Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4-QQQ    
  

THE CINCINNATI GAS & ELECTRIC COMPANY  

and  

THE BANK OF NEW YORK,

                                         
           Trustee  

Thirty-ninth Supplemental Indenture  

Dated as of September 1, 2002  

 

THE CINCINNATI GAS & ELECTRIC COMPANY

Thirty-ninth Supplemental Indenture

Dated as of September 1, 2002  

TABLE OF CONTENTS  

	 
	 	 
	 	Page

	Parties	 	1
	Recitals	 	1
	    Form of Bonds of Series Due 2037	 	2
	    Form of Trustee's Certificate on Bonds, Series Due 2037	 	5
	
ARTICLE ONE

BONDS OF SERIES DUE 2037 AND ISSUE THEREOF
	

Section 1.	
 	

Series and Form of Bonds of Series Due 2037	
 	

6
	Section 2.	 	Issue of Bonds of Series Due 2037	 	6
	Section 3.	 	Dates, Interest Rate, etc., of Bonds of Series Due 2037	 	6
	Section 4.	 	Fully Registered Bond; Transfer Restrictions; Denominations	 	6
	Section 5.	 	Interest Payments; Interest for Purposes of Section 5 of Article Five	 	7
	Section 6.	 	Redemption of Bonds of Series Due 2037	 	7
	Section 7.	 	Absence of Maintenance and Replacement Fund	 	7
	
ARTICLE TWO

COVENANTS OF THE COMPANY
	

Section 1.	
 	

Confirmation of Covenants by Company in First Mortgage	
 	

7
	Section 2.	 	Covenants with Respect to Subsidiaries	 	7
	
ARTICLE THREE

AMENDMENT OF ARTICLE ONE, ARTICLE FIVE, ARTICLE ELEVEN,

AND ARTICLE EIGHTEEN OF THE FIRST MORTGAGE AS AMENDED
	

Section 1.	
 	

Amendment to Section 5 of Article One	
 	

8
	Section 2.	 	Amendment to Section 2 of Article Eleven	 	8
	Section 3.	 	Amendment to Section 3 of Article Five	 	8
	Section 4.	 	Amendment to Section 2 of Article Eighteen	 	8
	
ARTICLE FOUR

MISCELLANEOUS
	

Section 1.	
 	

Thirty-ninth Supplemental Indenture to Form Part of First Mortgage	
 	

9
	Section 2.	 	Definitions in First Mortgage Shall Apply to Thirty-ninth

Supplemental Indenture	 	9
	Section 3.	 	Execution in Counterparts	 	9

-i-

   
        THIRTY-NINTH SUPPLEMENTAL INDENTURE, dated as of September 1, 2002, between The Cincinnati Gas & Electric Company, a corporation of the State of Ohio (the "Company"), and
The Bank of New York, a New York banking corporation (the "Trustee"), as Trustee (formerly Irving Trust Company). 

        WHEREAS,
the Company has executed and delivered to the Trustee a certain Indenture, dated as of August 1, 1936 (the "First Mortgage"), to secure the payment of the principal of
and interest on an issue of bonds of the Company, unlimited in aggregate principal amount (the Bonds); 

        WHEREAS
,Article Two of the First Mortgage provides that the Bonds may be issued in series, and Article Eighteen of the First Mortgage as amended provides that the Company and the
Trustee may from time to time enter into one or more indentures supplemental to the First Mortgage for the purpose of establishing the terms and provisions of any series of Bonds other than the
initial series; 

        WHEREAS,
the Company and the Trustee have amended and supplemented the First Mortgage by means of thirty-eight supplemental indentures (the "First Mortgage as amended") under the Thirty-
third, Thirty-fourth, Thirty-fifth and Thirty-sixth of which there are Bonds now outstanding; 

        WHEREAS,
the Company, pursuant to resolutions duly adopted by its Board of Directors at a duly called and held meeting, has approved the form, terms, and provisions of this Thirty-ninth
Supplemental Indenture and authorized its execution for the purpose of creating under the First Mortgage as amended and this Thirty-ninth Supplemental Indenture a new series of First Mortgage Bonds of
Series Due 2037, which bonds are to be substantially in the following form, with appropriate omissions, insertions, and variations as in the First Mortgage as amended and in this Thirty-ninth
Supplemental Indenture provided or permitted: 

        [THE
REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 

-1-

 
        [FORM
OF BOND OF SERIES DUE 2037] 

        THE
HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN
ADDITION, THE BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE SECURITIES LAWS. 

        THIS
BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TO AMBAC ASSURANCE CORPORATION UNDER THE INSURANCE AGREEMENT DATED AS OF SEPTEMBER 1, 2002 BETWEEN AMBAC ASSURANCE CORPORATION AND THE
CINCINNATI GAS & ELECTYRIC COMPANY. 

	No.	
	 	$	

THE CINCINNATI GAS & ELECTRIC COMPANY  

FIRST MORTGAGE BOND

SERIES DUE 2037  

Due September 1, 2037  

        THE CINCINNATI GAS & ELECTRIC COMPANY, a corporation of the State of Ohio (the "Company"), for value received hereby promises to pay to AMBAC ASSURANCE
CORPORATION, or registered assigns, on September 1, 2037, at the office or agency of the Company in the Borough of Manhattan, The City of New York, the principal sum of
                         Dollars ($ ) in such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts, and to pay by
check to the person in whose name this Bond is registered interest thereon from the interest payment date to which interest has been paid last preceding the date hereof (unless the date hereof is an
interest payment date to which interest has been paid, in which case from the date hereof, or unless the date hereof is September 18, 2002, or prior thereto, in which case from the Initial
Interest Accrual Date (hereinbelow defined), or unless the date hereof is between a record date and the interest payment date for such record date, in which case from such interest payment date), at
the rate from time to time borne by the Ohio Air Quality Development Authority, State of Ohio, Air Quality Development Revenue Refunding Bonds, 2002 Series A (the "OAQDA Bonds") issued by the
Ohio Air Quality Development Authority ("OAQDA") under a Trust Indenture, dated as of September 1, 2002, between OAQDA and Fifth Third Bank, as trustee (the "OAQDA Indenture"), in like coin or
currency, payable at such office or agency on each Interest Payment Date (hereinbelow defined), until the Company's obligation with respect to the payment of such principal shall have been discharged;
provided, however, that in no event shall the rate of interest borne by this Bond exceed the Maximum Interest Rate (hereinbelow defined). 

        This
Bond is one of an issue of First Mortgage Bonds of the Company issued and to be issued in series under and pursuant to and equally secured by an indenture of mortgage and deed of
trust dated as of August 1, 1936, executed by the Company to The Bank of New York, as Trustee, as amended and supplemented as hereinafter stated, and is one of a series of such First Mortgage
Bonds, which series is designated as the First Mortgage Bonds, Series Due 2037, of the Company (the "Bonds of Series Due 2037"), the terms and provisions of which have been established by a
Thirty-ninth Supplemental Indenture dated as of September 1, 2002, executed by the Company to The Bank of New York, as Trustee. Subsequent to the execution and delivery of the indenture of
mortgage and deed of trust there have been executed and delivered thirty-nine indentures supplemental thereto, including the Thirty- 

-2-

 

ninth Supplemental Indenture, supplementing and amending as therein set forth certain provisions thereof. The indenture of mortgage and deed of trust and the supplemental indentures collectively are
sometimes called the Indenture. 

        The
"Initial Interest Accrual Date" for the Bonds of Series Due 2037 shall be the date that interest begins to accrue on the OAQDA Bonds. Each Interest Payment Date under the OAQDA
Indenture shall be an "Interest Payment Date" for the Bonds of Series 2037. The "Maximum Interest Rate" shall be the lesser of (a) 13% per annum or (b) so long as the Company is
subject to regulation by The Public Utilities Commission of Ohio ("PUCO"), 10% per annum or such other higher rate as may then be approved by the PUCO. 

        For
a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the Bonds and of the Trustee therein and thereto, the duties
and immunities of the Trustee, and the terms and conditions upon which the Bonds are issued and secured, reference is hereby made to the Indenture. The rights and obligations of the Company and of the
holders and registered owners of the Bonds of this issue may be modified or amended at the request of the Company by an indenture or indentures supplemental to the Indenture, executed pursuant to the
consent of the holders or registered owners of at least 662/3% in principal amount of the Bonds then outstanding affected by such modification or amendment, all in the manner and
subject to the limitations set forth in the Indenture, any consent by the holder or registered owner of any Bond being conclusive and binding upon such holder or registered owner and upon all of its
future holders and owners, irrespective of whether or not any notation of such consent is made upon the Bond; provided that no such modification or amendment by such supplemental indenture shall
extend the maturity of, or reduce the rate of interest on, or otherwise modify the terms of payment of the principal of, or interest on, this Bond, which obligations are absolute and unconditional,
nor permit the creation of any lien ranking prior to or equal with the lien of the Indenture on any of the mortgaged property. 

        This
Bond is issued to Ambac Assurance Corporation ("Ambac") as security for the payment by the Company of its obligations under that certain Insurance Agreement dated as of
September 10, 2002 between the Company and Ambac (the "Insurance Agreement"). The Insurance Agreement was entered into in connection with the delivery by Ambac of its Financial Guaranty
Insurance Policy insuring certain payments of principal of, and interest on, the OAQDA Bonds. The proceeds of the OAQDA Bonds have been loaned to the Company pursuant to a Loan Agreement, dated as of
September 1, 2002, between OAQDA and the Company. 

        Notwithstanding
any other provision of this Bond, no principal shall be due and payable on this Bond unless and until an Event of Default shall have occurred under Section 4.01 of
the Insurance Agreement by reason of a failure by the Company to pay its obligations under the Insurance Agreement. If such an Event of Default under the Insurance Agreement shall occur, it shall be
deemed to be a default, for purposes of the Indenture, in the payment of an amount of principal of this Bond equal to the amount of such unpaid obligations. 

        If
and when interest is paid on the OAQDA Bonds for any given period of time, then there is deemed to have been paid on the Bonds of Series Due 2037 an amount of interest equal to such
interest paid on the OAQDA Bonds. The Company shall promptly notify the Trustee of the amounts and Interest Payment Dates if any interest becomes payable on this Bond. 

        The
Bonds of Series 2037 shall be deemed to have been paid and no longer outstanding under the Indenture to the extent that the OAQDA Bonds are paid or deemed to have been paid
and are no longer outstanding under the OAQDA Indenture and all amounts owed by the Company to Ambac under the Insurance Agreement have been indefeasibly paid in full, and the Trustee has been
notified to such effect by the Company. 

-3-

 

        Notwithstanding
the foregoing, this Bond shall be deemed to have been paid and redeemed at any time if and to the extent that the OAQDA Bonds are redeemed pursuant to the OAQDA
Indenture, in whole or in part, in an amount equal to 100% of the principal amount of the OAQDA Bonds redeemed and all amounts owed by the Company to Ambac under the Insurance Agreement have been
indefeasibly paid in full. The Bonds of Series 2037 are not otherwise redeemable prior to their maturity. 

        In
the event of such redemption of the OAQDA Bonds, the Company shall notify Ambac and the Trustee that a like principal amount of this Bond shall be deemed to have been paid and
redeemed. Ambac shall surrender this Bond to the Company for cancellation and discharge by the Trustee upon the expiration of the Insurance Agreement or in the event that the Release Test (as defined
in the Insurance Agreement) is satisfied. 

        The
principal hereof may be declared or may become due on the conditions, in the manner and at the time set forth in the Indenture, upon the happening of a completed default as in the
Indenture provided. 

        This
Bond shall be transferable only as required to effect an assignment thereof to a successor-in-interest of Ambac under the Insurance Agreement. Subject to the
foregoing, this Bond is transferable as prescribed in the Indenture by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough
of Manhattan, The City of New York, upon surrender and cancellation of this Bond; and thereupon a new registered Bond or Bonds of Series Due 2037 for a like principal amount and of authorized
denominations will be issued to the transferee in exchange therefor as provided in the Indenture, and upon payment, if the Company shall require it, of the charges therein prescribed. The Company and
the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal and interest due
hereon and for all other purposes. 

        Bonds
of Series Due 2037 are issuable as registered Bonds in the denominations of $1,000 and integral multiples thereof. 

        No
recourse shall be had for the payment of the principal of, or interest on, this Bond, or under or upon any obligation, covenant, or agreement contained in the Indenture, against any
incorporator or any past, present, or future subscriber to capital stock, shareholder, officer, or director, as such, of the Company or of any predecessor or successor corporation, either directly or
through the Company or any predecessor or successor corporation, under any present or future rule of law, statute, or constitution or by the enforcement of any assessment or otherwise, all such
liability of incorporators, subscribers, shareholders, officers, and directors being released by the registered owner hereof by the acceptance of this Bond and being likewise waived and released by
the terms of the Indenture. 

        This
Bond shall not become valid or obligatory for any purpose until The Bank of New York, the Trustee under the Indenture, or its successor thereunder, shall have signed the form of
certificate endorsed hereon. 

        IN
WITNESS WHEREOF, The Cincinnati Gas & Electric Company has caused this Bond to be signed in its name by its President or a Vice President, manually or in facsimile, and its
corporate seal or a facsimile thereof to be affixed hereto or reproduced hereon and attested by its Secretary or an Assistant Secretary, manually or in facsimile. 

Dated

	

 	
 	

THE CINCINNATI GAS & ELECTRIC COMPANY,
	

 	
 	

By	
 	

 
	 	 	 	 	
 President

	

Attest:	
 	

 	
 	

 
	 	 	
 Secretary

	 	 

-4-

 
        [FORM OF TRUSTEE'S CERTIFICATE ON ALL BONDS OF SERIES DUE 2037] 

        This
Bond is one of the Bonds, of the series designated therein, described in the within-mentioned Indenture. 

	

 	
 	

THE BANK OF NEW YORK,

                                         
       Trustee,
	

 	
 	

 	
 	

 
	

 	
 	

By	
 	

 
	 	 	 	 	
 Authorized Signatory.

        
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 

-5-

 

        WHEREAS,
all things necessary to make the Bonds of Series Due 2037 herein described, when duly authenticated by the Trustee and issued by the Company, valid, binding, and legal
obligations of the Company, and to make this Thirty-ninth Supplemental Indenture a valid and binding agreement supplemental to the First Mortgage, have been done and performed; 

THIS
THIRTY-NINTH SUPPLEMENTAL INDENTURE WITNESSETH 

        In
consideration of the premises and of the acceptance and purchase of the Bonds of Series Due 2037, the Company agrees with the Trustee as follows: 

ARTICLE ONE

BONDS OF SERIES DUE 2037 AND ISSUE THEREOF  

        SECTION 1.    There shall be a series of Bonds designated as set forth in the second paragraph of the form of Bond, each of which shall bear the
descriptive title First Mortgage Bond. The aggregate principal amount of the Bonds of Series Due 2037 which may be outstanding under the First Mortgage as amended and this Thirty-ninth Supplemental
Indenture shall be limited to $84,000,000, except as provided in Section 9 of Article Two of the First Mortgage as amended. 

        The
Bonds of Series Due 2037 and the Trustee's certificate to be endorsed on all the Bonds of such series shall respectively be substantially as recited above, with such appropriate
omissions, insertions, and variations as in the First Mortgage as amended and in this Thirty-ninth Supplemental Indenture permitted. 

        SECTION 2.    Upon
the execution and delivery of this Thirty-ninth Supplemental Indenture and upon delivery to the Trustee of $84,000,000 aggregate principal amount of
Bonds of Series Due 2037, executed by the Company, and upon compliance by the Company with the provisions of the First Mortgage as amended, the Trustee shall, without awaiting the filing or recording
of this Thirty-ninth Supplemental Indenture, authenticate and deliver the Bonds. 

        SECTION 3.    Bonds
of Series Due 2037 shall be dated the date of their authentication, shall mature on September 1, 2037, shall bear interest at the rate set
forth in the first paragraph of the form of Bond until paid or redeemed as hereinafter provided, payable by check on each Interest Payment Date (as defined the form of the Bond), and shall be payable
as to both principal and interest in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts, at the office or
agency of the Company in The City of New York. 

        SECTION 4.    The
Bonds of Series 2037 shall be issued in the form of a separate, single, authenticated, fully registered bond for each such series which need not
be in the form of a lithographed or engraved certificate, but may be typewritten or printed on ordinary paper or such paper as the Trustee may reasonably request and shall be registered in the name of
Ambac Assurance Corporation ("Ambac"). 

        The
Bonds of Series 2037 are being issued to Ambac as security for the payment by the Company of its obligations under the Insurance Agreement, dated as of September 1,
2002, between Ambac and the Company (the "Insurance Agreement"), which was entered into in connection with the delivery by Ambac of its Financial Guaranty Insurance Policy insuring certain payments of
principal of, and interest on, certain bonds (the "OAQDA Bonds") to be issued under a Trust Indenture, dated as of September 1, 2002, between the Ohio Air Quality Development Authority
("OAQDA") and Fifth Third Bank, as trustee (the "OAQDA Indenture"). The proceeds of the OAQDA Bonds will be loaned to the Company pursuant to a Loan Agreement, dated as of September 1, 2002,
between the OAQDA and the Company. 

        The
Bonds of Series 2037 shall be transferable only as required to effect an assignment thereof to a successor-in-interest of Ambac under the Insurance
Agreement. 

-6-

 

        Bonds
of Series Due 2037 shall be issued in the denominations of $1,000 and authorized multiples thereof. 

        SECTION 5.    If
and when interest is paid on the OAQDA Bonds for any given period of time, then there is deemed to have been paid on the Bonds of Series 2037 an
amount of interest equal to such interest paid on the OAQDA Bonds. The Company shall promptly notify the Trustee of the amounts and Interest Payment Dates if any interest becomes payable on the Bonds
of Series 2037. 

        For
purposes of the calculation required by Section 5 of Article Five of the First Mortgage as amended, annual interest in respect of: the Bonds of Series 2037 shall be
equal to the sum of (i) the sum of the amounts determined by multiplying the principal amount of the OAQDA Bonds, if any, outstanding on the date of such calculation which bear a fixed rate of
interest by such fixed rate, plus (ii) the amount determined by multiplying the aggregate principal amount of the OAQDA Bonds, if any,
outstanding on the date of such calculation which bear interest at rates which may fluctuate or may fluctuate from time to time in accordance with methods specified in such OAQDA Bonds  by 13% per annum.

        SECTION 6.    The
Bonds of Series 2037 shall be deemed to have been paid and redeemed at any time if and to the extent that the OAQDA Bonds are redeemed pursuant
to the OAQDA Indenture relating thereto, in whole or in part, in an amount equal to 100% of the principal amount of the OAQDA Bonds redeemed and all amounts owed by the Company to Ambac under the
Insurance Agreement have been indefeasibly paid in full. In the event of such redemption of the OAQDA Bonds, the Company shall notify Ambac and the Trustee that a like principal amount of the Bonds of
Series 2037 shall be deemed to have been paid and redeemed. The Bonds of Series 2037 are not otherwise redeemable prior to their maturity. 

        SECTION 7.    The
covenant to provide a Maintenance and Replacement Fund contained in the provisions of Section 5 of Article Eight of the First Mortgage as
amended shall not apply in respect of the Bonds of Series Due 2037. 

ARTICLE TWO

COVENANTS OF THE COMPANY  

        SECTION 1.    All covenants and agreements by the Company in the First Mortgage as heretofore and hereby amended are hereby confirmed, except the
covenant contained in Section 5 of Article Eight. 

        SECTION 2.    So
long as any Bonds of Series Due 2037 shall be outstanding the Company (a) will not sell or otherwise
dispose of any equity securities owned by it of The Union Light, Heat and Power Company, a Kentucky corporation (the "Subsidiary") otherwise than to the Subsidiary or otherwise than as part of a
merger or consolidation of the Subsidiary into or with the Company or the liquidation of the Subsidiary, unless all the equity securities owned by the Company of the Subsidiary shall be sold or
otherwise disposed of and the proceeds of such sale or other disposition deposited with the Trustee hereunder to be held and disposed of as provided in Section 5 of Article Eleven of the First
Mortgage as amended, and (b) will not permit the Subsidiary to sell, otherwise than to the Company, any equity
securities issued by the Subsidiary; provided that nothing in this clause (b) shall prevent the Subsidiary, in connection with the sale of equity
securities to the Company, from selling equity securities to others than the Company to the extent necessary to satisfy the preemptive rights of minority stockholders under applicable law. 

        So
long as any Bonds of Series Due 2037 shall be outstanding, the Company (a) will not sell or otherwise dispose of any securities, other
than equity securities, owned by it of the Subsidiary otherwise than to the Subsidiary or otherwise than as part of the merger or consolidation of the Subsidiary into or with the Company; or  (b) so long
as any equity securities of the Subsidiary shall be owned by the 

-7-

 

Company, will not permit the Subsidiary to issue or sell, otherwise than to the Company, any securities, other than equity securities, issued by the Subsidiary if, in either case, after giving effect
to such sale or other disposition, the outstanding securities, other than equity securities, of the Subsidiary will be in excess of 75% of the plant account of the Subsidiary as shown by its books as
of the end of the calendar month next preceding such sale or other disposition after deducting from such plant account the amount of the reserves for depreciation and amortization applicable thereto
shown by the books of the Subsidiary and any other reserves shown by its books which are applicable to such plant account or any part thereof. 

        The
term "equity securities", as used in this Section, shall mean any securities other than bonds, notes, or other evidences of indebtedness bearing interest at a fixed rate and payable
on demand or having a fixed maturity date. 

ARTICLE THREE

AMENDMENT OF ARTICLE ONE, ARTICLE FIVE, ARTICLE ELEVEN, AND

ARTICLE EIGHTEEN OF THE FIRST MORTGAGE AS AMENDED  

        SECTION 1.  The Bonds of Series Due 2037 are hereby excluded from subdivision (7) of Section 5 of Article One of the First
Mortgage as heretofore and hereby amended or supplemented. 

        SECTION 2.  Article
Eleven of the First Mortgage is hereby amended by inserting after the words "or other similar property," in subdivision (1) of
Section 2 thereof the following: 

"or
any nuclear fuel materials, assemblies or components," 

        SECTION 3.  Article
Five of the First Mortgage is hereby amended by substituting for the words "in a principal amount not exceeding sixty per centum (60%) of" in
Section 3 thereof the following: 

"in
a principal amount not exceeding sixty-six and two-thirds per centum (662/3%) of" 

        SECTION 4.  Article
Eighteen of the First Mortgage is hereby amended by: 

        (a)    substituting
for the words "with the consent of holders of seventy-five per centum (75%) in aggregate principal amount of the Bonds at the time
outstanding;" in Section 2 thereof the following: 

"with
the consent of holders of sixty-six and two-thirds per centum (662/3%) in aggregate principal amount of the Bonds at the time outstanding;" 

        (b)  substituting
for the third paragraph of Section 2 thereof the following: 

"Whenever,
at any time after the completion of publication of said notice, the Company shall deliver to the Trustee an instrument or instruments executed by holders of at least sixty-six
and two-thirds per centum (662/3%) in aggregate principal amount of the Bonds affected, outstanding at the time of such delivery, consenting to the substance of the proposed
modification or amendment, thereupon the Trustee shall execute such supplemental indenture in substantially the form of the copy thereof on file with the Trustee, and no holder of any Bond shall have
any right or interest to object to the execution of said supplemental indenture or to object to any of the terms or provisions therein contained, or the operation thereof, or in any manner to question
the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Company from executing the same or from taking any action pursuant to the provisions thereof, provided that, in lieu
of an instrument or instruments executed by holders of Bonds, the consent of the holders of any series of Bonds to any such proposed modification or amendment may be set forth in and 

-8-

 

evidenced by the supplemental indenture establishing the terms and provisions of such series." 

ARTICLE FOUR

MISCELLANEOUS  

        SECTION 1.  The provisions of this Thirty-ninth Supplemental Indenture shall become effective immediately upon the execution and delivery
hereof, except that the provisions hereof modifying and amending the First Mortgage as amended shall become effective simultaneously with and upon the
initial issue of Bonds of Series Due 2037. From and after such initial issue of Bonds of Series Due 2037, this Thirty-ninth Supplemental Indenture shall form a part of the First Mortgage and
all the terms and conditions hereof shall be deemed to be part of the terms of the First Mortgage, as fully and with the same effect as if they had been set forth in the First Mortgage as originally
executed. Except as modified or amended by this Thirty-ninth Supplemental Indenture, the First Mortgage as amended shall remain and continue in full force and effect in accordance with the terms and
provisions thereof, and all the covenants, conditions, terms, and provisions of the First Mortgage as amended shall be applicable with respect to the Bonds of Series Due 2037, except in so far as such
covenants, conditions, terms, and provisions are limited and applicable only to the Bonds of another or other series, and all the covenants, conditions, terms, and provisions of the First Mortgage as
amended with respect to the Trustee shall remain in full force and effect and be applicable to the Trustee under this Thirty-ninth Supplemental Indenture in the same manner as though set out herein at
length. All representations and recitals contained in this Thirty-ninth Supplemental Indenture and in the Bonds of Series Due 2037 (save only the Trustee's certificate upon such Bonds) are made by and
on behalf of the Company, and the Trustee is in no way responsible therefor or for any statement therein contained or for the validity or sufficiency thereof. 

        SECTION 2.  The
terms defined in Article One of the First Mortgage as heretofore and hereby amended, when used in this Thirty-ninth Supplemental Indenture shall,
respectively, have the meanings set forth in such Article. 

        No
Bonds of Series Due 2037 shall be deemed to be outstanding within the meaning of the phrase "so long as any of the Bonds of Series Due 2037 shall be outstanding" as used in this
Thirty-ninth Supplemental Indenture, if the Company shall have redeemed all the Bonds of Series Due 2037 in accordance with this Thirty-ninth Supplemental Indenture. 

        SECTION 3.  This
Thirty-ninth Supplemental Indenture may be executed in several counterparts and each counterpart shall be an original instrument. 

-9-

 

        IN
WITNESS WHEREOF, THE CINCINNATI GAS & ELECTRIC COMPANY has caused this instrument to be signed on its behalf by one of its Vice Presidents and its corporate seal to be hereunto
affixed and attested by its Secretary, and The Bank of New York has caused this instrument to be signed on its behalf by a Vice President and its corporate seal to be hereunto affixed and attested by
an Assistant Treasurer, as of the day and year first above written. 

	

 	
 	
THE CINCINNATI GAS & ELECTRIC COMPANY,
	

 	
 	

By	
 	

/s/  RONALD R. REISING      
 Ronald R. Reising, Vice President—Finance
	

ATTEST:	
 	

 	
 	

 
	

/s/  JEROME A. VENNEMANN      
 Jerome A. Vennemann, Secretary	
 	

(CORPORATE SEAL)
	
Signed and acknowledged in our presence on behalf of

THE CINCINNATI GAS & ELECTRIC COMPANY:	
 	

 	
 	

 
	
/s/  DEBBY GARRETT      
 Debby Garrett, Witness	
 	

 	
 	

 
	

/s/  JULIE M. THOMPSON      
 Julie M. Thompson, Witness	
 	

 	
 	

 
	

 	
 	
THE BANK OF NEW YORK,
	

 	
 	

By	
 	

/s/  PAUL SCHMALZEL      
 Paul Schmalzel, Vice President
	

ATTEST:	
 	

 	
 	

 
	

/s/  JOSEPH LLORET      
 Joseph Lloret, Assistant Treasurer	
 	

(CORPORATE SEAL)
	
Signed and acknowledged in our presence on behalf of

THE BANK OF NEW YORK:	
 	

 	
 	

 
	
/s/  MARY LAGUMINA      
 Mary LaGumina, Witness	
 	

 	
 	

 
	

/s/  PATRICIA GALLAGHER      
 Patricia Gallagher, Witness	
 	

 	
 	

 

-10-

 

	STATE OF OHIO	 	)	 	 
	 	 	)	SS:	 
	COUNTY OF HAMILTON	 	)	 	 

        On this 9th day of September 2002, RONALD R. REISING and JEROME A.
VENNEMANN, came before me and acknowledged that they signed and sealed this instrument as VICE PRESIDENT—FINANCE and  SECRETARY, respectively, of
THE CINCINNATI GAS & ELECTRIC COMPANY and that the same were free
acts; and such VICE PRESIDENT—FINANCE, being duly sworn, said that he resides in HAMILTON COUNTY,
OHIO, that he is a VICE PRESIDENT of the corporation, that the seal affixed hereto is its corporate seal, that it was affixed by
order of its Board of Directors, and that he signed his name thereto by like order. 

        IN
WITNESS WHEREOF I have signed my name and affixed my official seal. 

	

(NOTARIAL SEAL)	
 	

 
	

 	
 	

 
	

 	
 	

/s/  CECILIA A. TEMPLE      

	 	 	Notary Public
	

My commission expires 09-28-03.	
 	

 
	

County of residence:    Hamilton	
 	

 

-11-

 

	STATE OF NEW YORK	 	)	 	 
	 	 	)	SS:	 
	COUNTY OF NEW YORK	 	)	 	 

        On this 10th day of September 2002, PAUL SCHMALZEL and JOSEPH
LLORET, came before me and acknowledged that they signed and sealed this instrument as VICE PRESIDENT and  ASSISTANT TREASURER, respectively, of
THE BANK OF NEW YORK, and that the same were free acts; and such  VICE PRESIDENT being duly sworn, said that he resides in EATONTOWN, NEW
JERSEY, that he is a  VICE PRESIDENT of THE BANK OF NEW YORK, that the seal affixed hereto is its corporate seal, that it was
affixed by authority of its Board of Directors, and that he signed his name thereto by like authority. 

        IN
WITNESS WHEREOF I have signed my name and affixed my official seal. 

	

 	
 	

(NOTARIAL SEAL)
	

 	
 	

/s/  ROBERT HIRSCH      

	 	 	Notary Public
	

My commission expires 2006.	
 	

 
	

County of residence: New York	
 	

 

This instrument was prepared by: 

Bradley
C. Arnett, Esq.

139 East Fourth Street

Cincinnati, Ohio 45202 

-12-

QuickLinks

Exhibit 4-QQQQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4-RRR    
  

FIFTY-FOURTH SUPPLEMENTAL

INDENTURE  

TO  

 INDENTURE DATED SEPTEMBER 1, 1939  

PSI ENERGY, INC.  

(FORMERLY NAMED "PUBLIC SERVICE COMPANY OF INDIANA, INC." AND

SUCCESSOR BY CONSOLIDATION TO PUBLIC SERVICE COMPANY OF INDIANA)  

TO  

LASALLE BANK NATIONAL ASSOCIATION

AS TRUSTEE  

(FORMERLY NAMED "LASALLE NATIONAL BANK" AND THE

SUCCESSOR TRUSTEE TO THE FIRST NATIONAL BANK OF CHICAGO)  

DATED AS OF SEPTEMBER 1, 2002  

 CREATING FIRST MORTGAGE BONDS, SERIES FFF, DUE MARCH 1, 2031 AND

FIRST MORTGAGE BONDS, SERIES GGG, DUE MARCH 1, 2019  

 AND  

 OTHERWISE SUPPLEMENTING AND AMENDING THE INDENTURE  

   TABLE OF CONTENTS  

	 
	 	Page

	PARTIES:	 	 
	 	Company (PSI Energy, Inc. formerly named Public Service Company of Indiana, Inc., successor by consolidation to Initial Mortgagor (Public Service Company of Indiana)),

and Trustee	 	1
	
RECITALS:	
 	

 
	 	Indenture of the Initial Mortgagor, dated September 1, 1939,

and First Supplemental Indenture thereto of the Initial Mortgagor,

dated as of March 1, 1941	 	1
	 	Consolidation of Initial Mortgagor (and four other companies) into the Company	 	1
	 	Execution by Company of Second Supplemental Indenture to the original Indenture	 	1
	 	Company substituted for Initial Mortgagor under Indenture1 Execution

by Company of Third through the Fifty-Third Supplemental Indentures

to the original Indenture	 	2
	 	LaSalle Bank National Association, successor to original Trustee	 	3
	 	Change of name of Company from Public Service Company

of Indiana, Inc. to PSI Energy, Inc.	 	3
	 	Amount of bonds presently outstanding under the Indenture	 	3
	 	Fifty-Fourth Supplemental Indenture and Bonds of Series FFF

and GGG authorized	 	3
	 	Conditions precedent performed	 	4
	

EXECUTING CLAUSE	
 	

4

i

 

	 
	 	 
	 	Page

	ARTICLE I.

FIRST MORTGAGE BONDS, SERIES FFF, DUE MARCH 1, 2031, AND

FIRST MORTGAGE BONDS, SERIES GGG, DUE MARCH 1, 2019.
	

Section 1.	
 	

Creation and designation of Bonds of Series FFF and GGG	
 	

3
	Section 2.	 	Bonds of Series FFF and GGG to be in registered form only	 	3
	 	 	Form of face of the Series FFF Bond	 	5
	 	 	Form of reverse of the Series FFF Bond and Trustee's certificate	 	7
	 	 	Form of face of the Series GGG Bond	 	9
	 	 	Form of reverse of the Series GGG Bond and Trustee's certificate	 	11
	Section 3.	 	Date of Bonds of Series FFF and GGG	 	13
	Section 4.	 	Maturity dates and interest rates of Bonds of Series FFF and GGG	 	13
	Section 5.	 	Place and manner of payment of Bonds of Series FFF and GGG	 	13
	Section 6.	 	Denominations and numbering of definitive Bonds of Series FFF and GGG	 	13
	 	 	Temporary Bonds of Series FFF and GGG and exchange thereof for definitive bonds	 	14
	Section 7	 	Maintenance and Renewal Fund shall not apply to the Bonds of Series FFF and GGG	 	14
	Section 8.	 	Inspection requirements shall not apply to the Bonds of Series FFF and GGG	 	14
	Section 9.	 	Company's right to further amend the original Indenture	 	14
	
ARTICLE II.

ISSUANCE OF BONDS OF SERIES FFF AND GGG.
	

Section 1.	
 	

Aggregate principal amount of Bonds of Series FFF and Bonds of Series GGG issuable at once	
 	

15
	
ARTICLE III.

INDENTURE AMENDMENTS.
	

Section 1.	
 	

Amendments to Article I of the original Indenture	
 	

15
	Section 2.	 	Amendments to Article VII of the original Indenture	 	15
	Section 3.	 	No sinking fund for the Bonds of Series FFF and GGG	 	16

	

ARTICLE IV.

CONCERNING THE TRUSTEE.
	

Acceptance of trust by Trustee	
 	

16
	Trustee not responsible for validity or sufficiency of Fifty-Fourth

Supplemental Indenture, etc.	 	16
	Terms and conditions of Article XVII of the original Indenture

to be applied to the Fifty-Fourth Supplemental Indenture	 	16

ii

 

	
ARTICLE V.

MISCELLANEOUS PROVISIONS.
	

Section 1.	
 	

References in any article or section of the original Indenture refer to such article or section as amended by all Fifty-Four Supplemental Indentures thereto	
 	

17
	Section 2.	 	Operation and construction of amendments to the original Indenture	 	17
	Section 3.	 	All covenants, etc., for sole benefit of parties to the Fifty-Fourth Supplemental Indenture and holders of bonds	 	17
	Section 4.	 	Table of contents and headings of articles not part of Fifty-Fourth Supplemental Indenture	 	17
	Section 5.	 	Execution of Fifty-Fourth Supplemental Indenture in counterparts	 	17
	Section 6.	 	Payments Due on Legal Holidays	 	17

	

ATTESTATION CLAUSE	
 	

18
	SIGNATURES	 	18
	ACKNOWLEDGMENT BY COMPANY	 	19
	ACKNOWLEDGMENT BY TRUSTEE	 	20

iii

   
        FIFTY-FOURTH SUPPLEMENTAL INDENTURE dated as of the first day of September, 2002, made and entered into by and between PSI ENERGY, INC. (hereinafter commonly referred to as the
"Company"), a corporation organized and existing under the laws of the State of Indiana, formerly named Public Service Company of Indiana, Inc., and the successor by consolidation to Public
Service Company of Indiana, an Indiana corporation, party of the first part, and LASALLE BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United
States and having its office or place of business in the City of Chicago, State of Illinois, formerly named LaSalle National Bank, and the successor trustee to The First National Bank of Chicago
(hereinafter commonly referred to as the "Trustee"), party of the second part, 

        WITNESSETH:

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

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

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

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

        WHEREAS,
the Company has subsequently executed and delivered, for purposes authorized under the Indenture, a Third Supplemental Indenture dated as of March 1, 1942, a Fourth
Supplemental Indenture dated as of May 1, 1943, a Fifth Supplemental Indenture dated as of August 1, 1944, a Sixth Supplemental Indenture dated as of September 1, 1945, a Seventh
Supplemental Indenture dated as of November 1, 1947, an Eighth Supplemental Indenture dated as of January 1, 1949, a Ninth Supplemental Indenture dated as of May 1, 1950, a Tenth
Supplemental Indenture dated as of July 1, 1952, an Eleventh Supplemental Indenture dated as of January 1, 1954, a Twelfth Supplemental Indenture dated as of October 1, 1957, a
Thirteenth Supplemental Indenture dated as of February 1, 1959, a Fourteenth Supplemental Indenture dated as of July 15, 1960, a Fifteenth Supplemental Indenture dated as of
June 15, 1964, a Sixteenth Supplemental Indenture dated as of January 1, 1969, a Seventeenth Supplemental Indenture dated as of March 1, 1970, an Eighteenth Supplemental Indenture
dated as of January 1, 1971, a Nineteenth Supplemental Indenture dated as of January 1, 1972, a 

1

 

Twentieth Supplemental Indenture dated as of February 1, 1974, a Twenty-First Supplemental Indenture dated as of August 1, 1974, a Twenty-Second Supplemental Indenture dated as of
August 1, 1975, a Twenty-Third Supplemental Indenture dated as of January 1, 1977, a Twenty-Fourth Supplemental Indenture dated as of October 1, 1977, a Twenty-Fifth Supplemental
Indenture dated as of September 1, 1978, a Twenty-Sixth Supplemental Indenture dated as of September 1, 1978, a Twenty-Seventh Supplemental Indenture dated as of March 1, 1979, a
Twenty-Eighth Supplemental Indenture dated as of May 1, 1979, a Twenty-Ninth Supplemental Indenture dated as of March 1, 1980, a Thirtieth Supplemental Indenture dated as of
August 1, 1980, a Thirty-First Supplemental Indenture dated as of February 1, 1981, a Thirty-Second Supplemental Indenture dated as of August 1, 1981, a Thirty-Third Supplemental
Indenture dated as of December 1, 1981, a Thirty-Fourth Supplemental Indenture dated as of December 1, 1982, a Thirty-Fifth Supplemental Indenture dated as of March 30, 1984, a
Thirty-Sixth Supplemental Indenture dated as of November 15, 1984, a Thirty-Seventh Supplemental Indenture dated as of August 15, 1985, a Thirty-Eighth Supplemental Indenture dated as of
October 1, 1986, a Thirty-Ninth Supplemental Indenture dated as of March 15, 1987, a Fortieth Supplemental Indenture dated as of June 1, 1987, a Forty-First Supplemental Indenture
dated as of June 15, 1988, a Forty-Second Supplemental Indenture dated as of August 1, 1988, a Forty-Third Supplemental Indenture dated as of September 15, 1989, a Forty-Fourth
Supplemental Indenture dated as of March 15, 1990, a Forty-Fifth Supplemental Indenture dated as of March 15, 1990, a Forty-Sixth Supplemental Indenture dated as of June 1, 1990,
a Forty-Seventh Supplemental Indenture dated as of July 15, 1991, a Forty-Eighth Supplemental Indenture dated as of July 15, 1992, a Forty-Ninth Supplemental Indenture dated as of
February 15, 1993, a Fiftieth Supplemental Indenture dated as of February 15, 1993, a Fifty-First Supplemental Indenture dated as of February 1, 1994, a Fifty-Second Supplemental
Indenture dated as of April 30, 1999, and a Fifty-Third Supplemental Indenture dated as of June 15, 2001, each supplementing and amending the Indenture; and 

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

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

        WHEREAS,
as of September 1, 2002, the only bonds that have been heretofore issued under the Indenture which are now outstanding are $300,000,000 aggregate principal amount of "PSI
Energy, Inc. First Mortgage Bonds, Series VV, Due July 15, 2026" and $545,000,000 aggregate principal amount of "PSI Energy, Inc. First Mortgage Bonds, Series WW, Due
August 15, 2027" and $50,000,000 aggregate principal amount of "PSI Energy, Inc. First Mortgage Bonds, Series ZZ, 53/4%, Due February 15, 2028" and $30,000,000
aggregate principal amount of "PSI Energy, Inc. First Mortgage Bonds, Series AAA, 71/8%, Due February 1, 2024" and $124,665,000 aggregate principal amount of "PSI
Energy, Inc. First Mortgage Bonds, Series BBB, 8%, Due July 15, 2009" (such bonds being hereinafter referred to as "Bonds of Series BBB") and $53,055,000 aggregate principal amount of
"PSI Energy, Inc. First Mortgage Bonds, Series CCC, 8.85%, Due January 15, 2022" and $38,000,000 aggregate principal amount of "PSI Energy, Inc. First Mortgage Bonds, Series DDD,
8.31%, Due September 1, 2032" and $325,000,000 aggregate principal amount of "PSI Energy, Inc. First Mortgage Bonds, Series EEE, 6.65%, Due June 15, 2006"; and 

        WHEREAS,
in accordance with the provisions of Section 1 of Article XVIII of the Indenture, the Board of Directors has authorized the execution and delivery by the Company
of a Fifty-Fourth Supplemental Indenture, substantially in the form of this Fifty-Fourth Supplemental Indenture, for the 

2

 

purpose of creating a fifty-first and fifty-second series of bonds to be issued under the Indenture, to be known as, respectively, "PSI Energy, Inc. First Mortgage Bonds, Series FFF, Due
March 1, 2031" (such series to consist of a single bond being hereinafter referred to as the "Series FFF Bond") and "PSI Energy, Inc. First Mortgage Bonds, Series GGG, Due
March 1, 2019" (such series to consist of a single bond being hereinafter referred to as the "Series GGG Bond") (the Series FFF Bond and the Series GGG Bond, when referred to collectively in
this Fifty-Fourth Supplemental Indenture, shall be hereinafter referred to as the "Bonds of Series FFF and GGG"), and prescribing the form and substance of the Bonds of Series FFF and GGG and the
terms, provisions and characteristics thereof, and for the purpose of adding to the covenants and agreements of the Company for the protection of the bondholders and of the trust estate and of making
such changes in the Indenture as are deemed necessary or desirable and as are permitted by the Indenture; and 

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

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

ARTICLE I. 

FIRST MORTGAGE BONDS, SERIES FFF, DUE MARCH 1, 2031 AND

FIRST MORTGAGE BONDS, SERIES GGG, DUE MARCH 1, 2019 

        Section 1.    There are hereby created a fifty-first and fifty-second series of bonds to be issued under and secured by
the Indenture, to be designated as "PSI Energy, Inc. First Mortgage Bonds, Series FFF, Due March 1, 2031" (such series to consist of a single bond, which shall be the Series FFF Bond
hereinbefore referred to) and "PSI Energy, Inc. First Mortgage Bonds, Series GGG, Due March 1, 2019" (such series to consist of a single bond, which shall be the Series GGG Bond
hereinbefore referred to), respectively. 

        Section 2.    The Series FFF Bond and Series GGG Bond each shall be issued only in the form of a separate, single,
authenticated, fully registered bond which (i) need not be in the form of a lithographed or engraved certificate, but may be typewritten or printed on ordinary paper or such paper as the
Trustee may reasonably request, (ii) shall represent and be denominated in a principal amount not to exceed twenty-three million dollars ($23,000,000), with respect to Series FFF Bond, and a
principal amount not to exceed twenty-four million six hundred thousand dollars ($24,600,000) with respect to the Series GGG Bond, (iii) shall be executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture, and (iv) shall be registered in the name of Ambac Assurance Corporation, or its permitted assigns ("Ambac"). 

        The
Series FFF Bond is being issued to Ambac as security for the payment by the Company of its obligations under the Insurance Agreement, dated as of September 1, 2002, between
Ambac and the Company, which was entered into in connection with the delivery by Ambac of its Financial Guaranty Insurance Policy insuring certain payments of principal of, and interest on, certain
bonds (the "Series 2002A IDFA Bonds") to be issued under a Trust Indenture, dated as of September 1, 2002, between the Indiana Development Finance Authority ("IDFA") and Fifth Third
Bank, Indiana, as trustee. The proceeds of the Series 2002A IDFA Bonds will be loaned to the Company pursuant to a Loan Agreement, dated as of September 1, 2002, between IDFA and the
Company. 

3

 

        The
Series GGG Bond is being issued to Ambac as security for the payment by the Company of its obligations under an Insurance Agreement, dated as of September 1, 2002, between
Ambac and the Company, which was entered into in connection with the delivery by Ambac of its Financial Guaranty Insurance Policy insuring certain payments of principal of, and interest on, certain
bonds (the "Series 2002B IDFA Bonds") to be issued under a Trust Indenture, dated as of September 1, 2002, between the IDFA and Fifth Third Bank, Indiana, as trustee. The proceeds of the
Series 2002B IDFA Bonds will be loaned to the Company pursuant to a Loan Agreement, dated as of September 1, 2002, between IDFA and the Company. 

        The
Series FFF Bond and the Series GGG Bond each shall be transferable only as required to effect an assignment thereof to a successor-in-interest of Ambac under
the applicable Insurance Agreement referred to hereinabove, provided that the Trustee shall have received notice from the Company of such an assignment (which notice the Trustee may rely upon without
further inquiry). 

        The
Series FFF Bond and the Trustee's certificate to be endorsed thereon, and the Series GGG Bond and the Trustee's certificate to be endorsed thereon, shall be substantially in the
following forms, respectively: 

[THE
REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 

4

 
(FORM OF FACE OF THE SERIES FFF BOND) 

THE
HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE BOND
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE SECURITIES LAWS. 

THIS
BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TO AMBAC ASSURANCE CORPORATION UNDER THE INSURANCE AGREEMENT DATED AS OF SEPTEMBER 1, 2002 BETWEEN AMBAC ASSURANCE CORPORATION AND PSI
ENERGY, INC. 

	

No. FFF-	
 	

$                        

PSI ENERGY, INC.

FIRST MORTGAGE BOND, SERIES FFF,

DUE MARCH 1, 2031 

        PSI
Energy, Inc., an Indiana corporation (hereinafter called the "Company"), for value received, hereby promises to pay to AMBAC ASSURANCE CORPORATION, or registered assigns, the
principal sum of                        Dollars ($            ) on the
first day of March, 2031 and to pay interest on said principal sum, on each Interest Payment Date (hereinbelow defined), until said
principal sum is paid, at the rate from time to time borne by the Indiana Development Finance Authority Environmental Refunding Revenue Bonds, Series 2002A (the "Series 2002A IDFA
Bonds") issued by the Indiana Development Finance Authority ("IDFA") under a Trust Indenture, dated as of September 1, 2002, between IDFA and Fifth Third Bank, Indiana, as trustee (the "IDFA
Indenture"); provided, however, that in no event shall the rate of interest borne by this Bond exceed 13% per annum. Both the principal of and the interest on this bond shall be payable in any coin or
currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts at the office or agency of the Company in Plainfield, Indiana, or, at
the option of the registered owner hereof, at the office or agency of the Company in the Borough of Manhattan, the City of New York, State of New York, except that interest on this bond may be paid,
at the option of the Company, by check or draft mailed to the address of the person entitled thereto as it appears on the books of the Company maintained for that purpose. 

        This
bond is issued to Ambac Assurance Corporation, or its permitted assigns ("Ambac") as security for the payment by the Company of its obligations under that certain Insurance
Agreement dated as of September 12, 2002 between the Company and Ambac (the "Insurance Agreement"). The Insurance Agreement was entered into in connection with the delivery by Ambac of its
Financial Guaranty Insurance Policy insuring certain payments of principal of, and interest on, the Series 2002A IDFA Bonds. The proceeds of the Series 2002A IDFA Bonds have been loaned
to the Company pursuant to a Loan Agreement, dated as of September 1, 2002, between IDFA and the Company. 

        Notwithstanding
any other provision of this bond, no principal shall be due and payable on this bond unless and until an Event of Default shall have occurred under Section 4.01 of
the Insurance Agreement by reason of a failure by the Company to pay its obligations under the Insurance Agreement and the Trustee shall have received notice from Ambac or the Company of such an Event
of Default (which notice the Trustee may rely upon without further inquiry). If such an Event of Default under the
Insurance Agreement shall occur, it shall be deemed to be a default, for purposes of the Indenture, in the payment of an amount of principal of this bond equal to the amount of such unpaid obligation. 

5

 

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

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

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

Dated
as of: 

	

 	
 	

 	
 	

PSI ENERGY, INC.
	

 	
 	

 	
 	

By	
 	

  

	

 	
 	

 	
 	

 	
 	

	
 	

President
	

ATTEST:	
 	

 	
 	

 	
 	

 	
 	

 
	  
	 	 	 	 	 	 
	

	
 	

Secretary	
 	

 	
 	

 	
 	

 

6

 
(FORM OF REVERSE OF THE SERIES FFF BOND) 

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

        This
bond is designated as "PSI Energy, Inc. First Mortgage Bonds, Series FFF, Due March 1, 2031" (hereinafter referred to as the "Series FFF Bond") of the Company issued
under and secured by the Indenture and created by a Fifty-Fourth Supplemental Indenture, dated as of September 1, 2002 (the "Fifty-Fourth Supplemental Indenture"), which also amends the
Indenture. 

        The
rights and obligations of the Company and of the bearers and registered owners of bonds may be modified or amended with the consent of the Company by an affirmative vote of the
bearers or registered owners entitled to vote of at least seventy-five per centum (75%) in principal amount of the bonds then outstanding at a meeting of bondholders called for the purpose
(and by an affirmative vote of the bearers or registered owners entitled to vote of at least seventy-five per centum (75%) in principal amount of bonds of any series affected by such
modification or amendment in case one or more, but less than all, series of bonds are so affected), all in the manner and subject to the limitations set forth in the Indenture, any consent by the
bearer or registered owner of any bond being conclusive and binding upon such bearer or registered owner and upon all future bearers or registered owners of such bond, irrespective of whether or not
any notation of such consent is made on such bond; provided that no such modification or amendment shall, among other things, extend the maturity or reduce the amount of, or reduce the rate of
interest on, or otherwise modify the terms of the payment of the principal of, or interest or premium (if any) on this bond, which obligations are absolute and unconditional, or permit the creation of
any lien ranking prior to or equal with the lien of the Indenture on any of the mortgaged property. The Fifty-Fourth Supplemental Indenture provides that at any time when no bonds issued under the
Indenture prior to the issuance of the "PSI Energy, Inc. First Mortgage Bonds, Series BBB, 8%, Due July 15, 2009" are outstanding, the Company reserves the right to amend the Indenture,
without the consent or other action by the holders of the bonds outstanding at that time, to decrease the seventy-five per centum (75%) vote requirement referred to above to
sixty-six and two-thirds per centum (662/3%). 

        The
Series FFF Bond shall be transferable only as required to effect an assignment thereof to a successor-in-interest of Ambac under the Insurance Agreement,
provided that the Trustee shall have received notice from the Company of such an assignment (which notice the Trustee may rely upon without further inquiry). 

        Each
Interest Payment Date under the IDFA Indenture shall be an Interest Payment Date for the Series FFF Bond. If and when interest is paid on the Series 2002A IDFA Bonds for any
given period of time, then there is deemed to have been paid on this Series FFF Bond an amount of interest equal to such interest paid on the Series 2002A IDFA Bonds. The Company shall promptly
notify the Trustee of the amounts and Interest Payment Dates if any interest becomes payable on this Series FFF Bond. 

        The
Series FFF Bond shall be deemed to have been paid and no longer outstanding under the Indenture to the extent that Series 2002A IDFA Bonds are paid or deemed to have been paid
and are no longer outstanding under the IDFA Indenture and all amounts owed by the Company to Ambac 

7

 

under the Insurance Agreement have been indefeasibly paid in full, and the Trustee has received notice to such effect from the Company (which notice the Trustee may rely upon without further
inquiry). 

        Notwithstanding
the foregoing, this bond shall be deemed to have been paid and redeemed at any time if and to the extent that the Series 2002A IDFA Bonds are redeemed pursuant to
the IDFA Indenture, in whole or in part, in an amount equal to 100% of the principal amount of the Series 2002A IDFA Bonds redeemed and all amounts owed by the Company to Ambac under the
Insurance Agreement have been indefeasibly paid in full. In such an event, the Company shall notify Ambac and the Trustee that a like principal amount of this bond shall be deemed to have been paid
and redeemed. The Series FFF Bond is not otherwise redeemable prior to its maturity. 

        Ambac
shall surrender this bond to the Company for cancellation and discharge by the Trustee upon the expiration of the Insurance Agreement or in the event that the Release Test (as
defined in the Insurance Agreement) is satisfied. The Trustee may cancel and discharge the Series FFF Bond upon presentment thereof by the Company without making further inquiry. 

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

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

(FORM OF TRUSTEE'S CERTIFICATE) 

TRUSTEE'S CERTIFICATE 

        This
bond is the Series FFF Bond designated therein referred to and described in the within mentioned Indenture and Fifty-Fourth Supplemental Indenture. 

	

 	

LASALLE BANK NATIONAL ASSOCIATION,

    AS TRUSTEE,
	

 	

By	

  
        Authorized Officer

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 

8

   (FORM OF FACE OF THE SERIES GGG BOND) 

THE
HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE BOND
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE SECURITIES LAWS. 

THIS
BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TO AMBAC ASSURANCE CORPORATION UNDER THE INSURANCE AGREEMENT DATED AS OF SEPTEMBER 1, 2002 BETWEEN AMBAC ASSURANCE CORPORATION AND PSI
ENERGY, INC. 

	

No. GGG-	
 	

$                        

PSI ENERGY, INC.

FIRST MORTGAGE BOND, SERIES GGG,

DUE MARCH 1, 2019 

        PSI
Energy, Inc., an Indiana corporation (hereinafter called the "Company"), for value received, hereby promises to pay to AMBAC ASSURANCE CORPORATION, or registered assigns, the
principal sum of                        Dollars ($            ) on the
first day of March, 2019 and to pay interest on said principal sum, on each Interest Payment Date (hereinbelow defined), until said
principal sum is paid, at the rate from time to time borne by the Indiana Development Finance Authority Environmental Refunding Revenue Bonds, Series 2002B (the "Series 2002B IDFA
Bonds") issued by the Indiana Development Finance Authority ("IDFA") under a Trust Indenture, dated as of September 1, 2002, between IDFA and Fifth Third Bank, Indiana, as trustee (the "IDFA
Indenture"); provided, however, that in no event shall the rate of interest borne by this Bond exceed 13% per annum. Both the principal of and the interest on this bond
shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts at the office or agency of the Company
in Plainfield, Indiana, or, at the option of the registered owner hereof, at the office or agency of the Company in the Borough of Manhattan, the City of New York, State of New York, except that
interest on this bond may be paid, at the option of the Company, by check or draft mailed to the address of the person entitled thereto as it appears on the books of the Company maintained for that
purpose. 

        This
bond is issued to Ambac Assurance Corporation, or its permitted assigns ("Ambac") as security for the payment by the Company of its obligations under that certain Insurance
Agreement dated as of September 12, 2002 between the Company and Ambac (the "Insurance Agreement"). The Insurance Agreement was entered into in connection with the delivery by Ambac of its
Financial Guaranty Insurance Policy insuring certain payments of principal of, and interest on, the Series 2002B IDFA Bonds. The proceeds of the Series 2002B IDFA Bonds have been loaned
to the Company pursuant to a Loan Agreement, dated as of September 1, 2002, between IDFA and the Company. 

        Notwithstanding
any other provision of this bond, no principal shall be due and payable on this bond unless and until an Event of Default shall have occurred under Section 4.01 of
the Insurance Agreement by reason of a failure by the Company to pay its obligations under the Insurance Agreement and the Trustee shall have received notice from Ambac or the Company of such an Event
of Default (which notice the Trustee may rely upon without further inquiry). If such an Event of Default under the Insurance Agreement shall occur, it shall be deemed to be a default, for purposes of
the Indenture, in the payment of an amount of principal of this bond equal to the amount of such unpaid obligation. 

9

 

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

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

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

	

Dated as of:	
 	

 	
 	

PSI ENERGY, INC.
	

 	
 	

 	
 	

By	
 	

  

	

 	
 	

 	
 	

 	
 	

	
 	

President
	

ATTEST:	
 	

 	
 	

 	
 	

 	
 	

 
	  
	 	 	 	 	 	 
	

	
 	

Secretary	
 	

 	
 	

 	
 	

 

10

 
(FORM OF REVERSE OF THE SERIES GGG BOND) 

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

        This
bond is designated as "PSI Energy, Inc. First Mortgage Bonds, Series GGG, Due March 1, 2019" (hereinafter referred to as the "Series GGG Bond") of the Company issued
under and secured by the Indenture and created by a Fifty-Fourth Supplemental Indenture, dated as of September 1, 2002 (the "Fifty-Fourth Supplemental Indenture"), which also amends the
Indenture. 

        The
rights and obligations of the Company and of the bearers and registered owners of bonds may be modified or amended with the consent of the Company by an affirmative vote of the
bearers or registered owners entitled to vote of at least seventy-five per centum (75%) in principal amount of the bonds then outstanding at a meeting of bondholders called for the purpose
(and by an affirmative vote of the bearers or registered owners entitled to vote of at least seventy-five per centum (75%) in principal amount of bonds of any series affected by such
modification or amendment in case one or more, but less than all, series of bonds are so affected), all in the manner and subject to the limitations
set forth in the Indenture, any consent by the bearer or registered owner of any bond being conclusive and binding upon such bearer or registered owner and upon all future bearers or registered owners
of such bond, irrespective of whether or not any notation of such consent is made on such bond; provided that no such modification or amendment shall, among other things, extend the maturity or reduce
the amount of, or reduce the rate of interest on, or otherwise modify the terms of the payment of the principal of, or interest or premium (if any) on this bond, which obligations are absolute and
unconditional, or permit the creation of any lien ranking prior to or equal with the lien of the Indenture on any of the mortgaged property. The Fifty-Fourth Supplemental Indenture provides that at
any time when no bonds issued under the Indenture prior to the issuance of the "PSI Energy, Inc. First Mortgage Bonds, Series BBB, 8%, Due July 15, 2009" are outstanding, the Company
reserves the right to amend the Indenture, without the consent or other action by the holders of the bonds outstanding at that time, to decrease the seventy-five per centum (75%) vote
requirement referred to above to sixty-six and two-thirds per centum (662/3%). 

        The
Series GGG Bond shall be transferable only as required to effect an assignment thereof to a successor-in-interest of Ambac under the Insurance Agreement,
provided that the Trustee shall have received notice from the Company of such an assignment (which notice the Trustee may rely upon without further inquiry). 

        Each
Interest Payment Date under the IDFA Indenture shall be an Interest Payment Date for the Series GGG Bond. If and when interest is paid on the Series 2002B IDFA Bonds for any
given period of time, then there is deemed to have been paid on this Series GGG Bond an amount of interest equal to such interest paid on the Series 2002B IDFA Bonds. The Company shall promptly
notify the Trustee of the amounts and Interest Payment Dates if any interest becomes payable on this Series GGG Bond. 

        The
Series GGG Bond shall be deemed to have been paid and no longer outstanding under the Indenture to the extent that Series 2002B IDFA Bonds are paid or deemed to have been paid
and are no longer outstanding under the IDFA Indenture and all amounts owed by the Company to Ambac 

11

 

under the Insurance Agreement have been indefeasibly paid in full, and the Trustee has received notice to such effect from the Company (which notice the Trustee may rely upon without further
inquiry). 

        Notwithstanding
the foregoing, this bond shall be deemed to have been paid and redeemed at any time if and to the extent that the Series 2002B IDFA Bonds are redeemed pursuant to
the IDFA Indenture, in whole or in part, in an amount equal to 100% of the principal amount of the Series 2002B IDFA Bonds redeemed and all amounts owed by the Company to Ambac under the
Insurance Agreement have been indefeasibly paid in full. In such an event, the Company shall notify Ambac and the Trustee that a like principal amount of this bond shall be deemed to have been paid
and redeemed. The Series GGG Bond is not otherwise redeemable prior to its maturity. 

        Ambac
shall surrender this bond to the Company for cancellation and discharge by the Trustee upon the expiration of the Insurance Agreement or in the event that the Release Test (as
defined in the
Insurance Agreement) is satisfied. The Trustee may cancel and discharge the Series GGG Bond upon presentment thereof by the Company without making further inquiry. 

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

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

(FORM OF TRUSTEE'S CERTIFICATE) 

TRUSTEE'S CERTIFICATE 

        This
bond is the Series GGG Bond designated therein referred to and described in the within mentioned Indenture and Fifty-Fourth Supplemental Indenture. 

	

 	
 	

LASALLE BANK NATIONAL ASSOCIATION,

    AS TRUSTEE,
	

 	
 	

By	

  
        Authorized Officer

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 

12

 

        Section 3.    Each Bond of Series FFF and GGG issued prior to the first interest payment date shall be dated as of
September 12, 2002, and otherwise shall be dated as provided in Section 1 of Article II of the Indenture. 

        Section 4.    The Series FFF Bond shall be due and payable on March 1, 2031, and shall bear interest from
September 12, 2002, at the rate from time to time borne by the Series 2002A IDFA Bonds (as referred to in the form of the bond hereinabove set forth). The Series GGG Bond shall be due
and payable on March 1, 2019, and shall bear interest from September 12, 2002, at the rate from time to time borne by the Series 2002B IDFA Bonds (as referred to in the form of
the bond hereinabove set forth). 

        If
and when interest is paid on the Series 2002A IDFA Bonds for any given period of time, then there is deemed to have been paid on the Series FFF Bond an amount of interest equal
to such interest paid on the Series 2002A IDFA Bonds. If and when interest is paid on the Series 2002B IDFA Bonds for any given period of time, then there is deemed to have been paid on
the Series GGG Bond an amount of interest equal to such interest paid on the Series 2002B IDFA Bonds. The Company shall promptly notify the Trustee of the amounts and Interest Payment Dates if
any interest becomes payable on the Series FFF Bond or the Series GGG Bond. 

        For
purposes of the calculation required by the first paragraph of Section 5 of Article IV of the Indenture, annual interest in respect of: 

        (a)  the
Series FFF Bond shall be equal to the sum of (i) the sum of the amounts determined by multiplying the principal amount of the Series 2002A IDFA, if
any, outstanding on the date of such calculation which bear a fixed rate of interest by such fixed rate, plus (ii) the amount determined by
multiplying the aggregate principal amount of the Series 2002A IDFA Bonds, if any, outstanding on the date of such calculation which bear interest at rates which may fluctuate or may fluctuate
from time to time in accordance with methods specified in such Series 2002A IDFA Bonds by 13% per annum; and 

        (b)  the
Series GGG Bond shall be equal to the sum of (i) the sum of the amounts determined by multiplying the principal amount of the Series 2002B IDFA, if
any, outstanding on the date of such calculation which bear a fixed rate of interest by such fixed rate, plus (ii) the amount determined by
multiplying the aggregate principal amount of the Series 2002B IDFA Bonds, if any, outstanding on the date of such calculation which bear interest at rates which may fluctuate or may fluctuate
from time to time in accordance with methods specified in such Series 2002B IDFA Bonds by 13% per annum. 

        Section 5.    Both the principal of and the interest on the Bonds of Series FFF and GGG shall be payable in any coin or
currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, at the office or agency of the Company in Plainfield, Indiana, or, at
the option of the holder thereof, at the office or agency of the Company in the Borough of Manhattan, the City of New York, State of New York, except that interest on the Bonds of Series FFF and GGG
may be paid, at the option of the Company, by check or draft mailed to the address of the person entitled thereto as it appears on the books of the Company maintained for that purpose. 

        Section 6.    A single Series FFF Bond shall be issued and shall be numbered "FFF-1." A single Series GGG
Bond shall be issued and shall be numbered "GGG-1." 

        The
Bonds of Series FFF and GGG shall be executed on behalf of the Company by the manual or facsimile signature of its President or an Executive Vice President or one of its Vice
Presidents and shall have affixed thereto the seal of the Company or a facsimile thereof attested by the manual or 

13

 

facsimile signature of its Secretary or one of its Assistant Secretaries and shall be authenticated by the execution by the Trustee of the certificate endorsed on said bonds. 

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

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

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

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

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

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

"in
principal amount not greater than sixty-six and two-thirds per centum (662/3%) of". 

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

"shall
exceed sixty-six and two-thirds per centum (662/3%) of the value of bondable property so acquired". 

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

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

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

"with
the consent of holders of at least sixty-six and two-thirds per centum (662/3%) in aggregate principal amount of the bonds at the time outstanding;". 

14

 

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

"holders
(or persons entitled to vote the bonds) of not less than sixty-six and two-thirds per centum (662/3%) in aggregate principal amount of the bonds
entitled to be voted". 

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

"holders
(or persons entitled to vote the bonds) of at least sixty-six and two-thirds per centum (662/3%) in principal amount of the bonds outstanding". 

ARTICLE II. 

ISSUANCE
OF BONDS OF SERIES FFF AND GGG. 

        Section 1.    The Series FFF Bond, in the principal amount not exceeding twenty-three million dollars ($23,000,000) and
the Series GGG Bond in the principal amount not exceeding twenty-four million six hundred thousand dollars ($24,600,000), may be executed by the Company and delivered to the Trustee for
authentication, and shall be authenticated and delivered by the Trustee to or upon the order of the Company (which authentication and delivery may be made without awaiting the filing or recording of
this Fifty-Fourth Supplemental Indenture), upon receipt by the Trustee of the resolutions, certificates,
orders, opinions and other instruments required by the provisions of Section 3 of Article IV of the Indenture to be received by the Trustee as a condition to the authentication and
delivery by the Trustee of bonds pursuant to said Section 3. 

ARTICLE III. 

INDENTURE
AMENDMENTS. 

        Section 1.    Article I of the Indenture, as heretofore amended, is hereby further amended (i) by adding
immediately after subdivision "(93)" thereof an additional subdivision numbered "(94)" and reading as follows: 

"(94)
The term 'Fifty-Fourth Supplemental Indenture' shall mean the Fifty-Fourth Supplemental Indenture executed by the Company and the Trustee, dated as of September 1, 2002, supplementing and
amending the Indenture, and the terms 'Series FFF Bond' shall mean the 'PSI Energy, Inc. First Mortgage Bonds, Series FFF, Due March 1, 2031,' and 'Series GGG Bond' shall mean the 'PSI
Energy, Inc. First Mortgage Bonds, Series GGG, Due March 1, 2019,', created by the Fifty-Fourth Supplemental Indenture." 

and
(ii) by changing the numbering of the present subdivision "(94)" thereof to "(95)". 

        Section 2.    Article VII of the Indenture, as heretofore amended, is hereby further amended by inserting therein
immediately after Section 38 thereof, a new section designated "Section 39" and reading as follows: 

        "Section 39.
The Series FFF Bond shall be deemed to have been paid and redeemed at any time if and to the extent that the Series 2002A IDFA Bonds are redeemed pursuant to
the IDFA Indenture relating thereto, in whole or in part, in an amount equal to 100% of the principal amount of the Series 2002A IDFA Bonds redeemed and all amounts owed by the Company to Ambac
under the Insurance Agreement have been indefeasibly paid in full. In such an event, the Company shall notify Ambac and the Trustee that a like principal amount of the Bonds of Series FFF shall be
deemed to have been paid and redeemed. 

15

 

        The
Series GGG Bond shall be deemed to have been paid and redeemed at any time if and to the extent that the Series 2002B IDFA Bonds are redeemed pursuant to the IDFA Indenture
relating thereto, in whole or in part, in an amount equal to 100% of the principal amount of the Series 2002B IDFA Bonds redeemed and all amounts owed by the Company to Ambac under the
Insurance Agreement have been indefeasibly paid in full. In such an event, the Company shall notify Ambac and the Trustee that a like principal amount of the Bonds of Series GGG shall be deemed to
have been paid and redeemed. 

        The
Bonds of Series FFF and GGG are not otherwise redeemable prior to their maturity. The terms "Series 2002A IDFA Bonds", "Series 2002B IDFA Bonds", "IDFA Indenture",
"Ambac" and "Insurance Agreement" shall have the respective meanings specified in the Fifty-Fourth Supplemental Indenture. 

        Section 3.    The Bonds of Series FFF and GGG shall not be entitled to the benefit of a sinking fund. 

ARTICLE IV. 

CONCERNING
THE TRUSTEE. 

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

16

   ARTICLE V. 

MISCELLANEOUS
PROVISIONS. 

        Section 1.    Wherever in the original Indenture or in any of the fifty-four supplemental indentures thereto
reference is made to any article or section of the original Indenture, such reference shall be deemed to refer to such article or section as amended by such supplemental indentures. 

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

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

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

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

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

[THE
REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.] 

17

 

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

	

 	
 	

PSI ENERGY, INC.
	

(CORPORATE SEAL)	
 	

By	

/s/  RONALD R. REISING      
 Ronald R. Reising
 Vice President—Finance
	

ATTEST:	
 	

 	

 
	

/s/  JEROME A. VENNEMANN      
 Jerome A. Vennemann, Assistant Secretary	
 	

 	

 
	
Signed and delivered by PSI Energy, Inc.

    in the presence of:	
 	

 	

 
	

/s/  DEBBY GARRETT      
 Debby Garrett, Witness	
 	

 	

 
	

/s/  JULIE M. THOMPSON      
 Julie M. Thompson, Witness	
 	

 	

 
	

 	
 	
LASALLE BANK NATIONAL ASSOCIATION
	

(CORPORATE SEAL)	
 	

By	

/s/  VICTORIA Y. DOUYON      
 Victoria Y. Douyon
 First Vice President
	

ATTEST:	
 	

 	

 
	

/s/  RUSSELL C. BERGMAN      
 Russell C. Bergman, Assistant Secretary	
 	

 	

 
	
Signed and delivered by LaSalle Bank National Association in the presence of:	
 	

 	

 
	

/s/  DEBRA DONALDSON      
 Debra Donaldson, Witness	
 	

 	

 
	

/s/  ALVITA GRIFFIN      
 Alvita Griffin, Witness	
 	

 	

 

18

 

	

STATE OF OHIO	
 	

)	
 	

 
	 	 	)	 	ss:
	COUNTY OF HAMILTON	 	)	 	 

        BE IT REMEMBERED, that on this 9th day of September, 2002, before me, the undersigned, a notary public in and for the County and State aforesaid,
duly commissioned and qualified, personally appeared Ronald R. Reising and Jerome A. Vennemann, personally known to me to be the same persons whose names are subscribed to the foregoing instrument,
and personally known to me to be the Vice President—Finance, and an Assistant Secretary, respectively, of PSI Energy, Inc., an Indiana corporation, and acknowledged that they signed
and delivered said instrument as their free and voluntary act as such Vice President—Finance, and Assistant Secretary, respectively, and as the free and voluntary act of said PSI
Energy, Inc., for the uses and purposes therein set forth; in pursuance of the power and authority granted to them by resolution of the Board of Directors of said Company. 

        IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year aforesaid. 

	

(NOTARIAL SEAL)	
 	

 	
 	

 
	

 	
 	

/s/  CECILIA A. TEMPLE      
Notary Public	
 	

 

My commission expires 09-28-03. 

County
of residence: Hamilton 

19

 

	STATE OF ILLINOIS	 	)	 	 
	 	 	)	 	ss:
	COUNTY OF COOK	 	)	 	 

        BE IT REMEMBERED, that on this 6th day of September, 2002, before me, the undersigned, a notary public in and for the County and State aforesaid,
duly commissioned and qualified, personally appeared Victoria Y. Douyon and Russell C. Bergman, personally known to me to be the same persons whose names are subscribed to the foregoing instrument,
and personally known to me to be a First Vice President and an Assistant Secretary, respectively, of LaSalle Bank National Association, a national banking association, and acknowledged that they
signed and delivered said instrument as their free and voluntary act as such First Vice President and Assistant Secretary, respectively, and as the free and voluntary act of said LaSalle Bank National
Association, for the uses and purposes therein set forth; in pursuance of the power and authority granted to them by the bylaws of said association. 

        IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year aforesaid. 

	

(NOTARIAL SEAL)	
 	

 
	

 	
 	

/s/  MARY ANN KICMAL      
Notary Public

My commission expires 12-1-05. 

County
of residence: Cook 

20

QuickLinks

Exhibit 4-RRR

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]