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Exhibit 4-SSS    
  

THE CINCINNATI GAS & ELECTRIC COMPANY  

 AND  

 FIFTH THIRD BANK,

Trustee  

Sixth Supplemental Indenture  

 Dated as of September 15, 2002  

 To  

 Indenture  

 Dated as of May 15, 1995  

 5.70% Debentures Due 2012  

 

        SIXTH SUPPLEMENTAL INDENTURE, dated as of September 15, 2002, between The Cincinnati Gas & Electric Company, a corporation duly organized and
existing under the laws of the State of Ohio (herein called the "Company"), having its principal office at 139 East Fourth Street, Cincinnati, Ohio 45202, and Fifth Third Bank, an Ohio banking
corporation, as Trustee (herein called the "Trustee"), under the Indenture dated as of May 15, 1995 between the Company and the Trustee (the "Indenture"). 

Recitals of the Company 

        The
Company has executed and delivered the Indenture to the Trustee to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness
(the "Securities"), to be issued in one or more series as provided in the Indenture. 

        Pursuant
to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 5.70% Debentures Due 2012 (herein called
the "Debentures"), in this Sixth Supplemental Indenture. 

        All
things necessary to make this Sixth Supplemental Indenture a valid agreement of the Company have been done. 

        Now,
Therefore, This Sixth Supplemental Indenture Witnesseth: 

        For
and in consideration of the premises and the purchase of the Debentures by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Debentures, as follows: 

ARTICLE ONE 

Terms
of the Debentures 

        Section 101.    There
is hereby authorized a series of Securities designated the "5.70% Debentures Due 2012". The Debentures shall mature and the principal shall be due
and payable together with all accrued and unpaid interest thereon on September 15, 2012 and shall be issued in the form of a registered Global Security without coupons, registered in the name
of Cede & Co., as nominee of The Depository Trust Company (the "Depository"). 

        The
initial issue of the Debentures shall be limited in aggregate principal amount to $500,000,000 (except as provided in Section 301(2) of the Indenture). However, the Company
may, from time to time, without notice to or the consent of the registered holders of the Debentures then outstanding, issue additional Debentures, without limitation as to the aggregate principal
amount thereof. 

        Section 102.    The
provisions of Section 305 of the Indenture applicable to Global Securities shall apply to the Debentures. 

        Section 103.    Interest
on each of the Debentures shall be payable semiannually on March 15 and September 15 in each year (each an "Interest Payment
Date"), commencing on March 15, 2003, at the rate per annum specified in the designation of the Debentures from September 23, 2002, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the Person in whose name such Debenture (or
one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the Business Day immediately preceding such Interest Payment
Date. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. As used herein, "Business Day" means any day, other
than a Saturday or Sunday, or a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to be closed. 

1

 

        Section 104.    Subject
to agreements with or the rules of the Depositary or any successor book-entry security system or similar system with respect to
Global Securities, payments of interest will be made by check mailed to the Holder of each Debenture at the address shown in the Security Register, and payments of the principal amount of each
Debenture will be made at maturity by check against presentation of the Debenture at the office or agency of the Trustee. 

        Section 105.    The
Debentures shall be issued in denominations of $1,000 or any integral multiple of $1,000. 

        Section 106.    Principal
and interest on the Debentures shall be payable in the coin or currency of the United States of America, which, at the time of payment, is
legal tender for public and private debts. 

        Section 107.    The
Debentures shall be subject to defeasance and covenant defeasance, at the Company's option, as provided for in Sections 1302 and 1303 of the
Indenture. 

        Section 108.    Subject
to the terms of Article Eleven of the Indenture, the Company shall have the right to redeem the Debentures, at any time in whole or from time to
time in part, until maturity (such redemption, a "Make-Whole Redemption"), at a Redemption Price equal to the sum of (i) the principal amount of the Debentures being redeemed plus
accrued and unpaid interest thereon to the
Redemption Date, and (ii) the Make-Whole Amount, if any, with respect to the Debentures being redeemed. For purposes of this Section 108: 

        "Make-Whole
Amount" means, in connection with any Make-Whole Redemption of any Debentures, the excess, if any, of (i) the sum, as determined by a Quotation
Agent, of the present value of the principal amount of such Debentures to be redeemed, together with scheduled payments of interest thereon from the Redemption Date to September 15, 2012 (not
including any portion of such payments of interest accrued as of the Redemption Date), in each case discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate over (ii) 100% of the principal amount of the Debentures to be redeemed. 

        "Adjusted
Treasury Rate" means, with respect to any Redemption Date for a Make-Whole Redemption, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date, calculated on the third Business Day preceding the Redemption Date, plus in each case .25% (25 basis points). 

        "Comparable
Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to
the Stated Maturity of the Debentures that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Debentures. 

        "Quotation
Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company. "Reference Treasury Dealer" means a primary U.S. Government securities
dealer. 

        "Comparable
Treasury Price" means, with respect to any Redemption Date for a Make-Whole Redemption, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such Redemption Date, as set forth in the daily statistical release designated
"H.15" (or any successor release) published by the Board of Governors of the Federal Reserve System or (ii) if such release (or any successor release) is not published or does not contain such
prices on such Business Day, (A) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the 

2

 

highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of such Quotations. 

        "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date for a Make-Whole Redemption, the average, as determined
by the Trustee (after consultation with the Company), of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date. 

        Notice
of any redemption by the Company will be mailed at least 30 days but not more than 60 days before any Redemption Date to each Holder of Debentures to be redeemed. If
less than all the Debentures are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the Debentures to be redeemed. 

        Unless
the Company defaults in payment of the Redemption Price, on and after any Redemption Date, interest will cease to accrue on the Debentures or portions thereof called for
redemption. 

ARTICLE TWO 

Form
of the Debentures 

        Section 201.    The
Debentures are to be substantially in the following form and shall include substantially the legend shown so long as the Debentures are Global
Securities: 

3

 
(FORM OF FACE OF DEBENTURE) 

	No.	 	$

CUSIP No.: 172070 CN 2

ISIN: US172070CN29

Common Code: 015526378 

THE CINCINNATI GAS & ELECTRIC COMPANY 

5.70%
DEBENTURE DUE 2012 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT AND SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

        THE
CINCINNATI GAS & ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of Ohio (herein called the "Company," which term includes any
successor Person under the Indenture hereafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum
of                        and No/100
Dollars ($                        ) on September 15, 2012, and to pay interest thereon from September 23, 2002 or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on March 15 and September 15 in each year, commencing March 15, 2003, at the rate of 5.70% per annum, until the principal hereof is paid or made
available for payment. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the Business Day immediately preceding such Interest Payment Date. Any such interest not
so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities of this series not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. 

        Payment
of the principal of and interest on this Security will be made at the corporate trust office of the Trustee maintained for that purpose in the City of Cincinnati, in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may
be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. 

        Any
payment on this Security due on any day which is not a Business Day in the City of New York need not be made on such day, but may be made on the next succeeding Business Day with the
same 

4

 

force and effect as if made on the due date and no interest shall accrue for the period from and after such date, unless such payment is a payment at maturity or upon redemption, in which case
interest shall accrue thereon at the stated rate for such additional days. 

        As
used herein, "Business Day" means any day, other than a Saturday or Sunday, or a day on which banking institutions in New York, New York are authorized or obligated by law or
executive order to be closed. 

        Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth
at this place. 

        Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose. 

        In
Witness Whereof, the Company has caused this instrument to be duly executed. 

	

 	

THE CINCINNATI GAS & ELECTRIC COMPANY
	

 	

By	

  

5

   CERTIFICATE OF AUTHENTICATION 

Dated:

        This
is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 

	

 	
 	

FIFTH THIRD BANK,

    as Trustee	
 	

 
	

 	
 	

By	
 	

  
 Authorized Signatory	
 	

 

(FORM OF REVERSE OF DEBENTURE) 

        This
Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as
of May 15, 1995 (herein called the "Indenture," which term shall have the meaning assigned to it in such instrument), between the Company and Fifth Third Bank, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of
the series designated on the face hereof, which series is issuable without limitation as to the aggregate principal amount thereof. 

        The
Securities of this series are subject to optional redemption at any time in whole or from time to time in part, until maturity (such redemption, a "Make-Whole
Redemption"), at a Redemption Price equal to the sum of (i) the principal amount of the Securities being redeemed plus accrued and unpaid interest thereon to the Redemption Date, and
(ii) the Make-Whole Amount (as defined below), if any, with respect to the Securities being redeemed. 

        "Make-Whole
Amount" means, in connection with any Make-Whole Redemption of any Securities, the excess, if any, of (i) the sum, as determined by a Quotation
Agent of the present value of the principal amount of such Securities to be redeemed, together with scheduled payments of interest thereon from the Redemption Date to September 15, 2012 (not
including any portion of such payments of interest accrued as of the Redemption Date), in each case discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate over (ii) 100% of the principal amount of the Securities to be redeemed. 

        "Adjusted
Treasury Rate" means, with respect to any Redemption Date for a Make-Whole Redemption, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date, calculated on the third Business Day preceding the Redemption Date, plus in each case .25% (25 basis points). 

        "Comparable
Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to
the Stated Maturity of the Securities that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Securities. 

6

 

        "Quotation
Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company. "Reference Treasury Dealer" means a primary U.S. Government securities
dealer. 

        "Comparable
Treasury Price" means, with respect to any Redemption Date for a Make-Whole Redemption, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such Redemption Date, as set forth in the daily statistical release designated
"H.15" (or any successor release) published by the Board of Governors of the Federal Reserve System or (ii) if such release (or any successor release) is not published or does not contain such
prices on such Business Day, (A) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of such Quotations. 

        "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date for a Make-Whole Redemption, the average, as determined
by the Trustee (after consultation with the Company), of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. 

        Notice
of any redemption by the Company will be mailed at least 30 days but not more than 60 days before any Redemption Date to each Holder of Securities to be redeemed. If
less than all the Securities are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the Securities to be redeemed. 

        Unless
the Company defaults in payment of the Redemption Price, on and after any Redemption Date, interest will cease to accrue on the Securities or portions thereof called for
redemption. 

        The
Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this
Security upon compliance with certain conditions set forth in the Indenture. 

        If
an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture. 

        The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders
of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 

        As
provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series,
the Holders of not less than 35% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such 

7

 

Event of Default as Trustee and offered the Trustee reasonably satisfactory indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this
series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein. 

        No
reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 

        As
provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 

        The
Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same. 

        No
service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. 

        Prior
to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary. 

        All
terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 

ARTICLE THREE 

Issuance
of Debentures 

        Section 301.    An
initial issue of the Debentures in the aggregate principal amount of $500,000,000 may, upon execution of this Sixth Supplemental Indenture, or from
time to time hereafter, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Debentures upon a Company Order
without any further action by the Company. Additional Debentures may be issued by the Company pursuant to the terms of the Indenture and this Sixth Supplemental Indenture. 

ARTICLE FOUR 

Paying
Agent and Security Registrar 

        Section 401.    Fifth
Third Bank will be the Paying Agent and Security Registrar for the Debentures. 

8

 

ARTICLE FIVE 

Sundry
Provisions 

        Section 501.    Except
as otherwise expressly provided in this Sixth Supplemental Indenture or in the form of Debenture or otherwise clearly required by the context
hereof or thereof, all terms used herein or in said form of Debenture that are defined in the Indenture shall have the several meanings respectively assigned to them thereby. 

        Section 502.    The
Indenture, as supplemented by this Sixth Supplemental Indenture, is in all respects ratified and confirmed, and this Sixth Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. 

9

 

        This
instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one
and the same instrument. 

        In
Witness Whereof, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed as of the date first above written. 

	

 	

THE CINCINNATI GAS & ELECTRIC

    COMPANY
	

 	

By	
 	

/s/  WENDY L. AUMILLER      
 Wendy L. Aumiller

Treasurer
	

 	

FIFTH THIRD BANK, as Trustee
	

 	

By	
 	

/s/  CHRISTINE M. SCHAUB      
 Christine M. Schaub

Vice President

10

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 -- Click here to rapidly navigate through this document

 
 

Exhibit 4-TTT    
  

LOAN AGREEMENT  

between  

INDIANA DEVELOPMENT FINANCE AUTHORITY  

and  

PSI ENERGY, INC.  

$23,000,000

Indiana Development Finance Authority

Environmental Refunding

Revenue Bonds, Series 2002A

(PSI Energy, Inc. Project)  

 Dated  

 as of  

 September 1, 2002  

   TABLE OF CONTENTS  

	 
	 	 
	 	Page

	

ARTICLE I.	
 	

DEFINITIONS	
 	

2
	

Section 1.1.	
 	

Use of Defined Terms	
 	

2
	Section 1.2.	 	Definitions	 	2
	Section 1.3.	 	Interpretation	 	5
	Section 1.4.	 	Captions and Headings	 	5
	

ARTICLE II.	
 	

REPRESENTATIONS	
 	

6
	

Section 2.1.	
 	

Representations of the Issuer	
 	

6
	Section 2.2.	 	No Warranty by Issuer of Condition or Suitability of the Project	 	6
	Section 2.3.	 	Representations and Covenants of the Company	 	6
	

ARTICLE III.	
 	

COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS	
 	

9
	

Section 3.1.	
 	

Acquisition, Construction and Installation	
 	

9
	Section 3.2.	 	Project Description	 	9
	Section 3.3.	 	Issuance of the Bonds; Application of Proceeds	 	9
	Section 3.4.	 	Investment of Fund Moneys	 	9
	Section 3.5.	 	Rebate Fund	 	10
	

ARTICLE IV.	
 	

LOAN BY ISSUER; LOAN PAYMENTS; ADDITIONAL PAYMENTS; MUNICIPAL BOND INSURANCE POLICY AND LIQUIDITY FACILITY	
 	

11
	

Section 4.1.	
 	

Loan Repayment	
 	

11
	Section 4.2.	 	Additional Payments	 	11
	Section 4.3.	 	Place of Payments	 	11
	Section 4.4.	 	Obligations Unconditional	 	11
	Section 4.5.	 	Assignment of Revenues and Agreement	 	12
	Section 4.6.	 	Municipal Bond Insurance Policy; Liquidity Facility; Cancellation	 	12
	Section 4.7.	 	Company's Option to Elect Rate Period; Changes in Auction Date and Length of Auction Periods	 	12
	Section 4.8.	 	Company's Obligation to Purchase Bonds	 	12
	

ARTICLE V.	
 	

ADDITIONAL AGREEMENTS AND COVENANTS	
 	

13
	

Section 5.1.	
 	

Right of Inspection	
 	

13
	Section 5.2.	 	Maintenance	 	13
	Section 5.3.	 	Removal of Portions of the Project Facilities	 	13
	Section 5.4.	 	Operation of Project Facilities	 	14
	Section 5.5.	 	Insurance	 	14
	Section 5.6.	 	Workers' Compensation Coverage	 	14
	Section 5.7.	 	Damage; Destruction and Eminent Domain	 	14
	Section 5.8.	 	Company to Maintain its Corporate Existence; Conditions Under Which Exceptions Permitted	 	14
	Section 5.9.	 	Indemnification	 	14
	Section 5.10.	 	Company Not to Adversely Affect Exclusion of Interest on Bonds From Gross Income For Federal Income Tax Purposes	 	15
	Section 5.11.	 	Use of Project Facilities	 	15
	Section 5.12.	 	Assignment by Company	 	15
	Section 5.13.	 	The Depository Trust Company Letter of Representation	 	16

i

 

	

ARTICLE VI.	
 	

REDEMPTION	
 	

17
	

Section 6.1.	
 	

Optional Redemption	
 	

17
	Section 6.2.	 	Extraordinary Optional Redemption	 	17
	Section 6.3.	 	Mandatory Redemption	 	18
	Section 6.4.	 	Notice of Redemption	 	18
	Section 6.5.	 	Actions by Issuer	 	19
	

ARTICLE VII.	
 	

EVENTS OF DEFAULT AND REMEDIES	
 	

20
	

Section 7.1.	
 	

Events of Default	
 	

20
	Section 7.2.	 	Remedies on Default	 	20
	Section 7.3.	 	No Remedy Exclusive	 	21
	Section 7.4.	 	Agreement to Pay Attorneys' Fees and Expenses	 	21
	Section 7.5.	 	No Waiver	 	21
	Section 7.6.	 	Notice of Default	 	21
	

ARTICLE VIII.	
 	

MISCELLANEOUS	
 	

22
	

Section 8.1.	
 	

Term of Agreement	
 	

22
	Section 8.2.	 	Amounts Remaining in Funds	 	22
	Section 8.3.	 	Notices	 	22
	Section 8.4.	 	Extent of Covenants of the Issuer; No Personal Liability	 	22
	Section 8.5.	 	Binding Effect	 	22
	Section 8.6.	 	Amendments and Supplements	 	22
	Section 8.7.	 	Execution Counterparts	 	23
	Section 8.8.	 	Severability	 	23
	Section 8.9.	 	Governing Law	 	23
	EXHIBIT A Project	 	24

ii

LOAN AGREEMENT  

        THIS LOAN AGREEMENT is made and entered into as of September 1, 2002 between the INDIANA DEVELOPMENT FINANCE AUTHORITY (the "Issuer"), a separate body
corporate and politic organized and existing under the laws of the State of Indiana, and PSI ENERGY, INC. (the "Company"), a public utility and corporation duly organized and validly existing
under the laws of the State of Indiana. Capitalized terms used in the following recitals are used as defined in Article I of this Agreement. 

        Pursuant
to Indiana Code, Title 4, Article 4, Chapters 10.9 and 11 (collectively, the "Act"), the Issuer has determined to issue, sell and deliver the Bonds, and to lend the
proceeds derived from the sale thereof to the Company to assist in the refunding of the Refunded Bonds as defined below. The Refunded Bonds were issued to provide funds to make a loan to the Company
to assist in the refinancing of its portion of the costs of the Project as defined below. 

        The
Company and the Issuer each have full right and lawful authority to enter into this Agreement and to perform and observe the provisions hereof on their respective parts to be
performed and observed. 

        NOW
THEREFORE, in consideration of the premises and the mutual representations and agreements hereinafter contained, the Issuer and the Company agree as follows (provided that any
obligation of the Issuer or the State created by or arising out of this Agreement shall never constitute a general debt of the Issuer or the State or give rise to any pecuniary liability of the Issuer
or the State but shall be payable solely out of Revenues): 

   ARTICLE I.  

DEFINITIONS  

        Section 1.1.    Use of Defined Terms.    In addition to the words and terms defined elsewhere in this
Agreement, the Indenture or by reference to another document, the words and terms set forth in Section 1.2 hereof shall have the meanings set forth therein unless the context or use clearly
indicates another meaning or intent. Such definitions shall be equally applicable to both the singular and plural forms of any of the words and terms defined therein. 

        Section 1.2.    Definitions.    As used herein: 

        "Additional
Payments" means the amounts required to be paid by the Company pursuant to the provisions of Section 4.2 hereof. 

        "Administration
Expenses" means the compensation (which compensation shall not be greater than that typically charged in similar circumstances) and reimbursement of reasonable expenses
and advances payable to the Trustee, the Registrar, the Remarketing Agent, the Broker-Dealer, the Auction Agent, any Paying Agent and any Authenticating Agent. 

        "Agreement"
means this Loan Agreement, as amended or supplemented from time to time. 

        "Engineer"
means an engineer (who may be an employee of the Company) or engineering firm qualified to practice the profession of engineering under the laws of the State and who or which
is acceptable to the Trustee. 

        "EPA"
means the Department of Environmental Management of the State and any successor body, agency, commission or department. 

        "Event
of Default" means any of the events described as an Event of Default in Section 7.1 hereof. 

        "Force
Majeure" means any of the following: 

        (i)    acts
of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of
America or of the State or any of their departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; civil disturbances; riots; epidemics; landslides;
lightning; earthquakes; fires; hurricanes; tornados; storms; droughts; floods; arrests; restraint of government and people; explosions; breakage, nuclear accidents or other malfunction or accident to
facilities, machinery, transmission pipes or canals; partial or entire failure of a utility serving the Project; shortages of labor, materials, supplies or transportation; or 

        (ii)  any
cause, circumstance or event not reasonably within the control of the Company. 

        "Generating
Stations" means collectively the Gibson Generating Station, the Cayuga Generating Station, the Edwardsport Generating Station, the Gallagher Generating Station and the Wabash
River Generating Station and "Generating Station" means any one of such separately. 

        "Indenture"
means the Trust Indenture related to the Bonds, dated as of the same date as this Agreement, between the Issuer and the Trustee, as amended or supplemented from time to time. 

        "Insurance
Agreement" means the Insurance Agreement relating to the Bonds, dated as of the same date as this Agreement, between the Company and the Bond Insurer, as amended or
supplemented from time to time. 

        "Interest
Rate for Advances" means the interest rate per year payable on the Bonds. 

2

 

        "Loan"
means the loan by the Issuer to the Company of the proceeds received from the sale of the Bonds. 

        "Loan
Payment Date" means any date on which any Bond Service Charges are due and payable. 

        "Loan
Payments" means the amounts required to be paid by the Company in repayment of the Loan pursuant to Section 4.1 hereof. 

        "1954
Code" means the Internal Revenue Code of 1954 as amended from time to time through the date of enactment of the Code. References to the 1954 Code and Sections of the 1954 Code
include relevant applicable regulations (including temporary regulations) and proposed regulations thereunder and any successor provisions to those Sections, regulations or proposed regulations. 

        "Notice
Address" means: 

	

(a)    As to the Issuer:	
 	

Indiana Development Finance Authority

One North Capitol, Suite 320

Indianapolis, Indiana 46204

Attention: Executive Director
	

(b)    As to the Company:	
 	

PSI Energy, Inc.

139 East Fourth Street

Cincinnati, Ohio 45202

Attention: Treasurer
	

(c)    As to the Trustee:	
 	

Fifth Third Bank, Indiana

Fifth Third Center

38 Fountain Square

Cincinnati, Ohio 45263

Attention: Corporate Trust Administration

or such additional or different address, notice of which is given under Section 8.3 hereof. 

        "Original
Bonds" means the $23,000,000 Indiana Employment Development Commission 81/4% Environmental Revenue Bonds, Series 1988 (Public Service Company of
Indiana, Inc.). 

        "Original
Bonds Indenture" means the Trust Indenture dated as of June 15, 1988 between Bank One, Indianapolis, National Association (as successor to American Fletcher National
Bank & Trust Company) and the Indiana Employment Development Commission, as predecessor to the Issuer. 

        "Original
Bonds Loan Agreement" means the Loan Agreement dated as of June 15, 1988 between the Indiana Employment Development Commission, as predecessor of the Issuer and Public
Service Company of Indiana, as predecessor of the Company, as amended as of March 15, 1990 and as of March 15, 1992. 

        "Person"
or words importing persons mean firms, associations, partnerships (including without limitation, general and limited partnerships), limited liability entities, joint ventures,
societies, estates, trusts, corporations, public or governmental bodies, other legal entities and natural persons. 

        "Pollution
Control Facility" or "Pollution Control Facilities" means those facilities which are pollution control facilities as defined in Section 24 of Chapter 10.9 of the Act
and those facilities described in Section 103(b)(4)(F) of the Internal Revenue Code of 1954, as amended, and the final, proposed and temporary regulations promulgated thereunder and other
administrative authority in effect. 

        "Prior
Bonds" means the Original Bonds and the Refunded Bonds. 

3

 

        "Project"
or "Project Facilities" means the real, personal or real and personal property, including undivided or other interests therein, identified in the Project Description, financed
with the proceeds of the Original Bonds. 

        "Project
Description" means collectively the description of the Project Facilities originally financed with the proceeds of the Original Bonds, attached hereto as  Exhibit A. 

        "Project
Purposes" means the purposes of Pollution Control Facilities as described in the Act and as particularly described in  Exhibit A hereto. 

        "Project
Site" means with respect to the various components of the Project, certain pollution control, solid waste disposal and sewage facilities of the Company at its following
facilities: (a) the Cayuga Generating Station, State Road 63, Cayuga, Vermillion County, Indiana; (b) the Edwardsport Generating Station, State Road 67, Edwardsport, Knox County,
Indiana; (c) the Gallagher Generating Station, Jackson Street, New Albany, Floyd County, Indiana; (d) the Gibson Generating Station, Highway 64 West, Gibson County, Indiana; and
(e) the Wabash River Generating Station, Bolton Road, Terre Haute, Vigo County, Indiana. 

        "Refunded
Bonds" means the $23,000,000 Indiana Development Finance Authority Environmental Refunding Revenue Bonds, Series 1998 (PSI Energy, Inc. Project). 

        "Refunded
Bonds Indenture" means the Trust Indenture dated as of July 15, 1998 between the Indiana Development Finance Authority and Fifth Third Bank, Indiana (formerly, The Fifth
Third Bank of Central Indiana). 

        "Refunded
Bonds Loan Agreement" means the Loan Agreement dated as of July 15, 1998 between the Issuer and the Company. 

        "Refunded
Bonds Trustee" means Fifth Third Bank, Indiana (formerly The Fifth Third Bank of Central Indiana), as trustee under the Refunded Bonds Indenture. 

        "Revenues"
means (a) the Loan Payments, (b) all other moneys received or to be received by the Issuer (excluding any fees paid to the Issuer) or the Trustee in respect of
repayment of the Loan, including without limitation, all moneys and investments in the Bond Fund, (c) any moneys and investments in the Refunding Fund, and (d) all income and profit from
the investment of the foregoing moneys. The term "Revenues" does not include any moneys or investments in the Rebate Fund or the Bond Purchase Fund. 

        "Solid
Waste Disposal Facility" or "Solid Waste Disposal Facilities" means those facilities defined as pollution control facilities in Section 24 of Chapter 10.9 of the Act and
those facilities described in Section 142(a)(6) of the Code. 

        "State"
means the State of Indiana. 

        "Trustee"
means Fifth Third Bank, Indiana located in Indianapolis, Indiana, a corporation duly organized and validly existing under the laws of the State, until a successor Trustee shall
have become such pursuant to the applicable provisions of the Indenture, and thereafter "Trustee" shall mean the successor Trustee. "Principal Office" of the Trustee shall mean the principal corporate
trust office of the Trustee, which office at the date of issuance of the Bonds is located at its Notice Address. 

        "Unassigned
Issuer Rights" means all of the rights of the Issuer to receive Additional Payments under Section 4.2 hereof, to inspection pursuant to Section 5.1 hereof, to
be held harmless and indemnified under Section 5.9 hereof, to be reimbursed for attorney's fees and expenses under Section 7.4 hereof and to give or withhold consent to amendments,
changes, modifications, alterations and termination of this Agreement under Section 8.6 hereof and its right to enforce such rights. 

4

 

        Section 1.3.    Interpretation.    Any reference herein to the State, to the Issuer or to any member or officer
of either includes entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or lawfully performing their functions. 

        Any
reference to a section or provision of the Constitution of the State or the Act, or to a section, provision or chapter of the Indiana Code, or to any statute of the United States of
America, includes that section, provision or chapter as amended, modified, revised, supplemented or superseded from time to time; provided, that no amendment, modification, revision, supplement or
superseding section, provision or chapter shall be applicable solely by reason of this provision, if it constitutes in any way an impairment of the rights or obligations of the Issuer, the State, the
Holders, the Trustee, the Registrar, the Auction Agent, an Authenticating Agent, a Paying Agent, the Bond Insurer, the Remarketing Agent, or the Company under this Agreement, the Indenture or the
Bonds. 

        Unless
the context indicates otherwise, words importing the singular number include the plural number, and vice versa; the terms "hereof", "hereby", "herein", "hereto", "hereunder" and
similar terms refer to this Agreement; and the term "hereafter" means after, and the term "heretofore" means before, the date of delivery of the Bonds. Words of any gender include the correlative
words of the other genders, unless the sense indicates otherwise. 

        Section 1.4.    Captions and Headings.    The captions and headings in this Agreement are used solely for
convenience of reference and in no way define, limit or describe the scope or intent of any Articles, Sections, subsections, paragraphs or subparagraphs or clauses hereof. 

(End
of Article I) 

5

   ARTICLE II.  

REPRESENTATIONS  

        Section 2.1.    Representations of the Issuer.    The Issuer represents that: (a) it is a body corporate
and politic duly organized and validly existing under the laws of the State; (b) it has duly accomplished all conditions necessary to be accomplished by it prior to the issuance and delivery of
the Bonds and the execution and delivery of this Agreement and the Indenture; (c) it is not in violation of or in conflict with any provisions of the laws of the State which would impair its
ability to carry out its obligations contained in this Agreement or the Indenture; (d) it is empowered to enter into the transactions contemplated by this Agreement and the Indenture;
(e) it has duly authorized the execution, delivery and performance of this Agreement and the Indenture; (f) it will do all things in its power in order to maintain its existence or
assure the assumption of its obligations under this Agreement and the Indenture by any successor municipal corporation; and (g) following reasonable notice, a public hearing was held on
August 20, 2002 with respect to the issuance of the Bonds as required by Section 147(f) of the Code. 

        Section 2.2.    No Warranty by Issuer of Condition or Suitability of the Project.    The Issuer makes no
warranty, either express or implied, as to the suitability or utilization of the Project for the Project Purposes, or as to the condition of the Project Facilities or that the Project Facilities are
or will be suitable for the Company's purposes or needs. 

        Section 2.3.    Representations and Covenants of the Company.    The Company represents that: 

        (a)  The
Company has been duly incorporated and is validly existing as a corporation under the laws of the State, with power and authority (corporate and other) to own its
properties and conduct its business, to execute and deliver this Agreement and to perform its obligations under this Agreement. 

        (b)  This
Agreement has been duly authorized, executed and delivered by the Company and this Agreement constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and
to general equity principles. 

        (c)  The
execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby will not violate any provision of
law or regulation applicable to the Company, or of any writ or decree of any court or governmental instrumentality, or of the Amended Articles of Consolidation, as amended, or the By-laws
of the Company, or of any mortgage, indenture, contract, agreement or other undertaking to which the Company is a party or which purports to be binding upon the Company or upon any of its assets. 

        (d)  The
Project constitutes and will constitute either land or property of a character subject to the allowance for depreciation for purposes of the Code, and all
expenditures for the cost of constructing the Project have been charged to a capital account for federal income tax purposes (or would have been so charged either with or but for a proper election to
deduct such amounts). 

        (e)  No
portion of the Project had been acquired and placed in operation at substantially the level for which it was designed for more than one year prior to the date of
delivery of the Original Bonds which financed such portion of the Project. 

        (f)    The
weighted average maturity of the Bonds does not exceed 120% of the average economic life of the Project Facilities originally financed by the Original Bonds
(determined under Section 147(b) of the Code). 

        (g)  The
portions of the Project (i) which are Pollution Control Facilities were designed to meet or exceed applicable federal, state and local requirements then in
effect for the control of air pollution and have been and will be used to abate or control air pollution or contamination by removing, 

6

 

altering, disposing of or storing pollutants, contaminants, wastes or heat, and the Pollution Control Facilities components of the Project as designed constitute "air pollution control facilities" or
facilities functionally related or subordinate thereto within the meaning of Section 103(b)(4)(F) of the 1954 Code, and the final, temporary and proposed regulations promulgated thereunder and
other administrative authority in effect; and (ii) which are Solid Waste Disposal Facilities have been and will be used for the collection, storage, treatment, utilization, processing or final
disposal of solid waste and constitute "solid waste disposal facilities" within the meaning of Section 142(a)(6) of the Code and the regulations applicable thereto. 

        (h)  The
Project has been and will be used wholly to control pollution and dispose of solid waste and was designed for no significant purpose other than pollution control and
disposal of solid waste, and the Project was not designed to result in an increase in production or capacity, in a material extension of the useful life of the Generating Stations or, in the case of
the portions of the Project which are Pollution Control Facilities, in the recovery of by-products of any substantial value. 

        (i)    Substantially
all (at least 95%) of the proceeds of the Original Bonds were used to provide "Solid Waste Disposal Facilities" and "Pollution Control Facilities". 

        (j)    Acquisition,
construction and installation or the incurrence of Cost of Construction (as defined in the Original Bonds Loan Agreement) for the Pollution Control
Facilities portion of the Project or any separate facility thereof was not commenced prior to the adoption of the resolution of the City of Princeton, Indiana, on October 16, 1978; and
acquisition, construction and installation or the incurrence of Cost of Construction for the Solid Waste Disposal Facilities portion of the Project or any separate facility thereof was not commenced
prior to the adoption of the applicable resolution of the Issuer on April 18, 1988, and no such portion of the Project was, in fact, operated at such design level prior to October 1,
1987. 

        (k)  All
of the proceeds of the Original Bonds were spent for the Project Facilities pursuant to the Original Bonds Loan Agreement or to pay costs of issuance of the Original
Bonds. The proceeds of the Refunded Bonds (other than any accrued interest thereon) were used exclusively to refund the Original Bonds; any investment earnings on such proceeds of the Refunded Bonds
were used to pay principal, premium or interest on the Original Bonds; and none of the proceeds of the Refunded Bonds was used to pay for any costs of issuance of the Refunded Bonds. The principal
amount of the Refunded Bonds did not exceed the then outstanding principal amount of the Original Bonds. The proceeds of the Refunded Bonds were used to retire the Original Bonds not later than
90 days after the date of issuance of the Refunded Bonds. The proceeds of the Bonds (other than any accrued interest thereon) will be used exclusively to refund the Refunded Bonds; any
investment earnings on such proceeds of the Bonds will be used to pay principal, premium or interest on the Refunded Bonds; and none of the proceeds of the Bonds will be used to pay for any costs of
issuance of the Bonds. The principal amount of the Bonds does not exceed the outstanding principal amount of the Refunded Bonds. The proceeds of the Bonds will be used to retire the Refunded Bonds not
later than 90 days after the date of issuance of the Bonds. 

        (l)    It
has caused the Project to be substantially completed. The Project constitutes Pollution Control Facilities under the Act and is consistent with the purposes of the
Act. The Project is being, and the Company will cause the Project to be, operated and maintained in such manner to conform with all applicable zoning, planning, building, environmental and other
applicable governmental regulations and all permits, variances and orders issued or granted pursuant thereto, including the permit-to-install for the Project, which permits,
variances and orders have not been withdrawn or otherwise suspended, and to be consistent with the Act. 

        (m)  It
has used or operated or has caused to be used or operated, and presently intends to use or operate or cause to be used or operated the Project Facilities in a manner
consistent with the Project Purposes until the date on which the Bonds have been fully paid and knows of no reason why the 

7

 

Project Facilities will not be so operated. The Company does not intend to sell or otherwise dispose of the Project or any portion thereof. 

        (n)  None
of the proceeds of each of the Prior Bonds was used and none of the proceeds of the Bonds will be used to provide any airplane, skybox or other private luxury box,
or health club facility, any facility primarily used for gambling or any store the principal business of which is the sale of alcoholic beverages for consumption off premises. 

        (o)  Less
than 25% of the proceeds of each of the Prior Bonds was used to acquire land or any interest therein, and none of such proceeds was used to provide land which was
used for farming purposes. 

        (p)  None
of the proceeds of each of the Prior Bonds was used to acquire existing property or any interest therein unless the first use of such property was by the Company
and was pursuant to and followed such acquisition. 

        (q)  At
no time will any funds constituting gross proceeds of the Bonds be used in a manner as would constitute failure of compliance with Section 148 of the Code. 

        (r)  The
Prior Bonds were not, and the Bonds will not be, "federally guaranteed" within the meaning of Section 149(b) of the Code. 

        (s)  It
is not anticipated that as of the date hereof, there will be created any "replacement proceeds", within the meaning of Section 1.148-1(c) of the
Treasury Regulations, with respect to the Bonds; however, in the event that any such replacement proceeds are deemed to have been created, such amounts will be invested in compliance with
Section 148 of the Code. 

        (t)    On
the date of issuance and delivery each of the Prior Bonds, the Company reasonably expected that at least 85% of the respective spendable proceeds of each of the Prior
Bonds would be expended to carry out the respective governmental purpose of each such issue within the 3-year period beginning on the issue date of such issue and the Company reasonably
expected that the proceeds of each of the Prior Bonds would be spent in accordance with the spending requirements of Section 149(g)(2) of the Code. The spendable proceeds of each of the Prior
Bonds have been fully expended prior to the date of issuance of the Bonds. The proceeds of each of the Prior Bonds were not invested in nonpurpose investments having a substantially guaranteed yield
for four years or more. 

        (u)  The
information furnished by the Company and used by the issuer in preparing the certifications and statements pursuant to Sections 148 and 149(e) of the Code or
their statutory predecessors with respect to each of the Prior Bonds was accurate and complete as of the respective date of issuance thereof, and the information furnished by the Company and used by
the Issuer in preparing the certification pursuant to Section 148 of the Code and in preparing the information statement pursuant to Section 149(e) of the Code, both referred to in the
Bond Resolution, will be accurate and complete as of the date of issuance of the Bonds. 

        (v)  The
Project Facilities do not include any office except for offices (i) located on the Project Site and (ii) not more than a de minimis amount of the
functions to be performed at which is not directly related to the day-to-day operations of the Project Facilities. 

(End
of Article II) 

8

   ARTICLE III.  

COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS  

        Section 3.1.    Acquisition, Construction and Installation.    The Company represents that it has caused the
Project Facilities to be acquired, constructed and installed on the respective Project Sites, substantially in accordance with the Project Description and in conformance with all applicable zoning,
planning, building and other similar regulations of all governmental authorities having jurisdiction over the Project and all permits, variances and orders issued in respect of the Project by EPA, and
that the proceeds derived from the Original Bonds and the Refunded Bonds, including any investment thereof, were expended in accordance with the respective Original Bonds Indenture and the Original
Bonds Loan Agreement and Refunded Bonds Indenture and Refunded Bonds Loan Agreement. 

        Section 3.2.    Project Description.    The Project Description may be changed from time to time by, or with
the consent of, the Company provided that any such change shall also be filed with the Issuer and provided further that no change in the Project Description shall materially change the function of the
Project Facilities unless the Trustee shall have received (i) an Engineer's certificate that such changes will not impair the significance or character of the Project Facilities as Pollution
Control Facilities and (ii) an Opinion of Bond Counsel or ruling of the Internal Revenue Service to the effect that such amendment will not adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes. 

        Section 3.3.    Issuance of the Bonds; Application of Proceeds.    To provide funds to make the Loan to the
Company to assist the Company in the refunding of the Refunded Bonds, the Issuer will issue, sell and deliver the Bonds to the Original Purchaser. The Bonds will be issued pursuant to the Indenture in
the aggregate principal amount, will bear interest, will mature and will be subject to redemption as set forth therein. The Company hereby approves the terms and conditions of the Indenture and the
Bonds, and the terms and conditions under which the Bonds will be issued, sold and delivered. 

        The
Company hereby requests that the Issuer notify the Refunded Bonds Trustee (unless the Refunded Bonds Trustee has already received such notice), pursuant to the Refunded Bonds
Indenture, that the entire outstanding principal amount of the Refunded Bonds is to be redeemed on October 1, 2002, at a redemption price of 100% of the principal amount thereof plus accrued
interest to that redemption date. 

        The
proceeds from the sale of the Bonds (other than any accrued interest) shall be loaned to the Company to assist the Company in refunding the Refunded Bonds in order to reduce the
interest cost payable by the Company; those proceeds shall be deposited in the Refunding Fund. On October 1, 2002, all moneys on deposit in the Refunding Fund shall be disbursed by the Trustee
as provided in Section 5.02 of the Indenture to the Refunded Bonds Trustee for deposit in the Bond Fund created in the Refunded Bonds Indenture and applied by the Refunded Bonds Trustee to the
payment of principal of and interest on the Refunded Bonds on their redemption on October 1, 2002. The Company shall pay to the Refunded Bonds Trustee prior to the date of redemption of such
series of Refunded Bonds such additional amounts as shall be required to pay in full on such date the entire amount of principal of, premium and interest due on the Refunded Bonds. 

        Pending
disbursement pursuant to this Section, the proceeds so deposited in the Refunding Fund, together with any investment earnings thereon, shall constitute a part of the Revenues
assigned by the Issuer to the Trustee for the payment of Bond Service Charges. Any accrued interest shall be deposited in the Bond Fund. 

        Section 3.4.    Investment of Fund Moneys.    At the oral (confirmed promptly in writing) or written request of
the Company, any moneys held as part of the Bond Fund, the Refunding Fund or the Rebate Fund shall be invested or reinvested by the Trustee in Eligible Investments; provided, that such 

9

 

moneys shall be invested or reinvested by the Trustee only in Eligible Investments which shall mature, or which shall be subject to redemption by the holder thereof at the option of such holder, not
later than the date upon which the moneys so invested are needed to make payments from those Funds. The Issuer (to the extent it retained or retains direction or control) and the Company each hereby
represents that the investment and reinvestment and the use of the proceeds of the Refunded Bonds were restricted in such manner and to such extent as was necessary so that the Refunded Bonds would
not constitute arbitrage bonds under Section 148 of the Code or its statutory predecessor and each hereby covenants that it will restrict that investment and reinvestment and the use of the
proceeds of the Bonds in such manner and to such extent, if any, as may be necessary so that the Bonds will not constitute arbitrage bonds under Section 148 of the Code. 

        The
Company shall provide the Issuer with, and the Issuer may base its certificate and statement, each as authorized by the Bond Resolution, on a certificate of an appropriate officer,
employee or agent of or consultant to the Company for inclusion in the transcript of proceedings for the Bonds, setting forth the reasonable expectations of the Company on the date of delivery of and
payment for the Bonds regarding the amount and use of the proceeds of the Bonds and the facts, estimates and circumstances on which those expectations are based. 

        Section 3.5.    Rebate Fund.    To the extent required by Section 5.08 of the Indenture, within five
days after the end of the fifth Bond Year (as defined in the Indenture) and every fifth Bond Year thereafter, and within five days after payment in full of all outstanding Bonds, the Company shall
calculate the amount of Excess Earnings (as defined in the Indenture) as of the end of that Bond Year or the date of such payment and shall notify the Trustee of that amount. If the amount then on
deposit in the Rebate Fund created under the Indenture is less than the amount of Excess Earnings (computed by taking into account the amount or amounts, if any, previously paid to the United States
pursuant to Section 5.08 of the Indenture and this Section), the Company shall, within five days after the date of the aforesaid calculation, pay to the Trustee for deposit in the Rebate Fund
an amount sufficient to cause the Rebate Fund to contain an amount equal to the Excess Earnings. The obligation of the Company to make such payments shall remain in effect and be binding upon the
Company notwithstanding the release and discharge of the Indenture. The Company shall obtain and keep such records of the computations made pursuant to this Section as are required under
Section 148(f) of the Code. 

(End
of Article III) 

10

   ARTICLE IV.  

LOAN BY ISSUER; LOAN PAYMENTS;

ADDITIONAL PAYMENTS; MUNICIPAL BOND INSURANCE

POLICY AND LIQUIDITY FACILITY  

        Section 4.1.    Loan Repayment.    Upon the terms and conditions of this Agreement, the Issuer agrees to make
the Loan to the Company. The proceeds of the Loan shall be deposited with the Trustee pursuant to Section 3.3 hereof. In consideration of and in repayment of the Loan, the Company shall make,
as Loan Payments, to the Trustee for the account of the Issuer, payments which correspond, as to time, and are equal in amount as of the Loan Payment Date, to the corresponding Bond Service Charges
payable on the Bonds. All Loan Payments received by the Trustee shall be held and disbursed in accordance with the provisions of the Indenture and this Agreement for application to the payment of Bond
Service Charges. 

        The
Company shall be entitled to a credit against the Loan Payments required to be made on any Loan Payment Date to the extent that the balance of the Bond Fund is then in excess of
amounts required (a) for the payment of Bonds theretofore matured or theretofore called for redemption, or to be called for redemption pursuant to Section 6.1 hereof (b) for the
payment of interest for which checks or drafts have been drawn and mailed by the Trustee or Paying Agent, and (c) to be deposited in the Bond Fund by the Indenture for use other than for the
payment of Bond Service Charges due on that Loan Payment Date. 

        Except
for such interest of the Company as may hereafter arise pursuant to Section 8.2 hereof or Sections 5.06 or 5.07 of the Indenture, the Company and the Issuer each
acknowledge that neither the Company, the State nor the Issuer has any interest in the Bond Fund or the Bond Purchase Fund, and any moneys deposited therein shall be in the custody of and held by the
Trustee in trust for the benefit of the Holders. 

        Section 4.2.    Additional Payments.    The Company shall pay to the Issuer, as Additional Payments hereunder,
any and all costs and expenses incurred or to be paid by the Issuer in connection with the issuance and delivery of the Bonds or otherwise related to actions taken by the Issuer under this Agreement
or the Indenture. 

        The
Company shall pay the Administration Expenses to the Trustee, the Registrar, the Remarketing Agent, the Auction Agent, and any Paying Agent or Authenticating Agent, as appropriate,
as Additional Payments hereunder. 

        The
Company may, without creating a default hereunder, contest in good faith the reasonableness of any such cost or expense incurred or to be paid by the Issuer and any Administration
Expenses claimed to be due to the Trustee, the Registrar, the Auction Agent, the Remarketing Agent, any Paying Agent or any Authenticating Agent. 

        In
the event the Company should fail to pay any Loan Payments, Additional Payments or Administration Expenses when due, the payment in default shall continue as an obligation of the
Company until the amount in default shall have been fully paid together with interest thereon during the default period at the Interest Rate for Advances. 

        Section 4.3.    Place of Payments.    The Company shall make all Loan Payments directly to the Trustee at its
Principal Office. Additional Payments shall be made directly to the person or entity to whom or to which they are due. 

        Section 4.4.    Obligations Unconditional.    The obligations of the Company to make Loan Payments, Additional
Payments and any payments required of the Company under Section 5.08 of the Indenture shall be absolute and unconditional, and the Company shall make such payments without abatement, diminution
or deduction regardless of any cause or circumstances whatsoever including, without 

11

 

limitation, any defense, set-off, recoupment or counterclaim which the Company may have or assert against the Issuer, the Trustee, the Registrar, the Remarketing Agent, the Auction Agent,
the Paying Agent or any other Person. 

        Section 4.5.    Assignment of Revenues and Agreement.    To secure the payment of Bond Service Charges, the
Issuer shall, by the Indenture, (a) absolutely and irrevocably assign to the Trustee, its successors in trust and its and their assigns forever, all of the Issuer's rights and remedies under
this Agreement (except for the Unassigned Issuer Rights), and (b) grant a security interest to the Trustee, its successors in trust and its and their assigns forever, in all of its rights to
and interest in the Revenues including, without limitation, all Loan Payments and other amounts receivable by or on behalf of the Issuer under the
Agreement in respect of repayment of the Loan. The Company hereby agrees and consents to those assignments and that grant of a security interest. 

        Section 4.6.    Municipal Bond Insurance Policy; Liquidity Facility; Cancellation.    (a) The Company
agrees to provide for the payment of the principal of and interest on the Bonds by causing the Municipal Bond Insurance Policy to be delivered to the Trustee on the date of the delivery of the Bonds. 

        (b)  The
Company may provide for the delivery of a Liquidity Facility. 

        (c)  The
Company may cancel any Liquidity Facility then in effect at such time and direct the Trustee in writing to surrender such Liquidity Facility to the Liquidity
Facility Issuer by which it was issued in accordance with the Indenture; provided, that no such cancellation shall become effective and no such surrender shall take place until all Bonds subject to
purchase pursuant to Section 4.07(d) of the Indenture have been so purchased or redeemed with the proceeds of such Liquidity Facility. 

        Section 4.7.    Company's Option to Elect Rate Period; Changes in Auction Date and Length of Auction
Periods.    The Company shall have, and is hereby granted, the option to elect to convert on any Conversion Date the interest rate borne by the Bonds to another
Variable Rate or return to the Auction Rate, to be effective for a Rate Period pursuant to the provisions of Article II of the Indenture and subject to the terms and conditions set forth
therein. The Company also shall have the option to direct the change of Auction Dates and/or the length of Auction Rate Periods in accordance with the Indenture. To exercise such options, the Company
shall give the written notice required by the Indenture. 

        Section 4.8.    Company's Obligation to Purchase Bonds.    The Company hereby agrees to pay or cause to be paid
to the Trustee or the Paying Agent, on or before each day on which Bonds may be or are required to be tendered for purchase, amounts equal to the amounts to be paid by the Trustee or the Paying Agent
with respect to the Bonds tendered for purchase on such dates pursuant to Article IV of the Indenture; provided, however, that the obligation of the Company to make any such payment under this
Section shall be reduced by the amount of (A) moneys paid by the Remarketing Agent as proceeds of the remarketing of such Bonds by the Remarketing Agent, (B) moneys drawn under any
Liquidity Facility, for the purpose of paying such purchase price and (C) other moneys made available by the Company, as set forth in Section 4.08(b)(ii) of the Indenture. 

(End
of Article IV) 

12

   ARTICLE V.  

ADDITIONAL AGREEMENTS AND COVENANTS  

        Section 5.1.    Right of Inspection.    The Company agrees that, subject to reasonable security and safety
regulations and to reasonable requirements as to notice, the Issuer and the Trustee and their or any of their respective duly authorized agents shall have the right at all reasonable times to enter
upon the Project Site to examine and inspect the Projects. 

        Section 5.2.    Maintenance.    The Company shall use its best efforts to keep and maintain the Project
Facilities, including all appurtenances thereto and any personal property therein or thereon, in good repair and good operating condition so that the Project Facilities will continue to constitute
Pollution Control Facilities or Solid Waste Disposal Facilities, for the purposes of the operation thereof as required by Section 5.4 hereof. 

        So
long as such shall not be in violation of the Act or impair the character of the Project Facilities as Pollution Control Facilities or Solid Waste Disposal Facilities, and provided
there is continued compliance with applicable laws and regulations of governmental entities having jurisdiction thereof, the Company shall have the right to remodel the Project Facilities or make
additions, modifications and improvements thereto, from time to time as it, in its discretion, may deem to be desirable for its uses and purposes, the cost of which remodeling, additions,
modifications and improvements shall be paid by the Company and the same shall, when made, become a part of the Project Facilities. 

        Section 5.3.    Removal of Portions of the Project Facilities.    The Company shall not be under any obligation
to renew, repair or replace any inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary portions of the Project Facilities, except that, subject to Section 5.4 hereof, it will
use its best efforts to ensure the continued character of the Project Facilities as Pollution Control Facilities or Solid Waste Disposal Facilities. The Company shall have the right from time to time
to substitute personal property
or fixtures for any portions of the Project Facilities, provided that the personal property or fixtures so substituted shall not impair the character of the Project Facilities as Pollution Control
Facilities or Solid Waste Disposal Facilities. Any such substituted property or fixtures shall, when so substituted, become a part of the Project Facilities. The Company shall also have the right to
remove any portion of the Project Facilities, without substitution therefor; provided, that the Company shall deliver to the Trustee a certificate signed by an Engineer describing said portion of the
Project Facilities and stating that the removal of such property or fixtures will not impair the character of the Project Facilities as Pollution Control Facilities or Solid Waste Disposal Facilities. 

        Section 5.4.    Operation of Project Facilities.    The Company will, subject to its obligations and rights to
maintain, repair or remove portions of the Project Facilities, as provided in Sections 5.2 and 5.3 hereof, use its best efforts to continue operation of the Project Facilities so long as and to
the extent that operation thereof is required to comply with laws or regulations of governmental entities having jurisdiction thereof or unless the Issuer shall have approved the discontinuance of
such operation (which approval shall not be unreasonably withheld). The Company agrees that it will, within the design capacities thereof, use its best efforts to operate and maintain the Project
Facilities in accordance with all applicable, valid and enforceable rules and regulations of governmental entities having jurisdiction thereof; provided, that the Company reserves the right to contest
in good faith any such laws or regulations. 

        Nothing
in this Agreement shall prevent or restrict the Company, in its sole discretion, at any time, from discontinuing or suspending either permanently or temporarily its use of any
facility of the Company served by the Project Facilities and in the event such discontinuance or suspension shall render unnecessary the continued operation of the Project Facilities, the Company
shall have the right to discontinue the operation of the Project Facilities during the period of any such discontinuance or suspension. 

13

 

        Section 5.5.    Insurance.    The Company shall cause the Project Facilities to be kept insured against fire or
other casualty to the extent that property of similar character is usually so insured by companies similarly situated and operating like properties, to a reasonable amount by reputable insurance
companies or, in lieu of or supplementing such insurance in whole or in part, adopt some other method or plan of protection against loss by fire or other casualty at least equal in protection to the
method or plan of protection against loss by fire or other casualty of companies similarly situated and operating properties subject to similar or greater fire or other hazards or on which properties
an equal or higher primary fire or other casualty insurance rate has been set by reputable insurance companies. 

        Section 5.6.    Workers' Compensation Coverage.    Throughout the term of this Agreement, the Company shall
comply, or cause compliance, with applicable workers' compensation laws of the State. 

        Section 5.7.    Damage; Destruction and Eminent Domain.    If, during the term of this Agreement, the Project
Facilities or any portion thereof is destroyed or damaged in whole or in part by fire or other casualty, or title to, or the temporary use of, the Project Facilities or any portion thereof shall have
been taken by the exercise of the power of eminent domain, the Company (unless it shall have exercised its option to prepay the Loan Payments pursuant to Section 6.2 hereof) shall promptly
repair, rebuild or restore the portion of the Project Facilities so damaged, destroyed or taken with such changes, alterations and modifications (including the substitution and addition of other
property) as may be necessary or desirable for the administration and operation of the Project Facilities as Pollution Control Facilities or Solid Waste Disposal Facilities and as shall not impair the
character or significance of the Project Facilities as furthering the purposes of the Act. 

        Section 5.8.    Company to Maintain its Corporate Existence; Conditions Under Which Exceptions
Permitted.    The Company agrees that, during the term of this Agreement, it will maintain its corporate existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it; provided that the Company
may, without violating its agreement contained in this Section, consolidate with or merge into another corporation, or permit one or more other corporations to consolidate with or merge into it, or
sell or otherwise transfer to another corporation all or substantially all of its assets as an entirety and thereafter dissolve, provided the surviving, resulting or transferee corporation, as the
case may be (if other than the Company), is a corporation organized and existing under the laws of one of the states of the United States, and assumes in writing all of the obligations of the Company
herein, and, if not an Indiana corporation, is qualified to do business in the State. 

        If
consolidation, merger or sale or other transfer is made as provided in this Section, the provisions of this Section shall continue in full force and effect and no further
consolidation, merger or sale or other transfer shall be made except in compliance with the provisions of this Section. 

        Section 5.9.    Indemnification.    The Company releases the Issuer from, agrees that the Issuer shall not be
liable for, and indemnifies the Issuer against, all liabilities, claims, costs and expenses imposed upon or asserted against the Issuer on account of: (a) any loss or damage to property or
injury to or death of or loss by any person that may be occasioned by any cause whatsoever pertaining to the construction, maintenance, operation and use of the Project Facilities; (b) any
breach or default on the part of the Company in the performance of any covenant or agreement of the Company under this Agreement or any related document, or arising from any act or failure to act by
the Company, or any of its agents, contractors, servants, employees or licensees; (c) the authorization, issuance and sale of the Bonds, and the provision of any information furnished in
connection therewith concerning the Project Facilities or the Company (including, without limitation, any information furnished by the Company for inclusion in any certifications made by the Issuer
under Section 3.4 hereof or for inclusion in, or as a basis for preparation of, the Form 8038 information statement to be filed by the 

14

 

Issuer); and (d) any claim or action or proceeding with respect to the matters set forth in (a), (b) and (c) above brought thereon. 

        The
Company agrees to indemnify the Trustee, the Paying Agent, the Remarketing Agent, the Auction Agent, and the Registrar (each hereinafter referred to in this section as an
"indemnified party") for and to hold each of them harmless against all liabilities, claims, costs and expenses incurred without negligence or willful misconduct on the part of the indemnified party,
on account of any action taken or omitted to be taken by the indemnified party in accordance with the terms of this Agreement, the Bonds or the Indenture or any action taken at the request of or with
the consent of the Company, including the costs and expenses of the indemnified party in defending itself against any such claim, action or proceeding brought in connection with the exercise or
performance of any of its powers or duties under this Agreement, the Bonds or the Indenture. 

        In
case any action or proceeding is brought against the Issuer, or an indemnified party in respect of which indemnity may be sought hereunder, the party seeking indemnity promptly shall
give notice of that action or proceeding to the Company, and the Company upon receipt of that notice shall have the obligation and the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not relieve the Company from any of its obligations under this Section unless that failure prejudices the defense of the action or
proceeding by the Company. At its own expense, an indemnified party may employ separate counsel and participate in the defense; provided, however, where it is ethically inappropriate for one firm to
represent the interests of the Issuer, and any other indemnified party or parties, the Company shall pay the Issuer's legal expenses in connection with the Issuer's retention of separate counsel. The
Company shall not be liable for any settlement made without its consent. 

        The
indemnification set forth above is intended to and shall include the indemnification of all affected officials, directors, officers and employees of the Issuer, the Trustee, the
Paying Agent, the Remarketing Agent, the Auction Agent, and the Registrar, respectively. That indemnification is intended to and shall be enforceable by the Issuer, the Trustee, the Paying Agent, the
Remarketing Agent and the Registrar, respectively, to the full extent permitted by law. 

        Section 5.10.    Company Not to Adversely Affect Exclusion of Interest on Bonds From Gross Income For Federal Income Tax
Purposes.    The Company hereby covenants and represents that it has taken and caused to be taken and shall take and cause to be taken all actions that may be
required of it for the interest on the Bonds to be and remain excluded from the gross income of the Holders for federal income tax purposes, and that it has not taken or permitted to be taken on its
behalf, and covenants that it will not take, or permit to be taken on its behalf, any action which, if taken, would adversely affect that exclusion under the provisions of the Code. 

        Section 5.11.    Use of Project Facilities.    The Issuer agrees that it will not take any action, or cause any
action to be taken on its behalf, to interfere with the Company's ownership interest in the Project or to prevent the Company from having possession, custody, use and enjoyment of the Project other
than pursuant to Article VII of this Agreement or Article VII of the Indenture. 

        Section 5.12.    Assignment by Company.    Notwithstanding any other provision of this Loan Agreement, this
Agreement may be assigned in whole or in part by the Company and the Project may be sold or
conveyed by the Company without the necessity of obtaining the consent of either the Issuer or the Trustee, subject, however, to each of the following conditions: 

        (a)  The
Company must provide the Trustee and the Remarketing Agent with an Opinion of Bond Counsel that such action will not affect the exclusion of interest on the Bonds
for federal income tax purposes. 

        (b)  The
Bond Insurer must provide to the Trustee its written consent to such action. 

15

 

        (c)  The
Company shall, within 30 days after execution thereof, furnish or cause to be furnished to the Issuer and the Trustee a true and complete copy of each such
assignment together with any instrument of assumption. 

        (d)  Any
assignment from the Company shall not materially impair fulfillment of the Project Purposes to be accomplished by operation of the Project as herein provided. 

        Section 5.13.    The Depository Trust Company Letter of Representation.    The Company agrees that it shall
cause the Trustee on behalf of the Issuer to fulfill the obligations set forth in the Depository Trust Company Letter of Representation for the Bonds. 

(End
of Article V) 

16

   ARTICLE VI.  

REDEMPTION  

        Section 6.1.    Optional Redemption.    Provided no Event of Default shall have occurred and be subsisting, at
any time and from time to time, the Company may deliver moneys to the Trustee in addition to Loan Payments or Additional Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of calling Bonds for optional redemption in accordance with the applicable provisions of the Indenture providing for optional redemption at the redemption price stated in the
Indenture. Pending application for those purposes, any moneys so delivered shall be held by the Trustee in a special account in the Bond Fund and delivery of those moneys shall not, except as set
forth in Section 4.1 hereof, operate to abate or postpone Loan Payments or Additional Payments otherwise becoming due or to alter or suspend any other obligations of the Company under this
Agreement. 

        Section 6.2.    Extraordinary Optional Redemption.    The Company shall have, subject to the conditions
hereinafter imposed, the option during a Term Rate Period to direct the redemption of the Bonds in whole upon the occurrence of the event described below in paragraph (c) and in part upon the
occurrence of the other events described below in accordance with the applicable provisions of the Indenture. In the event that any of the events described below affect less than all of the Project
Facilities and the Generating Stations which they serve, the Bonds may be redeemed in an amount equal to the outstanding principal amount of the Bonds multiplied by the allocable percentage figure for
each Project Facility, to-wit: 43.5% for Facility 1, 1% for Facility 2, 0% for Facility 3, 0% for Facility 4, 5% for Facility 5, 44.5% for
Facility 6, 0% for Facility 7 and 6% for Facility 8. 

        (a)  One
or more of the Project Facilities or the Generating Stations which they serve shall have been damaged or destroyed to such an extent that (1) such Project
Facilities or such Generating Stations cannot reasonably be expected to be restored, within a period of six consecutive months, to the condition thereof immediately preceding such damage or
destruction or (2) the Company is reasonably expected to be prevented from carrying on its normal use and operation of such Project Facilities or such Generating Stations for a period of six
consecutive months. 

        (b)  Title
to, or the temporary use of, all or a significant part of one or more of the Project Facilities or the Generating Stations which they serve shall have been taken
under the exercise of the power of eminent domain to such an extent (1) that such Project Facilities or such Generating Stations cannot reasonably be expected to be restored within a period of
six consecutive months to a condition of usefulness comparable to that existing prior to the taking or (2) the Company is reasonably expected to be prevented from carrying on its normal use and
operation of such Project Facilities or such Generating Stations for a period of six consecutive months. 

        (c)  As
a result of any changes in the Constitution of the State, the Constitution of the United States of America or any state or federal laws or as a result of legislative
or administrative action (whether state or federal) or by final decree, judgment or order of any court or administrative body (whether state or federal) entered after any contest thereof by the Issuer
or the Company in good faith, this Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties as expressed in this
Agreement. 

        (d)  Unreasonable
burdens or excessive liabilities shall have been imposed upon the Issuer or the Company with respect to one or more of the Project Facilities or the
Generating Stations which they serve or the operation thereof, including, without limitation, the imposition of federal, state or other ad valorem, property, income or other taxes other than ad
valorem taxes at the rates presently levied upon privately owned property used for the same general purpose as such Project Facilities or such Generating Stations. 

17

 

        (e)  Changes
in the economic availability of raw materials, operating supplies, energy sources or supplies or facilities (including, but not limited to, facilities in
connection with the disposal of industrial wastes) necessary for the operation of one or more of the Project Facilities or the Generating Stations which they serve for the Project Purposes occur or
technological or other changes occur which the Company cannot reasonably overcome or control and which in the Company's reasonable judgment render such Project Facilities or such Generating Stations
uneconomic or obsolete for the Project Purposes. 

        (f)    Any
court or administrative body shall enter a judgment, order or decree, or shall take administrative action, requiring the Company to cease all or any substantial part
of its operations served by one or more of the Project Facilities or the Generating Stations which they serve to such extent that the Company is or will be prevented from carrying on its normal
operations at such Project Facilities or such Generating Stations for a period of six consecutive months. 

        (g)  The
termination by the Company of operations at any of the Generating Stations which are served by any of the Project Facilities. 

        The
amount payable by the Company in the event of its exercise of the option granted in this Section shall be the sum of the following: 

        (i)    An
amount of money which, when added to the moneys and investments held to the credit of the Bond Fund, will be sufficient pursuant to the provisions of the Indenture to
pay, at 100% of the principal amount thereof plus accrued interest to the redemption date, and discharge, all or such portion of Outstanding Bonds to be redeemed on the earliest applicable redemption
date, that amount to be paid to the Trustee, plus 

        (ii)  An
amount of money equal to the Additional Payments relating to those Bonds accrued and to accrue until actual final payment and redemption of those Bonds, that amount
or applicable portions thereof to be paid to the Trustee or to the Persons to whom those Additional Payments are or will be due. 

The
requirement of (ii) above with respect to Additional Payments to accrue may be met if provisions satisfactory to the Trustee and the Issuer are made for paying those amounts as they accrue. 

        The
rights and options granted to the Company in this Section may be exercised whether or not the Company is in default hereunder; provided, that such default will not relieve the
Company from performing those actions which are necessary to exercise any such right or option granted hereunder. 

        Section 6.3.    Mandatory Redemption.    The Company shall deliver to the Trustee the moneys needed to redeem
the Bonds in accordance with any mandatory redemption provisions relating thereto as may be set forth in Sections 4.01(b) of the Indenture. 

        Section 6.4.    Notice of Redemption.    In order to exercise an option granted in, or to consummate a
redemption required by, this Article VI, the Company shall, within 180 days following the event authorizing the exercise of such option, or at any time during the continuation of the
condition referred to in paragraphs (c), (d) or (e) of Section 6.2 hereof, or at any time that optional redemption of the Bonds is permitted under the Indenture as provided in
Section 6.1 hereof, or promptly upon the occurrence of a Determination of Taxability (as defined in the Indenture), give written notice to the Issuer and the Trustee that it is exercising its
option to direct the redemption of Bonds, or that the redemption thereof is required by Section 4.01(b) of the Indenture due to the occurrence of a Determination of Taxability, as the case may
be, in accordance with the Agreement and the Indenture, and shall specify therein the date on which such redemption is to be made, which date shall not be more than 180 days from the date such
notice is mailed. The Company shall make arrangements satisfactory to the Trustee for the giving of the required notice of redemption to the Holders of the Bonds, in which arrangements the Issuer
shall cooperate. 

18

 

        Section 6.5.    Actions by Issuer.    At the request of the Company or the Trustee, the Issuer shall take all
steps required of it under the applicable provisions of the Indenture or the Bonds to effect the redemption of all or a portion of the Bonds pursuant to this Article VI. 

(End
of Article VI) 

19

   ARTICLE VII.  

EVENTS OF DEFAULT AND REMEDIES  

        Section 7.1.    Events of Default.    Each of the following shall be an Event of Default: 

        (a)  The
occurrence of an event of default as defined in Section 7.01 (a), (b), or (c) of the Indenture; 

        (b)  The
Company shall fail to observe and perform any other agreement, term or condition contained in this Agreement, other than such failure as will have resulted in an
event of default described in (a) above and the continuation of that failure for a period of 90 days after notice thereof shall have been given to the Company by the Issuer or the
Trustee, or for such longer period as the Issuer and the Trustee may agree to in writing; provided, that failure shall not constitute an Event of Default so long as the Company institutes curative
action within the applicable period and diligently pursues that action to completion within 150 days after the expiration of initial cure period as determined above, or within such longer
period as the Issuer and the Trustee may agree to in writing; and 

        (c)  The
receipt by the Trustee of written notice from the Bond Insurer that an event of default has occurred and is continuing under the Insurance Agreement; and 

        (i)    By
decree of a court of competent jurisdiction the Company shall be adjudicated a bankrupt, or an order shall be made approving a petition or answer filed seeking
reorganization or readjustment of the Company under the federal bankruptcy laws or other law or statute of the United States of America or of the state of incorporation of the Company or of any other
state, or, by order of such a court, a trustee in bankruptcy, a receiver or receivers shall be appointed of all or substantially all of the
property of the Company, and any such decree or order shall have continued unstayed on appeal or otherwise and in effect for a period of sixty (60) days; or 

        (ii)  The
Company shall file a petition in voluntary bankruptcy or shall make an assignment for the benefit of creditors or shall consent to the appointment of a
receiver or receivers of all or any part of its property, or shall file a petition seeking reorganization or readjustment under the Federal bankruptcy laws or other law or statute of the United
States of America or any state thereof, or shall file a petition to take advantage of any debtors' act. 

        Notwithstanding
the foregoing, if, by reason of Force Majeure, the Company is unable to perform or observe any agreement, term or condition hereof which would give rise to an Event of
Default under subsection (b) hereof, the Company shall not be deemed in default during the continuance of such inability. However, the Company shall promptly give notice to the Trustee and the
Issuer of the existence of an event of Force Majeure and shall use its best efforts to remove the effects thereof; provided that the settlement of strikes or other industrial disturbances shall be
entirely within its discretion. 

        The
exercise of remedies hereunder shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding that declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or reorganization proceedings. 

        Section 7.2.    Remedies on Default.    Whenever an Event of Default shall have happened and be subsisting,
either or both of the following remedial steps may be taken: 

        (a)  The
Issuer or the Trustee may have access to, inspect, examine and make copies of the books, records, accounts and financial data of the Company, only, however, insofar
as they pertain to the Project; or 

        (b)  The
Issuer or the Trustee may pursue all remedies now or hereafter existing at law or in equity to recover all amounts, including all Loan Payments and Additional
Payments and under 

20

 

Section 4.8 hereof the purchase price of Bonds tendered for purchase, then due and thereafter to become due under this Agreement, or to enforce the performance and observance of any other
obligation or agreement of the Company under this Agreement. 

        Notwithstanding
the foregoing, the Issuer shall not be obligated to take any step which in its opinion will or might cause it to expend time or money or otherwise incur liability unless
and until a satisfactory indemnity bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other amounts which would be applicable to payment of Bond Service Charges collected pursuant to action taken under this
Section shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if the outstanding Bonds have been paid and discharged in accordance with the provisions of
the Indenture, shall be paid as provided in Section 5.07 of the Indenture for transfers of remaining amounts in the Bond Fund. 

        The
provisions of this Section are subject to the further limitation that the rescission and annulment by the Trustee of its declaration that all of the Bonds are immediately due and
payable also shall constitute a rescission and annulment of any corresponding declaration made pursuant to this Section and a rescission and annulment of the consequences of that declaration and of
the Event of Default with respect to which that declaration has been made, provided that no such rescission and annulment shall extend to or affect any subsequent or other default or impair any right
consequent thereon. 

        Section 7.3.    No Remedy Exclusive.    No remedy conferred upon or reserved to the Issuer or the Trustee by
this Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement, or now or hereafter existing at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer or the Trustee to exercise any
remedy reserved to it in this Article, it shall not be necessary to give any notice, other than any notice required by law or for which express provision is made herein. 

        Section 7.4.    Agreement to Pay Attorneys' Fees and Expenses.    If an Event of Default should occur and the
Issuer or the Trustee should incur expenses, including attorneys' fees, in connection with the enforcement of this Agreement or the collection of sums due hereunder, the Company shall be required, to
the extent permitted by law, to reimburse the Issuer and the Trustee, as applicable, for the expenses so incurred upon demand. 

        Section 7.5.    No Waiver.    No failure by the Issuer or the Trustee to insist upon the strict performance by
the Company of any provision hereof shall constitute a waiver of their right to strict performance and no express waiver shall be deemed to apply to any other existing or subsequent right to remedy
the failure by the Company to observe or comply with any provision hereof. 

        Section 7.6.    Notice of Default.    The Company shall notify the Trustee and the Bond Insurer immediately if
it becomes aware of the occurrence of any Event of Default hereunder or of any fact, condition or event which, with the giving of notice or passage of time or both, would become an Event of Default. 

(End
of Article VII) 

21

   ARTICLE VIII.  

MISCELLANEOUS  

        Section 8.1.    Term of Agreement.    This Agreement shall be and remain in full force and effect from the date
of delivery of the Bonds to the Original Purchaser until such time as (i) all of the Bonds shall have been fully paid (or provision made for such payment) and the Indenture has been released
pursuant to Section 9.01 thereof and (ii) all other sums payable by the Company under this Agreement shall have been paid; provided, however, the obligations of the Company under
Sections 4.2 and 5.9 hereof shall survive any termination of this Agreement. 

        Section 8.2.    Amounts Remaining in Funds.    Any amounts in the Bond Fund remaining unclaimed by the Holders
of Bonds for four years after the due date thereof (whether at stated maturity, by redemption, upon acceleration or otherwise), at the option of the Company, shall be deemed to belong to and shall be
paid, subject to Section 5.06 of the Indenture, at the written request of the Company, to the Company by the Trustee. With respect to that principal of and any premium and interest on the Bonds
to be paid from moneys paid to the Company pursuant to the preceding sentence, the Holders of the Bonds entitled to those moneys shall look solely to the Company for the payment of those moneys.
Further, any amounts remaining in the Bond Fund and any other special funds or accounts created under this Agreement or the Indenture, except the Rebate Fund, after all of the Bonds shall be deemed to
have been paid and discharged under the provisions of the Indenture and all other amounts required to be paid under this Agreement and the Indenture have been paid, shall be paid to the Company to the
extent that those moneys are in excess of the amounts necessary to effect the payment and discharge of the Outstanding Bonds. 

        Section 8.3.    Notices.    All notices, certificates, requests or other communications hereunder shall be in
writing, except as provided in Section 3.4 hereof, and shall be deemed to be sufficiently given when mailed by registered or certified mail, postage prepaid, and addressed to the appropriate
Notice Address. A duplicate copy of each notice, certificate, request or other communication given hereunder to the Issuer, the Company, the Bond Insurer or the Trustee shall also be given to the
others. The
Company, the Issuer, the Bond Insurer and the Trustee, by notice given hereunder, may designate any further or different addresses to which subsequent notices, certificates, requests or other
communications shall be sent. 

        Section 8.4.    Extent of Covenants of the Issuer; No Personal Liability.    All covenants, obligations and
agreements of the Issuer contained in this Agreement or the Indenture shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future member, officer, agent or employee of the Issuer in other than his official capacity, and neither the members of the Issuer
nor any official executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof or by reason of the covenants,
obligations or agreements of the Issuer contained in this Agreement or in the Indenture. 

        Section 8.5.    Binding Effect.    This Agreement shall inure to the benefit of and shall be binding in
accordance with its terms upon the Issuer, the Company and their respective permitted successors and assigns provided that this Agreement may not be assigned by the Company (except as permitted under
Sections 5.8 or 5.12 hereof) and may not be assigned by the Issuer except to (i) the Trustee pursuant to the Indenture or as otherwise may be necessary to enforce or secure payment of
Bond Service Charges or (ii) any successor public body to the Issuer. 

        Section 8.6.    Amendments and Supplements.    Except as otherwise expressly provided in this Agreement or the
Indenture, subsequent to the issuance of the Bonds and prior to all conditions provided for in the Indenture for release of the Indenture having been met, this Agreement may not be effectively
amended, changed, modified, altered or terminated by the parties hereto except with the 

22

 

consents required by, and in accordance with, the provisions of Article XI of the Indenture, as applicable. 

        Section 8.7.    Execution Counterparts.    This Agreement may be executed in any number of counterparts, each
of which shall be regarded as an original and all of which shall constitute but one and the same instrument. 

        Section 8.8.    Severability.    If any provision of this Agreement, or any covenant, obligation or agreement
contained herein is determined by a judicial or administrative authority to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement,
each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. That invalidity or unenforceability shall not affect any valid and enforceable
application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted
by law. 

        Section 8.9.    Governing Law.    This Agreement shall be deemed to be a contract made under the laws of the
State and for all purposes shall be governed by and construed in accordance with the laws of the State. 

(End
of Article VIII) 

23

   
        IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to be duly executed in their respective names, all as of the date hereinbefore written. 

	

 	

INDIANA DEVELOPMENT FINANCE

AUTHORITY
	

 	

By:	
 	

/s/  THOMAS F. MCKENNA      
 Thomas F. McKenna, Designee of Lt. Governor—Authorized Signatory
	

Attest:	

 	
 	

 
	

/s/  CALVIN KELLY      
 Calvin Kelly, Acting Executive Director	

 	
 	

 
	

 	

 	
 	

 
	

 	

 	
 	

 
	

 	

 	
 	

 
	

[Issuer's Signature Page to Loan Agreement]
	

 	

 	
 	

 
	

 	

 	
 	

 

24

 

	

 	

PSI ENERGY, INC.
	

 	

By:	
 	

/s/  WENDY L. AUMILLER      
 Treasurer
	

 	

 	
 	

 
	

 	

 	
 	

 
	

 	

 	
 	

 
	

[Borrower's Signature Page to Loan Agreement]

25

   EXHIBIT A  

Project  

DESCRIPTION OF SOLID WASTE DISPOSAL AND

POLLUTION CONTROL FACILITIES  

        The Project as amended is comprised of the following Solid Waste Disposal Facilities and Pollution Control Facilities constructed and installed in connection with
the following Generating Stations. 

	

Facility 1 —	

Flue gas desulfurization system and sludge fixation system for Gibson Generating Station, Unit 5, including facilities for transport of fly ash for sludge fixation purposes and modifications and upgrades to the Company's undivided ownership
interest in the Gibson Generating Station, Unit 5, ash handling and sludge disposal system.
	

Facility 2 —	

An ash sluice pump, ash pond dike addition and an irrigation system functionally related and subordinate to the ash handling and disposal system for the Cayuga Generating Station.
	

Facility 3 —	

Surfacing of loading area for loading of unregenerated spent resin on industrial vacuum trucks for the disposal of the unregenerated spend resin for the Cayuga Generating Station.
	

Facility 4 —	

The discrete portions of the demineralizer used in the regeneration of spent resin or the Edwardsport Generating Station.
	

Facility 5 —	

Miscellaneous improvements to the ash handling and disposal system for the Gallagher Generating Station, including the replacement of insulation on Units No. 1, No. 2 and No. 4 economizer hoppers, replacement of Unit No. 1,
No. 2 and No. 4 economizer dust lines, replacement of ash sluice pumps and replacement of low pressure service water pumps for Units 1, 2, 3 and 4.
	

Facility 6 —	

Miscellaneous improvements to and expansion of ash handling and disposal facilities for the Gibson Generating Station, including the acquisition of land and construction of a 500 acre ash storage pond for Unit 5, replacement of ash sluice
2B pump, motor, coupling and monitoring relay for Unit 2, replacement of ash sluice 4A pump and extensions of existing ash transport lines for Unit 4, and improvements and modifications of fly ash disposal equipment for Unit 1 and
Unit 2.
	

Facility 7 —	

Addition to landfill aggregate materials building for housing of solid waste transport and disposal equipment for the Gibson Generating Station Unit 5.
	

Facility 8 —	

Miscellaneous improvements to and expansion of ash handling and disposal facilities for the Wabash River Generating Station, including an ash hopper modifications for Wabash River Generating Station, Units 1-6.

26

QuickLinks

Exhibit 4-TTT

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