days after any officer of such Borrower with responsibility relatingthereto obtains knowledge of any Default, if such Default is then continuing, acertificate of an Approved Officer of such Borrower setting forth the details thereofand the action which such Borrower is taking or proposes to take with respectthereto;

(e)    promptlyupon the filing thereof, copies of all registration statements (other than theexhibits thereto and any registration statements on Form S-8 or its equivalent)and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which suchBorrower shall have filed with the Securities and Exchange Commission;

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(f)     if andwhen any member of such Borrower’s ERISA Group (i) gives or is required to givenotice to the PBGC of any “**reportable event**”(as defined in Section 4043 of ERISA) with respect to any Material Plan whichmight constitute grounds for a termination of such Plan under Title IV ofERISA, or knows that the plan administrator of any Material Plan has given oris required to give notice of any such reportable event, a copy of the noticeof such reportable event given or required to be given to the PBGC; (ii)receives notice of complete or partial withdrawal liability under Title IV ofERISA or notice that any Material Plan is in reorganization, is insolvent orhas been terminated, a copy of such notice; (iii) receives notice from the PBGCunder Title IV of ERISA of an intent to terminate, impose material liability(other than for premiums under Section 4007 of ERISA) in respect of, or appointa trustee to administer any Plan, a copy of such notice; (iv)applies for awaiver of the minimum funding standard under Section 412 of the InternalRevenue Code, a copy of such application; (v) gives notice of intent toterminate any Material Plan under Section 4041(c) of ERISA, a copy of suchnotice and other information filed with the PBGC; (vi) gives notice ofwithdrawal from any Material Plan pursuant to Section 4063 of ERISA, a copy ofsuch notice; or (vii) fails to make any payment or contribution to any MaterialPlan or makes any amendment to any Material Plan which has resulted or couldresult in the imposition of a Lien or the posting of a bond or other security,a certificate of the chief financial officer or the chief accounting officer ofsuch Borrower setting forth details as to such occurrence and action, if any,which such Borrower or applicable member of the ERISA Group is required orproposes to take; and

(g)    from timeto time such additional information regarding the financial position orbusiness of such Borrower and its Subsidiaries as the Administrative Agent, atthe request of any Bank, may reasonably request.

Information required to be delivered pursuant to theseSections 5.01(a), 5.01(b) and 5.01(e) shall be deemed to have been delivered onthe date on which such Borrower provides notice to the Banks that suchinformation has been posted on the Securities and Exchange Commission websiteon the Internet at sec.gov/edaux/searches.htm, on such Borrower’s IntraLinkssite at intralinks.com or at another website identified in such notice andaccessible by the Banks without charge; *provided*that (i) such notice may be included in a certificate deliveredpursuant to Section 5.01(c) and such notice or certificate shall also be deemedto have been delivered upon being posted to such Borrower’s IntraLinks site and(ii) such Borrower shall deliver paper copies of the information referred to inSections 5.01(a), 5.01(b) and 5.01(e) to any Bank which requests such delivery.

Section***5.02.*   Payment ofTaxes.*  *Such Borrower will pay anddischarge, and will cause each of its Material Subsidiaries to pay anddischarge, at or before maturity, all their tax liabilities, except where (i)nonpayment would not have a 

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material adverse effect on the business, financialposition or results of operations of such Borrower and its ConsolidatedSubsidiaries, considered as a whole, or (ii) the same may be contested in goodfaith by appropriate proceedings, and will maintain, and will cause each of itsMaterial Subsidiaries to maintain, in accordance with generally acceptedaccounting principles, appropriate reserves for the accrual of any of the same.

Section***5.03.*   Maintenance ofProperty; Insurance.*  *(a)**Such Borrower will keep, and will cause each of itsMaterial Subsidiaries to keep, all property useful and necessary in itsbusiness in good working order and condition, ordinary wear and tear excepted.

(b)    Such Borrowerwill, and will cause each of its Material Subsidiaries to, maintain (either inthe name of such Borrower or in such Subsidiary’s own name) with financiallysound and responsible insurance companies, insurance on all their respectiveproperties in at least such amounts and against at least such risks (and withsuch risk retention) as are usually insured against by companies of establishedrepute engaged in the same or a similar business; *provided* that self-insurance by such Borrower or anysuch Material Subsidiary, shall not be deemed a violation of this covenant tothe extent that companies engaged in similar businesses and owning similarproperties self-insure; and will furnish to the Banks, upon request fromthe Administrative Agent, information presented in reasonable detail as to theinsurance so carried.

Section***5.04.*   Maintenance ofExistence.*  *Such Borrower willpreserve, renew and keep in full force and effect, and will cause each of itsMaterial Subsidiaries to preserve, renew and keep in full force and effecttheir respective corporate or other legal existence and their respectiverights, privileges and franchises material to the normal conduct of theirrespective businesses; *provided*that nothing in this Section 5.04 shall prohibit the termination of any right,privilege or franchise of such Borrower or any such Material Subsidiary or ofthe corporate or other legal existence of any such Material Subsidiary, or thechange in form of organization of such Borrower or any such MaterialSubsidiary, if such Borrower in good faith determines that such termination orchange is in the best interest of such Borrower, is not materiallydisadvantageous to the Banks and, in the case of a change in the form oforganization of such Borrower, the Administrative Agent has consented thereto.

Section***5.05.*   Compliance withLaws.*  *Such Borrower will comply, andcause each of its Material Subsidiaries to comply, in all material respectswith all applicable laws, ordinances, rules, regulations, and requirements ofgovernmental authorities (including, without limitation, ERISA and EnvironmentalLaws) except where (i) noncompliance would not have a material adverse effecton the business, financial position or results of operations of such Borrowerand its 

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Consolidated Subsidiaries, considered as a whole, or(ii) the necessity of compliance therewith is contested in good faith byappropriate proceedings.

Section***5.06.*   Books andRecords.*  *Such Borrower will keep,and will cause each of its Material Subsidiaries to keep, proper books ofrecord and account in which full, true and correct entries shall be made of allfinancial transactions in relation to its business and activities in accordancewith its customary practices; and will permit, and will cause each suchMaterial Subsidiary to permit, representatives of any Bank at such Bank’sexpense (accompanied by a representative of such Borrower, if such Borrower sodesires) to visit any of their respective properties, to examine any of theirrespective books and records and to discuss their respective affairs, financesand accounts with their respective officers, employees and independent publicaccountants, all upon such reasonable notice, at such reasonable times and asoften as may reasonably be desired.

Section***5.07.*   Negative Pledge.*  *Such Borrower will not create, assume or suffer toexist any Lien on any asset now owned or hereafter acquired by it, except:

(a)    Liensgranted by such Borrower existing as of the Effective Date securingIndebtedness outstanding on the date of this Agreement in an aggregateprincipal amount not exceeding $100,000,000;

(b)    the Lienof such Borrower’s Mortgage Indenture (if any) securing Indebtednessoutstanding on the Effective Date or issued hereafter;

(c)    any Lienon any asset of any Person existing at the time such Person is merged orconsolidated with or into such Borrower and not created in contemplation ofsuch event;

(d)    any Lienexisting on any asset prior to the acquisition thereof by such Borrower and notcreated in contemplation of such acquisition;

(e)    any Lienon any asset securing Indebtedness incurred or assumed for the purpose offinancing all or any part of the cost of acquiring such asset; *provided* that such Lien attaches to suchasset concurrently with or within 180 days after the acquisition thereof;

(f)     any Lienarising out of the refinancing, extension, renewal or refunding of anyIndebtedness secured by any Lien permitted by any of the foregoing clauses ofthis Section; *provided* that suchIndebtedness is not increased and is not secured by any additional assets;

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(g)    Liens fortaxes, assessments or other governmental charges or levies not yet due or whichare being contested in good faith by appropriate proceedings and with respectto which adequate reserves or other appropriate provisions are being maintainedin accordance with generally accepted accounting principles;

(h)    statutoryLiens of landlords and Liens of carriers, warehousemen, mechanics, materialmenand other Liens imposed by law, created in the ordinary course of business andfor amounts not past due for more than 60 days or which are being contested ingood faith by appropriate proceedings which are sufficient to prevent imminentforeclosure of such Liens, are promptly instituted and diligently conducted andwith respect to which adequate reserves or other appropriate provisions arebeing maintained in accordance with generally accepted accounting principles;

(i)     Liensincurred or deposits made in the ordinary course of business (including,without limitation, surety bonds and appeal bonds) in connection with workers’compensation, unemployment insurance and other types of social securitybenefits or to secure the performance of tenders, bids, leases, contracts(other than for the repayment of Indebtedness), statutory obligations and othersimilar obligations or arising as a result of progress payments undergovernment contracts;

(j)     easements(including, without limitation, reciprocal easement agreements and utilityagreements), rights-of-way, covenants, consents, reservations,encroachments, variations and other restrictions, charges or encumbrances(whether or not recorded) affecting the use of real property;

(k)    Liens withrespect to judgments and attachments which do not result in an Event ofDefault;

(l)     Liens,deposits or pledges to secure the performance of bids, tenders, contracts(other than contracts for the payment of money), leases (permitted under theterms of this Agreement), public or statutory obligations, surety, stay,appeal, indemnity, performance or other obligations arising in the ordinarycourse of business;

(m)   other Liensincluding Liens imposed by Environmental Laws arising in the ordinary course ofits business which (i) do not secure Indebtedness, (ii) do not secure anyobligation in an amount exceeding $100,000,000 at any time at which InvestmentGrade Status does not exist as to such Borrower and (iii) do not in theaggregate materially detract from the value of its assets or materially impairthe use thereof in the operation of its business;

(n)    Lienssecuring obligations under Hedging Agreements entered into to protect againstfluctuations in interest rates or exchange rates or commodity 

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prices and not for speculative purposes, provided thatsuch Liens run in favor of a Bank hereunder or a Person who was, at the time ofissuance, a Bank; and

(o)    Liens nototherwise permitted by the foregoing clauses of this Section on assets of suchBorrower securing obligations in an aggregate principal or face amount at anydate not to exceed (i) in the case of each of Cinergy, CG&E and PSI Energy,$150,000,000 and (ii) in the case of ULH&P, $50,000,000.

Section***5.08.*   Consolidations, Mergers andSales of Assets.*  *SuchBorrower will not (i) consolidate or merge with or into any other Person or(ii) sell, lease or otherwise transfer, directly or indirectly, SubstantialAssets to any Person (other than a Subsidiary); *provided* that such Borrower may merge with another Person ifsuch Borrower is the Person surviving such merger and, after giving effectthereto, no Default shall have occurred and be continuing.

Section***5.09.*   Use of Proceeds.*  *The proceeds of the Loans made under this Agreementwill be used by such Borrower for its general corporate purposes, includingliquidity support for outstanding commercial paper and acquisitions. None ofsuch proceeds will be used, directly or indirectly, for the purpose, whetherimmediate, incidental or ultimate, of buying or carrying any “**margin stock**” within the meaning ofRegulation U.

Section***5.10.*   Indebtedness/CapitalizationRatio.*  *The ratio of ConsolidatedIndebtedness of such Borrower to Consolidated Capitalization of such Borrowerwill at no time exceed 65%.

**Article 6Defaults**

Section***6.01.*   Events ofDefault.*  *If one or more of thefollowing events (“**Events of Default**”)with respect to a particular Borrower shall have occurred and be continuing:

(a)    suchBorrower shall fail to pay when due any principal of any Loan to it or anyReimbursement Obligation owed by it or shall fail to pay, within five days ofthe due date thereof, any interest, fees or any other amount payable by it hereunder;

(b)    suchBorrower shall fail to observe or perform any covenant contained in Sections5.04, 5.07, 5.08, 5.10 or the second sentence of5.09, inclusive;

(c)    suchBorrower shall fail to observe or perform any covenant or agreement containedin this Agreement (other than those covered by clause (a) or 

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(b) above) for 30 days after notice thereof has beengiven to such Borrower by the Administrative Agent at the request of any Bank;

(d)    anyrepresentation, warranty, certification or statement made by such Borrower inthis Agreement or in any certificate, financial statement or other documentdelivered pursuant to this Agreement shall prove to have been incorrect in anymaterial respect when made (or deemed made);

(e)    suchBorrower or any of its Material Subsidiaries shall fail to make any payment inrespect of Material Debt (other than Loans to and Reimbursement Obligations ofsuch Borrower hereunder) when due or within any applicable grace period;

(f)     any eventor condition shall occur and shall continue beyond the applicable grace or cureperiod, if any, provided with respect thereto so as to result in theacceleration of the maturity of Material Debt;

(g)    suchBorrower or any of its Material Subsidiaries shall commence a voluntary case orother proceeding seeking liquidation, reorganization or other relief withrespect to itself or its debts under any bankruptcy, insolvency or othersimilar law now or hereafter in effect or seeking the appointment of a trustee,receiver, liquidator, custodian or other similar official of it or anysubstantial part of its property, or shall consent to any such relief or to theappointment of or taking possession by any such official in an involuntary caseor other proceeding commenced against it, or shall make a general assignmentfor the benefit of creditors, or shall admit in writing its inability to, orshall fail generally to, pay its debts as they become due, or shall take anycorporate action to authorize any of the foregoing;

(h)    aninvoluntary case or other proceeding shall be commenced against such Borroweror any of its Material Subsidiaries seeking liquidation, reorganization orother relief with respect to it or its debts under any bankruptcy, insolvencyor other similar law now or hereafter in effect or seeking the appointment of atrustee, receiver, liquidator, custodian or other similar official of it or anysubstantial part of its property, and such involuntary case or other proceedingshall remain undismissed and unstayed for a period of 90 days; or an order forrelief shall be entered against such Borrower or any of its MaterialSubsidiaries under the federal bankruptcy laws as now or hereafter in effect;

(i)     anymember of such Borrower’s ERISA Group shall fail to pay when due an amount oramounts aggregating in excess of $25,000,000 which it shall have become liableto pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent toterminate a Plan or Plans of such ERISA Group having aggregate Unfunded VestedLiabilities in excess of $50,000,000 (collectively, a “**Material Plan**”) shall be filed under TitleIV of ERISA by any 

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member of such ERISA Group, any plan administrator orany combination of the foregoing; or the PBGC shall institute proceedings underTitle IV of ERISA to terminate or to cause a trustee to be appointed toadminister any such Material Plan or a proceeding shall be instituted by afiduciary of any such Material Plan against any member of such ERISA Group toenforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not havebeen dismissed within 90 days thereafter; or a condition shall exist by reasonof which the PBGC would be entitled to obtain a decree adjudicating that anysuch Material Plan must be terminated;

(j)     ajudgment or other court order for the payment of money in excess of $50,000,000shall be rendered against such Borrower or any of its Material Subsidiaries andsuch judgment or order shall continue without being vacated, discharged,satisfied or stayed or bonded pending appeal for a period of 45 days;

(k)    any personor group of persons (within the meaning of Section 13 or 14 of the SecuritiesExchange Act of 1934, as amended (the “**Exchange Act**”))other than trustees and participants in employee benefit plans of the Companyand its Subsidiaries or the Endowment or Trust, shall have acquired beneficialownership (within the meaning of Rule 13d-3 promulgated by the Securities andExchange Commission under the Exchange Act) of 50% or more of the outstandingshares of common stock of the Company; during any period of twelve consecutivecalendar months, individuals who were directors of the Company on the first dayof such period (together with any successors nominated or appointed by suchdirectors in the ordinary course) shall cease to constitute a majority of theboard of directors of the Company; or such Borrower shall cease to be aSubsidiary of the Company; or

(l)     withrespect to Cinergy only, any of CG&E, PSI Energy or ULH&P shall ceaseto be a Subsidiary of Cinergy;

then, and in every such event, the AdministrativeAgent shall (i) if requested by Banks having more than 66-2/3% in aggregateamount of the Commitments, by notice to such Borrower terminate the Commitmentsas to such Borrower and they shall thereupon terminate, and such Borrower shallno longer be entitled to borrow hereunder, and the Maximum Availability of suchBorrower shall be $0, and (ii) if requested by Banks holding more than 66-2/3%in aggregate principal amount of the Loans and Reimbursement Obligations ofsuch Borrower, by notice to such Borrower declare such Loans and ReimbursementObligations (together with accrued interest thereon) to be, and such Loans andReimbursement Obligations (together with accrued interest thereon) shallthereupon become, immediately due and payable without presentment, demand,protest or other notice of any kind, all of which are hereby waived by eachBorrower; *provided* that in thecase of any of the Events of Default specified in clause (g) or (h) above withrespect to such Borrower, without any notice to such Borrower or any other 

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act by the Administrative Agent or the Banks, theCommitments shall thereupon terminate with respect to such Borrower and theLoans and Reimbursement Obligations of such Borrower (together with accruedinterest thereon) shall become immediately due and payable without presentment,demand, protest or other notice of any kind, all of which are hereby waived byeach Borrower.

Section***6.02.*   Notice of Default.*  *The Administrative Agent shall give notice to aBorrower under Section 6.01(c) promptly upon being requested to do so by anyLender and shall thereupon notify all the Lenders thereof.

Section***6.03.*   Cash Cover.*  *Each Borrower agrees, in addition to the provisionsof Section 6.01 hereof, that upon the occurrence and during the continuance ofany Event of Default with respect to such Borrower, it shall, if requested bythe Administrative Agent upon the instruction of the Banks having at least 662/3% in the aggregate amount of the Commitments (or, if the Commitments shallhave been terminated, holding at least 66 2/3% of the Letter of CreditLiabilities for the account of such Borrower), deposit with the AdministrativeAgent an amount in immediately available funds (which funds shall be held ascollateral pursuant to arrangements mutually satisfactory to the AdministrativeAgent and such Borrower) equal to the aggregate amount available for drawingunder all Letters of Credit for the account of such Borrower then outstandingat such time; *provided*that uponthe occurrence of any Event of Default specified in Section 6.01(g) or 6.01(h)with respect to such Borrower, such Borrower shall pay such amount forthwithwithout any notice or demand or any other act by the Administrative Agent orthe Banks.

**Article 7The Administrative Agent**

Section***7.01.*   Appointment and Authorization.*  *Each Bank irrevocably appoints and authorizes theAdministrative Agent to take such action as agent on its behalf and to exercisesuch powers under this Agreement and the Notes as are delegated to theAdministrative Agent by the terms hereof or thereof, together with all suchpowers as are reasonably incidental thereto.

Section***7.02.*   Administrative Agent andAffiliates.*  *Barclays**shall have the same rights and powers under this Agreementas any other Bank and may exercise or refrain from exercising the same asthough it were not the Administrative Agent, and Barclays. and its affiliatesmay accept deposits from, lend money to, and generally engage in any kind ofbusiness with any Borrower or any Subsidiary or affiliate of any Borrower as ifit were not the Administrative Agent hereunder.

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Section***7.03.*   Action by AdministrativeAgent.*  *The obligations of theAdministrative Agent hereunder are only those expressly set forth herein.Without limiting the generality of the foregoing, the Administrative Agentshall not be required to take any action with respect to any Default, except asexpressly provided in Article 6.

Section***7.04.*   Consultation with Experts.*  *The Administrative Agent may consult with legalcounsel (who may be counsel for a Borrower), independent public accountants andother experts selected by it and shall not be liable for any action taken oromitted to be taken by it in good faith in accordance with the advice of suchcounsel, accountants or experts.

Section***7.05.*   Liability of AdministrativeAgent.*  *Neither the AdministrativeAgent nor any of its affiliates nor any of their respective directors,officers, agents or employees shall be liable to any Bank for any action takenor not taken by it in connection herewith (i) with the consent or at therequest of the Required Banks or (ii) in the absence of its own grossnegligence or willful misconduct. Neither the Administrative Agent nor any ofits affiliates nor any of their respective directors, officers, agents oremployees shall be responsible for or have any duty to ascertain, inquire intoor verify (i) any statement, warranty or representation made in connection withthis Agreement or any borrowing hereunder; (ii) the performance or observanceof any of the covenants or agreements of any Borrower; (iii) the satisfactionof any condition specified in Article 3, except receipt of items required to bedelivered to the Administrative Agent; or (iv) the validity, effectiveness orgenuineness of this Agreement, the Notes or any other instrument or writingfurnished in connection herewith. The Administrative Agent shall not incur anyliability by acting in reliance upon any notice, consent, certificate,statement, or other writing (which may be a bank wire, telex or similarwriting) believed by it in good faith to be genuine or to be signed by the properparty or parties. Without limiting the generality of the foregoing, the use ofthe term “agent” in this Agreement with reference to the Administrative Agentis not intended to connote any fiduciary or other implied (or express)obligations arising under agency doctrine of any applicable law. Instead, suchterm is used merely as a matter of market custom and is intended to create orreflect only an administrative relationship between independent contractingparties.

Section***7.06.*   Indemnification.*  *Each Bank shall, ratably in accordance with itsCommitment, indemnify the Administrative Agent, its affiliates and theirrespective directors, officers, agents and employees (to the extent notreimbursed by the Borrowers) against any cost, expense (including counsel feesand disbursements), claim, demand, action, loss or liability (except such asresult from such indemnitees’ gross negligence or willful misconduct) that suchindemnitees may suffer or incur in connection with this Agreement or any actiontaken or omitted by such indemnitees thereunder.

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Section***7.07.*   Credit Decision.*  *Each Bank acknowledges that it has, independently andwithout reliance upon any Agent or any other Bank, and based on such documentsand information as it has deemed appropriate, made its own credit analysis anddecision to enter into this Agreement. Each Bank also acknowledges that itwill, independently and without reliance upon any Agent or any other Bank, andbased on such documents and information as it shall deem appropriate at the time,continue to make its own credit decisions in taking or not taking any actionunder this Agreement.

Section***7.08.*   Successor AdministrativeAgent.*  *The Administrative Agentmay resign at any time by giving notice thereof to the Banks and the Borrowers.Upon any such resignation, (i) Cinergy, with the consent of the Required Banks(such consent not to be unreasonably withheld or delayed), or (ii) if an Eventof Default has occurred and is continuing, then the Required Banks, shall havethe right to appoint a successor Administrative Agent. If no successorAdministrative Agent shall have been so appointed, and shall have accepted suchappointment, within 30 days after the retiring Administrative Agent givesnotice of resignation, then the retiring Administrative Agent may, on behalf ofthe Banks, appoint a successor Administrative Agent, which shall be acommercial bank organized or licensed under the laws of the United States ofAmerica or of any State thereof and having a combined capital and surplus of atleast $250,000,000. Upon the acceptance of its appointment as AdministrativeAgent hereunder by a successor Administrative Agent, such successorAdministrative Agent shall thereupon succeed to and become vested with all therights and duties of the retiring Administrative Agent, and the retiringAdministrative Agent shall be discharged from its duties and obligations hereunder;*provided* that if such successorAdministrative Agent is appointed without the consent of Cinergy, suchsuccessor Administrative Agent may be replaced by Cinergy with the consent ofthe Required Banks so long as no Event of Default has occurred and iscontinuing at the time. After any retiring Administrative Agent’s resignationhereunder as Administrative Agent, the provisions of this Article shall inureto its benefit as to any actions taken or omitted to be taken by it while itwas Administrative Agent.

Section***7.09.*   Administrative Agent’s Fee.*  *Cinergy shall pay to the Administrative Agent for itsown account fees in the amounts and at the times previously agreed upon betweenCinergy and the Administrative Agent.

Section***7.10.*   Other Agents.*  *None of the Syndication Agent or the DocumentationAgents, in their capacity as such, shall have any duties or obligations of anykind under this Agreement.

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**Article 8Change in Circumstances**

Section***8.01.*   Basis forDetermining Interest Rate Inadequate or Unfair.*  *Ifon or prior to the first day of any Interest Period for any Euro-DollarBorrowing:

(a)    theAdministrative Agent is advised by the Euro-Dollar Reference Banks thatdeposits in dollars (in the applicable amounts) are not being offered to theEuro-Dollar Reference Banks in the relevant market for such Interest Period, or

(b)    Bankshaving 66-2/3% or more of the aggregate amount of the affected Loans advise theAdministrative Agent that the London Interbank Offered Rate as determined bythe Administrative Agent will not adequately and fairly reflect the cost tosuch Banks of funding their Euro-Dollar Loans for such Interest Period,

the Administrative Agent shall forthwith give noticethereof to the Borrowers and the Banks, whereupon until the Administrative Agentnotifies the Borrower that the circumstances giving rise to such suspension nolonger exist, (i) the obligations of the Banks to make Euro-Dollar Loans or tocontinue or convert outstanding Loans as or into Euro-Dollar Loans shall besuspended and (ii) each outstanding Euro-Dollar Loan shall be converted into aBase Rate Loan on the last day of the then current Interest Period applicablethereto. Unless the Borrower notifies the Administrative Agent at least oneDomestic Business Day before the date of any Euro-Dollar Borrowing for which aNotice of Borrowing has previously been given that it elects not to borrow onsuch date, such Borrowing shall instead be made as a Base Rate Borrowing.

Section***8.02.*   Illegality.*  *If on or after the date of this Agreement, theadoption of any applicable law, rule or regulation, or any change in anyapplicable law, rule or regulation, or any change in the interpretation oradministration thereof by any governmental authority, central bank orcomparable agency charged with the interpretation or administration thereof, orcompliance by any Bank (or its Euro-Dollar Lending Office) with anyrequest or directive (whether or not having the force of law) of any suchauthority, central bank or comparable agency shall make it unlawful orimpossible for any Bank (or its Euro-Dollar Lending Office) to make,maintain or fund any of its Euro-Dollar Loans and such Bank shall sonotify the Administrative Agent, the Administrative Agent shall forthwith givenotice thereof to the other Banks and the Borrowers, whereupon until such Banknotifies the Borrowers and the Administrative Agent that the circumstancesgiving rise to such suspension no longer exist, the obligation of such Bank tomake Euro-Dollar Loans, or to continue or convert outstanding Loans as orinto Euro-Dollar Loans, shall be suspended. Before giving any notice 

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to the Administrative Agent pursuant to this Section,such Bank shall designate a different Euro-Dollar Lending Office if suchdesignation will avoid the need for giving such notice and will not beotherwise disadvantageous to such Bank in the good faith exercise of itsdiscretion. If such notice is given, each Euro-Dollar Loan of such Bank thenoutstanding shall be converted to a Base Rate Loan either (a) on the last dayof the then current Interest Period applicable to such Euro-Dollar Loan if suchBank may lawfully continue to maintain and fund such Loan to such day or (b)immediately if such Bank shall determine that it may not lawfully continue tomaintain and fund such Loan to such day.

Section***8.03.*   Increased Costand Reduced Return.*  *(a)**If on or after the date of this Agreement, the adoption ofany applicable law, rule or regulation, or any change in any applicable law,rule or regulation, or any change in the interpretation or administrationthereof by any governmental authority, central bank or comparable agencycharged with the interpretation or administration thereof, or compliance by anyBank (the terms “Bank” and “Issuing Bank” shall include, for purposes of thisSection 8.03, the holding company of any Issuing Bank) (or its ApplicableLending Office) with any request or directive (whether or not having the forceof law) issued on or after such date of any such authority, central bank orcomparable agency shall impose, modify or deem applicable any reserve, specialdeposit or similar requirement (including, without limitation, any suchrequirement imposed by the Board of Governors of the Federal Reserve System,but excluding with respect to any Euro-Dollar Loan any such requirementincluded in an applicable Euro-Dollar Reserve Percentage) against assetsof, deposits with or for the account of, or credit extended by, any Bank (orits Applicable Lending Office) or shall impose on any Bank (or its ApplicableLending Office) or on the London interbank market any other condition (otherthan in respect of Taxes or Other Taxes) affecting its Euro-Dollar Loans, itsNote or its obligation to make Euro-Dollar Loans or its obligations hereunderin respect of Letters of Credit and the result of any of the foregoing is toincrease the cost to such Bank (or its Applicable Lending Office) of making ormaintaining any Euro-Dollar Loan or of issuing or participating in any Letterof Credit, or to reduce the amount of any sum received or receivable by suchBank (or its Applicable Lending Office) under this Agreement or under its Notewith respect thereto, by an amount deemed by such Bank to be material, then,within 15 days after demand by such Bank (with a copy to the AdministrativeAgent), each Borrower shall pay to such Bank its Appropriate Share of suchadditional amount or amounts as will compensate such Bank for such increasedcost or reduction; *provided* thatno such amount shall be payable with respect to any period commencing more than90 days prior to the date such Bank first notifies the Borrowers of itsintention to demand compensation therefor under this Section 8.03(a).

(b)    If anyBank shall have determined that, on or after the date of this Agreement, theadoption of any applicable law, rule or regulation regarding 

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capital adequacy, or any change in any such law, ruleor regulation, or any change in the interpretation or administration thereof byany governmental authority, central bank or comparable agency charged with theinterpretation or administration thereof, or any request or directive regardingcapital adequacy (whether or not having the force of law) of any suchauthority, central bank or comparable agency given or made after the date ofthis Agreement, has or would have the effect of reducing the rate of return oncapital of such Bank (or its Parent) as a consequence of such Bank’sobligations hereunder to a level below that which such Bank (or its Parent) couldhave achieved but for such adoption, change, request or directive (taking intoconsideration its policies with respect to capital adequacy) by an amountdeemed by such Bank to be material, then from time to time, within 15 daysafter demand by such Bank (with a copy to the Administrative Agent), eachBorrower shall pay to such Bank its Appropriate Share of such additional amountor amounts as will compensate such Bank (or its Parent) for such reduction; *provided* that no such amount shall bepayable with respect to any period commencing less than 30 days after the datesuch Bank first notifies the Borrowers of its intention to demand compensationunder this Section 8.03(b).

(c)    Each Bankwill promptly notify the Borrowers and the Administrative Agent of any event ofwhich it has knowledge, occurring after the date hereof, which will entitlesuch Bank to compensation pursuant to this Section and will designate adifferent Applicable Lending Office if such designation will avoid the needfor, or reduce the amount of, such compensation and will not, in the judgmentof such Bank, be otherwise disadvantageous to such Bank. A certificate of anyBank claiming compensation under this Section and setting forth the additionalamount or amounts to be paid to it hereunder shall be conclusive in the absenceof manifest error. In determining such amount, such Bank may use any reasonableaveraging and attribution methods.

(d)    The “**Appropriate Share**” of a Borrower with respect to any amountpayable hereunder is the sum of (i) to the extent such amount is properlyallocable to Loans and Letters of Credit outstanding hereunder, the portion ofsuch amount properly allocable to the Loans and Letter of Credit outstanding toor for the account of such Borrower, and (ii) to the extent such amount is notproperly allocable to Loans and Letters of Credit outstanding hereunder, theAppropriate Share shall be the product of the Availability Percentage of suchBorrower and such amount.

Section***8.04.*   Taxes.*  *(a)**For purposesof this Section 8.04, the following terms have the following meanings:

“**Taxes**”means any and all present or future taxes, duties, levies, imposts, deductions,charges or withholdings with respect to any payment by the Borrower pursuant tothis Agreement or any Note, and all liabilities with respect thereto, 

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*excluding* (i) inthe case of each Bank and the Administrative Agent, taxes imposed on itsincome, net worth or gross receipts and franchise or similar taxes imposed onit by a jurisdiction under the laws of which such Bank or the AdministrativeAgent (as the case may be) is organized or in which its principal executiveoffice is located or, in the case of each Bank, in which its Applicable LendingOffice is located and (ii) in the case of each Bank, any United Stateswithholding tax imposed on such payments except to the extent that such Bank issubject to United States withholding tax by reason of a U.S. Tax Law Change.

“**Other Taxes**”means any present or future stamp or documentary taxes and any other excise orproperty taxes, or similar charges or levies, which arise from any payment madepursuant to this Agreement or under any Note or from the execution or deliveryof, or otherwise with respect to, this Agreement or any Note.

“**U.S. Tax Law Change**” means with respect toany Bank or Participant the occurrence (x) in the case of each Bank listed onthe signature pages hereof, after the date of its execution and delivery ofthis Agreement and (y) in the case of any other Bank, after the date such Bankshall have become a Bank hereunder, and (z) in the case of each Participant,after the date such Participant became a Participant hereunder, of the adoptionof any applicable U.S. federal law, U.S. federal rule or U.S. federal regulationrelating to taxation, or any change therein, or the entry into force,modification or revocation of any income tax convention or treaty to which theUnited States is a party.

(b)    Any andall payments by any Borrower to or for the account of any Bank or theAdministrative Agent hereunder or under any Note shall be made withoutdeduction for any Taxes or Other Taxes; *provided*that, if any Borrower shall be required by law to deduct any Taxes or OtherTaxes from any such payments, (i) the sum payable shall be increased asnecessary so that after making all required deductions (including deductionsapplicable to additional sums payable under this Section 8.04) such Bank or theAdministrative Agent (as the case may be) receives an amount equal to the sumit would have received had no such deductions been made, (ii) such Borrowershall make such deductions, (iii) such Borrower shall pay the full amountdeducted to the relevant taxation authority or other authority in accordancewith applicable law and (iv) such Borrower shall furnish to the AdministrativeAgent, at its address referred to in Section 9.01, the original or a certifiedcopy of a receipt evidencing payment thereof.

(c)    EachBorrower agrees to indemnify each Bank and the Administrative Agent for its AppropriateShare of the full amount of Taxes or Other Taxes (including, withoutlimitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction onamounts payable under this Section 8.04) paid by such Bank or theAdministrative Agent (as the case may be) and any liability 

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(including penalties, interest and expenses) arisingtherefrom or with respect thereto. This indemnification shall be paid within 15days after such Bank or the Administrative Agent (as the case may be) makesdemand therefor.

(d)    Each Bankorganized under the laws of a jurisdiction outside the United States, on orprior to the date of its execution and delivery of this Agreement in the caseof each Bank listed on the signature pages hereof and on or prior to the dateon which it becomes a Bank in the case of each other Bank, and from time totime thereafter as required by law (but only so long as such Bank remainslawfully able to do so), shall provide the Borrowers two completed and dulyexecuted copies of Internal Revenue Service form W-8BEN or W-8ECI, asappropriate, or any successor form prescribed by the Internal Revenue Service,or other documentation reasonably requested by the Borrowers, certifying thatsuch Bank is entitled to benefits under an income tax treaty to which theUnited States is a party which exempts the Bank from United States withholdingtax or reduces the rate of withholding tax on payments of interest for theaccount of such Bank or certifying that the income receivable pursuant to thisAgreement is effectively connected with the conduct of a trade or business inthe United States.

(e)    For anyperiod with respect to which a Bank has failed to provide the Borrowers withthe appropriate form pursuant to Section 8.04(d) (unless such failure is due toa U.S. Tax Law Change), such Bank shall not be entitled to indemnificationunder Section 8.04(b) or 8.04(c) with respect to any Taxes or Other Taxes whichwould not have been payable had such form been so provided; *provided* that if a Bank, which isotherwise exempt from or subject to a reduced rate of withholding tax, becomessubject to Taxes because of its failure to deliver a form required hereunder,the Borrowers shall take such steps as such Bank shall reasonably request toassist such Bank to recover such Taxes (it being understood, however, that theBorrowers shall have no liability to such Bank in respect of such Taxes).

(f)     If anyBorrower is required to pay additional amounts to or for the account of anyBank pursuant to this Section 8.04, then such Bank will take such action(including changing the jurisdiction of its Applicable Lending Office) as inthe good faith judgment of such Bank (i) will eliminate or reduce any suchadditional payment which may thereafter accrue and (ii) is not otherwisedisadvantageous to such Bank.

(g)    If anyBank or the Administrative Agent receives a refund (including a refund in theform of a credit against taxes that are otherwise payable by the Bank or theAdministrative Agent) of any Taxes or Other Taxes for which any Borrower hasmade a payment under Section 8.04(b) or (c) and such refund was received fromthe taxing authority which originally imposed such Taxes or Other Taxes, suchBank or the Administrative Agent agrees to reimburse such Borrower to theextent of such refund; *provided*that nothing contained in this 

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paragraph (g) shall require any Bank or theAdministrative Agent to seek any such refund or make available its tax returns(or any other information relating to its taxes which it deems to beconfidential).

Section***8.05.*   Base Rate LoansSubstituted for Affected Euro-Dollar Loans.*  *If(i) the obligation of any Bank to make or to continue or convert outstandingLoans as or into Euro-Dollar Loans has been suspended pursuant to Section8.02 or (ii) any Bank has demanded compensation under Section 8.03(a) or 8.04with respect to its Euro-Dollar Loans and the Borrower shall, by at least fiveEuro-Dollar Business Days’ prior notice to such Bank through theAdministrative Agent, have elected that the provisions of this Section shallapply to such Bank, then, unless and until such Bank notifies the Borrowersthat the circumstances giving rise to such suspension or demand forcompensation no longer apply:

(a)    all Loanswhich would otherwise be made by such Bank as (or continued as or converted to)Euro-Dollar Loans, as the case may be, shall instead be Base Rate Loans(on which interest and principal shall be payable contemporaneously with therelated Euro-Dollar Loans of the other Banks), and

(b)    after eachof its Euro-Dollar Loans has been repaid, all payments of principal whichwould otherwise be applied to repay such Loans shall be applied to repay itsBase Rate Loans instead.

If such Bank notifies the Borrowers that thecircumstances giving rise to such suspension or demand for compensation nolonger exist, the principal amount of each such Base Rate Loan shall beconverted into a Euro-Dollar Loan on the first day of the next succeedingInterest Period applicable to the related Euro-Dollar Loans of the other Banks.

Section***8.06.*   Substitution ofBank; Termination Option.*  *If (i)the obligation of any Bank to make or to convert or continue outstanding Loansas or into Euro-Dollar Loans has been suspended pursuant to Section 8.02, (ii)any Bank has demanded compensation under Section 8.03 or 8.04, (iii) any Bankexercises its right not to extend its Commitment Termination Date pursuant toSection 2.01(c) or (iv) Investment Grade Status ceases to exist as to any Bank,then:

(a)    Cinergyshall have the right, with the assistance of the Administrative Agent, todesignate a substitute bank or banks (which may be one or more of the Banks)mutually satisfactory to Cinergy, the Administrative Agent and the IssuingBanks (whose consent shall not be unreasonably withheld or delayed) to purchasefor cash, pursuant to an Assignment and Assumption Agreement in substantiallythe form of Exhibit D hereto, the outstanding Loans of such Bank and assume theCommitment and Letter of Credit Liabilities of such 

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Bank, without recourse to or warranty by, or expenseto, such Bank, for a purchase price equal to the principal amount of all ofsuch Bank’s outstanding Loans and funded Letter of Credit Liabilities plus anyaccrued but unpaid interest thereon and the accrued but unpaid fees in respectof such Bank’s Commitment hereunder and all other amounts payable by theBorrowers to such Bank hereunder plus such amount, if any, as would be payablepursuant to Section 2.13 if the outstanding Loans of such Bank were prepaid intheir entirety on the date of consummation of such assignment; and

(b)    if at thetime Investment Grade Status exists as to the Borrowers, Cinergy may elect toterminate this Agreement as to such Bank; *provided*that (i) Cinergy notifies such Bank through the Administrative Agent of suchelection at least three Euro-Dollar Business Days before the effectivedate of such termination, (ii) the Borrowers repay or prepay the principalamount of all outstanding Loans made by such Bank plus any accrued but unpaidinterest thereon and the accrued but unpaid fees in respect of such Bank’sCommitment hereunder plus all other amounts payable by the Borrower to suchBank hereunder, not later than the effective date of such termination and (iii)if at the effective date of such termination, any Letter of Credit Liabilitiesare outstanding, the conditions specified in Section 3.02 would be satisfied(after giving effect to such termination) were the related Letters of Creditissued on such date. Upon satisfaction of the foregoing conditions, theCommitment of such Bank shall terminate on the effective date specified in suchnotice, its participation in any outstanding Letters of Credit shall terminateon such effective date and the participations of the other Banks therein shallbe redetermined as of such date as if such Letters of Credit had been issued onsuch date.

**Article 9Miscellaneous**

Section***9.01.*   Notices.*  *All notices, requests and other communications to anyparty hereunder shall be in writing (including bank wire, telex, facsimiletransmission or similar writing) and shall be given to such party: (x) in thecase of any Borrower or the Administrative Agent, at its address or telecopy ortelex number set forth on the signature pages hereof, (y) in the case of anyBank, at its address or telecopy or telex number set forth in itsAdministrative Questionnaire or (z) in the case of any party, such otheraddress or telecopy or telex number as such party may hereafter specify for thepurpose by notice to the Administrative Agent and the Borrowers. Each suchnotice, request or other communication shall be effective (i) if given bytelecopy or telex, when such telecopy or telex is transmitted to the telecopyor telex number specified in this Section and the appropriate answerback orconfirmation slip, as the case may be, is received or (ii) if given by anyother means, when delivered at the address specified in this 

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Section; *provided*that notices to the Administrative Agent or any Issuing Bank under Article 2 orArticle 8 shall not be effective until delivered.

Section***9.02.*   No Waivers.*  *No failure or delay by the Administrative Agent orany Bank in exercising any right, power or privilege hereunder or under anyNote shall operate as a waiver thereof nor shall any single or partial exercisethereof preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. The rights and remedies herein provided shallbe cumulative and not exclusive of any rights or remedies provided by law.

Section***9.03.*   Expenses;Indemnification.*  *(a)**Each Borrower shall pay (i) its Appropriate Share of allreasonable out-of-pocket expenses of the Administrative Agent,including reasonable fees and disbursements of special counsel for the Agents,in connection with the preparation of this Agreement, any waiver or consenthereunder or any amendment hereof or any Default or alleged Default withrespect to such Borrower hereunder and (ii) if an Event of Default with respectto such Borrower occurs, all reasonable out-of-pocket expensesincurred by the Administrative Agent or any Bank, including reasonable fees anddisbursements of counsel, in connection with such Event of Default andcollection and other enforcement proceedings resulting therefrom.

(b)    EachBorrower agrees to indemnify each Agent and each Bank, their respectiveaffiliates and the respective directors, officers, agents and employees of theforegoing (each an “**Indemnitee**”)and hold each Indemnitee harmless from and against any and all liabilities,losses, damages, costs and expenses of any kind, including, without limitation,the reasonable fees and disbursements of counsel, which may be incurred by suchIndemnitee in connection with any investigative, administrative or judicialproceeding (whether or not such Indemnitee shall be designated a party thereto)relating to or arising out of this Agreement or any actual or proposed use ofproceeds of Loans hereunder, in each case to the extent of such Borrower’sAppropriate Share; *provided* thatno Indemnitee shall have the right to be indemnified hereunder for suchIndemnitee’s own gross negligence or willful misconduct as determined by acourt of competent jurisdiction.

Section***9.04.*   Sharing of Set-offs.*  *Each Bank agrees that if it shall, by exercising anyright of set-off or counterclaim or otherwise, receive payment of aproportion of the aggregate amount then due with respect to the Loans andLetter of Credit Liabilities held by it which is greater than the proportionreceived by any other Bank in respect of the aggregate amount then due withrespect to the Loans and Letter of Credit Liabilities held by such other Bank,the Bank receiving such proportionately greater payment shall purchase suchparticipations in the Loans and Letter of Credit Liabilities held by the otherBanks, and such other adjustments shall be made, as may be required so that allsuch payments with respect to the Loans and Letter of Credit Liabilities heldby the Banks shall be 

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shared by the Banks pro rata; *provided* that nothing in this Sectionshall impair the right of any Bank to exercise any right of set-off orcounterclaim it may have and to apply the amount subject to such exercise tothe payment of indebtedness of a Borrower other than its indebtedness underthis Agreement.

Section***9.05.*   Amendments andWaivers. (a)*  *Anyprovision of this Agreement or the Notes may be amended or waived if, but onlyif, such amendment or waiver is in writing and is signed by each Borrower andthe Required Banks (and, if the rights or duties of any Agent or any IssuingBank are affected thereby, by such Person); *provided*that no such amendment or waiver shall (x) unless signed by each affected Bank,(i) increase the Commitment of any Bank or subject any Bank to any additionalobligation, (ii) reduce the principal of or rate of interest on any Loan or theamount to be reimbursed in respect of any Letter of Credit or any interestthereon or any fees hereunder or (iii) postpone the date fixed for any paymentof principal of or interest on any Loan or for reimbursement in respect of anyLetter of Credit or interest thereon or any fees hereunder or for terminationof any Commitment or (y) unless signed by all Banks, (i) change the definitionof Required Banks or the provisions of this Section 9.05 or (ii) change the provisionsof Section 9.04.

(b)    ThisAgreement may be amended by Cinergy to remove any of CG&E, PSI Energy orULH&P as a Borrower (a “**Removed Borrower**”)hereunder subject to: (i) the receipt by the Administrative Agent of priorwritten notification from Cinergy of such amendment, (ii) repayment in full ofall Loans made to such Borrower, (iii) cash collateralization of all amountsavailable for drawing under Letters of Credit issued for the account of suchBorrower (or the amendment of such Letter of Credit to provide for Cinergy asthe account party) and (iv) repayment in full of all other amounts owing bysuch Borrower under this Agreement (it being agreed that any such repaymentshall be in accordance with the other terms of this Agreement). Upon the satisfactionof the foregoing conditions the rights and obligations of such Removed Borrowerhereunder shall terminate; *provided, however*,that the obligations of such Removed Borrower under Section 9.03 shall survivesuch amendment.

Section***9.06.*   Successors andAssigns.*  *(a)**Theprovisions of this Agreement shall be binding upon and inure to the benefit ofthe parties hereto and their respective successors and assigns and eachIndemnitee, except that no Borrower may assign or otherwise transfer any of itsrights under this Agreement without the prior written consent of all Banks.

(b)    Any Bankmay, with the consent (unless an Event of Default then exists) of Cinergy (suchconsent not to be unreasonably withheld or delayed), at any time grant to oneor more banks or other institutions (each a “**Participant**”)participating interests in its Commitment or any or all of its Loans and Letterof Credit Liabilities; *provided* thatany Bank may, without the consent of any 

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Borrower, at any time grant participating interests inits Commitment or any or all of its Loans and Letter of Credit Liabilities toanother Bank, an Approved Fund or an Affiliate of such transferor Bank. In theevent of any such grant by a Bank of a participating interest to a Participant,whether or not upon notice to the Administrative Agent, such Bank shall remainresponsible for the performance of its obligations hereunder, and theBorrowers, the Issuing Banks and the Administrative Agent shall continue todeal solely and directly with such Bank in connection with such Bank’s rightsand obligations under this Agreement. Any agreement pursuant to which any Bankmay grant such a participating interest shall provide that such Bank shallretain the sole right and responsibility to enforce the obligations of theBorrowers hereunder including, without limitation, the right to approve anyamendment, modification or waiver of any provision of this Agreement; *provided* that such participation agreementmay provide that such Bank will not agree to any modification, amendment orwaiver of this Agreement described in clause (x) (i), (ii) or (iii) of Section9.05(a) without the consent of the Participant. Each Borrower agrees that eachParticipant shall, to the extent provided in its participation agreement, beentitled to the benefits of Article 8 with respect to its participatinginterest, subject to the performance by such Participant of the obligations ofa Bank thereunder. An assignment or other transfer which is not permitted bysubsection (c) or (d) below shall be given effect for purposes of thisAgreement only to the extent of a participating interest granted in accordancewith this subsection (b).

(c)    Any Bankmay at any time assign to one or more banks or other financial institutions(each an “**Assignee**”) all, or aproportionate part (equivalent to an initial Commitment of not less than$10,000,000 (unless Cinergy and the Administrative Agent shall otherwiseagree)) of all, of its rights and obligations under this Agreement and its Note(if any), and such Assignee shall assume such rights and obligations, pursuantto an Assignment and Assumption Agreement in substantially the form of ExhibitD hereto executed by such Assignee and such transferor Bank, with (and onlywith and subject to) the prior written consent of the Issuing Banks, theAdministrative Agent (which shall not be unreasonably withheld or delayed) and,so long as no Event of Default has occurred and is continuing, Cinergy (whichshall not be unreasonably withheld or delayed); *provided* that unless such assignment is of the entire right,title and interest of the transferor Bank hereunder, after making any suchassignment such transferor Bank shall have a Commitment of at least $10,000,000(unless Cinergy and the Administrative Agent shall otherwise agree). Uponexecution and delivery of such instrument of assumption and payment by suchAssignee to such transferor Bank of an amount equal to the purchase priceagreed between such transferor Bank and such Assignee, such Assignee shall be aBank party to this Agreement and shall have all the rights and obligations of aBank with a Commitment as set forth in such instrument of assumption, and thetransferor Bank shall be released from its obligations hereunder to acorresponding extent, and no further consent 

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or action by any party shall be required. Upon theconsummation of any assignment pursuant to this subsection (c), the transferorBank, the Administrative Agent and the Borrowers shall make appropriatearrangements so that, if required by the Assignee, a Note(s) is issued to theAssignee. If the Assignee is not incorporated under the laws of the UnitedStates of America or a state thereof, it shall, prior to the first date onwhich interest or fees are payable hereunder for its account, deliver to theBorrowers and the Administrative Agent certification as to exemption fromdeduction or withholding of any United States federal income taxes inaccordance with Section 8.04. All assignments (other than assignments toAffiliates) shall be subject to a transaction fee established by, and payableby the transferor Bank to, the Administrative Agent for its own account (whichshall not exceed $5,000).

(d)    Any Bankmay at any time assign all or any portion of its rights under this Agreementand its Note (if any) to a Federal Reserve Bank. No such assignment shallrelease the transferor Bank from its obligations hereunder or modify any suchobligations.

(e)    NoAssignee, Participant or other transferee of any Bank’s rights (including anyApplicable Lending Office other than such Bank’s initial Applicable LendingOffice) shall be entitled to receive any greater payment under Section 8.03 or8.04 than such Bank would have been entitled to receive with respect to therights transferred, unless such transfer is made by reason of the provisions ofSection 8.02, 8.03 or 8.04 requiring such Bank to designate a differentApplicable Lending Office under certain circumstances or at a time when thecircumstances giving rise to such greater payment did not exist.

Section***9.07.*   Collateral.*  *Each of the Banks represents to the AdministrativeAgent and each of the other Banks that it in good faith is not relying upon any“**margin stock**” (as defined inRegulation U) as collateral in the extension or maintenance of the creditprovided for in this Agreement.

Section***9.08.*   Confidentiality.*  *Each Agent and each Bank agrees to keep anyinformation delivered or made available by any Borrower pursuant to thisAgreement confidential from anyone other than persons employed or retained bysuch Bank and its affiliates who are engaged in evaluating, approving,structuring or administering the credit facility contemplated hereby; *provided* that nothing herein shall preventany Bank from disclosing such information (a) to any other Bank or any Agent,(b) to any other Person if reasonably incidental to the administration of thecredit facility contemplated hereby, (c) upon the order of any court oradministrative agency, (d) upon the request or demand of any regulatory agencyor authority, (e) which had been publicly disclosed other than as a result of adisclosure by any Agent or any Bank prohibited by this Agreement, (f) inconnection with any litigation to which any Agent, any Bank or its subsidiariesor Parent may be a party, (g) to the extent necessary in connection 

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with the exercise of any remedy hereunder, (h) to suchBank’s or any Agent’s legal counsel and independent auditors and (i) subject toprovisions substantially similar to those contained in this Section 9.08, toany actual or proposed Participant or Assignee.

Section***9.09.*   Governing Law; Submission toJurisdiction.*  *ThisAgreement and each Note (if any) shall be construed in accordance with andgoverned by the law of the State of New York. Each Borrower hereby submits tothe nonexclusive jurisdiction of the United States District Court for theSouthern District of New York and of any New York State court sitting in NewYork City for purposes of all legal proceedings arising out of or relating tothis Agreement or the transactions contemplated hereby. Each Borrowerirrevocably waives, to the fullest extent permitted by law, any objection whichit may now or hereafter have to the laying of the venue of any such proceedingbrought in such a court and any claim that any such proceeding brought in sucha court has been brought in an inconvenient forum.

Section***9.10.*   Counterparts; Integration.*  *This Agreement may be signed in any number ofcounterparts, each of which shall be an original, with the same effect as ifthe signatures thereto and hereto were upon the same instrument. This Agreementconstitutes the entire agreement and understanding among the parties hereto andsupersedes any and all prior agreements and understandings, oral or written,relating to the subject matter hereof.

Section***9.11.*   WAIVER OF JURY TRIAL.*  *EACH OF THE BORROWERS, THE AGENTS, THE ISSUING BANKSAND THE BANKS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLELAW, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGALPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONSCONTEMPLATED HEREBY.

Section***9.12.*   USA Patriot Act.*  *Each Bank hereby notifies each Borrower that pursuantto the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signedinto law October 26, 2001) (the “**Act**”),it is required to obtain, verify and record information that identifies suchBorrower, which information includes the name and address of such Borrower andother information that will allow such Bank to identify such Borrower in accordancewith the Act.

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IN WITNESS WHEREOF, the parties hereto have causedthis Agreement to be duly executed by their respective authorized officers asof the day and year first above written.
|        | CINERGY CORP.                                                             |
|--------|---------------------------------------------------------------------------|
|   |                                                                      |
|   | By:                                                                       |   |
|   |                                                                      | Title: | Assistant Treasurer |
|   |                                                                      | Address: | 139 East Fourth Street  Cincinnati, OH 45202 |
|   |                                                                      | Attention: | Stephen G. De May |
|   |                                                                      | Telecopy number: | 704-382-3288 |
|   |                                                                      | Taxpayer ID: | 31-1385023 |
|   |                                                                      |
|   | THE CINCINNATI GAS & ELECTRIC COMPANY (d/b/a  DUKE ENERGY OHIO, INC.) |
|   |                                                                      |
|   | By:                                                                       |   |
|   |                                                                      | Title: | Assistant Treasurer |
|   |                                                                      | Address: | 139 East Fourth Street  Cincinnati, OH 45202 |
|   |                                                                      | Attention: | Stephen G. De May |
|   |                                                                      | Telecopy number: | 704-382-3288 |
|   |                                                                      | Taxpayer ID: | 31-0240030 |
|   |                                                                      |
|   | PSI ENERGY, INC. (d/b/a DUKE ENERGY INDIANA, INC.)                        |
|   |                                                                      |
|   | By:                                                                       |   |
|   |                                                                      | Title: | Assistant Treasurer |
|   |                                                                      | Address: | 1000 East Main Street  Plainfield, Indiana 46168 |
|   |                                                                      | Attention: | Stephen G. De May |
|   |                                                                      | Telecopy number: | 704-382-3288 |
|   |                                                                      | Taxpayer ID: | 35-0594457 |

 

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|        | THE UNION LIGHT, HEAT AND POWER COMPANY (d/b/a DUKE  ENERGY KENTUCKY, INC.) |
|--------|-----------------------------------------------------------------------------|
|   |                                                                        |
|   | By:                                                                         |   |
|   |                                                                        | Title: | Assistant Treasurer |
|   |                                                                        | Address: | 139 East Fourth Street  Cincinnati, OH 45202 |
|   |                                                                        | Attention: | Stephen G. De May |
|   |                                                                        | Telecopy number: | 704-382-3288 |
|   |                                                                        | Taxpayer ID: | 31-0473080 |

 

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|        | BARCLAYS BANK PLC, as Administrative Agent, as an  Issuing Bank and as a Lender |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   | By:                                                                             |   |
|   |                                                                            | Name: |   |
|   |                                                                            | Title: |   |
|   |                                                                            |
|   | By:                                                                             |   |
|   |                                                                            | Name: |   |
|   |                                                                            | Title: |   |

 

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|        | JPMORGAN CHASE BANK, N.A., as Syndication Agent, as  an Issuing Bank and as a Lender |
|--------|--------------------------------------------------------------------------------------|
|   |                                                                                 |
|   | By:                                                                                  |   |
|   |                                                                                 | Name: |   |
|   |                                                                                 | Title: |   |

 

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|        | BANK OF AMERICA, N.A., as a Lender |
|--------|------------------------------------|
|   |                               |
|   | By:                                |   |
|   |                               | Name: |   |
|   |                               | Title: |   |

 

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|        | CITIBANK, N.A., as a Lender |
|--------|-----------------------------|
|   |                        |
|   | By:                         |   |
|   |                        | Name: |   |
|   |                        | Title: |   |

 

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|        | WACHOVIA BANK, NATIONAL ASSOCIATION, as an Issuing  Bank and as a Lender |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |
|   | By:                                                                      |   |
|   |                                                                     | Name: |   |
|   |                                                                     | Title: |   |

 

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|        | ABN AMRO BANK N.V., as a Lender |
|--------|---------------------------------|
|   |                            |
|   | By:                             |   |
|   |                            | Name: |   |
|   |                            | Title: |   |
|   |                            |
|   | By:                             |   |
|   |                            | Name: |   |
|   |                            | Title: |   |

 

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|        | DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender |
|--------|-----------------------------------------------|
|   |                                          |
|   | By:                                           |   |
|   |                                          | Name: |   |
|   |                                          | Title: |   |
|   |                                          |
|   | By:                                           |   |
|   |                                          | Name: |   |
|   |                                          | Title: |   |

 

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|        | THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH,  as a Lender |
|--------|-------------------------------------------------------------------|
|   |                                                              |
|   | By:                                                               |   |
|   |                                                              | Name: |   |
|   |                                                              | Title: |   |

 

----

 
|        | UBS LOAN FINANCE LLC, as a Lender |
|--------|-----------------------------------|
|   |                              |
|   | By:                               |   |
|   |                              | Name: |   |
|   |                              | Title: |   |
|   |                              |
|   | By:                               |   |
|   |                              | Name: |   |
|   |                              | Title: |   |

 

----

 
|        | BNP PARIBAS, as a Lender |
|--------|--------------------------|
|   |                     |
|   | By:                      |   |
|   |                     | Name: |   |
|   |                     | Title: |   |
|   |                     |
|   | By:                      |   |
|   |                     | Name: |   |
|   |                     | Title: |   |

 

----

 
|        | CALYON NEW YORK BRANCH, as a Lender |
|--------|-------------------------------------|
|   |                                |
|   | By:                                 |   |
|   |                                | Name: |   |
|   |                                | Title: |   |
|   |                                |
|   | By:                                 |   |
|   |                                | Name: |   |
|   |                                | Title: |   |

 

----

 
|        | HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender |
|--------|--------------------------------------------------|
|   |                                             |
|   | By:                                              |   |
|   |                                             | Name: |   |
|   |                                             | Title: |   |

 

----

 
|        | KEYBANK NATIONAL ASSOCIATION, as a Lender |
|--------|-------------------------------------------|
|   |                                      |
|   | By:                                       |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |

 

----

 
|        | MIZUHO CORPORATE BANK, LTD., as a Lender |
|--------|------------------------------------------|
|   |                                     |
|   | By:                                      |   |
|   |                                     | Name: |   |
|   |                                     | Title: |   |

 

----

 
|        | MORGAN STANLEY BANK, as a Lender |
|--------|----------------------------------|
|   |                             |
|   | By:                              |   |
|   |                             | Name: |   |
|   |                             | Title: |   |

 

----

 
|        | THE ROYAL BANK OF SCOTLAND PLC, NEW YORK BRANCH, as  a Lender |
|--------|---------------------------------------------------------------|
|   |                                                          |
|   | By:                                                           |   |
|   |                                                          | Name: |   |
|   |                                                          | Title: |   |

 

----

 
|        | WILLIAM STREET COMMITMENT CORPORATION, as a Lender                  |
|--------|---------------------------------------------------------------------|
|   |                                                                |
|   | (Recourse only to assets of William Street  Commitment Corporation) |
|   |                                                                |
|   | By:                                                                 |   |
|   |                                                                | Name: |   |
|   |                                                                | Title: |   |

 

----

 
|        | PNC BANK, NATIONAL ASSOCIATION, as a Lender |
|--------|---------------------------------------------|
|   |                                        |
|   | By:                                         |   |
|   |                                        | Name: |   |
|   |                                        | Title: |   |

 

----

 
|        | UNION BANK OF CALIFORNIA, N.A., as a Lender |
|--------|---------------------------------------------|
|   |                                        |
|   | By:                                         |   |
|   |                                        | Name: |   |
|   |                                        | Title: |   |

 

----

 
|        | LEHMAN BROTHERS BANK, FSB, as a Lender |
|--------|----------------------------------------|
|   |                                   |
|   | By:                                    |   |
|   |                                   | Name: |   |
|   |                                   | Title: |   |

 

----

 
|        | FIFTH THIRD BANK, as a Lender |
|--------|-------------------------------|
|   |                          |
|   | By:                           |   |
|   |                          | Name: |   |
|   |                          | Title: |   |

 

----

 
|        | THE BANK OF NEW YORK, as a Lender |
|--------|-----------------------------------|
|   |                              |
|   | By:                               |   |
|   |                              | Name: |   |
|   |                              | Title: |   |

 

----

 
|        | MELLON BANK, N.A., as a Lender |
|--------|--------------------------------|
|   |                           |
|   | By:                            |   |
|   |                           | Name: |   |
|   |                           | Title: |   |

 

----

 
|        | MERRILL LYNCH BANK USA, as a Lender |
|--------|-------------------------------------|
|   |                                |
|   | By:                                 |   |
|   |                                | Name: |   |
|   |                                | Title: |   |

 

----

 
|        | THE BANK OF NOVA SCOTIA, as a Lender |
|--------|--------------------------------------|
|   |                                 |
|   | By:                                  |   |
|   |                                 | Name: |   |
|   |                                 | Title: |   |

 

----

**COMMITMENTSCHEDULE**
| **Lender**                                           | ** ** | **Commitment** | ** **       |
|------------------------------------------------------|------------|----------------|------------------|
| Barclays Bank  PLC                                   |       | $              | 141,000,000.00   |   |
| JPMorgan Chase  Bank, N.A.                           |       | 141,000,000.00 |             |
| Bank of America,  N.A.                               |       | 130,000,000.00 |             |
| Citibank, N.A.                                       |       | 130,000,000.00 |             |
| Wachovia Bank,  National Association                 |       | 130,000,000.00 |             |
| ABN AMRO Bank  N.V.                                  |       | 82,000,000.00  |             |
| Deutsche Bank AG  New York Branch                    |       | 82,000,000.00  |             |
| The Bank of  Tokyo-Mitsubishi, Ltd., New York Branch |       | 82,000,000.00  |             |
| UBS Loan Finance  LLC                                |       | 82,000,000.00  |             |
| BNP Paribas                                          |       | 80,000,000.00  |             |
| Calyon New York  Branch                              |       | 80,000,000.00  |             |
| HSBC Bank USA,  National Association                 |       | 80,000,000.00  |             |
| KeyBank National  Association                        |       | 70,000,000.00  |             |
| Mizuho Corporate  Bank, Ltd.                         |       | 70,000,000.00  |             |
| Morgan Stanley  Bank                                 |       | 70,000,000.00  |             |
| The Royal Bank  of Scotland plc, New York Branch     |       | 70,000,000.00  |             |
| William Street  Commitment Corporation               |       | 70,000,000.00  |             |
| PNC Bank,  National Association                      |       | 65,000,000.00  |             |
| Union Bank of  California, N.A.                      |       | 65,000,000.00  |             |
| Lehman Brothers  Bank, FSB                           |       | 60,000,000.00  |             |
| Fifth Third Bank                                     |       | 50,000,000.00  |             |
| The Bank of New  York                                |       | 50,000,000.00  |             |
| Mellon Bank,  N.A.                                   |       | 40,000,000.00  |             |
| Merrill Lynch  Bank USA                              |       | 40,000,000.00  |             |
| The Bank of Nova  Scotia                             |       | 40,000,000.00  |             |
| Total                                                |       | $              | 2,000,000,000.00 |   |

 

----

**Pricing Schedule**

Each of “**Euro-Dollar Margin**” and “**Facility FeeRate**” means, for any date, the rate set forth below in theapplicable row and column corresponding to the column and “**Utilization**”that exist on such date:

(basis points perannum)

 
| **Basis for Pricing**  | ** ** | **at least A by S&P or A2 by Moody’s** | ** ** | **at least A- by S&P or A3 by Moody’s** | ** ** | **at least BBB+ by S&P or Baa1 by Moody’s** | ** ** | **at least BBB by S&P or Baa2 by Moody’s** | ** ** | **at least BBB- by S&P or Baa3 by Moody’s** | ** ** | **less than BBB- by S&P and less than  Baa3 by Moody’s** |
|------------------------|------------|-------------------------------------------------|------------|--------------------------------------------------|------------|------------------------------------------------------|------------|-----------------------------------------------------|------------|------------------------------------------------------|------------|-------------------------------------------------------------------|
| **Facility Fee**       |       | 6.0                                             |       | 7.0                                              |       | 8.0                                                  |       | 10.0                                                |       | 12.5                                                 |       | 17.5                                                              |
| **Euro-Dollar Margin** |       |                                            |       |                                             |       |                                                 |       |                                                |       |                                                 |       |                                                              |
| Utilization =  50%     |       | 19.0                                            |       | 23.0                                             |       | 27.0                                                 |       | 35.0                                                |       | 47.5                                                 |       | 60.0                                                              |
| Utilization >  50%  |       | 24.0                                            |       | 28.0                                             |       | 32.0                                                 |       | 40.0                                                |       | 52.5                                                 |       | 65.0                                                              |

 

TheEuro-Dollar Margin for any Term Loan shall equal the sum of (i) the rate thatwould otherwise be in effect based upon the table above and (ii) 12.5 basispoints.

The**“Utilization”** applicable to anydate is the percentage equivalent of a fraction the numerator of which is thesum of (i) the aggregate outstanding principal amount of the Loans to allBorrowers determined at such time after giving effect, if one or more Loans arebeing made at such time, to any substantially concurrent application of theproceeds thereof to repay one or more other Loans plus (ii) the aggregateamount of the Letter of Credit Liabilities of all Banks for the account of allBorrowers at such time and the denominator of which is the aggregate amount ofthe Commitments at such date. If for any reason any Loans or Letter of CreditLiabilities remain outstanding following termination of the Commitments,Utilization will be deemed to be 100%.

TheFacility Fee Rate at any date shall be determined on the basis of the creditratings of Cinergy at such date, while the Euro-Dollar Margin applicable at anydate for purposes of calculating interest on a Loan or fees in respect of aLetter of Credit shall be based upon the credit ratings of the Borrower towhich such Loan is outstanding or for whose account such Letter of Credit wasissued. The credit ratings to be utilized for purposes of this Schedule arethose indicated for or assigned to the senior unsecured long-term debtsecurities of the relevant Borrower without third-party credit enhancement, andany rating indicated for or assigned to any other debt security of suchBorrower shall be disregarded. The ratings in effect for any day are those ineffect at the close of business on such 

----

day. A change in credit rating will result in animmediate change in the applicable pricing. In the case of split ratings fromS&P and Moody’s, the rating to be used to determine the applicable pricingis a rating one notch higher than the lower of the two.

 

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**EXHIBITA**

**NOTE**

New York, New York

______ __, 20__

For value received, [Cinergy Corp., a Delaware] [TheCincinnati Gas & Electric Company, an Ohio] [PSI Energy, Inc., an Indiana][The Union Light, Heat and Power Company, a Kentucky] corporation (the “**Borrower**”), promises to pay to the order of                                    (the “**Bank**”), for the account ofits Applicable Lending Office, the unpaid principal amount of each Loan made bythe Bank to the Borrower pursuant to the Credit Agreement referred to below onthe date specified in the Credit Agreement. The Borrower promises to payinterest on the unpaid principal amount of each such Loan on the dates and atthe rate or rates provided for in the Credit Agreement. All such payments ofprincipal and interest shall be made in lawful money of the United States inFederal or other immediately available funds at the office of Barclays BankPLC, 200 Park Avenue, New York, New York 10166.

All Loans made by the Bank, the respective types andmaturities thereof and all repayments of the principal thereof shall berecorded by the Bank, and the Bank, if the Bank so elects in connection withany transfer or enforcement of its Note, may endorse on the schedule attachedhereto appropriate notations to evidence the foregoing information with respectto the Loans then outstanding; *provided*that the failure of the Bank to make any such recordation or endorsement shallnot affect the obligations of the Borrower hereunder or under the CreditAgreement.

This note is one of the Notes referred to in theAmended and Restated Credit Agreement dated as of June 29, 2006 among CinergyCorp., The Cincinnati Gas & Electric Company, PSI Energy, Inc., The UnionLight, Heat and Power Company, the banks listed on the signature pages thereof,Barclays Bank PLC, as Administrative Agent, and JPMorgan Chase Bank, N.A., asSyndication Agent (as the same may be amended from time to time, the “**Credit Agreement**”). Terms defined in theCredit Agreement are used herein with the same meanings. Reference is made tothe Credit Agreement for provisions for the prepayment hereof and theacceleration of the maturity hereof.

----

 
|        | [CINERGY CORP.]                                  |
|--------|--------------------------------------------------|
|   |                                             |
|   | [THE CINCINNATI GAS & ELECTRIC COMPANY]      |
|   |                                             |
|   | [PSI ENERGY, INC.]                               |
|   |                                             |
|   |  [THE UNION LIGHT,  HEAT AND POWER COMPANY] |
|        |                                             |
|   | By:                                              |   |
|   |                                             | Title: |

** **

2

----

Note (cont’d)

**LOANS AND PAYMENTS OFPRINCIPAL**
| Date   | **Amount  of Loan** | **Type  of Loan** | **Amount of  Principal  Repaid** | **Maturity Date** | **Notation  Made By** |
|--------|---------------------|-------------------|----------------------------------|-------------------|-----------------------|
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |
|   |                |              |                             |              |                  |

 

3

----

**EXHIBITB-1**

OPINIONOF INTERNAL COUNSEL OF THE BORROWER

[EffectiveDate]

To the Banks andthe Administrative AgentReferred to Below

c/o Barclays BankPLCas Administrative Agent

200 Park Avenue

New York, New York 10166

Ladies and Gentlemen:

Iam [title of internal counsel] of [Cinergy Corp.] [The Cincinnati Gas &Electric Company] [PSI Energy, Inc.] [The Union Light, Heat and Power Company](the “**Borrower**”) and have acted asits counsel in connection with the Amended and Restated Credit Agreement (the “**Credit Agreement**”), dated as of June 29,2006, among Cinergy Corp., The Cincinnati Gas & Electric Company, PSIEnergy, Inc., The Union Light, Heat and Power Company (together with CinergyCorp., The Cincinnati Gas & Electric Company and PSI Energy, Inc., the “**Borrowers**”), the banks listed on the signature pagesthereof, Barclays Bank PLC, as Administrative Agent, and JPMorgan Chase Bank,N.A., as Syndication Agent. Capitalized terms defined in the Credit Agreementare used herein as therein defined. This opinion letter is being deliveredpursuant to Section 3.01(b) of the Credit Agreement.

Insuch capacity, I or attorneys under my direct supervision have examinedoriginals or copies, certified or otherwise identified to my satisfaction, ofsuch documents, corporate records, certificates of public officials and otherinstruments and have conducted such other investigations of fact and law as Ihave deemed necessary or advisable for purposes of this opinion.

Uponthe basis of the foregoing, I am of the opinion that:

1.             The Borrower is [a Delaware] [anOhio] [an Indiana] [a Kentucky] corporation, validly existing and in goodstanding under the laws of [Delaware] [Ohio] [Indiana] [Kentucky].

2.             The execution, delivery andperformance by the Borrower of the Credit Agreement and any Notes are withinthe Borrower’s corporate powers, 

----

have been duly authorized by all necessary corporateaction, require no action by or in respect of, or filing with, any governmentalbody, agency or official (except for [list exceptions], which have beenobtained or made, as the case may be, and are in full force and effect) and donot contravene, or constitute a default under, any provision of applicable lawor regulation or of the articles of incorporation or by-laws of the Borroweror, to my knowledge, of any agreement, judgment, injunction, order, decree orother instrument binding upon the Borrower or, to my knowledge, result in thecreation or imposition of any Lien on any asset of the Borrower or any of itsMaterial Subsidiaries.

3.             The Credit Agreement and any Notesexecuted and delivered as of the date hereof have been duly executed anddelivered by the Borrower.

4.             Except as disclosed in the Borrower’sannual report on Form 10-K for the fiscal year ended December 31, 2005 and itsquarterly report on Form 10-Q for the period ended March 31, 2006, to myknowledge (but without independent investigation), there is no action, suit orproceeding pending or threatened against or affecting, the Borrower or any ofits Subsidiaries before any court or arbitrator or any governmental body,agency or official, which would be likely to be decided adversely to theBorrower or such Subsidiary and, as a result, to have a material adverse effectupon the business, consolidated financial position or consolidated results ofoperations of the Borrower and its Consolidated Subsidiaries, considered as awhole, or which in any manner draws into question the validity of the CreditAgreement or any Notes.

Thephrase “to my knowledge”, as used in the foregoing opinion, refers to my actualknowledge without any independent investigation as to any such matters.

Iam a member of the Bar of the State of [Delaware] [Ohio] [Indiana] [Kentucky]and do not express any opinion herein concerning any law other than the law ofthe State of [Delaware] [Ohio] [Indiana] [Kentucky] and the federal law of theUnited States of America.

Theopinions expressed herein are limited to the matters expressly stated herein,and no opinion is to be inferred or may be implied beyond the matters expresslyso stated. This opinion is rendered to you in connection with theabove-referenced matter and may not be relied upon by you for any otherpurpose, or relied upon by, or furnished to, any other Person, firm orcorporation without my prior written consent, except for Additional Banks andAssignees. My opinions expressed herein are as of the date hereof, and Iundertake no obligation to advise you of any changes of applicable law or anyother matters that may come to my attention after the date hereof that mayaffect my opinions expressed herein.

Very truly yours,

 

2

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**EXHIBIT B-2**

OPINIONOFROBINSON, BRADSHAW & HINSON, P.A.,SPECIAL COUNSEL FOR THE BORROWER

[EffectiveDate]

To the Banks andthe Administrative AgentReferred to Below

c/o Barclays BankPLCas Administrative Agent

200 Park Avenue

New York, New York 10166

Ladies and Gentlemen:

Wehave acted as counsel to [Cinergy Corp., a Delaware] [The Cincinnati Gas &Electric Company, an Ohio] [PSI Energy, Inc., an Indiana] [The Union Light,Heat and Power Company, a Kentucky] corporation (the “**Borrower**”), in connection with the Amendedand Restated Credit Agreement (the “**CreditAgreement**”), dated as of June 29, 2006, among Cinergy Corp., TheCincinnati Gas & Electric Company, PSI Energy, Inc., The Union Light, Heatand Power Company (together with Cinergy Corp., The Cincinnati Gas &Electric Company and PSI Energy, Inc., the “**Borrowers**”),the banks listed on the signature pages thereof, Barclays Bank PLC, asAdministrative Agent, and JPMorgan Chase Bank, N.A., as Syndication Agent.Capitalized terms used herein and not defined shall have the meanings given tothem in the Credit Agreement. This opinion letter is being delivered pursuantto Section 3.01(b) of the Credit Agreement.

Inconnection with this opinion, we also examined originals, or copies identifiedto our satisfaction, of such other documents and considered such matters of lawand fact as we, in our professional judgment, have deemed appropriate to renderthe opinions contained herein. Where we have considered it appropriate, as tocertain facts we have relied, without investigation or analysis of anyunderlying data contained therein, upon certificates or other comparabledocuments of public officials and officers or other appropriate representativesof the Borrower.

Inrendering the opinions contained herein, we have assumed, among other things,that the Credit Agreement and any Notes to be executed (i) are within theBorrower’s corporate powers, (ii) have been duly authorized by all necessarycorporate action, (iii) have been duly executed and delivered, (iv) require no 

----

action by or in respect of, or filing with, anygovernmental body, agency of official and (v) do not contravene, or constitutea default under, any provision of applicable law or regulation or of theBorrower’s certificate of incorporation or by-laws or any agreement, judgment,injunction, order, decree or other instrument binding upon the Borrower orresult in the creation or imposition of any Lien on any asset of the Borrower.In addition, we have assumed that the Credit Agreement fully states theagreement between the Borrower and the Banks with respect to the mattersaddressed therein, and that the Credit Agreement constitutes a legal, valid andbinding obligation of each Bank, enforceable in accordance with its respectiveterms.

Theopinions set forth herein are limited to matters governed by the laws of theState of North Carolina and the federal laws of the United States, and noopinion is expressed herein as to the laws of any other jurisdiction. Forpurposes of our opinions, we have disregarded the choice of law provisions inthe Credit Agreement and, instead, have assumed with your permission that theCredit Agreement and the Notes are governed exclusively by the internal,substantive laws and judicial interpretations of the State of North Carolina.We express no opinion concerning any matter respecting or affected by any lawsother than laws that a lawyer in North Carolina exercising customaryprofessional diligence would reasonably recognize as being directly applicableto the Borrower, the Loans, or any of them.

Basedupon and subject to the foregoing and the further limitations andqualifications hereinafter expressed, it is our opinion that the CreditAgreement constitutes the legal, valid and binding obligation of the Borrowerand the Notes, if and when issued, will constitute legal, valid and bindingobligations of the Borrower, in each case, enforceable against the Borrower inaccordance with its terms.

Theopinions expressed above are subject to the following qualifications and limitations:

1.             Enforcement of the Credit Agreementand the Notes is subject to the effect of applicable bankruptcy, insolvency,reorganization, fraudulent conveyance, moratorium and similar laws affectingthe enforcement of creditors’ rights generally.

2.             Enforcement of the Credit Agreementand the Notes is subject to the effect of general principles of equity(regardless of whether considered in a proceeding in equity or at law) by whicha court with proper jurisdiction may deny rights of specific performance, injunction,self-help, possessory remedies or other remedies.

2

----

3.             We do not express any opinion as tothe enforceability of any provisions contained in the Credit Agreement or anyNote that (i) purport to excuse a party for liability for its own acts, (ii)purport to make void any act done in contravention thereof, (iii) purport toauthorize a party to act in its sole discretion, (iv) require waivers oramendments to be made only in writing, (v) purport to effect waivers ofconstitutional, statutory or equitable rights or the effect of applicable laws,(vi) impose liquidated damages, penalties or forfeiture, or (vii) purport toindemnify a party for its own negligence or willful misconduct. Indemnificationprovisions in the Credit Agreement are subject to and may be renderedunenforceable by applicable law or public policy, including applicablesecurities law.

4.             We do not express any opinion as tothe enforceability of any provisions contained in the Credit Agreement or theNotes purporting to require a party thereto to pay or reimburse attorneys’ feesincurred by another party, or to indemnify another party therefor, which may belimited by applicable statutes and decisions relating to the collection andaward of attorneys’ fees, including but not limited to North Carolina GeneralStatutes § 6-21.2.

5.             We do not express any opinion as tothe enforceability of any provisions contained in the Credit Agreementpurporting to waive the right of jury trial. Under North Carolina GeneralStatutes § 22B-10, a provision for the waiver of the right to a jury trial isunconscionable and unenforceable.

6.             We do not express any opinion as tothe enforceability of any provisions contained in the Credit Agreementconcerning choice of forum or consent to the jurisdiction of courts, venue ofactions or means of service of process.

7.             It is likely that North Carolinacourts will enforce the provisions of the Credit Agreement providing forinterest at a higher rate resulting from a Default or Event of Default (a “**Default Rate**”) which rate is higher thanthe rate otherwise stipulated in the Credit Agreement. The law, however,disfavors penalties, and it is possible that interest at the Default Rate maybe held to be an unenforceable penalty, to the extent such rate exceeds the rateapplicable prior to a default under the Credit Agreement. Also, since NorthCarolina General Statutes § 24-10.1 expressly provides for late charges, it ispossible that North Carolina courts, when faced specifically with the issue,might rule that this statutory late charge preempts any other charge (such asdefault interest) by a bank for delinquent payments. The only North Carolinacase which we have found that addresses this issue is a 1978 Court of Appealsdecision, which in our opinion is of limited precedential value, *North Carolina National Bank v. Burnette,*38 N.C. App. 120, 247 S.E.2d 648 (1978), *rev’don other grounds*, 297 N.C. 524, 256 S.E.2d 388 (1979). While thecourt in that case did allow interest after default (commencing with the daterequested in the complaint) at a rate six 

3

----

percent in excess of pre-default interest, we areunable to determine from the opinion that any question was raised as to thisbeing penal in nature, nor does the court address the possible question of thestatutory late charge preempting a default interest surcharge. Therefore, sincethe North Carolina Supreme Court has not ruled in a properly presented caseraising issues of its possible penal nature and those of North Carolina GeneralStatutes § 24-10.1, we are unwilling to express an unqualified opinion that theDefault Rate of interest prescribed in the Credit Agreement is enforceable.

8.             We do not express any opinion as tothe enforceability of any provisions contained in the Credit Agreement relatingto evidentiary standards or other standards by which the Credit Agreement areto be construed.

Thisopinion letter is delivered solely for your benefit in connection with theCredit Agreement and, except for any Additional Bank or any Assignee whichbecomes a Bank pursuant to Section 2.17 or 9.06(c) of the Credit Agreement, maynot be used or relied upon by any other Person or for any other purpose withoutour prior written consent in each instance. Our opinions expressed herein areas of the date hereof, and we undertake no obligation to advise you of anychanges of applicable law or any other matters that may come to our attentionafter the date hereof that may affect our opinions expressed herein.

Very truly yours,

 

4

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**EXHIBIT C**

OPINIONOFDAVIS POLK & WARDWELL, SPECIAL COUNSELFOR THE AGENTS

[EffectiveDate]

To the Banks and theAdministrative Agent    Referred to Belowc/o Barclays Bank PLC,as Administrative Agent200 Park Avenue

New York, New York 10166

Dear Sirs:

Wehave participated in the preparation of the Amended and Restated CreditAgreement (the “**Credit Agreement**”)dated as of June 29, 2006 among Cinergy Corp., a Delaware corporation, TheCincinnati Gas & Electric Company, an Ohio corporation, PSI Energy, Inc.,an Indiana corporation, The Union Light, Heat and Power Company, a Kentuckycorporation (together with Cinergy Corp., The Cincinnati Gas & ElectricCompany and PSI Energy, Inc., the “**Borrowers**”,each individually, a “**Borrower**”), thebanks listed on the signature pages thereof (the “**Banks**”), Barclays Bank PLC, as Administrative Agent (the “**Administrative Agent**”), and JPMorgan ChaseBank, N.A., as Syndication Agent, and have acted as special counsel for theAgents for the purpose of rendering this opinion pursuant to Section 3.01(c) ofthe Credit Agreement. Terms defined in the Credit Agreement are used herein astherein defined.

Wehave examined originals or copies, certified or otherwise identified to oursatisfaction, of such documents, corporate records, certificates of publicofficials and other instruments and have conducted such other investigations offact and law as we have deemed necessary or advisable for purposes of thisopinion.

Uponthe basis of the foregoing, we are of the opinion that:

1.             The execution, delivery andperformance by each Borrower of the Credit Agreement and the Notes are withinsuch Borrower’s corporate powers and have been duly authorized by all necessarycorporate action.

----

2.             The Credit Agreement constitutes avalid and binding agreement of each Borrower and the Notes, if and when issuedby a Borrower, constitute valid and binding obligations of such Borrowerenforceable in accordance with their respective terms, except as the same maybe limited by bankruptcy, insolvency or similar laws affecting creditors’rights generally and by general principles of equity.

Ingiving the foregoing opinion, (i) we express no opinion as to the effect (ifany) of any law of any jurisdiction (except the State of New York) in which anyBank is located which limits the rate of interest that such Bank may charge orcollect and (ii) we have relied, without independent investigation, as to allmatters governed by the laws of each of Delaware, Ohio, Indiana and Kentuckyupon the opinion of the internal counsel of the Borrower located in suchjurisdiction, dated [Effective Date], a copy of each of which has beendelivered to you.

Thisopinion is rendered solely to you in connection with the above matter. Thisopinion may not be relied upon by you for any other purpose or relied upon byor furnished to any other person, firm or corporation without our prior writtenconsent, except for Additional Banks and all Participants.

Very truly yours,

 

2

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**EXHIBIT D**

**ASSIGNMENT AND ASSUMPTIONAGREEMENT**

AGREEMENTdated as of _________, 20__ among [ASSIGNOR] (the “**Assignor**”), [ASSIGNEE] (the “**Assignee**”),[CINERGY CORP.] and BARCLAYS BANK PLC, as Administrative Agent (the “**Administrative Agent**”).

*W**I**T**N**E**S**S**E**T**H*

WHEREAS,this Assignment and Assumption Agreement (the “**Agreement**”) relates to the Amended and Restated CreditAgreement dated as of June 29, 2006 among Cinergy Corp., The Cincinnati Gas& Electric Company, PSI Energy, Inc., The Union Light, Heat and PowerCompany (together with Cinergy Corp., The Cincinnati Gas & Electric Companyand PSI Energy, Inc., the “**Borrowers**”,each individually, a “**Borrower**”), theAssignor and the other Banks party thereto, as Banks, the Administrative Agentand JPMorgan Chase Bank, N.A., as Syndication Agent (the “**Credit Agreement**”);

WHEREAS,as provided under the Credit Agreement, the Assignor has a Commitment to makeLoans to the Borrowers and participate in Letters of Credit in an aggregateprincipal amount at any time outstanding not to exceed $__________;(1)

WHEREAS,Loans made to the Borrowers by the Assignor under the Credit Agreement in theaggregate principal amount of $__________ are outstanding at the date hereof;

WHEREAS,Letters of Credit with a total amount available for drawing thereunder of$__________ are outstanding at the date hereof; and

WHEREAS,the Assignor proposes to assign to the Assignee all of the rights of theAssignor under the Credit Agreement in respect of a portion of its Commitmentthereunder in an amount equal to $__________ (the “**Assigned Amount**”), together with a corresponding portion ofits outstanding Loans and Letter of Credit Liabilities, and the Assigneeproposes to accept assignment of such rights and assume the correspondingobligations from the Assignor on such terms;*

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1Theasterisked provisions shall be appropriately revised in the event of anassignment after the Commitment Termination Date.

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NOW,THEREFORE, in consideration of the foregoing and the mutual agreementscontained herein, the parties hereto agree as follows:

SECTION 1.            *Definitions*. All capitalized terms nototherwise defined herein shall have the respective meanings set forth in theCredit Agreement.

SECTION 2. *Assignment*.The Assignor hereby assigns and sells to the Assignee all of the rights of theAssignor under the Credit Agreement to the extent of the Assigned Amount, andthe Assignee hereby accepts such assignment from the Assignor and assumes allof the obligations of the Assignor under the Credit Agreement to the extent ofthe Assigned Amount, including the purchase from the Assignor of thecorresponding portion of the principal amount of the Loans made by, and Letterof Credit Liabilities of, the Assignor outstanding at the date hereof. Upon theexecution and delivery hereof by the Assignor, the Assignee [, Cinergy Corp.][, the Issuing Banks] and the Administrative Agent, the payment of the amountsspecified in Section 3 required to be paid on the date hereof (i) the Assigneeshall, as of the date hereof, succeed to the rights and be obligated to performthe obligations of a Bank under the Credit Agreement with a Commitment in anamount equal to the Assigned Amount, and (ii) the Commitment of the Assignorshall, as of the date hereof, be reduced by a like amount and the Assignorreleased from its obligations under the Credit Agreement to the extent suchobligations have been assumed by the Assignee. The assignment provided forherein shall be without recourse to the Assignor.

SECTION 3. *Payments*.As consideration for the assignment and sale contemplated in Section 2 hereof,the Assignee shall pay to the Assignor on the date hereof in Federal funds theamount heretofore agreed between them.(2) It is understood that facility [andLetter of Credit] fees accrued to the date hereof in respect of the AssignedAmount are for the account of the Assignor and such fees accruing from andincluding the date hereof are for the account of the Assignee. Each of theAssignor and the Assignee hereby agrees that if it receives any amount underthe Credit Agreement which is for the account of the other party hereto, itshall receive the same for the account of such other party to the extent ofsuch other party’s interest therein and shall promptly pay the same to suchother party.

SECTION 4. *Consentto Assignment.*This Agreement is conditioned upon the consent of[Cinergy Corp.,] [the Issuing Banks] and the Administrative Agent pursuant toSection 9.06(c) of the Credit Agreement. The execution of this Agreement by[Cinergy Corp.,] [the Issuing Banks] and the Administrative Agent is evidenceof this consent. Pursuant to Section 9.06(c) each Borrower agrees to executeand deliver a Note, if required by the Assignee, payable to the order of theAssignee to evidence the assignment and assumption provided for herein.

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2Amountshould combine principal together with accrued interest and breakagecompensation, if any, to be paid by the Assignee. It may be preferable in anappropriate case to specify these amounts generically or by formula rather thanas a fixed sum.

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SECTION 5. *Non-relianceon Assignor.*The Assignor makes no representation or warranty inconnection with, and shall have no responsibility with respect to, thesolvency, financial condition, or statements of any Borrower, or the validityand enforceability of the obligations of any Borrower in respect of the CreditAgreement or any Note. The Assignee acknowledges that it has, independently andwithout reliance on the Assignor, and based on such documents and informationas it has deemed appropriate, made its own credit analysis and decision toenter into this Agreement and will continue to be responsible for making itsown independent appraisal of the business, affairs and financial condition ofeach Borrower.

SECTION 6. *GoverningLaw.*This Agreement shall be governed by and construed in accordancewith the laws of the State of New York.

SECTION 7. *Counterparts.*This Agreement may be signed in any number of counterparts, each ofwhich shall be an original, with the same effect as if the signatures theretoand hereto were upon the same instrument.

SECTION 8. *AdministrativeQuestionnaire.*Attached is an Administrative Questionnaire dulycompleted by the Assignee.

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INWITNESS WHEREOF, the parties have caused this Agreement to be executed and deliveredby their duly authorized officers as of the date first above written.
|        | [ASSIGNOR]                                 |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | By:                                        |   |
|   |                                       | Title: |
|   |                                       |   |
|   |                                       |   |
|   | [ASSIGNEE]                                 |
|   |                                       |
|   |                                       |
|   | By:                                        |   |
|   |                                       | Title: |
|   |                                       |   |
|   |                                       |   |
|   | [CINERGY CORP.]                            |
|   |                                       |
|   |                                       |
|   | By:                                        |   |
|   |                                       | Title: |
|   |                                       |   |
|   |                                       |   |
|   | BARCLAYS BANK PLC, as Administrative Agent |
|   |                                       |
|   |                                       |
|   | By:                                        |   |
|   |                                       | Title: |

 

 

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**EXHIBIT E**

EXTENSIONAGREEMENT

Barclays Bank PLC, asAdministrativeAgent under the Credit Agreementreferred to below200 Park AvenueNew York, New York 10166

Ladies and Gentlemen:

Effectiveas of [date], the undersigned hereby agrees to extend its Commitment andCommitment Termination Date under the Amended and Restated Credit Agreementdated as of June 29, 2006 among Cinergy Corp., The Cincinnati Gas &Electric Company, PSI Energy, Inc., The Union Light, Heat and Power Company(together with Cinergy Corp., The Cincinnati Gas & Electric Company and PSIEnergy, Inc., the “**Borrowers**”,each individually, a “**Borrower**”), theBanks party thereto, Barclays Bank PLC, as Administrative Agent, and JPMorganChase Bank, N.A., as Syndication Agent (the “**CreditAgreement**”) for one year to [date to which its CommitmentTermination Date is to be extended] pursuant to Section 2.01(c) of the CreditAgreement. Terms defined in the Credit Agreement are used herein as thereindefined.

ThisExtension Agreement shall be construed in accordance with and governed by thelaw of the State of New York. This Extension Agreement may be signed in anynumber of counterparts, each of which shall be an original, with the sameeffect as if the signatures thereto and hereto were upon the same instrument.
|        | [NAME OF BANK] |
|--------|----------------|
|   | By:            |   |
|   |           | Title: |

 

 

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Agreed and Accepted:
| CINERGY CORP. |
|---------------|
| as Borrower   |
| By:           |   |   |
|          | Title: |

 
| THE CINCINNATI GAS & ELECTRIC COMPANY, |
|-------------------------------------------------|
| as Borrower                                     |
| By:                                             |   |   |
|                                            | Title: |

 
| PSI ENERGY, INC.,  as Borrower |
|--------------------------------|
| By:                            |   |   |
|                           | Title: |

 
| THE UNION LIGHT, HEAT AND  POWER COMPANY,  as Borrower |
|--------------------------------------------------------|
| By:                                                    |   |   |
|                                                   | Title: |

 
| BARCLAYS BANK PLC,  as Administrative Agent |
|---------------------------------------------|
| By:                                         |   |   |
|                                        | Title: |

 

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**EXHIBIT F**

**NOTICE OF ISSUANCE**

**Date:                                                        **
| To:    | Barclays Bank PLC, as Administrative Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ______________, as Issuing Bank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| From:  | [Cinergy Corp.] [The Cincinnati Gas & Electric  Company] [PSI Energy, Inc.] [The Union Light, Heat and Power Company]                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Re:    | Amended and Restated Credit Agreement dated as of  June 29, 2006 (as amended from time to time, the “Credit Agreement”) among  Cinergy Corp., The Cincinnati Gas & Electric Company, PSI Energy, Inc.,  The Union Light, Heat and Power Company (together with Cinergy Corp., The  Cincinnati Gas & Electric Company and PSI Energy, Inc., the “**Borrowers**”, each individually, a “**Borrower**”),  the Banks party thereto and Barclays Bank PLC, as Administrative Agent |

 

[CinergyCorp.] [The Cincinnati Gas & Electric Company] [PSI Energy, Inc.] [TheUnion Light, Heat and Power Company]****hereby givesnotice pursuant to Section 2.15(b) of the Credit Agreement that it requests theabove-named Issuing Bank to issue on or before ________________ a Letter ofCredit containing the terms attached hereto as Schedule I (the “**Requested Letter of Credit**”).

TheRequested Letter of Credit will be subject to [UCP 500] [ISP98].

[CinergyCorp.] [The Cincinnati Gas & Electric Company] [PSI Energy, Inc.] [TheUnion Light, Heat and Power Company] hereby represents and warrants to theIssuing Bank, the Administrative Agent and the Banks that:

(a)                                  immediatelyafter the issuance of the Requested Letter of Credit, (i) the sum of theaggregate amount of Letter of Credit Liabilities and the aggregate principalamount of the Utilization will not exceed the aggregate amount of theCommitments, (ii) the aggregate outstanding principal amount of Loans to anyBorrower plus the aggregate amount of Letter of Credit Liabilities for theaccount of such Borrower shall not exceed the Maximum Availability of suchBorrower and (iii) the aggregate amount of the Letter of Credit Liabilitiesshall not exceed $1,000,000,000;

(b)                                 immediatelyafter the issuance of the Requested Letter of Credit, no Default shall haveoccurred and be continuing; and

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(c)                                  therepresentations and warranties contained in the Credit Agreement (except therepresentations and warranties set forth in Sections 4.04(c) and 4.06 of theCredit Agreement) shall be true on and as of the date of issuance of theRequested Letter of Credit.

[CinergyCorp.] [The Cincinnati Gas & Electric Company] [PSI Energy, Inc.] [TheUnion Light, Heat and Power Company] hereby authorizes the Issuing Bank toissue the Requested Letter of Credit with such variations from the above termsas the Issuing Bank may, in its discretion, determine are necessary and are notmaterially inconsistent with this Notice of Issuance. The opening of the RequestedLetter of Credit and [Cinergy Corp.] [The Cincinnati Gas & ElectricCompany] [PSI Energy, Inc.] [The Union Light, Heat and Power Company]’sresponsibilities with respect thereto are subject to [UCP 500] [ISP98] asindicated above and the terms and conditions set forth in the Credit Agreement.

Termsused herein and not otherwise defined herein have the meanings assigned to themin the Credit Agreement.
|            | **[CINERGY CORP.]**                             |
|------------|-------------------------------------------------|
|       | ** **                                      |
|       | **[THE CINCINNATI GAS & ELECTRIC COMPANY]** |
|       | ** **                                      |
| ** ** | **[PSI ENERGY, INC.]**                          |
| ** ** | ** **                                      |
| ** ** | **[THE UNION LIGHT, HEATAND POWER COMPANY]**    |
| ** ** | ** **                                      |
|       |                                            |
|       | By:                                             |   |
|       | Title:                                          |   |
|       |                                            |   |
|            |                                                 |  |  |

 

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SCHEDULE I

**Applicationand Agreement for Irrevocable Standby Letter of Credit**

**To:____________________ (“Bank”)**

Please TYPE informationin the fields below. We reserve the right to return illegible applications forclarification.
| Date:           |            | The undersigned  Applicant hereby requests Bank to issue and transmit by: o  Overnight Carrier     o  Teletransmission     o  Mail     o  Other:                                                                               |
|-----------------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  

L/C No. | (Bank Use Only) | Explain: 

 

an Irrevocable Standby  Letter of Credit (the “Credit”) substantially as set forth below. In issuing  the Credit, Bank is expressly authorized to make such changes from the terms  herein below set forth as it, in its sole discretion, may deem advisable. |
|            |            |                                                                                                                                                                                                                                                                                       |

 
| Applicant (Full name &  address)                                                                            | Advising Bank  (Designate name & address only, if desired) |
|-----------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
|                                                                                                            |                                                           |
|                                                                                                            |                                                           |
|                                                                                                            |                                                           |
| Beneficiary  (Full name & address)                                                                          | Currency and  amount in figures:                               |
|                                                                                                            |                                                           |
|                                                                                                            | Currency and  amount in words:                                 |
|                                                                                                            |                                                           |
|                                                                                                            | Expiration Date:                                               |
|                                                                                                            |                                                           |
| Charges: the Bank’s charges are for our account; all  other banking charges are to be paid by beneficiary. |
|                                                                                                            |

 
|   | Credit to be available for  payment against Beneficiary’s draft(s) at sight drawn on Bank or its  correspondent at Bank’s option accompanied by the following documents: |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                                                               |   |
|   | o  Statement, purportedly signed by the Beneficiary, reading as follows (please  state below exact wording to appear on the statement):                                            |   |
|   |                                                                                                                                                                               |   |
|   |                                                                                                                                                                               |   |
|   | o  Other Documents                                                                                                                                                                 |   |
|   |                                                                                                                                                                               |   |
|   |                                                                                                                                                                               |   |
|   | o  Special Conditions (including, if Applicant has a preference, selection of  UCP as herein defined or ISP98 as herein defined).                                                  |   |
|   |                                                                                                                                                                               |   |
|   |                                                                                                                                                                               |   |
|   | o  Issue substantially in form of attached specimen. (Specimen must also be  signed by applicant.)                                                                                 |   |
|   |                                                                                                                                                                               |   |
|   |                                                                                                                                                                               |   |
|   |                                                                                                                                                                               |   |

 

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

 

EachApplicant signing below affirms that it has fully read and agrees to thisApplication. (Note: If a bank, trust company, or other financial institutionsigns as Applicant or joint and several co-Applicant for its customer, or iftwo Applicants jointly and severally apply, both parties sign below.) Documentsmay be forwarded to the Bank by the beneficiary, or the negotiating bank, inone mail. Bank may forward documents to Applicant’s customhouse broker, orApplicant if specified above, in one mail. Applicant understands and agreesthat this Credit will be subject to the Uniform Customs and Practice for DocumentaryCredits of the International Chamber of Commerce currently in effect, and inuse by Bank (“UCP”) or to the International Standby Practices of theInternational Chamber of Commerce, Publication 590 or any subsequent versioncurrently in effect and in use by Bank (“ISP98”).
|                               |   |                               |
|------------------------------------|--------|------------------------------------|
| (Print or type name of  Applicant) |   | (Print or type  name of Applicant) |
|                               |   |                               |
| (Address)                          |   | (Address)                          |
|                               |   |                               |
| Authorized  Signature (Title)      |   | Authorized  Signature (Title)      |
|                               |   |                               |
| Authorized  Signature (Title)      |   | Authorized  Signature (Title)      |
|                               |   |                               |
| Customer  Contact:                 |   | Phone:                             |
|                               |   |                               |

 
| **BANK USE ONLY**                                                                          |
|--------------------------------------------------------------------------------------------|
| **NOTE:**Application will** NOT **be processed if this  section is not complete. |
| Approved (Authorized  Signature)                                                           | Date: |   |
|                                                                                       |   |   |
|                                                                                       |   |   |
| Approved (Print name  and title)                                                           | City: |   |
|                                                                                       |   |   |
|                                                                                       |   |   |
| Customer SIC Code:                                                                         | Borrower Default Grade: | Telephone: |   |
|                                                                                       |   |   |   |
| Charge DDA#:                                                                               | Fee: | RC #: | CLAS Bank #: | CLAS Obligor #: |
|                                                                                       |   |   |   |   |
| Other (please explain):                                                                    |   |   |   |   |
|                                                                                       |   |   |   |   |

 

 

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**EXHIBIT G**

**APPROVED FORM OF LETTER OF CREDIT**

**IRREVOCABLESTANDBY LETTER OF CREDIT NO.**

**BENEFICIARY:**

**LADIESAND GENTLEMEN:**

**WEHEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER _____________, INFAVOR OF [INSERT BENEFICIARY NAME], BY ORDER AND FOR THE ACCOUNT OF [CINERGYCORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSI ENERGY, INC.] [THEUNION LIGHT, HEAT AND POWER COMPANY], [ON BEHALF OF [INSERT NAME OF [CINERGYCORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSI ENERGY, INC.] [THEUNION LIGHT, HEAT AND POWER COMPANY]’S AFFILIATE OR SUBSIDIARY],] AT SIGHT FORUP TO _______________ U.S. DOLLARS ( ______________ UNITED STATES DOLLARS)AGAINST THE FOLLOWING DOCUMENTS:**

**1)             A BENEFICIARY’S SIGNED CERTIFICATESTATING “[[CINERGY CORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSIENERGY, INC.] [THE UNION LIGHT, HEAT AND POWER COMPANY]/[INSERT NAME OF [CINERGYCORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSI ENERGY, INC.] [THEUNION LIGHT, HEAT AND POWER COMPANY]’S AFFILIATE OR SUBSIDIARY]] IS IN DEFAULTUNDER ONE OR MORE AGREEMENTS BETWEEN [[CINERGY CORP.] [THE CINCINNATI GAS &ELECTRIC COMPANY] [PSI ENERGY, INC.] [THE UNION LIGHT, HEAT AND POWER COMPANY]/[INSERTNAME OF [CINERGY CORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSIENERGY, INC.] [THE UNION LIGHT, HEAT AND POWER COMPANY]’S AFFILIATE ORSUBSIDIARY]] AND [INSERT BENEFICIARY’S NAME].”**

**OR**

**2)             A BENEFICIARY’S SIGNED CERTIFICATESTATING “[INSERT BENEFICIARY’S NAME] HAS REQUESTED ALTERNATE SECURITY FROM [[CINERGYCORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSI ENERGY, INC.] [THEUNION LIGHT, HEAT AND**

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**POWERCOMPANY]/[INSERT NAME OF [CINERGY CORP.] [THE CINCINNATI GAS & ELECTRICCOMPANY] [PSI ENERGY, INC.] [THE UNION LIGHT, HEAT AND POWER COMPANY]’SAFFILIATE OR SUBSIDIARY]] AND [CINERGY CORP.] [THE CINCINNATI GAS &ELECTRIC COMPANY] [PSI ENERGY, INC.] [THE UNION LIGHT, HEAT AND POWER COMPANY]/[INSERTNAME OF [CINERGY CORP.] [THE CINCINNATI GAS & ELECTRIC COMPANY] [PSIENERGY, INC.] [THE UNION LIGHT, HEAT AND POWER COMPANY]’S AFFILIATE OR SUBSIDIARY]]HAS NOT PROVIDED ALTERNATE SECURITY ACCEPTABLE TO [INSERT BENEFICIARY’S NAME]AND THIS LETTER OF CREDIT HAS LESS THAN TWENTY DAYS UNTIL EXPIRY.”**

**AND**

**3)             A DRAFT STATING THE AMOUNT TO BEDRAWN.**

**SPECIALCONDITIONS:**

**1.             PARTIAL DRAWINGS ARE PERMITTED.**

**2.             DOCUMENTS MUST BE PRESENTED AT OURCOUNTER NO LATER THAN _________, WHICH IS THE EXPIRY DATE OF THIS STANDBYLETTER OF CREDIT.**

**WEHEREBY ENGAGE WITH YOU THAT ALL DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THETERMS OF THIS CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR PAYMENT ATOUR OFFICE LOCATED AT ________________________ ON OR BEFORE THE EXPIRY DATE OFTHIS CREDIT.**

**EXCEPTAS OTHERWISE EXPRESSLY STATED HEREIN, THIS CREDIT IS SUBJECT TO THE UNIFORMCUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, INTERNATIONALCHAMBER OF COMMERCE PUBLICATION NO. 500.**

**COMMUNICATIONSWITH RESPECT TO THIS STANDBY LETTER OF CREDIT SHALL BE IN WRITING AND SHALL BEADDRESSED TO US AT ___________________, SPECIFICALLY REFERRING TO THE NUMBER OFTHIS STANDBY LETTER OF CREDIT.**

**VERYTRULY YOURS**

**[ISSUINGBANK]**

 

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