Exhibit 4-yyy


 


	
  No. 
  R-2003-1

  	
   

  	
  $200,000,000

  



 


 


PSI ENERGY,
INC.

6.302% Subordinated Note

Due 2004


 


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES OR BLUE SKY LAWS OF ANY JURISDICTION OF
THE UNITED STATES OF AMERICA (“BLUE SKY LAWS”)
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR PURSUANT TO A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS.


 


PSI Energy, Inc., a corporation
duly organized and existing under the laws of the state of Indiana (herein
called the “Company”), for value received, hereby promises to pay to CINERGY
CORP., or registered assigns, the principal sum of Two Hundred Million and
No/100 Dollars ($200,000,000.00) on April 15, 2004, and to pay interest thereon
from February 5, 2003 or from the most recent interest payment date to which
interest has been paid or duly provided for, semiannually on April 15 and October 15 in each year,
commencing April 15, 2003, at the rate of 6.302% per annum, until the principal
hereof is paid or made available for payment.


 


Payment of the principal of and interest on this Note will be made at
the office or agency of the Company maintained for that purpose in Cincinnati,
Ohio, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check.


 


Interest on this Note shall be computed on the basis
of a 360-day year of twelve 30-day months.


 


Any payment on
this Note due on any day which is not a Business Day in the City of Cincinnati,
Ohio need not be made on such day, but may be made on the next succeeding
Business Day with the same force and effect as if made on the due date and no
interest shall accrue for the period from and after such date.  For purposes of this Note “Business Day,”
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in Cincinnati, Ohio are authorized or obligated
by law or executive order to close.


 

















 


Redemption


 


This Note is
subject to redemption upon not less than 30 days’ notice by mail, at a
redemption price equal to 100% of the principal amount, as a whole or in part,
at the election of the Company, together with accrued interest to the
redemption date.


 


In the event of redemption of this Note in part only, a new Note of
like tenor for the unredeemed portion hereof will be issued in the name of the
holder hereof upon the cancellation hereof.


 


Subordination


 


The
indebtedness evidenced by this Note is, to the extent and in the manner
provided herein, expressly subordinate and subject in right of payment to the
prior payment in full of all Senior Debt of the Company (as defined
hereinbelow) whether outstanding at the date hereof or hereafter incurred.  Each holder and owner of this Note, by
accepting the same, agrees to and shall be bound by such provisions.


 


For purpose
hereof, the “Senior Debt” of the Company means the principal of, premium, if
any, interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Note or thereafter
incurred, created or assumed: (a) all indebtedness of the Company evidenced by
notes, debentures, bonds or other securities sold by the Company for money,
excluding this Note, but including all first mortgage bonds of the Company
outstanding from time to time; (b) all indebtedness of others of the kinds
described in the preceding clause (a) assumed by or guaranteed in any manner by
the Company, including through an agreement to purchase, contingent or
otherwise; and (c) all renewals, extensions or refundings of indebtedness of
the kinds described in any of the preceding clauses (a) and (b); unless, in the
case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee of
the same expressly provides that such indebtedness, renewal, extension or
refunding is not superior in right of payment to or is pari passu with this
Note.


 


In the event
and during the continuation of any default in the payment of principal,
premium, interest or any other payment due on any Senior Debt continuing beyond
the period of grace, if any, specified in the instrument evidencing such Senior
Debt, unless and until such default shall have been cured or waived or shall
have ceased to exist, or in the event that the maturity of any Senior Debt has
been accelerated because of a default, then no payment shall be made by the
Company with respect to the principal of or interest on this Note.


 


2

















 


In the event
that, notwithstanding the foregoing, any payment shall be received by the
holder of this Note when such payment is prohibited by the preceding paragraph,
such payment shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear.


 


Upon any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior Debt shall
first be paid in full, or payment thereof provided for in money in accordance
with its terms, before any payment is made on account of the principal or
interest on this Note; and upon any such dissolution or winding-up or
liquidation or reorganization any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the holder of this Note would be entitled, except for the
provisions of this Note, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, or by the holder of this Note if received by it,
directly to the holders of Senior Debt (pro rata to such holders on the basis
of the respective amounts of Senior Debt held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay all Senior Debt in full, in money or money’s worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt, before any payment or distribution is made to the
holder of this Note.


 


In the event that, notwithstanding the foregoing, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, prohibited by the foregoing, shall be received by the holder of
this Note before all Senior Debt is paid in full, or provision is made for such
payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered
to the holders of Senior Debt or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Debt may have been issued, as their respective interests
may appear, as calculated by the Company, for application to the payment of all
Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in
full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior Debt.


 


3

















 


For purposes
of this Note, the words, “cash, property or securities” shall not be deemed to
include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated with
respect to this Note to the payment of all Senior Debt which may at the time be
outstanding; provided that (i) the Senior Debt is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of the Senior Debt are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
this Note shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes hereunder if such other corporation shall, as a
part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated hereunder.


 


Subject to the
payment in full of all Senior Debt, the rights of the holder of this Note shall
be subrogated to the rights of the holders of Senior Debt to receive payments
or distributions of cash, property or securities of the Company applicable to
the Senior Debt; and, for the purposes of such subrogation, no payment or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the holder of this Note would be entitled except for the
provisions hereunder, and no payment over to or for the benefit of the holders
of Senior Debt by the holder of this Note, shall, as between the Company, its
creditors other than holders of Senior Debt, and the holder of this Note, be
deemed to be a payment by the Company to or on account of the Senior Debt.  It is understood that the subordination
provisions of this Note are and are intended solely for the purposes of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Debt on the other hand.


 


Nothing
contained in this Note is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Debt, and the holder of this
Note, the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Note as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holder of this Note and creditors of
the Company other than the holders of the Senior Debt, nor shall anything
herein or therein prevent the holder of this Note from exercising all remedies
otherwise permitted by applicable law upon default hereunder, subject to the
rights, if any, of the holders of Senior Debt in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.


 


4

















 


Events of
Default


 


“Event of
Default,” wherever used herein with respect to this Note, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):


 


(1)           default in the
payment of any interest upon this Note when it becomes due and payable, and
continuance of such default for a period of 30 days; or


 


(2)           default in the
payment of the principal of this Note at its maturity; or


 


(3)           default in the
performance, or breach, of any covenant or warranty of the Company in this Note
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere specifically dealt with) and continuance of such default or
breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the holder of the Note a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or


 


(4)           the entry by a court
having jurisdiction in the premises of (A) a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 90 consecutive days; or


 


(5)           the commencement by the Company of a
voluntary case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it of
a petition or answer or consent seeking reorganization or relief under any
applicable Federal or state law, or the consent by it to the filing of such
petition or to the appointment of, or taking possession of the Company or of
any substantial part of its property by, a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official or the making by the
Company of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or


 


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If an Event of
Default (other than an Event of Default specified in paragraphs (4) or (5)
above) occurs and is continuing, then the holder of this Note may declare the
principal amount to be due and payable immediately, by a notice in writing to
the Company, and upon any such declaration such principal amount shall become
immediately due and payable.  If an
Event of Default specified in paragraphs (4) or (5) above occurs, the principal
amount of this Note shall automatically, and without any declaration or other
action on the part of the holder, become immediately due and payable.


 


No delay or omission of the holder of this Note to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given
by this Note or by law to the holder may be exercised from time to time, and as
often as may be deemed expedient, by the holders.


 


Consolidations and Mergers Permitted


 


Nothing contained in this Note shall prevent any consolidation or
merger of the Company with or into any other corporation or corporations
(whether or not affiliated with the Company), or successive consolidations or
mergers in which the Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition
of the property of the Company or its successor or successors as an entirety,
or substantially as an entirety, to any other corporation (whether or not
affiliated with the Company or its successor or successors) authorized to
acquire and operate the same; provided, however, the Company hereby covenants
and agrees that, upon any such consolidation, merger, sale, conveyance,
transfer or other disposition, the due and punctual payment of the principal of
and interest on this Note in accordance with its terms, according to its tenor,
and the due and punctual performance and observance of all the covenants and
conditions of hereunder to be kept or performed by the Company, shall be
expressly assumed, by written agreement satisfactory in form to the holder
executed and delivered to the holder by the entity formed by such consolidation,
or into which the Company shall have been merged, or by the entity which shall
have acquired such property.


 


In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor corporation of
the due and punctual payment of the principal of and interest on this Note and
the due and punctual performance of all of the covenants and conditions
hereunder to be performed by the Company, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named herein as the party of the first part, and thereupon the
predecessor corporation shall be relieved of all obligations and covenants
under this Note.


 


6

















 


Nothing
contained in this Note shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the property of any other
corporation (whether or not affiliated with the Company).


 












 


IN WITNESS WHEREOF,
the Company has caused this instrument to be duly executed.


 


Dated:  February 5, 2003


 


	
   

  	
  PSI ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ WENDY L. AUMILLER

  	
   

  
	
   

  	
   

  	
   Wendy L. Aumiller

  
	
   

  	
   

  	
   Treasurer

  



 


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