Document:

Exhibit 10.3

 

SEEBEYOND TECHNOLOGY CORPORATION

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

FOR

 

ALEX DEMETRIADES

 

 

TABLE OF
CONTENTS

 

	
  Article I. Certain Definitions

  	
   

  
	
  1.1.

  	
  “Accrued Obligations”

  	
   

  
	
  1.2.

  	
  “Affiliate”

  	
   

  
	
  1.3.

  	
  “Agreement Date”

  	
   

  
	
  1.4.

  	
  “Agreement Term”

  	
   

  
	
  1.5.

  	
  “Article”

  	
   

  
	
  1.6.

  	
  “Base Salary”

  	
   

  
	
  1.7.

  	
  “Beneficial Owner”

  	
   

  
	
  1.8.

  	
  “Beneficiary”

  	
   

  
	
  1.9.

  	
  “Board”

  	
   

  
	
  1.10.

  	
  “Bonus”

  	
   

  
	
  1.11.

  	
  “Cause”

  	
   

  
	
  1.12.

  	
  “Change of Control”

  	
   

  
	
  1.13.

  	
  “Change of Control Date”

  	
   

  
	
  1.14.

  	
  “Code”

  	
   

  
	
  1.15.

  	
  “Common Stock”

  	
   

  
	
  1.16.

  	
  “Company”

  	
   

  
	
  1.17.

  	
  “Competitive Business”

  	
   

  
	
  1.18.

  	
  “Continuity of Ownership”

  	
   

  
	
  1.19.

  	
  “Disability”

  	
   

  
	
  1.20.

  	
  “Exchange Act”

  	
   

  
	
  1.21.

  	
  “Good Reason”

  	
   

  
	
  1.22.

  	
  “including”

  	
   

  
	
  1.23.

  	
  “Incumbent Directors”

  	
   

  
	
  1.24.

  	
  “Notice of Termination”

  	
   

  
	
  1.25.

  	
  “Performance Period”

  	
   

  
	
  1.26.

  	
  “Person”

  	
   

  
	
  1.27.

  	
  “Plans”

  	
   

  
	
  1.28.

  	
  “Post-Change Employment Period”

  	
   

  
	
  1.29.

  	
  “Pro-rata Bonus”

  	
   

  
	
  1.30.

  	
  “Reorganization Transaction”

  	
   

  
	
  1.31.

  	
  “SEC Person”

  	
   

  
	
  1.32.

  	
  “Section”

  	
   

  
	
  1.33.

  	
  “Severance Period”

  	
   

  
	
  1.34.

  	
  “Stock Options”

  	
   

  
	
  1.35.

  	
  “Stock Plan”

  	
   

  
	
  1.36.

  	
  “Surviving Corporation”

  	
   

  
	
  1.37.

  	
  “Target Bonus”

  	
   

  
	
  1.38.

  	
  “Termination Date”

  	
   

  
	
  1.39.

  	
  “Termination of Employment”

  	
   

  
	
  1.40.

  	
  “Voting Securities”

  	
   

  
	
  1.41.

  	
  “Welfare Benefits”

  	
   

  

 

i

 

	
  Article II. Benefits Upon a Change of
  Control

  	
   

  
	
  2.1.

  	
  Position and Duties

  	
   

  
	
  2.2.

  	
  Compensation

  	
   

  
	
  2.3.

  	
  Vesting of Stock Options

  	
   

  
	
   

  	
   

  	
   

  
	
  Article III. Company’s Obligations
  Upon Certain Terminations of Employment

  	
   

  
	
  3.1.

  	
  Termination Without Cause or For Good
  Reason Not Related To or In Anticipation of a Change of Control

  	
   

  
	
  3.2.

  	
  Termination Without Cause or For Good
  Reason Related To or In Anticipation of a Change of Control

  	
   

  
	
  3.3.

  	
  Time of Payment

  	
   

  
	
  3.4.

  	
  Waiver and Release

  	
   

  
	
  3.5.

  	
  Termination for Cause or Other Than for
  Good Reason

  	
   

  
	
  3.6.

  	
  Disability or Death

  	
   

  
	
  3.7.

  	
  Notice of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  Article IV. Limitation on Payments by
  the Company

  	
   

  
	
  4.1.

  	
  Limitation

  	
   

  
	
   

  	
   

  	
   

  
	
  Article V. Arbitration

  	
   

  
	
  5.1.

  	
  Binding Arbitration

  	
   

  
	
   

  	
   

  	
   

  
	
  Article VI. No Set-off or Mitigation

  	
   

  
	
  6.1.

  	
  No Set-off by Company

  	
   

  
	
  6.2.

  	
  No Mitigation

  	
   

  
	
   

  	
   

  	
   

  
	
  Article VII. Confidentiality and
  Noncompetition

  	
   

  
	
  7.1.

  	
  Confidential Information

  	
   

  
	
  7.2.

  	
  Non-Competition

  	
   

  
	
  7.3.

  	
  Non-Solicitation

  	
   

  
	
  7.4.

  	
  Intellectual Property

  	
   

  
	
  7.5.

  	
  Reasonableness of Restrictive Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  Article VIII. Non-Exclusivity of
  Rights

  	
   

  
	
  8.1.

  	
  Waiver of Certain Other Rights

  	
   

  
	
  8.2.

  	
  Other
  Rights

  	
   

  
	
  8.3.

  	
  No Right to Continued Employment

  	
   

  
	
   

  	
   

  	
   

  
	
  Article IX. Miscellaneous

  	
   

  
	
  9.1.

  	
  No Assignability

  	
   

  
	
  9.2.

  	
  Successors

  	
   

  
	
  9.3.

  	
  Payments to Beneficiary

  	
   

  
	
  9.4.

  	
  Non-Alienation of Benefits

  	
   

  
	
  9.5.

  	
  Severability

  	
   

  
	
  9.6.

  	
  Amendments

  	
   

  
	
  9.7.

  	
  Notices

  	
   

  
	
  9.8.

  	
  Counterparts

  	
   

  

 

ii

 

	
  9.9.

  	
  Governing Law

  	
   

  
	
  9.10.

  	
  Captions

  	
   

  
	
  9.11.

  	
  Number and Gender

  	
   

  
	
  9.12.

  	
  Tax Withholding

  	
   

  
	
  9.13.

  	
  Waiver

  	
   

  
	
  9.14.

  	
  Entire Agreement

  	
   

  

 

iii

 

SeeBeyond
Technology Corporation

 

CHANGE
OF CONTROL EMPLOYMENT AGREEMENT

 

THIS AGREEMENT
dated as of February 23, 2005 (the “Agreement Date”) is made by and
between SeeBeyond Technology Corporation, a Delaware corporation (together with
all successors thereto, the “Company”), and Alex Demetriades (“Executive”), an
individual resident of California.

 

RECITALS

 

The Company
has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued services of
Executive.  The Company also believes it
is imperative to reduce the distraction of Executive that would result from the
personal uncertainties caused by a pending or threatened change of control of
the Company, to encourage Executive’s full attention and dedication to the
Company, and to provide Executive with compensation and benefits arrangements
upon a change of control which ensure that the expectations of Executive will
be satisfied and are competitive with those of similarly-situated businesses.  This Agreement is intended to accomplish
these objectives.

 

The Executive
previously entered into a letter agreement dated March 19, 2001 (“Prior
Agreement”) with the Company providing certain benefits upon a change of
control.  This Agreement entirely
supersedes the Prior Agreement.

 

ARTICLE I.

 

CERTAIN DEFINITIONS

 

As used in
this Agreement, the terms specified below shall have the following meanings:

 

1.1.                              “Accrued Obligations” means, as of any date, the sum
of Executive’s (a) Base Salary that is accrued but not yet paid as of the
Termination Date, (b) Bonus earned but not yet paid with respect to any
Performance Period ended prior to the Change of Control Date, (c) accrued
but unpaid paid vacation or paid time off, and (d) any other amounts and
benefits which are then due to be paid or provided to Executive by the Company,
but have not yet been paid or provided.

 

1.2.                              “Affiliate” means any Person that directly or indirectly controls, is
controlled by, or is under common control with, the Company.  For purposes of this definition the term “control”
with respect to any Person means the power to direct or cause the direction of
management or policies of such Person, directly or indirectly, whether through
the ownership of Voting Securities, by contract or otherwise.

 

1.3.                              “Agreement Date” has the meaning defined for that term in the introduction
to this Agreement.

 

 

1.4.                              “Agreement Term” means the period beginning on the Agreement Date and
continuing thereafter so long as Executive is employed by the Company or by a
successor to the Company that assumes this Agreement pursuant to Section 9.2.

 

1.5.                              “Article” means an article of this Agreement.

 

1.6.                              “Base Salary” has the meaning defined for that term in Section 2.2(a).

 

1.7.                              “Beneficial Owner” means such term as defined in
Rule 13d-3 under the Exchange Act.

 

1.8.                              “Beneficiary” has the meaning defined for that term in Section 10.3.

 

1.9.                              “Board” means the Board of Directors of
the Company, or, from and after the effective date of a Reorganization Transaction,
the Board of Directors of the Surviving Corporation.

 

1.10.                        “Bonus” has the meaning defined for
that term in Section 2.2(b).

 

1.11.                        “Cause” means any one or more of the
following:

 

(a)                                  Executive’s willful violation of
any law or regulation applicable to the business of the Company;

 

(b)                                 Executive’s conviction of or
plea of no contest to any felony;

 

(c)                                  Executive’s commission of any
willful act involving moral turpitude or common law fraud whether or not
related to the business of the Company;

 

(d)                                 Executive’s willful misconduct
that is materially injurious to the financial condition or business reputation
of the Company or otherwise is materially injurious to the Company;

 

(e)                                  Any act of gross negligence in
Executive’s performance of his duties as an employee;

 

(f)                                    Any violation by Executive of
the “Behaviors at Work” provisions of the Company’s Employee Manual; and

 

provided,
however that an act or omission described in clause (e) or (f) shall not
constitute Cause unless the Company first gives Executive 30 days’ advance
written notice of such act or omission that specifically refers to this
Section, and thereafter shall not constitute Cause if Executive cures such act
or omission to the fullest extent that it is curable.

 

1.12.                        “Change of Control”
means, except as otherwise provided below, the occurrence of any one or more of
the following:

 

(a)                                  any SEC Person becomes the
Beneficial Owner of 50% or more of the Common Stock or of Voting Securities
representing 50% or more of the combined voting power of all Voting Securities
of the Company; or

 

2

 

(b)                                 the Incumbent Directors
(determined using the Agreement Date as the baseline date) cease for any reason
to constitute at least a majority of the Board; or

 

(c)                                  consummation of a merger,
reorganization, consolidation, or similar transaction (any of the foregoing, a “Reorganization
Transaction”) where the Continuity of Ownership is not more than 50%; or

 

(d)                                 consummation of a plan or
agreement for the sale or other disposition of all or substantially all of the
consolidated assets of the Company; or

 

(e)                                  approval by the Company’s
stockholders of a plan of liquidation of the Company.

 

A Change of
Control shall not occur with respect to Executive if, in advance of such event,
Executive agrees in writing that such event shall not constitute a Change of
Control.

 

1.13.                        “Change of Control Date”
means the date on which a Change of Control first occurs during the Agreement
Term.

 

1.14.                        “Code”
means the Internal Revenue Code of 1986, as amended.  References to particular provisions of the
Code include references to successor provisions.

 

1.15.                        “Common Stock”
means the common stock of the Company.

 

1.16.                        “Company”
has the meaning defined for that term in the introductory paragraph to this
Agreement and includes any successor to a Company.

 

1.17.                        “Competitive Business”
means as of any date (including during Severance Period) any Person (and any
branch, office or operation thereof) that engages in, or proposes to engage in:

 

(a)                                  the development and deployment
of enterprise application integration (EAI) and composite applications,
including but not limited to IT convergence, business process management,
single view applications, multi-channel integration, and business activity
monitoring; or

 

(b)                                 any other business that as of
such date is a direct and material competitor of a Company and its Affiliates
to the extent that prior to the Date of Termination any of the Company or its
Affiliates engaged at any time within 12 months in or had under active
consideration a proposal to engage in such competitive business;

 

and that is
located anywhere in the United States or anywhere outside of the United States
where such Company or its Affiliates is then engaged in, or has under active
consideration a proposal to engage in, any of such activities.

 

1.18.                        “Continuity of Ownership”
of a stated percentage means the Persons who were the direct or indirect owners
of the outstanding Common Stock and Voting Securities of the Company immediately
before a Reorganization Transaction became, immediately after the consummation
of the Reorganization Transaction, the direct or indirect owners of both the
stated

 

3

 

percentage of
the then-outstanding common stock of the Surviving Corporation and Voting
Securities representing the stated percentage of the combined voting power of
the then-outstanding Voting Securities of the Surviving Corporation, in
substantially the same respective proportions as such Persons’ ownership of the
Common Stock and Voting Securities of the Company immediately before the
Reorganization Transaction.

 

1.19.                        “Disability”
means (i) if Executive is covered by a disability income Plan of the Company, “Disability”
as defined for purposes of such Plan, or (ii) if Executive is not covered by a
disability income Plan of the Company, a physical or mental impairment that in
the medical judgment of a physician acceptable to Executive has lasted or is
expected to last for at least six months and renders the Executive incapable,
with or without accommodation, of performing the material duties of his
employment with the Company.

 

1.20.                        “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

1.21.                        “Good Reason”
means the occurrence of any one or more of the following actions or omissions:

 

(a)                                  any material adverse change in
the title, duties, and reporting chain of Executive as in effect on the
Agreement Date or, after a Change of Control, as required by Section 2.1;

 

(b)                                 any material reduction in Base
Salary or Bonus opportunity as in effect on the Agreement Date or, after a
Change of Control, as required by Section 2.2;

 

(c)                                  requiring Executive without his
consent to be based at any office or location more than 35 miles from Executive’s
business office or location as of the Agreement Date or, after a Change of
Control, as of the Change of Control Date; and

 

(d)                                 any other material breach of
this Agreement by the Company.

 

1.22.                        “including” means
including without limitation.

 

1.23.                        “Incumbent Directors”
means, as of any specified baseline date, individuals then serving as members
of the Board who were members of the Board as of the date immediately preceding
such baseline date; provided that any subsequently-appointed or elected member
of the Board whose election, or nomination for election, by stockholders of the
Company or the Surviving Corporation, as applicable, was approved by a vote or
written consent of at least a majority of the directors then comprising the
Incumbent Directors shall also thereafter be considered an Incumbent Director.

 

1.24.                        “Notice of Termination”
means a written notice containing (i) the specific termination provision in
this Agreement relied upon by the party giving such notice, (ii) in reasonable
detail the specific facts and circumstances claimed to provide a basis for such
Termination of Employment, and (iii) if the Termination Date is other than the
date of receipt of such Notice of Termination, the Termination Date.

 

4

 

1.25.                        “Performance Period”
means each period of time designated in accordance with any Bonus Plan, or in
the absence of such Bonus Plan or any such designated period of time, each
calendar year.

 

1.26.                        “Person”
means any individual, sole proprietorship, partnership, joint venture, limited
liability company, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
instrumentality, division, agency, body or department.

 

1.27.                        “Plans”
means plans, programs, policies, practices or procedures of the Company.

 

1.28.                        “Post-Change
Employment Period” means the period commencing on the Change of
Control Date and ending on the third annual anniversary of the Change of
Control Date.

 

1.29.                        “Pro-rata Bonus”
means an amount equal to the product of Executive’s Target Bonus (for the
Performance Period in which the Termination Date occurs) multiplied by a
fraction, the numerator of which is the number of days elapsed in the
Performance Period through the Termination Date, and the denominator of which
is the number of days in the Performance Period.

 

1.30.                        “Reorganization
Transaction” has the meaning defined for that term in clause (c) of
the definition of “Change of Control.”

 

1.31.                        “SEC Person” means
any person (as such term is used in Rule 13d-5 under the Exchange Act) or group
(as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act),
other than an Affiliate or any employee benefit plan (or any related trust) of
the Company or any of its Affiliates.

 

1.32.                        “Section”
means, unless the context otherwise requires, a section of this Agreement.

 

1.33.                        “Severance Period”
means, in respect of an Executive entitled to a payment under Section 3.1(b)
or 3.2(c), the period described in Section 3.1(b)(ii) or 3.2(c)(ii),
whichever is applicable.

 

1.34.                        “Stock Options”
means stock options, stock appreciation rights, and similar incentive awards
granted pursuant to Stock Plan or any similar plan or successor plan.

 

1.35.                        “Stock Plan”
means the SeeBeyond Technology Corporation 1998 Stock Plan as amended from time
to time.

 

1.36.                        “Surviving Corporation”
means the corporation resulting from a Reorganization Transaction or, if
securities representing at least 50% of the aggregate voting power of such
resulting corporation is directly or indirectly owned by another corporation,
such other corporation.

 

1.37.                        “Target Bonus”
means the amount Executive would have been entitled to receive for the
applicable Performance Period if the performance goals were achieved at the
target (or “plan”) level as of the end of the Performance Period; provided,
however, that any reduction in

 

5

 

Executive’s Base Salary or
Bonus opportunity that would qualify as Good Reason shall be disregarded for
purposes of this definition.

 

1.38.                        “Termination Date”
means the date of the receipt of the Notice of Termination by Executive (if such Notice is given by the
Company) or by the Company (if such Notice is given by Executive), or any later
date, not more than 15 days after the giving of such Notice, specified in such
notice as of which Executives’ employment shall be terminated; provided,
however, that if Executive’s employment is terminated by reason of death or
Disability or if no Notice of Termination is given, the Termination Date shall
be the last date on which Executive is employed by the Company.

 

1.39.                        “Termination of Employment”
means any termination of Executive’s employment with the Company and its
Affiliates (determined as of date of such termination), whether such
termination is initiated by the Company or by Executive.

 

1.40.                        “Voting Securities”
means securities of a corporation that are entitled to vote generally in the
election of directors of the corporation.

 

1.41.                        “Welfare Benefits”
means welfare benefits, whether or not provided under a Plan, including
medical, prescription, vision and dental benefits.

 

ARTICLE II.

 

BENEFITS UPON A CHANGE OF CONTROL

 

2.1.                              Position and Duties.  During the Post-Change Employment Period,
Executive’s position (including offices, titles, reporting requirements and
responsibilities) shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 90-day period immediately before the Change of Control Date,
(ii) Executive’s services shall be performed at the location where
Executive was employed immediately before the Change of Control Date or any
other location no more than 35 miles from such former location, and (iii)
Executive shall devote Executive’s full attention and time to the business and
affairs of the Company and use Executive’s best efforts to perform those duties
in all material respects commensurate with the duties performed during the
90-day period immediately before the Change of Control Date.

 

2.2.                              Compensation.  During the Post-Change Employment Period, the
Company shall pay or cause to be paid to Executive (i) an annual base salary in
cash, which shall be paid in a manner consistent with the Company’s payroll
practices in effect immediately before the Change of Control Date, at an annual
rate not less than 12 times the highest monthly base salary paid or payable to
Executive by the Company in respect of the 12-month period immediately before
the Change of Control Date (such annual rate of salary, the “Base Salary”);
(ii) provide to Executive the opportunity to receive payment of a bonus (the “Bonus”)
with a bonus opportunity no less than, and target (or “plan”) performance goals
substantially comparable to, those in effect immediately prior to the Change of
Control Date for each Performance Period which ends during the Post-Change
Employment Period; and (iii) Executive and Executive’s family shall be eligible
to participate in, and receive all benefits under, Welfare Benefits under the
same plans (including provider networks) as those applicable to Executive
immediately before the Change of Control

 

6

 

Date.  The costs of such Welfare
Benefits to Executive shall not exceed the cost of such benefits to actively
employed peer executives of the Company as applicable from time to time.

 

2.3.                              Vesting of Stock Options.  Upon the Change of Control Date, fifty
percent (50%) of Executive’s outstanding Stock Options that are not otherwise
vested and exercisable immediately before the Change of Control shall become
fully vested and exercisable. 
Thereafter, Executive’s unvested outstanding Stock Options not becoming
vested and exercisable pursuant to this Section 2.3 shall become vested
and exercisable on the schedule set forth in the Award (as defined in the
Stock Plan) with the number of Stock Options becoming vested and exercisable
shall be the same percentage of the unvested Stock Options remaining after
applying this Section 2.3 as such schedule provided for the vesting
of unvested Stock Options before applying this Section 2.3.

 

ARTICLE III.

 

COMPANY’S OBLIGATIONS UPON CERTAIN TERMINATIONS OF EMPLOYMENT

 

3.1.                              Termination Without Cause or For
Good Reason Not Related To or In Anticipation of a Change of Control.  If during the Agreement Term the Company
terminates Executive’s employment other than for Cause or Disability, or
Executive terminates employment for Good Reason, and Section 3.2 does not
apply, the Company shall pay or provide to Executive:

 

(a)                                  Accrued Obligations.  A lump-sum cash amount equal to all Accrued
Obligations (reduced (but not below zero) by that portion, if any, of any such
Accrued Obligations previously paid to Executive whether pursuant to this
Agreement or otherwise.

 

(b)                                 Severance Benefit.  A lump-sum cash amount equal to (i) the
highest monthly base salary paid or payable to Executive by the Company in
respect of the 12-month period immediately before the Termination Date,
multiplied by (ii) a number equal to (A) one month for each year of service
(pro-rated for partial years of service) plus (B) six months, up to a total
maximum of 18 months.

 

3.2.                              Termination Without Cause or For
Good Reason Related To or In Anticipation of a Change of Control.  If, in anticipation of a Change of Control or
thereafter during the Post-Change Employment Period the Company terminates
Executive’s employment other than for Cause or Disability, or Executive
terminates employment for Good Reason, the Company shall pay or provide to
Executive:

 

(a)                                  Accrued Obligations.  A lump-sum cash amount equal to all Accrued
Obligations, reduced (but not below zero) by that portion, if any, of any such
Accrued Obligations for the previously paid to Executive, whether pursuant to
this Agreement or otherwise;

 

(b)                                 Severance Benefit.  A lump-sum cash amount equal to (i) sum
(A) of the highest monthly Base Salary paid or payable to Executive by the
Company in respect of the 12-month period immediately before the Termination
Date, plus (B) the monthly

 

7

 

equivalent of Executive’s Target Bonus for
the Performance Period which includes the Termination Date (or, if greater, for
the Performance Period which includes the Change of Control Date), multiplied
by (ii) a number equal to (A) one month for each year of service (pro-rated for
partial years of service) plus (B) six months, up to a total maximum of 18
months.

 

(c)                                  Pro-rata Bonus for Performance
Period of Termination.  A lump-sum cash amount equal to Executive’s
Pro-rata Bonus reduced (but not below zero) by the amount of any Bonus paid to
Executive with respect to the Performance Period in which the Termination Date
occurs, whether paid pursuant to this Agreement or otherwise;

 

(d)                                 Unvested Plan Benefits.  A lump-sum cash amount equal to the amount,
if any, forfeited by Executive upon the Termination of Employment under any
401(k) plan or other tax-qualified pension or profit sharing plan maintained by
the Company.

 

(e)                                  Continuation of Welfare Benefits.  The Company shall continue, to provide to
Executive and Executive’s family, Welfare Benefits under the same plans
(including the same provider networks) as those applicable to Executive
immediately before the Change of Control Date. 
The costs of such Welfare Benefits to Executive shall not exceed the
cost of such benefits to actively employed peer executives of the Company as
applicable from time to time.  Executive’s
rights under this Section shall be in addition to, and not in lieu of, any
post-termination continuation coverage or conversion rights Executive may have
pursuant to applicable law, including continuation coverage required by Section 4980
of the Code.  These Welfare Benefits
shall be secondary to any similar welfare benefits provided by the Executive’s
subsequent employer (if any).

 

(f)                                    Indemnification.  The Executive shall be indemnified and held
harmless by the Company to the greatest extent permitted under applicable
Delaware law (or the law of the State of incorporation of Company, any
successor or Surviving Corporation) and the Company’s respective by-laws as
such exist on the Agreement Date if the Executive was, is, or is threatened to
be, made a party to any proceeding whether civil, criminal, administrative or
investigative, and whether formal or informal, by reason of Executive’s status
as an actual or potential director, officer, employee, agent, or fiduciary of a
Company or any other entity (“Proceeding”), against all expenses (including all
reasonable attorneys’ fees) and all claims, damages, liabilities and losses
incurred or suffered by the Executive. 
The Company shall advance reasonable expenses, including but not limited
to reasonable attorneys fees and costs, to Executive or pay such expenses for
Executive, all in advance of the final disposition of any such matter, upon the
written request of Executive and a written undertaking by Executive to repay
such amounts if it is ultimately determined that Executive is not entitled to
indemnification.

 

(g)                                 Anticipation of a Change of
Control.  For purposes of this Agreement a Termination
of Employment is in anticipation of a Change of Control only if it is in
anticipation of a Change of Control that actually occurs within one year of the
Termination of Employment.  Any payment
or benefit required by this Section for a Termination of Employment in
anticipation of a Change of Control that is not paid or provided at such
Termination of Employment shall be paid or provided immediately upon

 

8

 

such Change of Control, retroactive to the
Termination of Employment, except as otherwise required by Section 3.3.

 

3.3.                              Time of Payment.  Any lump-sum cash payment required by this Article III
shall be made not later than 30 days after Termination of Employment, except
that if (i) Executive is a key employee (as determined under Section 416(i)
of the Code without regard to paragraph (5) thereof) of the Company or
Surviving Corporation, (ii) any common stock of the Company or Surviving Corporation
is publicly traded on an established securities market, and (iii) a portion of
such payment is deferred compensation within the meaning of Section 409A
of the Code, the portion of such lump-sum cash payment required by this Article III
that is deferred compensation shall be made on the first business day after the
date which is 6 months after the Termination Date (or, if earlier, upon the
death of the Executive), to the extent necessary to comply with Section 409A
after applying all applicable transitional rules.

 

3.4.                              Waiver and Release.  The Company shall have no obligation to
Executive under this Article III unless and until Executive executes a
release and waiver of the Company, in form and substance satisfactory to the
Company, and the period (if any) during which Executive may revoke such release
and waiver has expired without revocation.

 

3.5.                              Termination for Cause or Other
Than for Good Reason.  If the Company terminates Executive’s
employment for Cause, or Executive elects to retire or otherwise terminate
employment other than for Good Reason, the Company’s sole obligation to
Executive under this Agreement shall be to pay Executive, pursuant to the
Company’s then-effective Plans, a lump-sum cash amount equal to all Accrued
Obligations determined as of the Termination Date.

 

3.6.                              Disability or Death.  If Executive’s employment is terminated by
reason of Executive’s death or Disability, the Company’s sole obligations to
Executive under this Agreement shall be to pay Executive or Executive’s Beneficiary,
pursuant to the Company’s then-effective Plans, a lump-sum cash amount equal to
all Accrued Obligations, and to provide Executive or Executive’s Beneficiary
Disability, survivor and other benefits, if any, that are not less than the
most favorable survivor and other benefits then available under plans of the
Company.

 

3.7.                              Notice of Termination.  Any Termination of Employment of Executive by
the Company for any reason or by the Executive for Good Reason shall be
communicated to the other and effective pursuant to a Notice of Termination.

 

ARTICLE IV.

 

LIMITATION ON PAYMENTS BY THE COMPANY

 

4.1.                              Limitation.  In the event that the Company’s independent
tax counsel confirm in writing to the Company and Executive that payments under
this Agreement, together with any other payments to Executive from the Company
that are “parachute payments” within the meaning of Section 280G of the
Code (“Potential Parachute Payments”) would otherwise exceed three times
the Executive’s “base amount” as defined in Section 280G of the Code, then
notwithstanding anything to the contrary in this Agreement the payments under
this Agreement

 

9

 

shall be reduced to an amount such that the Potential Parachute
Payments do not exceed 2.99 times the Executive’s base amount.  Any reduction in payments required by this Section 4.1
shall be applied to such payments and benefits under this Agreement as the
Company in its sole discretion deems necessary, shall be communicated to
Executive in writing prior to the date the first reduced payment or benefit
would otherwise be due, shall be accompanied by the certification of the
Company’s independent auditors to Executive that the reductions are in the
minimum amount required to comply with this Section 4.1.

 

ARTICLE V.

 

ARBITRATION

 

5.1.                              Binding Arbitration.  Any dispute, controversy or claim arising out
of or in connection with or relating to this Agreement or any breach or alleged
breach thereof, or any benefit or alleged benefit hereunder, shall be submitted
to and settled by binding arbitration, in accordance with the American
Arbitration Association rules (“AAA Rules”) for the resolution of
employment disputes.  Any award rendered
shall be final and conclusive upon the parties and a judgment thereon may be
entered in the highest court of a forum, state or federal, having
jurisdiction.  The expenses of the
arbitration shall be borne according to AAA Rules and applicable law.  No arbitration shall be commenced after the
date when institution of legal or equitable proceedings based upon such subject
matter would be barred by the applicable statute of limitations.  Notwithstanding anything to the contrary
contained in this Section 5.1 or elsewhere in this Agreement, either party
may bring an action in any applicable court having jurisdiction of the parties,
in order to maintain the status quo ante of the parties.  The “status quo ante” is defined as the last
peaceable, uncontested status between the parties.  However, neither the party bringing the action
nor the party defending the action thereby waives its right to arbitration of
any dispute, controversy or claim arising out of or in connection or relating
to this Agreement.  Notwithstanding
anything to the contrary contained in this Section 5.1 or elsewhere in
this Agreement, either party may seek relief in the form of specific
performance, injunctive or other equitable relief in order to enforce the
decision of the arbitrator(s).  The
parties agree that in any arbitration commenced pursuant to this Agreement, the
parties shall be entitled to such discovery (including depositions, requests
for the production of documents and interrogatories) as would be available in a
federal district court pursuant to Rules 26 through 37 of the Federal Rules of
Civil Procedure.  In the event that
either party fails to comply with its discovery obligations hereunder, the
arbitrator(s) shall have full power and authority to compel disclosure or
impose sanctions to the full extent of Rule 37 of the Federal Rules of Civil
Procedure.

 

ARTICLE VI.

 

NO SET-OFF OR MITIGATION

 

6.1.                              No Set-off by Company.  Executive’s right to receive when due the
payments and other benefits under this Agreement is not subject to any setoff,
counterclaim or legal or equitable defense. 
Time is of the essence in the performance by the Company of its
obligations under this Agreement.  Any
claim which the Company may have against Executive, whether for a breach of
this Agreement or otherwise, shall be brought in a separate action or
proceeding and

 

10

 

not as part of any action or proceeding brought by Executive to enforce
any rights against the Company under this Agreement.

 

6.2.                              No Mitigation.  Executive shall not have any duty to mitigate
the amounts payable by the Company under this Agreement by seeking new
employment or self-employment following termination.  Except as otherwise provided in this
Agreement, all amounts payable pursuant to this Agreement shall be paid without
reduction for any amounts which may be paid or payable to Executive as the
result of Executive’s employment by another employer or self-employment.

 

ARTICLE VII.

 

CONFIDENTIALITY AND NONCOMPETITION

 

7.1.                              Confidential Information.  Executive acknowledges that in the course of
performing services for the Company and its Affiliates, he may create, develop,
learn of, receive or contribute non public information, ideas, processes,
methods, designs, devices, inventions, data, models and other information
relating to the Company and its Affiliates or their products, services,
businesses, operations, employees or customers, whether in tangible or
intangible form, that the Company or its Affiliates desire to protect and keep
secret and confidential, including trade secrets and information from third
parties that the Company or its Affiliates are obligated to keep confidential (“Confidential
Information”).  Confidential
Information shall not include:  (i)
information that is or becomes generally known through no fault of Executive;
(ii) information received from a third party outside of the Company or its
Affiliates that was disclosed without a breach of any confidentiality
obligation; or (iii) information approved for release on a non-confidential
basis by written authorization of the Company or its Affiliates.  The Executive recognizes that all such
Confidential Information is the sole and exclusive property of the Company and
its Affiliates (or one or more third parties, as the case may be), and that disclosure
or unauthorized use of Confidential Information would cause irreparable damage
to the Company and its Affiliates.  The
Executive agrees that, except as required by the duties of his employment with
any of the Company or its Affiliates and except in connection with enforcing
the Executive’s rights under this Agreement or if compelled by a court or
governmental agency, in each case provided that prior written notice is given
to the Company, he will not, without the consent of the Company, willfully
disseminate or otherwise disclose, directly or indirectly, any Confidential
Information obtained during his employment with the Company or its Affiliates,
and will take all necessary precautions to prevent disclosure, to any
unauthorized individual or entity inside or outside the Company or its Affiliates,
and will not use the Confidential Information or permit its use for the benefit
of Executive or any other person or entity other than the Company or its
Affiliates.  These obligations shall
continue during and after the termination of Executive’s employment.

 

7.2.                              Non-Competition.  During the period beginning on the Agreement
Date and ending on the last to occur of the first anniversary of a Termination
Date occurring for any reason during a Post-Change Employment Period, or the
end of the Severance Period, Executive shall not at any time, directly or
indirectly, in any capacity:

 

11

 

(a)                                  engage or participate in, become
employed by, serve as a director of, or render advisory or consulting or other
services in connection with, any Competitive Business; provided, however, that
after the Termination Date this Section 7.2 shall not preclude Executive
from being an employee of, or consultant to, any business unit of a Competitive
Business if (i) such business unit does not qualify as a Competitive Business
in its own right and (ii) Executive does not have any direct or indirect
involvement in, or responsibility for, any operations of such Competitive
Business that cause it to qualify as a Competitive Business; or

 

(b)                                 make or retain any financial
investment, whether in the form of equity or debt, or own any interest, in any
Competitive Business.  Nothing in this
subsection shall, however, restrict Executive from making an investment in
any Competitive Business if such investment does not (i) represent more than 1%
of the aggregate market value of the outstanding capital stock or debt (as
applicable) of such Competitive Business, (ii) give Executive any right or
ability, directly or indirectly, to control or influence the policy decisions
or management of such Competitive Business, and (iii) create a conflict of
interest between Executive’s duties under this Agreement and his interest in
such investment.

 

7.3.                              Non-Solicitation.  During the period beginning on the Agreement
Date and ending on the last to occur of the first anniversary of any
Termination Date, or the end of the Severance Period, Executive shall not,
directly or indirectly:

 

(a)                                  other than in connection with
the good-faith performance of his duties as an officer or employee of the
Company, encourage any employee or agent of the Company or any Affiliate to
terminate his or her relationship with the Company or such Affiliate;

 

(b)                                 employ, engage as a consultant
or adviser, or solicit the employment or engagement as a consultant or adviser,
of any employee or agent of the Company (other than by the Company or its
Affiliates), or cause or encourage any Person to do any of the foregoing;

 

(c)                                  establish (or take preliminary
steps to establish) a business with, or encourage others to establish (or take
preliminary steps to establish) a business with, any employee or agent of the
Company or any Affiliate; or

 

(d)                                 interfere with the relationship
of the Company or any Affiliate with, or endeavor to entice away from the
Company or such Affiliate, any Person who or which at any time during the
period commencing one year prior to the Agreement Date was or is a material
customer or material supplier of, or maintained a material business
relationship with, the Company or any Affiliate.

 

7.4.                              Intellectual Property.  During the period beginning on the first date
of Executive’s employment and ending on the Termination Date, Executive shall
disclose immediately to the Company all ideas, inventions and business plans
that he makes, conceives, creates, authors, reduces to practice, discovers or
develops alone or with others during the course of his employment with any of
the Company or its Affiliates, including any inventions, information,

 

12

 

innovations, know-how, methods, processes, designs, formulas, concepts,
software, plans, original works of authorship, modifications, discoveries,
developments, improvements, computer programs, processes, products or
procedures (whether or not protectable upon application by copyright, patent,
trademark, trade secret or other proprietary rights) (“Work Product”)
that:  (i) relate to the current or
reasonably foreseeable or anticipated future business of the Company or its
Affiliates or any customer or supplier to the Company or its Affiliates or any
of the products or services being developed, manufactured, sold, offered for
sale or otherwise provided or offered by the Company or its Affiliates or that
may be used in relation therewith; or (ii) result from, relate to, or arise out
of tasks assigned to Executive by the Company or its Affiliates; or (iii)
result from, relate to, or arise out of the use of the premises or personal
property (whether tangible or intangible) owned, leased or contracted for by
the Company or its Affiliates.  Executive
agrees that any Work Product shall be the property of the Company and, if
subject to copyright, shall be considered a “work made for hire” within the
meaning of the Copyright Act of 1976, as amended (the “Act”).  If and to the extent that any such Work
Product is found as a matter of law not to be a “work made for hire” within the
meaning of the Act, or is otherwise not owned by such Company as a matter of
law, Executive expressly assigns to such Company all right, title and interest
in and to the Work Product, and all copies thereof, and the copyright, patent,
trademark, trade secret and all intellectual property or other proprietary
rights in the Work Product, without further consideration, free from any claim,
lien for balance due or rights of retention thereto on the part of Executive.

 

(a)                                  The Company hereby notifies
Executive that the preceding paragraph does not apply to any inventions for
which no equipment, supplies, facility, or trade secret information of the
Company was used and which was developed entirely on the Executive’s own time,
unless:  (i) the invention relates (a) to
the Company’s business, or (b) to the Company’s actual or demonstrably
anticipated research or development, or (ii) the invention results from
any work performed by the Executive for the Company.

 

(b)                                 Executive agrees that Executive
will, during his employment and at any time thereafter, at the request and cost
of the Company, execute all such documents and perform all such acts as the
Company or its duly authorized agents may reasonably require:  (i) to apply for, prosecute, register or
otherwise obtain and vest in the name of the Company alone (unless the Company
otherwise directs) all right, title and interest in and to letters patent,
copyrights, trade marks, trade secrets, or other intellectual property,
proprietary or analogous protection in any country throughout the world, and
when so obtained or vested to renew, amend modify, reissue, re-examine,
maintain and restore the same as required; and (ii) to defend any opposition or
other administrative or court proceedings in respect of such applications,
registrations or other intellectual property rights and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright and other analogous protection and all other analogous proceedings in
any country throughout the world.

 

(c)                                  In the event that the Company is
unable, after reasonable effort, to secure Executive’s signature on any document
required for the application, registration, issuance, prosecution, or
maintenance of any letters patent, copyright or other analogous protection of
proprietary or intellectual property rights relating to any Work Product,
whether because of Executive’s physical or mental incapacity or for any other
reason whatsoever, Executive hereby irrevocably designates and appoints the
Company and its

 

13

 

duly-authorized officers and agents as his
agent and attorney-in-fact in any country throughout the world, to act for and
on his behalf to execute and file any documents and to do all other lawfully
permitted acts to further the application, registration, maintenance,
prosecution and issuance of letters patent, copyright and other analogous
protection of proprietary or intellectual property rights relating to any Work
Products, with the same legal force and effect as if personally executed by
Executive, in any country throughout the world.

 

7.5.                              Reasonableness of Restrictive
Covenants.

 

(a)                                  Executive acknowledges that the
covenants contained in Sections 7.1, 7.2, 7.3 and 7.4 are reasonable in the
scope of the activities restricted, the geographic area covered by the
restrictions, and the duration of the restrictions, and that such covenants are
reasonably necessary to protect the Company’s legitimate interests in its
Confidential Information and the Work Product and in its relationships with its
employees, customers and suppliers. 
Executive further acknowledges such covenants are essential elements of
this Agreement and that, but for such covenants, the Company would not have
entered into this Agreement.

 

(b)                                 The Company and Executive have
each had the opportunity to consult with their respective legal counsel and have
been advised concerning the reasonableness and propriety of such
covenants.  Executive acknowledges that
his observance of the covenants contained in Sections 7.1, 7.2, 7.3 and 7.4
will not deprive him of the ability to earn a livelihood or to support his
dependents.

 

ARTICLE VIII.

 

NON-EXCLUSIVITY OF RIGHTS

 

8.1.                              Waiver of Certain Other Rights.  To the extent that lump sum cash severance
payments are made to Executive pursuant to Article III, Executive hereby
waives the right to receive severance payments or severance benefits under any
other Plan or agreement of the Company.

 

8.2.                              Other Rights.  Except as expressly provided in Section 8.1
or elsewhere in this agreement, this Agreement shall not prevent or limit
Executive’s continuing or future participation in any benefit, bonus, incentive
or other Plans provided by the Company and for which Executive may qualify, nor
shall this Agreement limit or otherwise affect such rights as Executive may
have under any other agreements with the Company.  Amounts which are vested benefits or which
Executive is otherwise entitled to receive under any Plan and any other payment
or benefit required by law at or after the Termination Date shall be payable in
accordance with such Plan or applicable law except as expressly modified by
this Agreement.

 

8.3.                              No Right to Continued Employment.  Nothing in this Agreement shall guarantee the
right of Executive to continue in employment, and the Company retains the right
to terminate the Executive’s employment at any time for any reason or for no
reason.

 

14

 

ARTICLE IX.

 

MISCELLANEOUS

 

9.1.                              No Assignability.  This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive otherwise than under Section 9.3.  This Agreement shall inure to the benefit of
and be enforceable by Executive’s legal representatives.

 

9.2.                              Successors.  This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.  The Company will require any successor to all
or substantially all of the business or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place.  Any
successor to the business or assets of the Company which assumes or agrees to
perform this Agreement by operation of law, contract, or otherwise shall be
jointly and severally liable with the Company under this Agreement as if such
successor were the Company.

 

9.3.                              Payments to Beneficiary.  If Executive dies before receiving amounts to
which Executive is entitled under this Agreement, such amounts shall be paid in
a lump sum to one or more beneficiaries designated in writing by Executive
(each, a “Beneficiary”).  If none is so
designated, the Executive’s estate shall be his or her Beneficiary.

 

9.4.                              Non-Alienation of Benefits.  Benefits payable under this Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.

 

9.5.                              Severability.  If any one or more portions of this Agreement
are declared by any court or governmental authority to be unlawful or invalid,
such unlawfulness or invalidity shall not serve to invalidate any portion not
so declared to be unlawful or invalid. 
Any portion declared to be unlawful or invalid shall be construed so as
to effectuate the terms of such portion to the fullest extent possible while
remaining lawful and valid.

 

9.6.                              Amendments.  This Agreement shall not be amended or
modified except by written instrument executed by the Company and Executive.

 

9.7.                              Notices.  All notices and other communications under
this Agreement shall be in writing and delivered by hand, by
nationally-recognized delivery service that promises overnight delivery, or by
first-class registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

 

If to Executive, to Executive at his most
recent home address on file with the Company.

 

15

 

If to Company:

 

SeeBeyond Technology Corporation

800 East Royal Oaks Drive

Monrovia, CA 91016

Attention:  General Counsel

 

or to such
other address as either party shall have furnished to the other in writing.  Notice and communications shall be effective
when actually received by the addressee.

 

9.8.                              Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.

 

9.9.                              Governing Law.  This Agreement shall be interpreted and
construed in accordance with the laws of the State of California, without
regard to its choice of law principles.

 

9.10.                        Captions.  The captions of this Agreement are not a part
of the provisions hereof and shall have no force or effect.

 

9.11.                        Number and Gender.  Wherever appropriate, the singular shall
include the plural, the plural shall include the singular, and the masculine
shall include the feminine.

 

9.12.                        Tax Withholding.  The Company may withhold from any amounts
payable under this Agreement any Taxes that are required to be withheld
pursuant to any applicable law or regulation and may report all such amounts
payable to such authority as is required by any applicable law or regulation.

 

9.13.                        Waiver.  Executive’s failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed a waiver of
such provision or any other provision of this Agreement.  A waiver of any provision of this Agreement
shall not be deemed a waiver of any other provision, and any waiver of any
default in any such provision shall not be deemed a waiver of any later default
thereof or of any other provision.

 

9.14.                        Entire Agreement.  This Agreement contains the entire
understanding of the Company and Executive with respect to its subject matter
and supersedes any prior agreement, whether written or oral, dealing with the
subject matter hereof.  The Prior
Agreement dated March 19, 2001 is hereby expressly superseded as of the
date hereof.

 

16

 

IN WITNESS
WHEREOF, Executive and SeeBeyond Technology Corporation have executed this
Change of Control Employment Agreement as of the date first above written.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /S/ ALEX
  DEMETRIADES

  	
   

  
	
   

  	
  Alex
  Demetriades

  
	
   

  	
   

  
	
   

  	
  SEEBEYOND TECHNOLOGY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ BARRY J.
  PLAGA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Chief Financial
  Officer

  	
   

  
					

 

17Exhibit
4-hhhh

 

 

FIFTY-SIXTH 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 DECEMBER 1, 2004

 

 

CREATING FIRST MORTGAGE BONDS, SERIES III, DUE
DECEMBER 1, 2039 AND

FIRST MORTGAGE BONDS, SERIES JJJ, DUE DECEMBER 1,
2039

 

AND

 

OTHERWISE SUPPLEMENTING AND AMENDING THE INDENTURE

 

 

 

TABLE OF CONTENTS

 

	
  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

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  
	
  Consolidation
  of Initial Mortgagor (and four other companies) into the Company

  	
   

  
	
  Execution
  by Company of Second Supplemental Indenture to the original Indenture

  	
   

  
	
  Company
  substituted for Initial Mortgagor under Indenture

  	
   

  
	
  Execution
  by Company of Third through the Fifty-Fifth Supplemental Indentures to the
  original Indenture

  	
   

  
	
  LaSalle
  Bank National Association, successor to original Trustee

  	
   

  
	
  Change
  of name of Company from Public Service Company of Indiana, Inc. to PSI
  Energy, Inc.

  	
   

  
	
  Amount
  of bonds presently outstanding under the Indenture

  	
   

  
	
  Fifty-Sixth
  Supplemental Indenture and Bonds of Series III and JJJ authorized

  	
   

  
	
  Conditions
  precedent performed

  	
   

  
	
   

  	
   

  
	
  EXECUTING
  CLAUSE

  	
   

  

 

i

 

	
  ARTICLE I.

  	
   

  
	
   

  	
   

  
	
  FIRST MORTGAGE BONDS, SERIES III,
  DUE DECEMBER 1, 2039, AND

  FIRST MORTGAGE BONDS, SERIES JJJ, DUE DECEMBER 1, 2039.

  	
   

  
	
   

  	
   

  
	
  Section 1.

  	
  Creation and
  designation of Bonds of Series III and JJJ

  	
   

  
	
  Section 2.

  	
  Bonds of Series III
  and JJJ to be in registered form only

  	
   

  
	
   

  	
  Form of face of
  the Series III Bond

  	
   

  
	
   

  	
  Form of
  reverse of the Series III Bond and Trustee’s certificate

  	
   

  
	
   

  	
  Form of face of
  the Series JJJ Bond

  	
   

  
	
   

  	
  Form of reverse
  of the Series JJJ Bond and Trustee’s certificate

  	
   

  
	
  Section 3.

  	
  Date of Bonds of
  Series III and JJJ

  	
   

  
	
  Section 4.

  	
  Maturity dates and
  interest rates of Bonds of Series III and JJJ

  	
   

  
	
  Section 5.

  	
  Place and manner of
  payment of Bonds of Series III and JJJ

  	
   

  
	
  Section 6.

  	
  Denominations and
  numbering of definitive Bonds of Series III and JJJ

  	
   

  
	
   

  	
  Temporary
  Bonds of Series III and JJJ and exchange thereof for definitive bonds

  	
   

  
	
  Section 7

  	
  Maintenance and
  Renewal Fund shall not apply to the Bonds of Series III and JJJ

  	
   

  
	
  Section 8.

  	
  Inspection
  requirements shall not apply to the Bonds of Series III and JJJ

  	
   

  
	
  Section 9.

  	
  Company’s right to
  further amend the original Indenture

  	
   

  
	
   

  	
   

  
	
  ARTICLE II.

  	
   

  
	
   

  	
   

  
	
  ISSUANCE OF
  BONDS OF SERIES III AND JJJ.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Aggregate principal amount
  of Bonds of Series III and Bonds of Series JJJ issuable at once

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
   

  
	
   

  	
   

  
	
  INDENTURE AMENDMENTS.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Amendments
  to Article I of the original Indenture

  	
   

  
	
  Section
  2.

  	
  Amendments
  to Article VII of the original Indenture

  	
   

  
	
  Section 3.

  	
  No sinking fund for
  the Bonds of Series III and JJJ

  	
   

  

 

ii

 

	
  ARTICLE IV.

  	
   

  
	
   

  	
   

  
	
  CONCERNING THE TRUSTEE.

  	
   

  
	
   

  	
   

  
	
  Acceptance
  of trust by Trustee

  	
   

  
	
  Trustee
  not responsible for validity or sufficiency of Fifty-Sixth Supplemental
  Indenture, etc.

  	
   

  
	
  Terms
  and conditions of Article XVII of the original Indenture to be applied to the
  Fifty-Sixth Supplemental Indenture

  	
   

  
	
   

  	
   

  
	
  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-Sixth Supplemental Indentures thereto

  	
   

  
	
  Section 2.

  	
  Operation and
  construction of amendments to the original Indenture

  	
   

  
	
  Section 3.

  	
  All covenants,
  etc., for sole benefit of parties to the Fifty-Sixth Supplemental Indenture
  and holders of bonds

  	
   

  
	
  Section 4.

  	
  Table of
  contents and headings of articles not part of Fifty-Sixth Supplemental
  Indenture

  	
   

  
	
  Section 5.

  	
  Execution of
  Fifty-Sixth Supplemental Indenture in counterparts

  	
   

  
	
  Section 6.

  	
  Payments Due on
  Legal Holidays

  	
   

  
	
   

  	
   

  
	
  ATTESTATION
  CLAUSE

  	
   

  
	
  SIGNATURES

  	
   

  
	
  ACKNOWLEDGMENT
  BY COMPANY

  	
   

  
	
  ACKNOWLEDGMENT
  BY TRUSTEE

  	
   

  

 

iii

 

FIFTY-SIXTH
SUPPLEMENTAL INDENTURE dated as of the first day of December, 2004, 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

 

1

 

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 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, a Fifty-Third Supplemental
Indenture dated as of June 15, 2001, a Fifty-Fourth Supplemental Indenture
dated as of September 1, 2002, and a Fifty-Fifth Supplemental Indenture dated
as of February 15, 2003, each supplementing and amending the Indenture; and

 

2

 

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 December 1, 2004, the only bonds that have been heretofore issued under
the Indenture which are now outstanding are $7,500,000 aggregate principal
amount of “PSI Energy, Inc. First Mortgage Bonds, Series VV, Due July 15, 2026”
and $70,000,000 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, 5 3/4%, Due
February 15, 2028” and $30,000,000 aggregate principal amount of “PSI Energy,
Inc. First Mortgage Bonds, Series AAA, 7 1/8%, 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
$23,000,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series FFF, Due March 1, 2031” and $24,600,000 aggregate principal
amount of “PSI Energy, Inc. First Mortgage Bonds, Series GGG, Due March 1, 2019”
and $35,000,000 aggregate principal amount of “PSI Energy, Inc. First Mortgage
Bonds, Series HHH, Due April 1, 2022”; 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-Sixth Supplemental Indenture, substantially in the form
of this Fifty-Sixth Supplemental Indenture, for the purpose of creating a
fifty-fourth and fifty-fifth series of bonds to be issued under the Indenture,
to be known as, respectively, “PSI Energy, Inc. First Mortgage Bonds, Series
III, Due December 1, 2039” (such series to consist of a single bond being
hereinafter referred to as the “Series III Bond”) and “PSI Energy, Inc. First
Mortgage Bonds, Series JJJ, Due December 1, 2039”  (such series to consist of a single bond
being hereinafter referred to as the “Series JJJ Bond”) (the Series III Bond
and the Series JJJ Bond, when referred to collectively in this Fifty-Sixth
Supplemental Indenture, shall be hereinafter referred to as the “Bonds of
Series III and JJJ”), and prescribing the form and substance of the Bonds of
Series III and JJJ 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

 

3

 

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-Sixth 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 III and JJJ 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-Sixth Supplemental Indenture for the uses and purposes hereinafter
expressed, that is to say:

 

ARTICLE
I.

 

FIRST
MORTGAGE BONDS, SERIES III, DUE DECEMBER 1, 2039 AND

FIRST MORTGAGE BONDS, SERIES JJJ, DUE DECEMBER 1, 2039

 

Section 1. 
There are hereby created a fifty-fourth and fifty-fifth series of bonds
to be issued under and secured by the Indenture, to be designated as “PSI
Energy, Inc. First Mortgage Bonds, Series III, Due December 1, 2039” (such
series to consist of a single bond, which shall be the Series III Bond
hereinbefore referred to) and “PSI Energy, Inc. First Mortgage Bonds, Series
JJJ, Due December 1, 2039” (such series to consist of a single bond, which
shall be the Series JJJ Bond hereinbefore referred to), respectively.

 

Section 2.  The Series III Bond and Series JJJ 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 seventy-seven million one hundred
twenty-five thousand dollars ($77,125,000) with respect to Series III Bond, and
a principal amount not to exceed seventy-seven million one hundred twenty-five
thousand dollars ($77,125,000) with respect to the Series JJJ 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 XL
Capital Assurance Inc., or its permitted assigns (“XL Capital”).

 

The
Series III Bond is being issued to XL Capital as security for the payment by
the Company of its obligations under the Insurance Agreement, dated as
of December 1, 2004, between XL
Capital and the Company, which was
entered into in connection with the delivery by XL Capital of its Financial
Guaranty Insurance Policy insuring certain payments of principal of, and
interest on, certain bonds (the “Series 2004B IDFA

 

4

 

Bonds”) to be issued under a
Trust Indenture, dated as of December 1, 2004, between the Indiana Development
Finance Authority (“IDFA”) and Deutsche Bank National Trust Company, as
trustee.  The proceeds of the Series
2004B IDFA Bonds will be loaned to the Company pursuant to a Loan Agreement,
dated as of December 1, 2004, between IDFA and the Company.

 

The Series JJJ Bond is being issued to XL Capital as
security for the payment by the Company of its obligations under an Insurance
Agreement, dated as of December 1, 2004, between XL Capital and the Company,
which was entered into in connection with the delivery by XL Capital of its
Financial Guaranty Insurance Policy insuring certain payments of principal of,
and interest on, certain bonds (the “Series 2004C IDFA Bonds”) to be issued
under a Trust Indenture, dated as of December 1, 2004, between the IDFA and
Deutsche Bank National Trust Company, as trustee.  The proceeds of the Series 2004C IDFA Bonds
will be loaned to the Company pursuant to a Loan Agreement, dated as of
December 1, 2004, between IDFA and the Company.

 

The Series III Bond and the Series JJJ Bond each shall
be transferable only as required to effect an assignment thereof to a
successor-in-interest of XL Capital 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 III Bond and the Trustee’s certificate to be endorsed thereon, and the
Series JJJ 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.]

 

5

 

(FORM
OF FACE OF THE SERIES III 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 XL CAPITAL ASSURANCE INC.
UNDER THE INSURANCE AGREEMENT DATED AS OF DECEMBER 1, 2004 BETWEEN XL CAPITAL
ASSURANCE INC AND PSI ENERGY, INC.

 

	
  No.
  III-

  	
   

  	
  $         

  

 

PSI ENERGY, INC.

FIRST MORTGAGE BOND, SERIES III,

DUE DECEMBER 1, 2039

 

PSI Energy, Inc., an
Indiana corporation (hereinafter called the “Company”), for value received,
hereby promises to pay to XL CAPITAL ASSURANCE INC., or registered assigns, the
principal sum of                                                     
Dollars ($   ) on the first day of
December, 2039 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 Revenue
Bonds, Series 2004B (the “Series 2004B IDFA Bonds”) issued by the Indiana
Development Finance Authority (“IDFA”) under a Trust Indenture, dated as of
December 1, 2004, between IDFA and Deutsche Bank National Trust Company 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 XL Capital Assurance Inc., or its permitted assigns (“XL
Capital”) as security for the payment by the Company of its obligations under
that certain Insurance Agreement dated as of December 1, 2004 between the
Company and XL Capital (the “Insurance Agreement”).  The Insurance Agreement was entered into in
connection with the delivery by XL Capital of its Financial Guaranty Insurance
Policy insuring certain payments of principal of, and interest on, the Series
2004B IDFA Bonds.

 

6

 

The
proceeds of the Series 2004B IDFA Bonds have been loaned to the Company
pursuant to a Loan Agreement, dated as of December 1, 2004, 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 XL Captial 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.

 

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

  	
   

  
					

 

7

 

(FORM
OF REVERSE OF THE SERIES III 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 III, Due
December 1, 2039” (hereinafter referred to as the “Series III Bond”) of the
Company issued under and secured by the Indenture and created by a Fifty-Sixth
Supplemental Indenture, dated as of December 1, 2004  (the “Fifty-Sixth 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-Sixth 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 (66-2/3%).

 

8

 

The Series III Bond shall be transferable only as required
to effect an assignment thereof to a successor-in-interest of XL Capital 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 III Bond.  If and
when interest is paid on the Series 2004B IDFA Bonds for any given period of
time, then there is deemed to have been paid on this Series III Bond an amount
of interest equal to such interest paid on the Series 2004B IDFA Bonds.  The Company shall promptly notify the Trustee
of the amounts and Interest Payment Dates if any interest becomes payable on
this Series III Bond.

 

The
Series III Bond shall be deemed to have been paid and no longer outstanding
under the Indenture to the extent that Series 2004B 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 XL Capital 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 2004B 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 2004B IDFA Bonds redeemed and all amounts
owed by the Company to XL Capital under the Insurance Agreement have been
indefeasibly paid in full.  In such an
event, the Company shall notify XL Capital and the Trustee that a like
principal amount of this bond shall be deemed to have been paid and
redeemed.  The Series III Bond is not
otherwise redeemable prior to its maturity.

 

XL
Capital 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 III 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

 

9

 

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 III Bond designated therein referred to and described in the
within mentioned Indenture and Fifty-Sixth Supplemental Indenture.

 

	
   

  	
  LASALLE BANK NATIONAL
  ASSOCIATION,

  AS TRUSTEE,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  

 

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

 

10

 

(FORM
OF FACE OF THE SERIES JJJ 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 XL CAPITAL ASSURANCE INC.
UNDER THE INSURANCE AGREEMENT DATED AS OF DECEMBER 1, 2004 BETWEEN XL CAPITAL
ASSURANCE INC. AND PSI ENERGY, INC.

 

	
  No.
  JJJ-

  	
   

  	
  $         

  

 

PSI ENERGY, INC.

FIRST MORTGAGE BOND, SERIES JJJ,

DUE DECEMBER 1, 2039

 

PSI Energy, Inc., an
Indiana corporation (hereinafter called the “Company”), for value received,
hereby promises to pay to XL CAPITAL ASSURANCE INC., or registered assigns, the
principal sum of                                             
Dollars ($   ) on the first day of
December, 2039 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 Revenue
Bonds, Series 2004C (the “Series 2004C IDFA Bonds”) issued by the Indiana
Development Finance Authority (“IDFA”) under a Trust Indenture, dated as of
December 1, 2004, between IDFA and Deutsche Bank National Trust Company 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 XL Capital Assurance Inc., or its permitted assigns (“XL
Capital”) as security for the payment by the Company of its obligations under
that certain Insurance Agreement dated as of December 1, 2004, between the
Company and XL Capital (the “Insurance Agreement”).  The Insurance Agreement was entered into in
connection with the delivery by XL Capital of its Financial Guaranty Insurance
Policy insuring certain payments of principal of, and interest on, the Series
2004C IDFA Bonds.

 

11

 

The
proceeds of the Series 2004C IDFA Bonds have been loaned to the Company
pursuant to a Loan Agreement, dated as of December 1, 2004, 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 XL Capital 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.

 

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

  	
   

  
					

 

12

 

(FORM
OF REVERSE OF THE SERIES JJJ 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 JJJ, Due
December 1, 2039” (hereinafter referred to as the “Series JJJ Bond”) of the
Company issued under and secured by the Indenture and created by a Fifty-Sixth
Supplemental Indenture, dated as of December 1, 2004  (the “Fifty-Sixth 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-Sixth 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 (66-2/3%).

 

13

 

The Series JJJ Bond shall be transferable only as
required to effect an assignment thereof to a successor-in-interest of XL
Capital 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 JJJ Bond.  If and
when interest is paid on the Series 2004C IDFA Bonds for any given period of
time, then there is deemed to have been paid on this Series JJJ Bond an amount
of interest equal to such interest paid on the Series 2004C IDFA Bonds.  The Company shall promptly notify the Trustee
of the amounts and Interest Payment Dates if any interest becomes payable on
this Series JJJ Bond.

 

The
Series JJJ Bond shall be deemed to have been paid and no longer outstanding
under the Indenture to the extent that Series 2004C 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 XL Capital 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 2004C 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 2004C IDFA Bonds redeemed and all amounts
owed by the Company to XL Capital under the Insurance Agreement have been
indefeasibly paid in full.  In such an
event, the Company shall notify XL Capital and the Trustee that a like
principal amount of this bond shall be deemed to have been paid and
redeemed.  The Series JJJ Bond is not
otherwise redeemable prior to its maturity.

 

XL
Capital 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 JJJ 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

 

14

 

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 JJJ Bond designated therein referred to and described in the
within mentioned Indenture and Fifty-Sixth Supplemental Indenture.

 

	
   

  	
  LASALLE BANK NATIONAL
  ASSOCIATION,

  AS TRUSTEE,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  

 

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

 

15

 

Section 3.  Each Bond of Series
III and JJJ issued prior to the first interest payment date shall be dated as
of December 7, 2004, and otherwise shall be dated as provided in Section 1 of
Article II of the Indenture.

 

Section 4.  The Series III Bond
shall be due and payable on December 1, 2039, and shall bear interest from
December 7, 2004, at the rate from time to time borne by the Series 2004B IDFA
Bonds (as referred to in the form of the bond hereinabove set forth).  The Series JJJ Bond shall be due and payable
on December 1, 2039, and shall bear interest from December 7, 2004, at the rate
from time to time borne by the Series 2004C IDFA Bonds (as referred to in the
form of the bond hereinabove set forth).

 

If
and when interest is paid on the Series 2004B IDFA Bonds for any given period
of time, then there is deemed to have been paid on the Series III Bond an
amount of interest equal to such interest paid on the Series 2004B IDFA
Bonds.  If and when interest is paid on
the Series 2004C IDFA Bonds for any given period of time, then there is deemed
to have been paid on the Series JJJ Bond an amount of interest equal to such
interest paid on the Series 2004C IDFA Bonds. 
The Company shall promptly notify the Trustee of the amounts and
Interest Payment Dates if any interest becomes payable on the Series III Bond
or the Series JJJ 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 III Bond shall be equal to the sum of (i) the sum of the amounts
determined by multiplying the principal amount of the Series 2004B 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 2004B 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 2004B
IDFA Bonds by 13% per
annum; and

 

(b)       the
Series JJJ Bond shall be equal to the sum of (i) the sum of the amounts
determined by multiplying the principal amount of the Series 2004C 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 2004C 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 2004C
IDFA Bonds by 13% per
annum.

 

Section 5.  Both the principal
of and the interest on the Bonds of Series III and JJJ 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,

 

16

 

State
of New York, except that interest on the Bonds of Series III and JJJ 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 III Bond shall be issued and shall be numbered “III-1.”  A single Series JJJ Bond shall be issued and
shall be numbered “JJJ-1.”

 

The
Bonds of Series III and JJJ 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 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 III and JJJ 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
III and JJJ 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 III and JJJ 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 III and JJJ 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 III and JJJ) 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
III and JJJ), 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 III and JJJ), 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:

 

17

 

(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 (66-2/3%)
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 (66-2/3%) 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
(66-2/3%) in aggregate principal amount of the bonds at the time outstanding;”.

 

(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 (66-2/3%) 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:

 

18

 

“holders
(or persons entitled to vote the bonds) of at least sixty-six and two-thirds
per centum (66-2/3%) in principal amount of the bonds outstanding”.

 

ARTICLE
II.

 

ISSUANCE
OF BONDS OF SERIES III AND JJJ.

 

 Section 1.  The Series III Bond, in the principal amount
not exceeding seventy-seven million one hundred twenty-five thousand dollars
($77,125,000) and the Series JJJ Bond in the principal amount not exceeding
seventy-seven million one hundred twenty-five thousand dollars ($77,125,000),
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-Sixth 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 “(95)”
thereof an additional subdivision numbered “(96)” and reading as follows:

 

 “(94) The term ‘Fifty-Sixth Supplemental
Indenture’ shall mean the Fifty-Sixth Supplemental Indenture executed by the
Company and the Trustee, dated as of December 1, 2004, supplementing and amending
the Indenture, and the terms ‘Series III Bond’ shall mean the ‘PSI Energy, Inc.
First Mortgage Bonds, Series III, Due December 1, 2039,’ and ‘Series JJJ Bond’
shall mean the ‘PSI Energy, Inc. First Mortgage Bonds, Series JJJ, Due December
1, 2039,’, created by the Fifty-Sixth Supplemental Indenture.”

 

and
(ii) by changing the numbering of the present subdivision “(96)” thereof to “(97)”.

 

Section 2. 
Article VII of the Indenture, as heretofore amended,
is hereby further amended by inserting therein immediately after Section 40
thereof, a new section designated “Section 41” and reading as follows:

 

“Section 41. 
The Series III Bond shall be deemed to have been paid and redeemed at
any time if and to the extent that the Series 2004B IDFA Bonds are

 

19

 

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 2004B IDFA Bonds
redeemed and all amounts owed by the Company to XL Capital under the Insurance
Agreement have been indefeasibly paid in full. 
In such an event, the Company shall notify XL Capital and the Trustee
that a like principal amount of the Bonds of Series III shall be deemed to have
been paid and redeemed.

 

The Series JJJ Bond shall be deemed to have been
paid and redeemed at any time if and to the extent that the Series 2004C 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 2004C
IDFA Bonds redeemed and all amounts owed by the Company to XL Capital under the
Insurance Agreement have been indefeasibly paid in full.  In such an event, the Company shall notify XL
Capital and the Trustee that a like principal amount of the Bonds of Series JJJ
shall be deemed to have been paid and redeemed.

 

The Bonds of Series III and JJJ are not
otherwise redeemable prior to their maturity. 
For clarity, the Bonds of Series III and/or Series JJJ may also be
cancelled and discharged at the election of the Company 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 III and Series JJJ Bonds upon
presentment thereof by the Company without making further inquiry.  The terms “Series 2004B IDFA Bonds”, “Series
2004C IDFA Bonds”, “IDFA Indenture”, “XL Capital” and “Insurance Agreement”
shall have the respective meanings specified in the Fifty-Sixth Supplemental
Indenture.

 

Section 3.  The Bonds of
Series III and JJJ 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-Sixth
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-Sixth 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-Sixth Supplemental Indenture.

 

20

 

ARTICLE
V.

 

MISCELLANEOUS
PROVISIONS.

 

Section 1. 
Wherever in the original Indenture or in any of
the fifty-six 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-six 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-Sixth 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-Sixth 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-Sixth 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 III and JJJ 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.]

 

21

 

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

  	
   

  	
   

  
	
   

  	
  James L. Turner

  	
   

  
	
   

  	
  Executive Vice President and

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Richard
  G. Beach, Assistant Secretary

  	
   

  
	
   

  	
   

  
	
  Signed and delivered
  by PSI Energy, Inc.

  in the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Deborah
  L. Gates, Witness

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Julie
  M. Thompson, Witness

  	
   

  
					

 

22

 

	
   

  	
  LASALLE
  BANK NATIONAL ASSOCIATION

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  (CORPORATE
  SEAL)

  	
  By

  	
   

  	
   

  	 

	
   

  	
  Victoria Y. Douyon

  	
   

  	 

	
   

  	
  First Vice President

  	
   

  	 

	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kristine
  Brutsman, Assistant Secretary

  	
   

  
	
   

  	
   

  
	
  Signed and delivered
  by LaSalle Bank National

  Association in the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Debra
  Donaldson, Witness

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Alvita
  Griffin, Witness

  	
   

  
						

 

23

 

	
  STATE OF OHIO

  	
  )

  
	
   

  
	
   

  	
  ) ss:

  
	
   

  
	
  COUNTY
  OF HAMILTON

  	
  )

  

 

BE
IT REMEMBERED, that on this 30th day of November, before me, the
undersigned, a notary public in and for the County and State aforesaid, duly
commissioned and qualified, personally appeared James L. Turner and Richard G.
Beach, 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 Executive
Vice President and Chief Financial Officer, 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 Executive Vice President and Chief Financial Officer, 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)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  

 

My
commission expires 9-28-08.

 

County
of residence: Hamilton

 

24

 

	
  STATE OF ILLINOIS

  	
  )

  
	
   

  
	
   

  	
  ) ss:

  
	
   

  
	
  COUNTY
  OF COOK

  	
  )

  

 

BE
IT REMEMBERED, that on this 29th day of November, 2004, 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 Kristine
Brutsman 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)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

My
commission expires 12-1-05.

 

County
of residence: Cook

 

25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]